Laws of Ona'a

  • Rav Shlomo Levy
Based on a shiur by Rav Shlomo Levy
"When you sell property to your fellow, or buy any from your fellow, you shall not wrong one another." (Vayikra 25:14)
     The Torah introduces here a prohibition against "wronging" one another in the commercial realm, a prohibition to which Chazal describe as "ona'a" (based on the terminology in the verse – "al TONU ish et achiv").  What precisely does this prohibition entail?
     The Arukh Ha-shulchan writes (227:1):
"There are two types of ona'a.  The first is ona'a regarding the actual merchandise, when one sells it as quality merchandise that comes from such-and-such place, when it actually comes from a different place, or it is somewhat defective, unbeknownst to the buyer… The second ona'a… applies when the storekeeper knows that this merchandise is now sold in all the stores at such-and-such price and no more, and a certain buyer is not proficient [in the prices], so he takes from him an expensive price, more than the conventional price."
Thus, the prohibition of ona'a includes two halakhot.  First, a seller may not conceal from the buyer important information concerning the item he sells, and secondly, the seller may not raise the prices inordinately.  The first type of ona'a arises in many situations, for example, when a person sells a car and lies about its mileage.  Needless to say, this violates an explicit Torah prohibition, and this applies as well to any item one sells, both new and old.
Raising Prices
     The Gemara states that if a seller misleads the buyer and charges more than one-sixth above the standard sales price, the transaction is null and void.  This halakha gives rise to the question posed by the Rosh as to whether there exists a prohibition against raising the prices even less than one-sixth.  The Arukh Ha-shulchan (227:6) explains the Rosh's ambivalence as follows: Does a person violate the prohibition even by raising the prices less than one-sixth, only the transaction remains valid, or does the prohibition not apply at all when one raises prices less than one-sixth, as this constitutes standard commercial procedure?  In any event, the Rosh concludes, "A God-fearing person should satisfy all opinions."
     The basic question that arises regarding the second type of ona'a is, on what basis do we determine the standard price of a given object?  Today, for example, one can find virtually any item in many different stores at many different prices.  Therefore, in order to determine if a given retailer violates the prohibition of ona'a, we must first decide what is the "normal" price – a very difficult task given the differences in price between different stores.
     To resolve this problem, let us bring several examples of different kinds of products.  Some products are under price supervision, meaning, the law establishes fixed rates.  Here, of course, the situation is very simple: whoever charges even a penny above the fixed price violates the prohibition of ona'a. 
     Other products have a recommended price, or a list price.  On the one hand, one might equate these products with those in the first category, and claim that the list price determines the standard amount for the given product just like those established through legislation.  On the other hand, however, many times prices are intentionally listed higher than the items' true prices so as to give the retailers the appearance of lowering prices.  In these cases, the list price will not help us determine at which amount the seller violates ona'a.  Clearly, however, one who sells for a price higher than the list price violates this prohibition.
     One who sells a product for a much higher price than do the other stores, violates ona'a.  But what if one sells an item for the price charged by the expensive stores?  This will depend on whether or not he in fact charges a set price.  A seller must establish consistent standards and prices.  Often, retailers will inform consumers of a high price, but someone who asks for a discount can purchase the item for a cheaper amount, whereas those who do not ask will pay the full, listed price.  This, as we saw, is forbidden; one violates the prohibition of ona'a when he sells the item to those who do not ask for the discount, since he sells it for more than the actual price.
Unique Circumstances
     According to one view in the authorities, the prohibition of ona'a does not apply on Erev Shabbat.  For example, if on Erev Shabbat a person still has no wine for Shabbat, he is willing to pay more than the accepted price, and therefore one may sell him wine for a higher price.  The Shulchan Arukh (227) cites different views concerning this issue.
     This debate would impact upon the phenomenon of merchants who take advantage of the location where they sell their merchandise.  The buyers understand full well that the price charged far exceeds the standard price, but they realize that this stems from the unique circumstances in which they currently find themselves.  What is the halakha in this regard?
     According to the view presented earlier, it would appear that the prohibition of ona'a would not apply, since this situation directly parallels the case of someone who desperately needs to buy wine on Erev Shabbat.  Even under these circumstances, however, there is an accepted price for such situations, and if a given merchant raises his prices far beyond the amount charged by others who sell in those same locations, he violates the prohibition of ona'a.
     We must emphasize that the prohibition applies even if the buyer knows that the seller overcharges but decides to purchase the item nonetheless.  The Arukh Ha-shulchan (se'if 22) writes, "One who says to his fellow, '[I sell you] on condition that you do not accuse me of ona'a' – he may accuse him of ona'a."
     Halakhic literature speaks of a "nosei ve-notein be-emuna" (literally, "who buys and sells on trust") – the middleman, or wholesaler, who buys merchandise from manufacturers and then sells it to retailers.  He offers to sell it at, for example, a one-percent profit, without assuming any responsibility for the merchandise he sold.  At times, the wholesaler may have purchased the items at a higher price than what is accepted in the market.  Nevertheless, if he then sells it for an even higher price to the retailers, he does not violate the prohibition of ona'a, because he charges a reasonable one-percent profit, and the retailer is aware of the original price and the middleman's profit.  Indeed, the Arukh Ha-shulchan (se'if 30) writes:
"We can extract from what has been explained that those middlemen who sit in large places and purchase merchandise on behalf of stores from cities throughout the country, and they take a specified profit – such as two or three percent, they are not subject to claims of ona'a, for this is precisely the case of 'nosei ve-notei be-emuna.'"
Later in his discussion, the Arukh Ha-shulchan explains that the retailers themselves must be aware of the nature of the merchandise, and the wholesaler bears no responsibility in this regard.
     Needless to say, this assumes that the wholesaler deals honestly.  If, for example, half of his merchandise is at one standard, and the other half is of a lower quality, then when determining the price he must take into account the lower quality of half the merchandise.  If he sells this half based on half the price he paid for the entire stock, then he undoubtedly violates the prohibition of ona'a, since he sells lower quality items at the price he would sell the higher quality merchandise.
Salaries/Service Fees
     The Gemara establishes that the prohibition of ona'a does not apply to the sale of real estate, nor does it apply to the sale of servants, which are halakhically equated with real estate (through a "hekesh").  Obviously, however, one should refrain from overcharging for real estate, as well.
     What is the status of workers with regard to ona'a?  Do we equate them with servants, such that the laws of ona'a would not apply to rendering services?
     The poskim distinguish between two types of workers: a day-worker, and someone hired for a specific project.  If a person works a day-job, he commits his time to his employer, since their arrangement requires that he work for specific hours.  He therefore has the status of a servant, towards whom the prohibition of ona'a does not apply.  A contract worker, by contrast, who did not commit to specific hours of work, differs from a servant and therefore the laws of ona'a apply.  For example, a community's head of security commits himself to do his work whenever his services are needed; he does not commit specific hours to the town.  Therefore, even if he receives a monthly salary, he would have the status of a contract worker, and the laws of ona'a would not apply.
Canceling a Transaction
     As we saw, when the price exceeds the standard price by more than one-sixth, the transaction is null and void.  Does this halakha have a statute of limitation?  For how long after the unfair sale can the buyer demand its revocation?
     The Gemara establishes, and this is indeed the accepted halakha, that the buyer has the period of time necessary to go immediately after the transaction to an expert to inquire whether he paid a fair price.  Clearly, this is not a very long period of time.  This then gives rise to a problem, given the fact that people generally trust sellers and do not run immediately after a purchase to ask if they overpaid.  People usually discover this only sometime later.
     In any event, it would appear that if as part of the price negotiations the seller gave the impression that he charges the standard market price, then the transaction is null and void regardless of how much time transpires.  In such a case, we would consider this misinformation one of the conditions of the sale. Since the buyer agreed to the transaction under a misconception, the sale is automatically null and void, no matter when the buyer comes forth to demand his money in return.