Lesson #105: Difficult Partnerships
A businessman approaches his fellow and asks if hewould enter into a partnership with him.
"There's a building I would like to buy," heexplains, "but I already have too many properties under my name. Let's buy it together and we'll go 50/50 –but it will have to be entirely under your name."
The fellow realizes that this is an attractiveoffer, but that it comes with a good deal of risk. Since the building will be solely under hisname, the bank will hold him exclusively responsible. If the other partner is at any point unableto come up with his share of the mortgage payment, he will have to make theentire payment.
He goes over to his friend who knows that otherperson, and asks him what he thinks.
"You know this guy," he says. "Do you think I can trust him? Is he honest and reliable? Does he treat his partners well?"
What is the friend allow to divulge in such asituation?
If the friend knows that this businessman isdishonest and cannot be trusted, then he must advise the other fellow not toenter into a partnership with him. Assuch a partnership runs the real risk of financial harm, he must urge him todecline. He should simply say, "It's nota good idea," or "Don't do it," without providing any additionalinformation. If the fellow asks fordetails, that he explain why he does not advise going into the partnership,then he is allowed to say that he does not think the businessman ishonest. Initially, however, he shouldurge him to decline without speaking negatively about the one who offered thepartnership.
This is not the case if the friend feels that thebusinessman is trustworthy, but knows that his financial condition is currentlyunstable. Although this poses some levelof risk to the prospective partner, who will have to come up with the mortgagepayments on his own if the partner cannot pay his share, nevertheless, thefriend is not permitted to share this information with the fellow whoinquired. The reason is that thebusinessman's current difficulties do not necessarily mean that he will beunable to make his mortgage payments going forward. Since his situation does not definitively posea risk, the person who was consulted is not permitted to inform the prospectivepartner about the man's current state of financial instability. He is, however, permitted to advise theprospective partner to do some research into the businessman's situation, or tooffer to help him through the process of due diligence so he can make aninformed decision as to whether or not the partnership would be too risky. Buthe may not directly reveal to the prospective partner that the other fellow iscurrently struggling.
He may directly reveal this information, however, ifthe prospective partner explicitly tells him that he wants to ensure the otherperson's financial stability. Forexample, if he says, "I myself am not doing so well right now, so I need tomake sure that he will be able to cover for me if I am unable to pay my shareof the mortgage," then the person whom he consults should inform him of theother fellow's struggles. In this case,the decision of whether or not to enter the partnership hinges on the man'sstrong financial footing, and so the friend who is consulted is permitted toshare this information in order to advise the prospective partner.
Finally, if the friend knows that other people hadlost money after going into partnerships with this fellow, then he must advisethe person who is consulting with him not to enter into the relationship. If this businessman has a history of causingpartners to lose money, this partnership poses a risk, and so the friend must advisethe prospective partner to decline. Heshould do so without maligning the fellow, and should instead simply inform hisfriend that he does not think it is a good idea.
A partnership is a serious matter, and we must bevery careful before entering into any sort of partnership. At the same time, however, we must avoidunnecessarily sharing negative information that can ruin a fellow's reputation,and ensure to share such information only in circumstances when Halacha allows doingso in the interest of saving our fellow from potential harm.