Financial Laws in Judaism - Part 2

July 7, 2014

8 min read


The Torah view of damages, and how to resolve disputes.

Personal Injury

When Moses was in Egypt, he observed one Jew raising his hand to strike another Jew. The Torah records that Moses asked, "Why are you striking your fellow?"1 The Sages note that the offender did not yet hit the other, but had only raised his hand to hit him. Thus we see that merely the act of raising one's hand against another is forbidden.2

It is forbidden to injure another person even if he gave permission to do so.3 Moreover, it is even forbidden for a person to needlessly injure himself.4 God gave us a body to take good care of it and to use it for a meaningful life. We do not "own" our body; it is "on loan" to us.

If one person is attempting to assail another person, it is permitted to injure the assailant, if there is no alternate means of defense.5

Damage to Possessions

The cornerstone of the Torah is sensitivity to the needs of others. Thus an important path to piety is to be careful with other people's possessions and to observe the laws of damages.6 In fact, these laws were taught to the Jewish people even before the rest of the Torah was taught at Sinai.7

It is forbidden to cause monetary damage to someone, even if you intend to later compensate him.8 Even by means of speech, one may not cause others a monetary loss.9

As we described regarding Jacob, material possessions are to be used for accomplishing meaningful goals. Thus the Torah forbids unnecessarily wasting one's assets and resources.10

One who directly damages another person must provide compensation, even if it was done accidentally,11 and even if it was done while the damager was asleep.12

One evening, after a hard day at work, Sid was finishing up some paperwork at home. To shake the cobwebs out of his head, he went outside to get some fresh air. He stumbled out the door and walked all over Mrs. Johnson's prized petunias. Sid must pay for the damages.

In some cases, if damage was merely the indirect result of one's actions, the victim is not entitled to compensation.13

Two teenagers were exploring the woods and discovered a log cabin. They decided this would be an ideal to place to break for lunch. When they left, they neglected to clean up their mess, and as a result attracted a hungry bear to the cabin. Although the bear did considerable damage, the cabin-owner may not demand payment from the teenagers for the loss they indirectly caused.

If someone put someone else's object in a place that it will get damaged, he is responsible.14

To earn extra money, Sophia sometimes cleaned people's homes. While she was cleaning Mrs. Goldsmith's fancy coffee table, she carefully placed the exquisite vase on the window sill. A few moments later, a strong gust of wind blew the antique vase to the floor and it shattered into pieces. Sophia is considered responsible and must compensate Mrs. Goldsmith for her precious vase.

In situations where it is not obvious that the damage was the result of a person's actions, the burden of proof is on the victim.15

Neither a child nor his parents are ever required to compensate for damage that is done by the child.16 However, when the child matures, as part of the teshuva process, it is proper for him to pay for damages committed when he was a minor.17 In certain circumstances, parents may want to go beyond the letter of the law and have the child compensate (at least partially) for damage that he committed in order to teach him a lesson of responsibility.18


When you hear the word "thief," you might envision a burglar stealthily crawling into a window in the middle of the night, or a purse snatcher running away from a screaming lady.

In truth, the category of theft is far more extensive. Most people are ignorant of the extent of these laws and violate them.19

The definition of theft is taking or using something that is not within your right to do so. This is true even if you plan to return it before the owner will know about it. Moreover, it is even forbidden to take something as a practical joke20 or to teach a lesson of responsibility to the owner.21

Tom and Eddie were construction workers and good friends. Eddie would often put down his cellular phone since it would get in the way of his work. Tom warned his friend that he should not leave the phone in unattended locations because there were other people on site who could not be trusted. One day, Tom saw his friend's phone lying around, and he decided to teach Eddie a lesson. Tom is forbidden to hide the phone, even though it is ultimately for Eddie's own good.

Even a small item of miniscule value may not be misappropriated.22

David and Marc were enjoying an afternoon at the ballgame. When Marc stepped out to use the restrooms, David noticed that Marc's open bag of potato chips. David may not taste one of the potato chips unless Marc gives him permission.

Theft is not limited to belongings; it is even forbidden to steal someone's rights. For example, a resident in an apartment building is entitled to sleep at night. The neighbors are not allowed to play loud music at night that will disturb this right.23


The Torah forbids the use of inaccurate scales for business purposes.24 In fact, it is even forbidden to own such scales.25

If a product contains any flaws, it is the obligation of the seller to point it out to the buyer before the deal is completed.26

It is likewise forbidden to cover up existing defects in the products being sold.27 For example, a vegetable store may not place the most desirable strawberries at the top of that the package so the buyer won't realize there is less-desirable produce beneath them.28

Stolen goods

If one did steal, whether intentionally or not, there is an obligation to return the stolen object.29 If the item is no longer available, or if the object has since undergone a significant change, one must provide monetary restitution instead.30

If the owner does not yet know that that item was taken, it may be returned to its original location without needing to inform the owner.31

After Susan came home from the bank, she realized she had accidentally put the bank's pen in her purse. Susan must go back to the bank and return the pen to the desk where she filled out the forms.

It is forbidden to buy stolen goods, since doing so encourages more crime.32


In the course of everyday life, whether in business or in interpersonal relations, monetary disputes are inevitable. The Torah way of dealing with disputes is through peaceful dialogue. If the parties cannot agree on fair compensation, then they should try to reach some form of compromise. If that does not work, then they should seek arbitration in a rabbinical court.33

It is forbidden to pursue a case in civil court, unless the rabbinical court grants permission to do so.34 Typically, such permission is granted only in the event that one of the parties refuses to come to the rabbinical court.35

Sanctifying God's Name on Wall Street

The Jewish people are expected to teach truth and morality to the world36 by reflecting Godliness in our behavior. Thus a Jew must be particularly careful with financial matters37 lest one come to desecrate God's name. On the contrary, if a Jew can maintain propriety in an environment of corruption and dishonesty, it will sanctify the Name of God and serve as a role model for others, as a "Light unto the Nations."

  1. Exodus 2:13
  2. Talmud – Sanhedrin 58b; Rashi (Exodus 2:13)
  3. Shulchan Aruch HaRav (Nizkei HaGuf 4)
  4. Choshen Mishpat 420:31
  5. Choshen Mishpat 421:13
  6. Talmud – Baba Kama 30a
  7. Tanna D’Bei Eliyahu 4:4
  8. Sma (Choshen Mishpat 378:1)
  9. Shulchan Aruch HaRav (Nizkei Mamon 1)
  10. Rambam (Melachim 6:10); Shulchan Aruch HaRav (Shemirat HaGuf ViHanefesh 14)
  11. Choshen Mishpat 378:11
  12. Choshen Mishpat 421:3
  13. See Choshen Mishpat 386. These issues are best left for a rabbi to evaluate.
  14. Pischei Choshen 5:1:19
  15. Choshen Mishpat 399:3
  16. Choshen Mishpat 424:8
  17. Mishnah Berurah 343:9
  18. See Mishnah Berurah 343:9
  19. Talmud – Baba Batra 165a
  20. Choshen Mishpat 348:1
  21. She'iltat D’Rav Achai Gaon (Parshat Noach 4)
  22. Choshen Mishpat 348:1 359:1
  23. Pischei Choshen (vol. 4, pp. 432-433)
  24. Leviticus 19:25
  25. Deut. 25:13
  26. Choshen Mishpat 228:6
  27. Choshen Mishpat 228:9
  28. Based on Choshen Mishpat 228:10
  29. Leviticus 19:23
  30. Choshen Mishpat 360:1
  31. Choshen Mishpat 355:1
  32. Choshen Mishpat 356:1
  33. Rabbi S. Wagschal’s Torah Guide for the Businessman [Feldheim], pg. 22
  34. Choshen Mishpat 26:1
  35. Choshen Mishpat 26:2
  36. See Radak (Isaiah 51:4)
  37. See Rambam (Yesodei HaTorah 5:1)
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