I Broke or Damaged An Item – Do I Pay Full Retail Price or The Owner’s Cheaper Cost Price? [#103]

I Broke or Damaged An Item - Do I Pay Full Retail Price or The Owner's Cheaper Cost Price?

Today we’ll be discussing a fundamental question of how to assess the price of something that was damaged or broken etc.

This won’t be an all-encompassing video and we may make following up ones for different variants, but in general, how do you establish the market value of an item when there was damage done? We're using a sefer from R’ Tzvi Shpitz titled, Cases In Monetary Halacha.

He brings two examples. One case is, a person is shopping in a store and breaks an item, and that item had a ticket price of let’s say $50, but you know yourself that price really only cost that store owner $30, because he buys from a wholesaler, that's how he makes his profit, the $20 margin.

One might say, “Hey, I didn't cause him a $50 loss, I only caused him a $30 loss, so I only have to pay $30”. And unfortunately, this makes lots of machlokes, and be’ezras Hashem through this video we can help settle that and make it less. But the question is, is do you have to pay the $50? Or maybe you're right, it only costs him $30, so you may only need to pay $30.

Another similar case he brings, you're not in a store, you're on the beach, a kosher beach, and you have a cold bottle of Coke. Someone's selling it over there and you know it costs a little extra than normal at $3 for this bottle of Coke. You buy this bottle of Coke, and someone bumps into you, and it falls on the ground and it breaks.

We’re talking about a case where the person was negligent and he has to pay you back for the value of the Coke, let's say. And again, in this video specifically, we're talking about brand new items and NOT used items. We'll have to have another video about used items.

So let's say it's a brand new bottle of Coke and someone smashed into you, he was clumsy, should have been more careful. He must pay for your bottle of Coke, so how much does he have to pay? Is he only liable to pay a dollar or $0.50 cents because he can get it in back in the city at Costco for $0.50 cents or no, the price is the $3 here at the beach. So, he brings over here, the halacha is that the damage is always calculated by the local market of where you are right now.

We look at the stores in the area where people go and shop for that item. What's the range of the prices that people sell it for? Where do people shop for that item? So let's say, we said this item was selling for $50 but in the whole local area people sell it for between, let's say $40 and $55. So that's the price range in your market and the person who broke the item in the store would be bound by that local price and not the price, irrelevant of what the owner of the store paid wholesale the $30.

Now, like we said, it would range, let's say between 40 and $55. So, he would actually only be bound by the lowest price in that range. Now let’s say there's things that people don't only buy in their local area, they actually drive a little bit. They shop in different cities in their state, and nowadays it would sometime even include prices that one would find on the internet on such websites like Amazon.com or Walmart and Target etc.

It's not in the sefer, but we spoke it over with our Poskim, who said that regarding online shopping, if there's items that people actually go online to buy, then that now becomes the market for that item as well. We're not talking about a sandwich. People don't go buy a sandwich or a bottle of coke on the internet, but for items that people would go onto the internet for, then that would also help establish the going price range for that thing and he would only be bound to pay by the lowest price.

And the lowest price would be what someone would have to pay. So therefore, in the case of the broken item, you would pay the market price, the lowest one. And as well, in the case of this bottle of Coke, you would be bound by paying the price of how much a cold bottle of Coke on the beach would cost, which would be in this case, the $3, like we said, and not $1 or $0.50 cents that you can get from a cheap store back in the city.

He does bring over here that when you do pay back for damages, you are allowed to pay back with any item of value and are not forced to pay with cash. Therefore, if you can go and get another cold bottle of Coke and bring it to him on the beach, then that would also constitute as a payment. So if it's the same exact quality as what you damaged.

We will follow up on more cases, and again, like in all our videos, even if we don't mention it, any case must be spoken over with a qualified Posek would know how to assess the proper market values as well as any other variables in any specific case individually.

Thank you very much and have a wonderful day.