Maimonides and the Merchants. Mark R. Cohen

with merchant custom from his India trader brother and from the legal queries about merchant activities that he regularly received. It should come as no surprise, therefore, to find Maimonides acknowledging and giving normative standing to the custom of the merchants in his Code.

      A key text marking the place of merchant custom in the Code is found in the lead halakha of chapter 5 of Hilkhot sheluḥin ve-shutafim (Laws of Agents and Partners). Notably, however, the codifier does not use the phrase “custom of the merchants.” Here, as elsewhere in the Code, for the custom of the merchants, he uses the Hebrew phrase minhag ha-medina, literally, “custom of the land” or “local custom,” a locution that occurs in the Mishna, the Tosefta, and the Talmuds in relation to both ritual and civil law. He might have employed a neologism, minhag ha-soḥarim, translating the Gaonic term ḥukm al-tujjār and parallel to his own use of minhag ha-sappanim. His choice of the old, Tannaitic Hebrew expression minhag ha-medina suggests that he wished to anchor the custom of the merchants in his own time to the ancient halakha.

      If a person forms a partnership with another without indicating stipulations [bi-stam], he may not deviate from local custom [minhag ha-medina] as regards that kind of merchandise. Nor may he travel to another place, or form a partnership with others with the same kind of merchandise, or deposit it with others as a bailment, or trade in any other merchandise. He shall not sell on credit except that which it is always the custom to sell on credit—unless [both partners] stipulated this at the outset or [the itinerant partner] acted with the other’s knowledge. If he deviates and acts without the other’s knowledge and afterwards tells him “I did such-and-such” and [the stationary partner] consents to this, then the former is not held liable. None of these matters requires ratification by qinyan. Oral agreement alone is sufficient.

      The standard commentators could find no precise source for this halakha in its entirety in a classical rabbinic text. For the statement “or trade in any other merchandise,” R. Joseph Caro (d. 1575 in Safed, Palestine) in his Kesef Mishneh, one of the major commentaries on Maimonides’ Code, cites a baraita in the Tosefta (Bava Meṣi‘a 4:12 in the Lieberman edition), which is also cited by R. Isaac Alfasi in his epitome of the Talmudic tractate Bava Meṣi‘a. The core text in the Mishna (Bava Meṣi‘a 4:5) concerns a person hired to tend a shop. If he is a craftsman, the Tosefta adds, he should not practice his craft while on duty, lest he fail to pay attention to the customers. In Beit Yosef, Caro’s commentary on another great work of codification, the Tur, by Jacob b. Asher (d. 1340 in Toledo, Spain) (Hoshen Mishpaṭ 176:10), the author speculates that Maimonides is analogizing from that case to a partner, who should devote all his attention to the partnership at hand, lest he be distracted by other business. In fact, as we know from the Geniza letters, merchants dealt in a myriad of different types of merchandise, often merchandise belonging to partnerships that they held at one and the same time with different merchants, and it was easy to lose track.

      The topic sentence, “If a person forms a partnership with another without indicating stipulations, he may not deviate from local custom [minhag ha-medina, lit., “custom of the city or region”] as regards that kind of merchandise,” warrants special attention. It calls to mind a principle expressed in Islamic jurisprudence with respect to hire: “Whatever is not stipulated explicitly [ghayra mashrūṭ] in the contract is treated in accordance with the custom of each city.”⁴²

      The phrase “local custom” (minhag ha-medina) is, indeed, key to contextualizing the halakha in question. It reflects aspects of everyday commercial practice in the Islamic world known to us from the Geniza and other Jewish sources from the Islamic period, particularly business arrangements concluded without drawing up formal, written contracts, which will be discussed in detail in chapters to come. The final sentence in the halakha makes this explicit: “Oral agreement alone is sufficient.”

      The phrase “[n]or may he travel to another place … unless [both partners] stipulated this at the outset or [the partner in question] acted with the other’s knowledge” reflects the concern expressed in many Geniza letters or contracts and in a responsum of R. Isaac Alfasi that partners or agents keep to their prescribed itinerary, and it resonates with geographical restrictions that could be imposed upon an active party in an Islamic commenda, a type of business collaboration that we will discuss in Chapter 5.⁴³ Violation of an agreement about trading destinations, along with infringement of other conditions, often ended up in court or on the desk of a jurisconsult like Maimonides. One of his responsa, for instance, describes a dispute that arose in a commenda, called by its Arabic name, muḍāraba, in the query. The active merchant was supposed to proceed to a certain city, sell the merchandise belonging to the stationary investor, take his portion of the profit, and turn the capital sum plus the investor’s earnings over to a specified person in that place. However, as is typical of so many informal arrangements between Geniza merchants, the traveling party and the investor had not recorded the stipulations in a contract; rather, they had agreed about this orally in front of the active partner’s two brothers, who happened to be his designated heirs.

      The traveling merchant sold the investor’s merchandise but failed to deliver the latter’s money as directed. Instead, be purchased other goods with the proceeds and departed for another destination by sea. When the ship on which he was traveling capsized, he lost his life, and only a portion of the goods that he was transporting could be salvaged. The investor demanded that the man’s heirs pay him the entire original capital and all his profits because their brother had violated the conditions agreed to in their presence. Because there was no written contract, the case came before the Jewish court and ultimately was submitted to Maimonides for his opinion. He ruled that the truth about the agreed conditions could be ascertained only by the heirs taking an oath, the typical method of resolving disputes in both the Jewish and the Islamic courts in the absence of third-party testimony.⁴⁴

      The provision in halakha 5:1 about credit and the custom of the merchants reflects problems that could, and often did, arise when partners failed to stipulate whether merchandise could be sold on credit. Islamic schools of law discuss and disagree about whether a partnership contract needs to specifically stipulate permission to trade on credit.⁴⁵ Gaonic opinions were divided on the matter as well, but the power of merchant custom driving the commercial economy, in which credit was an essential tool, overcame compunctions in the Jewish, as it did in the Islamic, case.⁴⁶

      A responsum of the Babylonian Gaon Samuel b. Ḥofni (d. 1013) relates the story of a merchant-traveler who engaged in credit transactions. His action was challenged by the stationary partner, who claimed that he had not granted the man permission to extend credit to customers. The Gaon supported the active partner’s actions because the man was putting his own money in jeopardy as much as that of his partner and because the stationary partner had not formally stipulated in advance that the other person should not sell on credit. The former, moreover, could not invoke the Talmudic rule expressed in the contract clause, “I sent you for my benefit, not to my detriment,” because the active party was neither an agent nor a paid employee but rather a partner.⁴⁷

      Sale on credit was always potentially problematic because of the effort needed to collect what was due. Understandably, many stationary investors instructed their active partners to avoid such transactions. An example from the Geniza is a partnership contract among four investors in which the single, active partner agreed explicitly not to sell on the basis of “deferred payment” (ṣabr), meaning at a higher price, a way of circumventing the prohibition against taking interest among Jewish coreligionists.⁴⁸

      Maimonides’ ruling on credit transactions in halakha 5:1 acquires particular significance in light of the extensive use of credit in the world of the mobile Geniza traders. In a situation where instructions about credit are not specified, Maimonides rules that everything depends on local merchant custom. The itinerant partner may not “sell on credit except that which it is always the custom to sell on credit—unless [both partners] stipulated this at the outset or [the active partner] acted with the other’s knowledge. If he deviates and acts without the other’s