Abadi Apparel was preparing its new winter collection. The owner, Joseph Abadi, reviewed the plans with his plant manager and verified the rolls of fabric that would be used. A roll of gold-tone was to be incorporated as a designer stripe on the pants.

Mr. Abadi walked around the plant, tossing an encouraging word here and there to his employees. He made a special stop at the quality control station. "Keep a good lookout," he cautioned. "No shoddy pants come out of here!"

"Get the first run going," he told the manager, satisfied.

Machines whirred into action, cutting, stitching, pressing, and labeling. Some hours later, Mr. Abadi was interrupted by an urgent message from quality control: "60% of the new pants are defective!"

"Halt production immediately and meet me at quality control!"  Mr. Abadi ordered the plant manager.  He rushed over to the quality control supervisor. A large pile of pants was heaped on the inspection table.

 "What's going on?" shouted Mr. Abadi.

 "You know the gold-tone stripe? The roll had a defect running through most of it," said the supervisor. "These pants all have defective fabric sewn in them."

 Mr. Abadi turned to his plant manager. "Didn't you check the rolls?"

 "We checked the beginning of each roll," he answered, "and they looked perfect."

 "So what happened?" thundered Mr. Abadi.

 "The first two lots of pants came out fine," explained the quality control supervisor. "The roll was defective only towards the middle."

 "Get inventory to locate the supplier," snapped Mr. Abadi. "He's going to have to refund the cost of the roll and today's ruined production run. And we’ll need a new fabric for the stripe."

A few minutes later, Mr. Abadi's cell phone buzzed. "Hello, this is inventory. The defective roll was purchased from Fried's Fabrics in 2007, order #1673."

 Mr. Abadi went back to his office and rang Fried's Fabrics. "Hello, Joseph Abadi speaking. Give me Mr. Fried."

 Mr. Fried got on. "Hi, Joseph! I hear your new winter line’s coming out."

 "It is," Mr. Abadi responded. "But one of your rolls proved defective!"

 "I'm sorry," said Mr. Fried. "Just return it and we’ll replace it promptly."

 "I can't return it," said Mr. Abadi. "It was left over from an order three years ago and was already used for today's run. Hundreds of new pants are useless. In addition to a refund for the defective fabric, I expect compensation for the damaged pants!"

"Just a minute," responded Mr. Fried. "Three years? You had plenty of time to return the roll! Furthermore, had you returned it, I could have sold it as irregular. Now you cut the roll and want me to pay you damages in addition?! That's a bit much, even for a valued client like you."

 "Well," retorted Mr. Abadi, "the defect was inside, so we couldn’t know about it until now."

 "Neither could we," said Mr. Fried. "I don't think we’re responsible. Let's take the issue to Rabbi Dayan."

 Rabbi Dayan listened to both sides and ruled: "If the invoice specified warranty terms, they are binding. If nothing was specified, Mr. Fried must refund the entire cost of the defective roll and is entitled to receive whatever remains of the fabric. However, he does not owe Mr. Abadi compensation for the damage to the run."

Rabbi Dayan his ruling: "If merchandise is discovered to be defective, the sale is invalid and the buyer may return it even after many years (H.M. 232:3). Furthermore, if the buyer used the merchandise in the intended manner and thereby ruined it further before discovering the defect, he is not liable for that damage. Therefore, Mr. Abadi is entitled to a full refund even though he already cut the roll (232:13). At the same time, since Mr. Fried was also unaware of the defect, he is not accountable for the consequential damage that was caused to the production run (232:20-21).

 "But what about the warranty terms of the supply contract?" asked Mr. Fried.

 "All this is the ruling of the Shulchan Aruch," concluded Rabbi Dayan. "However, halacha usually validates predefined agreements between the parties and common commercial practice. So if the supply contract stipulated different warranty terms and limitations, that agreement is most likely binding also according to halacha." (See 225:5 and 232:7,19)

I lent my friend $26,000. When the loan was due, he sent me a check for the full amount – plus $461 as interest for the loan. I immediately called and told him that I wouldn’t accept interest for the loan under any circumstances, since it is prohibited. He apologized for the error but told me that I should cash the check and give the $461 as a donation to a tzedaka of my choice. I would love to make a donation to my children’s school… but something about it doesn’t feel right.

Q: May I cash the check and write a check for $461 to my children’s school?

A: Shulchan Aruch (Yoreh Deah 160:23) rules that a lender may not stipulate that the borrower must hire him when his services are needed.  For example, if the lender is a painter, he may not stipulate that the borrower hire him if he needs a painter.  Similarly, if the lender owns a retail store, he may not stipulate that the borrower must shop in his store (Bris Yehudah 11:24-25).  At first glance it would seem that this should not violate the prohibition against charging interest, since the borrower is not paying interest to the lender; he is merely hiring him to work as a painter and he is paying him a fair wage for that work.  As such, the lender is not receiving any additional amount of money for the loan and it should be permitted.  The reason this is prohibited is that it constitutes tovas hana’ah – benefit of gratitude.  Although there is a dispute in the Gemara (see Kiddushin 58b) whether tovas hana’ah has intrinsic monetary value, Shulchan Aruch maintains that both positions would agree that it is considered an interest payment.  The only difference between the two opinions is whether it is Biblically prohibited or prohibited by Rabbinic injunction.  Accordingly, to accept the additional $461 to give to your children’s school is a form of tovas hana’ah. The prohibition of ribbis applies even if it was not stipulated at the issuing of the loan. Therefore, here, too, it is prohibited to give the $461 to tzedaka. You should return the check to the borrower and ask him to write you a check for the exact amount of the loan.

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.]