Bava Metzia 73 - Forward Contracts with High Risk (Finds)

Before the grapes ripen, a buyer can pay in advance for the wine yield of a vineyard. He pays much less than the estimated value of the wine.

Rav forbids it: since the wine will be worth much more in the future, it resembles a "reward for waiting," or interest. Shmuel permits it: sometimes a misfortune can befall the vineyard, and the reduced price is due to accepting risk. And Rav? – The slight chance of loss does not justify the significant price reduction. The law follows Rav. But Rav agrees to Shmuel, where harvesting is done with the aid of oxen because of the high risk to the oxen.

Art: Figures and Animals in a Vineyard by John Frederick Lewis

Bava Metzia 72 - Guarantor and Loan Assumption (Finds)

One may act as a guarantor for an interest-bearing loan advanced by a non-Jew to a Jew, structured so that there is no interest payment if the borrower pays back to the guarantor.

One may assume an interest-bearing loan given by a non-Jew to a Jew, but the non-Jew must agree, for otherwise, one would, in fact, be paying interest to the first borrower, who would then be paying it to the lender.

If a non-Jew lent money on interest to a Jew and then converted, he may still collect interest if, before his conversion, he establishes it as a new loan, in the amount of principal plus interest.

Art: Rudolph Ernst - A Hard Bargain

Bava Metzia 71 - Taking Interest from Non-Jews is also Prohibited (Finds)

King Solomon and his court prohibited taking interest from non-Jews, as it says in Proverbs, "One who increases his wealth by interest collects it for he who favors the poor"- and who will distribute the interest to the poor after the usurer's demise.

This prohibition is because if the financier becomes used to taking interest, he may come to take it from Jews, too. Excluded are cases of minor interest, "enough to live on," and Torah scholars who know the law and will not come to take interest from the Jews. Later on, taking interest from non-Jews became permitted since it was not possible otherwise.

Art: King Solomon by Simeon Solomon

Bava Metzia 70 - When Interest is Allowed (Finds)

One is not allowed to invest in a business venture in which he shares in profits but not losses or in which his proportionate share of profits is greater than that of his losses. The guaranteed part of the investment is then a loan, and its profit is a form of interest prohibited by the Sages.

However, one is allowed to invest the money of orphans where they stand to gain more than to lose by a court appointee.

One is allowed to loan on interest to a non-Jew. In fact, there is nothing wrong with charging interest, but the Torah wants all Jews to behave like family members.

Art: Young Beggar by Bartolome Esteban Murillo

Bava Metzia 69 – Half-and-half Venture (Finds)

One can assign an animal to a shepherd to be raised, sharing in profit and loss. The shepherd needs to be paid wages; otherwise, his service constitutes interest on that half of the animal, which is a loan. The offspring represents profits and can be divided.

If the shepherd continues to care for the offspring after the prescribed time of growth, he now takes 3/4 of the new profits. Half of the offspring is his, and the other half constitutes a new half-and-half venture.

One may pay an independent son of a lender to obtain a loan from his father, and it is not considered interest.

Art: A Shepherdess And Her Flock by Cornelis van Leemputten

Bava Metzia 68 – Joint Venture Avoids Interest Prohibition (Finds)

Originally, the financier supplied the capital, and the managing partner conducted the business. They would share equally in the profits. If the venture failed, the financier would sustain the loss.

Since financiers were not eager, the Rabbis enacted that the managing partner sustains a share of the losses, corresponding to his share of the profits. Now, half of the capital is essentially loaned to the managing partner since he is responsible for returning it intact. Thus, the managing partner receives profit from his half of the capital and manages the financier’s half for free. This free service constitutes interest, so the managing partner must also receive wages.

Art: Double portrait of two men by Jacopo Tintoretto

Bava Metzia 67 - Excessive Penalty on Default is Illegal (Finds)

The rule that the lender takes a field pledged for a loan of smaller value is only sometimes valid. It applies only to a case where the borrower transmitted the field to the lender at the beginning of the term so that the sale is canceled retroactively upon payment. In the interim, the produce is deposited with a third party because, for the lender, the crop may constitute interest if the borrower pays, and the borrower can't take it because the field is not his.

Typically, however, any agreement that calls for an excessive penalty IF the party defaults is NOT binding. If the borrower mistakenly gives the field up, the lender returns the field and the fruit he collects.

Art: Slender with the assistance of Shallow Courting Anne Page by Charles Robert Leslie