<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv=Content-Type content="text/html; charset=us-ascii">
<meta name=Generator content="Microsoft Word 12 (filtered medium)">
<style>
<!--
/* Font Definitions */
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Consolas;
panose-1:2 11 6 9 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0cm;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p.MsoPlainText, li.MsoPlainText, div.MsoPlainText
{mso-style-priority:99;
mso-style-link:"Plain Text Char";
margin:0cm;
margin-bottom:.0001pt;
font-size:10.5pt;
font-family:Consolas;}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:"Calibri","sans-serif";
color:windowtext;}
span.PlainTextChar
{mso-style-name:"Plain Text Char";
mso-style-priority:99;
mso-style-link:"Plain Text";
font-family:Consolas;}
.MsoChpDefault
{mso-style-type:export-only;}
@page Section1
{size:612.0pt 792.0pt;
margin:72.0pt 72.0pt 72.0pt 72.0pt;}
div.Section1
{page:Section1;}
-->
</style>
<!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang=EN-CA link=blue vlink=purple>
<div class=Section1>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Dear RAM,<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Your first line is exactly correct: the “buy back”
provisions of the auto lease do indeed require that the lessee makes sure that
the value is there at the end of the lease.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Essentially, the lessee will make smaller payments during
the term of the lease in favour of a higher buy back at the end or has the
option of making larger payments for a lesser risk of the marketplace at the
end of the term when, using your example, a Toyota situation could have intervened.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>So my question remains: In the absence of a standard of
valuation, what is the chiyuv of the lessee in terms of proving a value? Or,
should the lessor have provided a specific standard in the lease document and
in its absence, can he extract a presumed difference from the lessee?<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>HT<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Cantor Henry Topas brought a case:<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>> Reuven leases a car from Shimon's leasing company.<o:p></o:p></p>
<p class=MsoPlainText>> The lease stipulates that upon the end of the lease<o:p></o:p></p>
<p class=MsoPlainText>> term, the vehicle must have a value of $30,000.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>You seem to be interpreting this to mean that when the
lease ends, and Reuven returns that car to Shimon, he will be required to make
sure that it is worth $30,000 at that time.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>That's not how I understand auto leases to work. Rather,
at the time of lease origination, a value is stipulated in advance, and when
the lease ends, Reuven has the exclusive option of returning the car or paying
the $30,000, regardless of what anyone thinks the car is actually worth.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Moreover, I don't know if a lease CAN work the way the OP
suggests. Reuven has no control over market forces. There's no way he can
promise, years in advance, how the market will value his car a few years down
the line. He can promise that the car will not have more than a normal amount
of wear-and-tear. But he cannot control whether this car will turn out to have
some sort of defect which causes the value to tumble, such as in many of
today's Toyota. Nor can he control gasoline prices, which caused gas-guzzlers
to tumble a few years back.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>So here's the question as I see it: Shimon can agree that
when the lease is up, Reuven will have the option of returning the car or
paying $30,000 in lieu of that car. But does halacha (or civil law) allow
Reuven to obligate himself to $30,000, payable either in full or by returning
the car plus an amount of money to be determined at that date? --- Well, now
that I've phrased it in those terms, I suppose it can indeed work like that.
But I don't think it is actually done in that way, because the leasing company
is much more able to take the gamble than the consumer is.<o:p></o:p></p>
<p class=MsoPlainText><o:p> </o:p></p>
<p class=MsoPlainText>Akiva Miller<o:p></o:p></p>
<p class=MsoNormal> <o:p></o:p></p>
</div>
</body>
</html>