I entered into a contract to sell some property with a penalty clause. The buyer put $10,000 in escrow, with the understanding that if he would not close on the property by the specified date, the money would be mine. We worded the clause in a way that was also halachically binding.

I never contacted the buyer to remind him that the target date was approaching. When he finally called - after the deadline - to complete the transaction, I told him that I have the right to collect the $10,000 that is in the escrow account. He responded that since I hadn’t contacted him, he had figured that I was no longer in a rush to close on the property, and he instead became busy with other transactions.

Q: Does the buyer, who assumed that my silence indicated that I forgave the condition, have a right to the money, or is my claim correct?

A: The core issue is the nature of a time-related stipulation between two parties. Is the stipulation enforceable only if the one who stipulated asks for it to be fulfilled, or is such a stipulation enforceable automatically once the two parties agree to it?

One perspective is that the stipulation remains in a dormant state until it is activated by the one who made the stipulation. At that moment, the other party is obligated to carry out the stipulation. If the one who added the stipulation does not activate it, the other party is not obligated to carry out the stipulation. This is similar to the halacha that states that an employer does not violate the prohibition against delaying payment of an employees wages until the employee demands payment for his employment (C.M. 339:10). Even if the details of the salary were worked out, the employee must first ask for payment in order to activate the employer’s obligation to pay without delay (Avodas HaGershuni 7, cited in Pischei Teshuvah 73:10).

The other perspective is that once a stipulation is agreed upon, it is immediately binding, and it is not necessary for one of the parties to activate it. An employer does not violate the prohibition against delaying payment of wages to an employee until the employee demands payment because as long as the employee does not demand payment, the employer may assume that the employee is willing to wait for his salary. In cases involving penalty clauses, silence is not an indication that the stipulation was forgiven; it is likely that the party is silent in order to be able to collect the penalty (Erech Shai C.M. 73:6).

In conclusion, there is a debate whether a time-based stipulation becomes activated immediately or whether the one who made the stipulation must demand compliance. Since the matter is subject to debate, it is not possible to force the party that is in possession of the disputed money to pay the penalty.