We learned previously that a transaction is not finalized, i.e., either party still has the legal ability to retract until a kinyan, an act of acquisition, is performed.

Q: What are the classic forms of kinyan for various items?

A: Different kinds of items have different forms of kinyan, as described in masechtos Kiddushin and Bava Metzia.

Real estate transactions are finalized either through cash payment (kesef), document of sale (shtar), or act of possession (chazakah). Small movable items are acquired through picking up (hagboho), and large movable items through dragging them (meshichah). Small animals are similarly acquired through leading (meshichah) and large animals through grasping the reigns (mesirah).

Many items can also be acquired by placing them in the buyer’s property (chatzer), or as an “add-on” to a real-estate transaction (agav). Most transactions can also be completed through a symbolic exchange (chalipin), by having the seller grasp the handkerchief or other item of the buyer.

Customary business practices of the time are often recognized by Halachah (situmta). Finally, admission of the “seller” can sometimes serve to grant ownership (odisa).

Details of these various kinyanim will be discussed in the coming weeks, iy”H.

Q: What are the kinyanim (acts of acquisition) for real estate?

A: Real-estate transactions are finalized either through cash payment (kesef), document of sale (shtar), or act of possession (chazakah).

Kesef: The buyer gives the seller money — whether full, partial or even token payment — with intent to thereby consummate the sale (C.M. 190:2). A personal check, bank check or authorized check from a third party is considered kesef by many poskim. However, giving the “earnest money” (good-faith deposit) is not a kinyan, because it is only intended to serve as a deposit, not to finalize the sale (ibid. 190:9).

Shtar: The seller gives the buyer a document that states that he hereby sells the property to the buyer (ibid. 191:1).

In principle, each one of these three actions can suffice independently. However in typical situations, both kesef and shtar are required, because the buyer and seller do not intend for the sale to be irrevocably binding until both the payment is made and the documents are given over (ibid. 190:7; 191:2). 

Q: How is real estate acquired through kinyan chazakah (act of possession)?

A: Chazakah: The buyer performs an act demonstrating possession of the property, either in the presence of the seller or upon his authorization. This act typically entails a capital improvement to the property, such as affixing a lock, constructing a fence or making an opening (C.M. 192:1-2).

Locking the door with a key is also considered chazakah by the Rambam and Shulchan Aruch. Simply handing over the key, however, is not considered chazakah, but is viewed as authorization to do chazakah (C.M. 192:3).

Collecting the fruit of a field or using the property is considered kinyan chazakah by the Rambam and Shulchan Aruch, but not by most other Rishonim and the Rema (C.M. 192:10-11).

Although chazakah is not commonly used nowadays for sale of property, it sometimes serves to finalize a rental, which also requires kesef, shtar or chazakah. According to many authorities, usage of the property (e.g., moving belongings in) would be a valid chazakah to finalize a rental even according to the Rema, since the rental “acquisition” itself is limited to usage of the property (C.M. 192:13; Nesivos 192:6).

Q: I over-ordered some merchandise, and told my neighbor he could take the extra for free. I later realized that the surplus is useful for me. Can I retract my gift offer?

A: The transaction of movable items is finalized through hagbaha, picking up. Thus, if the neighbor picked the merchandise up with the intent to acquire ownership, it is his, even if it remains meanwhile in your store or warehouse. Large or heavy items that are hard to pick up can be acquired through meshicha, dragging into your neighbor's property or a semi-public area such an alleyway (C.M. 198:1-5).

If the neighbor has not yet picked up or dragged the item, it is legally possible to retract the offer. Nonetheless, one who retracts from a small gift offer is deemed lacking trustworthiness (mechusar amana), since the recipient certainly expects the gift. However, if the recipient was offered a large gift, he entertains the possibility that the giver might retract before the gift is finalized (204:8). If the gift was promised to a poor person, a charity, or a Torah institution, it is considered a vow and must be upheld in any case (243:2).

Q: I am purchasing a bedroom set second-hand. I have already paid the seller in cash and arranged to come by the next day to collect the furniture. Does either side still have the possibility of backing out?

A: In a famous statement, R’ Yochanan teaches that cash payment finalizes a transaction according to Torah law. (B.M. 47b) However, the Mishna (B.M. 44a) teaches that for transactions between Jews, the Sages revoked the effect of cash payment and enabled retracting until an act of transaction (kinyan) is performed. In the case of a bedroom set, this would require picking up or dragging the beds (C.M. 198:1).

Thus, both sides still have the legal ability to back out before the items are collected. The Sages strongly discouraged doing so, and imposed a curse (mi shepara) on one who does not uphold his commitment (204:1, 4). The sale can easily be made binding though performing a kinyan sudar, whereby the buyer hands his handkerchief or pen to the seller in exchange for title to the beds (195:1). Moreover, nowadays cash payment might be considered a kinyan based on the concept of situmta – common business practice.

Q: I placed an order over the internet. When I click "confirm", is the transaction binding?

A: According to almost all poskim, such transactions are binding based on the concept of situmta. The Gemara (B.M. 74a) teaches that the wine merchants would often make a sign on wine barrels that had been sold as an indication that they were sold. If the common business practice is to consider the sale binding on the basis of this marking – even if no other kinyan was made – then the sale is binding. The poskim extend this idea to any common business practice, minhag hasocharim, as a binding form of kinyan (C.M. 201:1-2). Thus, if the common business practice is to consider internet transactions as binding when the customer clicks on the "confirm" button, this action is also given halachic validity as a modern form of situmta. Other possible examples of situmta include affixing a signature on an order form and "mazel and bracha" in the diamond business. Many poskim even suggest that cash payment does finalize transactions based on situmta nowadays, since that is the common business practice these days.

Q: I bought something by check or credit card at a store that does not allow returns. Can I "cancel" the sale by stopping the check or instructing the credit card company to refuse payment?

A: If you already took the item, the transaction is finalized. You are not able to retract the sale. If you have not paid yet, you owe the seller payment. To stop the check or refuse payment is tantamount to refusing to pay what you owe, and is not allowed (C.M. 198:1).

If you did not receive the item yet, we learned that the Sages granted the legal ability to retract the item is taken, although they imposed a curse upon one who does so. A check or credit card should be no stronger than cash payment. However, in a typical commercial setting nowadays, signing a formal order form or paying in the routine manner is considered an act of kinyan situmta if the common business practice is to consider such transactions as final. [It is illegal to stop a check or cancel credit card payment after the item has been shipped.]

Q: I recently sold my house. I agreed to also sell the sofas and dining room set to the buyer for an additional cash payment. Can I retract on the furniture sale and take the furniture with me instead of accepting the payment?

A: If the sofas and dining room set were set to be sold along with the house, it is not permissible to retract. This remains true even if they were not paid for yet and no other kinyan was made on the furniture. This is based on the concept of kinyan agav. Kinyan agav means that when one is selling real estate, it is possible to incorporate the sale of movable items along with the sale of real estate. The kinyan finalizing the real estate transaction also affects the sale of the movable items (C.M. 202:1-2).

If, however, the understanding was that the sale of the furniture would be a separate transaction unrelated to the sale of the house, the sofas and dining room set would require their own act of kinyan to make the transaction binding.

Q: I received complimentary samples of a product that the manufacturer sent to me by mail. I did not need that product, but thought my neighbor would appreciate it. I tossed the samples onto my neighbor's porch or walkway. If I later decide that I would like to take the product back, can I take it before my neighbor comes home?

A: The Gemara (B.M. 11a) teaches that a person acquires items that are in or on his property, even if he is not aware that the items are there. This is known as kinyan chatzer. However, this applies only if the property is secure or if the person is standing next to his property, so it depends where you tossed the sample. If you tossed it onto the neighbor's porch, it immediately becomes his, and you cannot take it back. [Of course, this is only if the neighbor ultimately expresses interest in receiving the product.] However, if you tossed it onto his open lawn or walkway and he is not present at the time, his property does not acquire the sample, and you can still take it back.

Q: I am involved in litigation in a Beis Din. I agreed at first to arbitration, but am now convinced that the halacha is on my side. Before the arbitration verdict is given, can I now refuse compromise and demand that the Beis Din rule based on the absolute law?

A: In theory, a person can withdraw his agreement to arbitration until the verdict is given. However, in practice, it is not possible nowadays.

The reason why it is not possible is because at the beginning of the arbitration process, the Beis Din makes a kinyan sudar, otherwise known as chalipin (symbolic exchange) with each of the parties. The secretary or Dayan of the Beis Din asks each party, in turn, to grasp his handkerchief or take his pen as a symbolic exchange. This act creates a binding commitment to either pay or forego the amount determined by Beis Din (C.M. 12:7). Thus, the agreement to arbitration is finalized through the kinyan sudar.

It is possible to use kinyan sudar as a convenient method to finalize almost any kind of transaction or commitment (195:1).