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 Shabbat Parashat Behar| 5765Ask the RabbiQuestion: Our daughter was accepted to a seminary, and we paid $1,500 as a non-refundable registration fee to hold a spot. She decided to attend a different institution. When we informed the first seminary, they refused to return the money. Given that another girl has already replaced our daughter, do they have the right to retain the money?
Answer: We wish you in advance nachas from your daughter’s spiritual gains during her studies in whatever fine institution she will attend. The willingness of people like you to part with their children for a while and spend much hard-earned money has revolutionized our community. We will address both the halachic and moral elements of the question, as Torah institutions should conform to both. We will start with institutions’ rationale for this common policy, which is important for both aspects. (We cannot say anything authoritative without hearing both sides’ claims in beit din.)
Firstly, these institutions incur heavy expenses well before students arrive. This includes transportation for recruitment teams and tens of hours of administrational work to name just a couple of costs which reach tens of thousands of dollars. It is logical that applicants defray costs and that those who complete the process pay more. But $1,500 seems too much for defraying costs.
The main logic of the payment’s non-refundable nature is preventative. Often institutions will have fewer students (and less money to pay expenses) if students can freely change their minds. A student’s change of decision can have a domino effect on her friends, which can severly damage an institution. Even if they can be replaced numerically, in the meantime, the top wait-listed students usually commit elsewhere. Replacing a few top students with others who are marginally suitable can affect the character of a school’s student body and its reputation in the short and even the long term.
The fact that the money is non-refundable also puts the student and parents in a mind-set of certainty about their choice. Then, like an engaged couple, one does not consider changing her mind, unless a serious mistake surfaces. This mind-set usually benefits all. Students remain positive, and seminaries can hire a staff that suits the incoming student body. While $1,500 sounds like a lot (and might be a little high), if it were much lower it would not sufficiently deter cancellation.
Now we can examine the halachic issues. You hired a seminary to teach your daughter. Usually, an employer can break an employment agreement, even if a kinyan was done on it, without paying the salary, if the worker can find alternative employment (i.e. another student) (Shulchan Aruch, CM 333:2; see Pitchei Choshen III, 10:7). However, there is a rule that conditions made to change standard financial arrangements are binding (Ketubot 56a). You tacitly agreed to the stipulation of non-refundable payment and made the agreement final by transfering the money unconditionally.
Your only claim is asmachta, that an exaggerated obligation that one accepted because he did not think it would come to fruition is not binding (Choshen Mishpat 207). However, the Shulchan Aruch (ad loc.:11) says that if one already gave money as a guarantee, he cannot demand it back. Although the Rama (ad loc.) argues, one cannot extract money from a muchzak when there is a serious contending position. The seminary may have additional claims to justify their position (see ibid.:16, regarding penalty clauses to prevent damage and Tosafot, Bava Metzia 66a regarding accepted practices). To shorten and over-simplify a complicated matter, it does not appear, based on what we know, that you can halachically demand the money back.
Just as it is a mitzva for you to see the seminary’s side of the matter, so it is for them to see your side. If you can convince them that: 1) you were confident your daughter would attend; 2) something arose to turn that into a wrong decision; 3) it turns out they were not seriously damaged by the withdrawal, then we hope they will return much of the deposit.
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