Uri met Chaim at summer camp. Chaim would come each year from Toronto, Canada, to the United States for the summer. The two maintained their friendship beyond camp; when they grew older, they would occasionally visit each other. Sometimes Chaim came to Uri’s house in the U.S., and sometimes Uri went to Chaim’s home in Canada.

On one of Uri’s visits to Toronto, Chaim took a folded piece of paper out of his wallet. “I came across this,” he said to Uri. “Have a look.”

Uri unfolded the paper and saw that it was a signed IOU note: “I, Uri, owe Chaim $100.”

“When is this from?” Chaim asked.

“I don’t remember,” Uri replied. “It’s probably from camp one year. Whatever it is, you owe me a hundred dollars.”

Uri reached into his wallet and pulled out his last Canadian $100 bill.

Chaim looked at the bill. “That’s a Canadian bill,” he said.

“Of course,” said Uri. “What do you want me to pay you here, American dollars? What good are they here?”

“You know that American dollars are worth about 3% more than Canadian dollars,” Chaim answered. “If you borrowed U.S. dollars and pay back Canadian dollars, I’m losing 3%. You’ll have to toss in a package of cookies to fill in the difference,” he added with a smile.

“But maybe it was Canadian dollars that I borrowed on one of my visits here,” countered Uri. “If I give you American dollars, I’m paying 3% more than I borrowed. You’ll have to buy me a package of cookies to return the difference! Anyway, it just says dollars in the note; any kind of dollar will suffice.”

“Obviously, I’m not going to make a fuss over the $3,” said Chaim. “But I wonder what the halacha is? What if it were not $100, but rather $1,000 or $10,000? That’s already a significant difference!”

“How about trying Rabbi Dayan on this one,” suggested Uri. “I’ve got an earpiece for my cell phone that allows us both to listen and talk.”

“That would be neat!” replied Chaim.

Uri called Rabbi Dayan; both he and Chaim listened in.

“If the currency of the loan is not stated clearly, what currency does the borrower have to pay?” asked Uri. “For example, U.S. dollars or Canadian dollars?”

“The borrower has to repay whatever currency he borrowed,” said Rabbi Dayan (Kesubos 110b). “If the currency is not defined explicitly, we presume the currency was of the place where the loan took place. Therefore, if the loan was granted in America, Uri owes U.S. dollars. If the loan was granted in Canada, Uri owes Canadian dollars (C.M. 42:14).”

“What if the place of the loan is unclear?” asked Chaim. “The IOU note doesn’t state the place, and neither of us remembers.”

“In that case, we follow the place where the document was presented, so Uri only has to pay Canadian dollars,” said Rabbi Dayan. “One explanation is that, presumably, the place where the document was presented was also the place of the loan (Sma 42:37). Thus, in the opposite case - the document was presented in the U.S. - if the borrower can prove that they used to live in Canada where the currency is less, he only needs to pay the lesser currency (Rema 42:14; see Shach 42:34).”

“What if the loan was granted in a place where neither currency is used?” asked Uri. “Let’s say the loan took place in a third country.”

“According to this explanation, since there is no indication at all, we would apply the rule of hamotzi mechavero alav hara’ayah - the burden of proof is on the plaintiff,” said Rabbi Dayan. “Thus, the borrower would only have to pay the lesser currency.”

“Does that mean that any dollar loan in Israel can be paid in Canadian dollars?” asked Chaim.

“No, because U.S. dollars are the standard dollar currency used in Israel,” said Rabbi Dayan. “Therefore, the default assumption is that the dollars loaned in Israel are U.S. dollars (see Pischei Choshen, Shtaros, vol. X, 5:48).”