Yanky was going through difficult times.

“My company merged over a year ago and I got laid off,” he poured his heart out to Moish, a neighbor. “I’ve been trying everywhere to get a job, but nothing’s available.”

“How have you been managing meanwhile?” asked Moish.

“Barely, with my wife’s salary and our savings,” said Yanky.

“I’m sorry to hear that,” said Moish consolingly. “Is there some way I can help?”

“If you could lend us $1,000 for four months, that would help greatly,” said Yanky. “I expect to be able to find something by then.”

“I can do that,” replied Moish. “Come by tomorrow. I just ask that you write an IOU note for the loan.”

The following day, Yanky stopped by Moish’s house and received the loan. “We will make every effort to repay on time,” he said.

Three months later, Moish was talking with Yanky. “What’s doing?” he asked. “Any leads with a new job?”

“Unfortunately, nothing yet,” said Yanky. “I had a couple of interviews, but nothing’s panned out.”

“I wish you hatzlacha (success),” Moish encouraged him.

“Thank you,” said Yanky. “We’ve been setting aside a little each month towards repaying you, but now the transmission went on our car. We’re going to have to use that money to cover the repair!”

“How much is the repair?” asked Moish.

“Almost $2,000,” said Yanky with a sigh.

Moish thought for a moment. “You’ve got too much on your head,” he said. “Forget about the loan; you don’t have to repay it.”

“Thank you!” said Yanky. “That will be a big burden off of me.”

A week later, Yanky met Moish. “Guess what?” he said. “I just found a job!”

“I’m glad to hear that,” said Moish. “So you’ll be able to pay back my $1,000 sometime soon?”

“You told me to forget about the loan,” said Yanky with surprise.

“I did,” said Moish. “That was because I thought you wouldn’t be able to come out from under. It’s not like I can easily afford to forgo $1,000. Anyway, I didn’t sign any release or receipt and I’m still holding the IOU.”

“I don’t understand you,” said Yanky. “I am thankful for the loan, but you told me that I didn’t have to repay it! We’re not rolling in money, and a word is a word.“

“Not if said mistakenly,” said Moish. “Anyway, words alone do not always carry legal validity, especially when a document remains extant.”

“I suggest that we consult with Rabbi Dayan,” said Yanky. “If he says that I still have to pay, I will.”

Yanky and Moish arranged to meet with Rabbi Dayan. He listened attentively, and then ruled: “Yanky does not have to repay the loan, even though no formal release was made.”

“Why is that?” asked Moish.

“When you said to Yanky, ‘Forget about the loan; you don’t have to repay it,’ it is considered mechila (forgoing the loan),” explained Rabbi Dayan. “Although most transactions require some formal act or document to be legally valid, mechila is valid with words alone; it does not require any official confirmation, receipt, or kinyan (act of transaction) (C.M. 241:2).”

“But doesn’t the fact that I held on to the IOU note negate the mechila?” asked Moish.

“There is, in fact, a dispute whether mechila with words alone is valid when the lender continues to possess a loan document (shtar),” replied Rabbi Dayan. “However, the Rama indicates that it is valid. Even if we consider the dispute as a doubt, Yanky is in possession of the money and cannot be made to pay. Furthermore, the dispute relates to a loan document signed by witnesses, not an IOU note signed by the borrower alone (Shach 241:4; Pischei Teshuva 241:2).”

“What about the fact that the mechila was made by mistake?” said Moish. “I wouldn’t have been willing to forgo the loan if I had known that he would get a job a week later.”

“You are correct that a mechila made mistakenly is not valid,” answered Rabbi Dayan. “However, this applies only when there was a mistake at the time of the mechila, such as if Yanky had already found a new job. However, if there was no mistake at the time and circumstances only changed afterwards, the mechila remains valid (Pischei Teshuva 241:3).

“Therefore,” concluded Rabbi Dayan, “Yanky does not have to repay the loan and Moish must return the IOU note to him.”