Shabbat Parashat Lech Lecha| 5766
Canceling a Publishing Agreement Due to Breech of Contract - Part I - Based on Piskei Din Rabbani’im, vol. VI, pp. 116-131
Case: An author made a binding agreement with a publisher to publish his book. The publisher received the right to sell the book and was required to pay royalties to the author as editions were published. The publisher was significantly behind in his payments, citing large debt. The author died, and his inheritors want to nullify the contract because it was breeched or use the rights to the book as a means of payment. [We will discuss the topic in two parts: 1) whether late payment voids an agreement; 2) whether inheritors have to uphold this type of agreement.]
Ruling: Generally, a buyer’s lack of payment does not cancel a sale; rather, the seller should enforce his right to payment rather than renege. However, if the seller was openly concerned about receiving payment, payment is required for the sale to be final (Bava Metzia 77b). In our case, the author expressed his concerns. However, this halacha may not apply here, because the payment was anyway not due with the completion of the agreement but as the distribution ensued. The Shulchan Aruch (Choshen Mishpat 190:15) rules that even when payment was due later, if one demanded that the money be paid at a set time, lack of payment cancels the agreement. However, in our case, while the conditions for payment were set, the exact time of payment was not. Furthermore, an agreement is canceled only when the seller inquires about the money on its due date (ibid.:16), which did not happen. Thus, the author should not be able to cancel the agreement.
On the other hand, the Netivot Hamishpat (190:7) says that if when confronted with the seller’s desire to break the deal, the buyer is still unprepared to pay, the sale is void. However, not everyone accepts the Netivot’s thesis. Furthermore, the sources upon which the Netivot is based indicate that this is so only when the payment was supposed to be immediate. Thus, the author should not be able to back out of the agreement.
There is another reason not to allow the author to renege. In the classic case of a sale of an object, it is more logical for a sale’s finality to hang in the balance until payment. However, in this case, there is no transfer of an object that obligates the publisher to pay. Rather, the steps he takes obligate him, based on the agreement, to provide payment to the author. This payment is thus a more general type of monetary obligation, in regard to which we do not have precedent that late payment undoes the agreement.
The plaintiff’s claim that even if the agreement is not null, he should be able to demand the book’s rights as payment is incorrect. The Nachal Yitzchak demonstrates that asking for the sales item as payment is tantamount to nullifying the sale, even if one phrases it as a form of payment. Therefore, the agreement bound the author. [Next week we will discuss the issue of the author’s inheritors’ involvement in the matter.]
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