ONA'AH (Heb. אוֹנָאָה; "overreaching"), the act of wronging another by selling him an article for more than its real worth or by purchasing from him an article for less than its real worth.
Origin and Nature of the Prohibition
The prohibition against ona'ah has its origin in the Pentateuch, "And if thou sell aught unto thy neighbor, or buy of thy neighbor's hand, ye shall not wrong one another" (Lev. 25:14). The passage was construed by the scholars as relating to overreaching in monetary matters, and they distinguished three degrees of this, according to whether the discrepancy amounts to one-sixth, less than one-sixth, or more than one-sixth of the value of the article (see below). The law of ona'ah
Three Degrees of Ona'ah
In the case where a person has overreached by one-sixth, the transaction is valid, but he must make good the discrepancy to the injured party (BM 50b). The discrepancy of one-sixth is calculated on the market value. If the discrepancy amounts to less than one-sixth, the transaction is valid and the difference need not be made good (Yad, loc. cit. 12:3). As regards sales and purchases transacted by minors, the scholars, having noted that their transactions shall be valid for the sake of insuring their vital needs, also laid down that, even though minors have no legal capacity to waive their rights, their mistake shall nonetheless be treated in the same way as the mistake of an adult (Sh. Ar., ḤM 235:3), and they must be deemed to waive their right in respect of overreaching amounting to less than one-sixth. If the discrepancy amounts to more than one-sixth, the transaction is void, but the injured party may waive his right in respect of the overreaching and uphold the transaction (Yad, loc. cit. 12:4). Some scholars held that the party who has overreached may insist on voiding the transaction even though the injured party is willing to waive his rights in the matter (Tos. to BM 50b).
Contracting Out of the Law of Overreaching
A stipulation between the parties stating, "on condition that there is no overreaching therein" (i.e., in the transaction), or "on condition that you have no claim of overreaching against me," is invalid (Sh. Ar., ḤM 227:21), since the language used implies a stipulation contrary to a prohibition laid down in the Torah and one may not stipulate to set aside the Pentateuchal law; however, when the amounts involved in the transaction are specified, a stipulation of this nature is valid, since the injured party knows the precise amount of the overreaching to which he waives his right, and all stipulations in monetary matters are valid (ibid. (mamon) see also *Contract). If the parties agreed that the purchase price be determined by the valuation of a third party, the parties to the transaction will have a claim against each other for overreaching if it is later found that the valuer erred in his valuation (Sh. Ar., ḤM 227:25).
Property Not Subject to the Law of Overreaching
Four items are not subject to the law of overreaching: land, slaves, deeds, and consecrated property (hekdesh; BM 56b). "Even though it is a decree of the Torah, yet the matter must to some extent be amplified by logical reasoning. For a person sometimes buys land for more than its worth, and the scholars called land something that is always worth the money paid for it. Contrariwise, when a person is in need of money but finds no purchaser, he sells it (land) for much less than its worth, since it is impossible to carry land from place to place. Similarly, slaves are sometimes the source of trouble, yet a person who is in need of a slave may be prepared to pay a high price for him. As regards deeds which are due for payment, these are sometimes subject to depreciation because of the financial position of the debtor or his aggressiveness. Concerning consecrated property in the Temple period, it was decided that 'if hekdesh worth a maneh had been redeemed for the equivalent of a perutah, the redemption was valid' – hence, in the sale of consecrated property also there is no law of overreaching, even though the Temple treasury be wronged, so that the buyer cannot retract since 'a verbal undertaking in favor of the Temple treasury is as a delivery to the common man'" (Arukh ha-Shulḥan, ḤM 227:34).
The law of overreaching applies neither to the sale nor the leasing of land (Yad, Mekhirah 13:14). Anything which is attached to the land is subject to the same law as the land itself, provided that it is dependent on that land itself (Sh. Ar., ḤM 193). An opinion was also expressed that the same law applies to both, even when the article attached to the land is not dependent on that land itself (Rema, ad loc.). A very early opinion that land outside Ereẓ Israel is considered as movable property and subject to the law of overreaching was rejected (Tur., ḤM, 95:4).
There is no overreaching as regards slaves, since the law of slaves is analogous to the law of land (BM 56b. See *Slavery). Hence it was laid down as halakhah that the law of overreaching does not apply to the hire of laborers, because it is as if the employer buys the laborer for a limited time and the latter's position is assimilated to that of a slave required for a limited period (Yad, Mekhirah, 13:15). The opinion that the law of overreaching applies to a contractor (kabbelan; Yad, loc. cit. 13:18) is disagreed with by certain scholars (Nov. Ramban, BM 55a; Maggid Mishneh, Mekhirah 13:15). A minority opinion that the hire of a laborer is subject to the law of overreaching was rejected (Resp. Maharam of Rothenburg, ed. Prague, no. 749; see also *Labor Law). There is no law of overreaching as regards a Hebrew slave (Minḥat Ḥinnukh, no. 337).
There is no overreaching as regards bonds, but money bills issued in different countries at the instance of the government are treated as money in all respects since they are officially issued and are taken in payment; however, shares and the like which are not officially issued are apparently like deeds and not subject to the law of overreaching (Pitḥei Teshuvah, YD 305, n. 7 and ḤM 95, n. 1).
The scholars expressed differing opinions on the question of whether enormous overreaching gives ground for invalidating a transaction relating to land, slaves, or deeds; one view is that the transaction may be invalidated when the overreaching
In the Temple period the law of overreaching did not apply to consecrated property (BM 56b; Yad, Mekhirah 13:8), but "in these times" the law of over-reaching does apply in respect of consecrated property and property dedicated to the poor (ḤM 227, n. 48; see *Hekdesh). Although it was enjoined, "if you shall sell" the law of over-reaching applies to coins (BM 51b), despite the fact that a coin is not something that is sold (ḤM 227, n. 26).
Further Cases of Exclusion from the Law of Overreaching
The accepted opinion is that the law of overreaching does not operate in a transaction of barter (see *Acquisition, Yad, Mekhirah, 13:1; Sh. Ar., ḤM 227:20). In the opinion of some scholars, utensils and animals that are stock in trade are subject to the law of overreaching even when bartered, and the rule excluding overreaching in barter was laid down solely in respect of property traded by a layman (Resp. Radbaz, no. 1340, and see below).
"ONE WHO TRADES ON TRUST"
There is no overreaching as regards "one who trades on trust" (BM 51b). "How so? If the seller said to the purchaser 'I purchased this article for so and so much and I wish to earn thereon so and so much,' the purchaser will have no claim against him for overreaching" (Arukh ha-Shulḥan 227:28), "even if the overreaching amounts to more than one-sixth" (Yad, Mekhirah 14:1). On the other hand, the scholars laid down that raising the prices of commodities beyond the accepted level, or beyond those fixed by the competent authority, amounts to a transgression of the prohibition against profiteering.
The law of overreaching does not apply to the sale of apparel because the owner would not sell such articles except if he received the price he demanded (BM 51a), and this is so even when he is known to have sold these items on account of financial hardship (Resp. Rosh, no. 105:3). The scholars differed as to whether or not the "layman" has a claim in respect of overreaching (Shitah Mekubbeẓet loc. cit.; Maggid Mishneh, Mekhirah 13:2). It was held that if he has sold articles which are normally traded, he will have a claim in respect of overreaching (Ḥananel, BM 51a).
The law of ona'ah does not operate in respect of property sold through an agent. If the agent is overreached in any manner, the sale is void since his principal may say, "I delegated you to act to my advantage and not to my detriment" (Kid. 42b; Yad, Mekhirah 13:9). If the purchaser is the injured party, some scholars hold that the sale is void, as it is in the reverse case, but the accepted opinion is that in this case the law applies as if the agent were acting independently and the purchaser waives a discrepancy of less than one-sixth (Rosh, loc. cit.; Sh. Ar., EH 104:6). When the fact that a party was acting as an agent remained undisclosed, the sale will be valid as long as the overreaching did not reach the stipulated measure (Yad, Sheluḥin 2:4). The principal has the right to retract on account of overreaching even in matters which are not otherwise subject to the law of overreaching (Sh. Ar., ḤM, 227:30). He has the right either to void the sale or to uphold it, but the purchaser is not entitled to seek its invalidation (Netivot ha-Mishpat, Mishpat ha-Urim 185, n. 8).
The law of overreaching is the same for a guardian (see *Apotropos) as it is for a principal (Sh. Ar., ḤM 227:30), even when the former is appointed by the court (Mekhirah 13:9). A partner who has bought or sold is subject to the same law as a person who has bought or sold his own property, since this is not a case in which it may properly be said, "I have delegated you to act to my advantage and not to my detriment" (Siftei Kohen, ḤM 77, 19). A broker who has an interest in the property sold is held by some scholars to be in the same position as an agent (Netivot ha-Mishpat, Mishpat ha-Urim, 222, n. 16), while another opinion is that his position is equated with that of a partner (ḤM 227, n. 42; see also *Shalish). The law of overreaching does not apply to transactions negotiated by the "seven senior citizens" (i.e., public representatives) on behalf of the community (Ran on Rif, Meg. 8a; Rema, OH 153:7; Taz, thereto, n. 8).
Division of Property by Brothers or Partners
The law of overreaching applies to the division of inherited property by brothers or partners, since their position is assimilated to that of purchasers. This rule applies to partners in respect of the partnership property only and not to a mere profit-sharing or business partnership (Arukh ha-Shulḥan, ḤM 8, 227:338; see also *Ownership).
Claim for Restitution or Invalidation of a Transaction
A purchaser who wishes to claim restitution or to invalidate a transaction on the grounds of overreaching must do so within the time it would take for him to show the article to a merchant or other person from whom he may ascertain its market price (Sh. Ar., ḤM 227:7). Longer delay entails forfeiture of his right, but he need not pay the price if he has not yet done so (Siftei Kohen, thereto). If the injured party is the seller, he may retract at any time since he no longer holds the article and cannot show it to a merchant (BM 50b; Yad, Mekhirah 12:6; Sh. Ar., ḤM 227:8). However, if the seller should ascertain the value of the article and thereafter fail to claim restitution of the amount of the overreaching or invalidation of the sale, he will forfeit his right to do so (Yad and Sh. Ar., loc. cit.), but another opinion is that the seller retains this right at all times (Maggid Mishneh, Mekhirah 12:6).
Further Remarks on the Nature of Ona'ah
In addition to comments above regarding the nature of the law of overreaching, it may be regarded as derivative of the prohibition of robbery, and the Talmud indeed discusses the relationship between overreaching and theft (BM 61a). However, it is more likely that this law was an innovation of Jewish law, being a separate prohibition in its own right, since the prohibition of overreaching has many unique characteristics, as indicated by the details of the laws discussed above, and because the prohibition does not apply to a sale to non-Jews (Yad, Mekhirah 13:7; Sh. Ar, ḤM 227:26), whereas the prohibition of theft applies to the non-Jew as well.
Certain authorities even regard the prohibition as being religiously based, unrelated to civil law (Rabbenu Hanannel, BM 51b; Asheri, BM 4:7), indicating that this law originated from the ethical imperative of conducting business fairly and amicably, based on the verse "that your brother may live with you" (Lev. 25:36).
The unique nature of the prohibition against overreaching is expressed by the conditions of its application: (1) The article to be sold must have a known market value; (2) the buyer must be unaware of this market value. These conditions severely impede the implementation of the law in our times, as the vast majority of items sold do not have a fixed, uniform price, and prices may vary considerably from place to place and among different vendors. Furthermore, a buyer would have difficulty in convincing a court that he did not know that prices of goods are likely to vary.
The Law of Overreaching and Acts of Public Authorities
Actions of a public authority in the areas of finance and commerce differ from those of the private person, in that a public authority must exercise a higher degree of seriousness, integrity, and fairness. One of the manifestations of the special standing of the public authority is that the law of ona'ah does not apply to public authorities. Where a public authority sells something, it cannot revoke the sale by claiming that the consideration for the sale was too low, to the extent of constituting ona'ah – invoking the talmudic rule that where the contract price was a sixth below the fair price, the seller, who is the injured party in this case, cannot rescind the transaction.
The rationale given for this principle is that "it is unseemly for the community to say: We have made a mistake" (R. Solomon b. Simeon Duran, Algiers, 15th century – Resp. Rashbash, no. 566). This principle and its sources in Jewish law were cited and relied upon in the Israeli Supreme Court in the Lugasi case (HC 376/81 Lugasi v. Minister of Communications, 36 (2) PD, 449, pp. 465–471, per Justice Menachem Elon, in the context of the obligations of a public authority in its business dealings.
[Menachem Elon (2nd ed.)]
J.S. Zuri, Mishpat ha-Talmud, 5 (1921), 70–76; Gulak, Yesodei, 1 (1922), 64–66; 2 (1922), 153–60; P. Dickstein, in: Ha-Mishpat ha-Ivri, 1 (1925/26), 15–55; Herzog, Instit, 1 (1936), 112–7; 2 (1939), 121–4; E.Z. Melamed, in: Yavneh, 3 (1942), 35–56; ET. 1 (19513), 153–60; B. Rabinowitz-Teomim, Ḥukkat Mishpat (1957), 113–40, Elon, Mafte'aḥ, 1f. ADD. BIBLIOGRAPHY: M. Elon, Ha-Mishpat ha-Ivri (1988), 1:113, 574, 642; 2:1101, 1106; idem, Jewish Law (1994), 1:127; 2:707, 795; 3:1324, 1330; idem, Jewish Law (Cases and Materials) (1999), 274–75; S. Warhaftig, Dinei Misḥar ba-Mishpat ha-Ivri (1990), 51–94; I. Warhaftig, "Halikhot Misḥar – Ona'ah u-Mekkaḥ Ta'ut," in: Teḥumin, 2 (1981), 471–92; Y. Ahituv, "Kalkalah ve-Halakhah," in: Teḥumin, 12 (1991), 145–70.
Source: Encyclopaedia Judaica. © 2008 The Gale Group. All Rights Reserved.