This Mishnah continues to talk about the laws of documents, specifically a loan document that was partially paid. The Mishnah says that somebody owed money to another person and paid back part of his loan. The loan was already recorded in a document. Let’s say $100,000 was borrowed, and $50,000 was paid back. With the borrower’s consent, the lender took the loan document and gave it to a third party to hold. They sort of placed the responsibility with that third party, who was going to be the middleman between them to handle the continued repayment of the rest of the debt.
Normally, in this type of situation, the lender would still hold on to the document, but he would write a receipt for partial payment and give it to the borrower. The borrower would hold on to that receipt in case there was a miscommunication and the lender didn’t realize that part of the loan had been paid back. Here, they don’t want to have to deal with writing a receipt and keeping records, so they want to hand the situation over to a third party. He would hold on to the document until the balance was fully paid off. The document could be used to collect the debt, so they don’t want to leave it in the lender’s hands. If no receipt was written, he could claim that he was owed the full amount. This third party was going to keep track of how things developed.
The borrower said to the third party, “If, between now and a certain date, I don’t give you the balance of the loan, give the lender back his document so he can collect the entire amount one more time. If that occurs, the money I’m giving him now would be considered a matana (gift).” The borrower is creating a condition that would push and incentivize him to get the rest of the money paid back by a certain date, because the document the third party is holding is a bill—a document that could be used to collect the entire amount. No receipt was written here. So the borrower tells the third party, “I’m going to pay it back by this time. If I don’t, you can give the document back to the lender, and he can use it to say that I never paid him at all and get all of the money that was originally loaned out.” Paid for. “And the money that I already paid is considered to be gone. It’s considered to be a gift.”
What happens if that date arrives and the borrower never repays the rest of the loan? We have the machloket (dispute) about what the third party has to do. He takes the document he was holding and gives it to the lender. The borrower now has that penalty. He accepted it upon himself. He didn’t have to do that. He put himself in a situation where he’s now paying back much more money than he originally intended. We said he paid back $50,000 of the $100,000 debt. That $50,000 is considered to be a gift, and the lender has the ability to collect the entire $100,000 again.
He says the third party should not give the document back to the lender. The borrower agreed to the penalty only because, in his mind, he was definitely going to pay things back. He had no situation in mind in which he wasn’t going to make this repayment on time. Therefore, since that was his mindset at the time, the agreement he made isn’t considered legally binding. This is called an asmachta agreement, a conditional commitment. There is a machloket between Rabbi Yose and Rabbi Yehuda. This applies according to Rabbi Yose: an asmachta agreement is binding. The condition was fulfilled: the date arrived, and therefore the person has to pay. So the third party would give the document back to the lender, and the lender would use it to collect again. That is the penalty the borrower has to face.
But according to Rabbi Yehuda, an asmachta agreement like this is never really binding. The person never meant to commit himself; he thought the situation would never arise. Therefore, Rabbi Yehuda says it isn’t considered a binding situation. The third party holds on to the debt. He holds on to the document and ensures that the borrower continues to pay the missing $50,000 so that the lender gets his full amount back.