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    -- Iska B: When Merchandise is for Personal Use

Iska B: When Merchandise is for Personal Use

When a customer buys merchandise for personal use, and not to generate a profit, the previous Heter Iska should not be used. This is because the merchandise does not generate profit in a direct way. Still, since the customer does not immediately have to pay for the merchandise, he has more money available for other investments. In exchange for the merchandise, he may accept the seller as a partner in these investments and share their profits with him. The following Heter Iska accomplishes this.

Iska Contract1

I, the undersigned, hereby acknowledge receipt of merchandise valued at $________ from ________________ (hereafter referred to as the "Investor"), subject to the following terms:

In exchange for the aforementioned merchandise, the Investor shall aquire a share (in the value of the merchandise recieved) in any investment, real estate or business which I own2. This investment shall be owned jointly by the Investor and myself. Any profits realized or losses sustained shall be shared equally between the Investor and myself.

Any claim of loss must be verified through the testimony of two qualified witnesses in, and under conditions acceptable to, an Orthodox Jewish court of law. Any claim regarding the amount of profit generated by this merchandise shall be verified under solemn oath, before and under conditions acceptable to, an Orthodox Jewish court of law.

It is agreed that if I pay the Investor the sum of $________ (enter amount that is due) on or before _____________ (enter date that payment is due) as payment of both the investment and the profits which are generated, then I will not be required to make any further payment nor will I be required to make an oath.

I have received one dollar from the Investor as payment for my services during the term of our partnership.3

It is agreed that any dispute which may arise in connection with this agreement shall be submitted before ________________.4 Judgment rendered by the aforesaid authority may be entered in any court having jurisdiction thereof. This agreement shall follow the guidelines of Heter Iska as explained in Sefer Bris Yehudah and has been executed in a manner which effects a legal transfer and obligation, known as kinyan sudar.5

Signature of the Recipient ________________________

Dated ______________

Signature of the Investor6 ________________________

Dated ______________


In witness whereof the above-mentioned parties have entered into this Heter Iska agreement on this _________ day of __________.

Signature of Witness ________________________

Signature of Witness ________________________


1. Hebrew versions of a Heter Iska suitable for use in this situation appear in Tam Ribbis p. 307 and Mishnas Ribbis p. 257.

2. If the customer does not own any type of investment, the previous sentence should be replaced with the following: "In exchange for the aforementioned merchandise, the Investor will aquire partnership in any future investment which I shall make. The Investor appoints me as an agent to execute this investment (or investments), as I deem appropriate, on his behalf." [The Investor should add his signature to the bottom of this document.]

3. The purchaser should pay one dollar to the trader.

4. This part of the contract is optional.

5. The supplier gives a handkerchief (or another utensil or item of clothing) to the customer. In exchange, the customer obligates himself to the terms of the Heter Iska. This is not required when the Heter Iska is signed before the delivery of the merchandise.

6. This part of the contract is optional, depending on whether the parties prefer to have witnesses attest to their agreement.

Reprinted with permission of ArtScroll/Mesorah Publications, Ltd. from "The Laws of Ribbis: The Laws of Interest and their Application to Everyday Life and Business" by Rabbi Yisroel Reisman

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