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Mordechai returned to his dorm late at night with two Slurpees, one for him and one for his roommate, Aharon.

“Thank you, but I have a stomachache,” said Aharon. “I’m sure someone will be happy to buy it.”

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News of the Slurpee for sale spread quickly through the dorm. Many friends expressed an interest in buying it.

Mordechai decided to run an auction and award the Slurpee to the highest bidder.

After a short, heated bidding war, Shlomie bought the Slurpee for $10. He took the coveted Slurpee back to his room.

Fifteen minutes later, Shlomie returned and demanded his money back. “What happened?” asked Mordechai.

“I realized that Slurpees cost no more than $6,” replied Shlomie. “The price that I paid is a rip-off, almost twice its value!”

“So what?” asked Mordechai. “You agreed to pay $10.”

“Even so, when the price is significantly more than its real value, the customer has a halachic claim of onaah (unfair pricing),” replied Shlomie. “If the price differential reaches a sixth, he can claim a refund of the difference, and if it is more than a sixth – like our case – he can cancel the sale entirely” (C.M. 227:2-4).

“But I didn’t mislead you,” insisted Mordechai.

Onaah applies even if the seller did not maliciously overcharge,” countered Shlomie, “and even if he also was not aware of the true value” (Rama, C.M. 232:18).

“But when I auctioned the Slurpee, I didn’t overcharge you at all,” claimed Mordechai. “The whole idea of an auction is to see what price I can get for the item. You chose, of your own volition, to pay $10 and outbid the previous bidder!”

The two came to Rabbi Dayan and asked, “Does Shlomie have a claim of onaah in the auction?”

“The Mishnah (B.M. 56b) cites a dispute whether onaah applies to a sefer Torah, work animal, or diamond,” replied Rabbi Dayan. “Rabi Yehuda maintains that it does not: a sefer Torah is priceless, and a person is willing to pay more than the regular value of a work animal or of a diamond in order to pair it with a comparable one that he owns. However, the Sages maintain that onaah applies also to such items, even though a person is sometimes willing to pay extra.

“Shulchan Aruch (C.M. 227:15) rules according to the Sages.

“Even so, regarding auctions of specialty items like works of art, Judaica, rare sefarim, stamps or other collectors’ items, which do not have a defined market value, there is no claim of onaah, since the auction itself increases the item’s value” (Hilchos Mishpat 227:25).

“Regarding public auctions of standard items, Teshuras Shai (1:456) rules that onaah applies, like any other sale. Even if according to dina d’malchusa there is no claim of onaah in auctions, he follows the poskim that this does not apply between individual Jews. Moreover, even an explicit condition is not always valid regarding onaah” (C.M. 227:22).

“However, several Acharonim rule that onaah does not apply to auctions for several reasons. If the auction is open to non-Jews, regarding whom onaah clearly does not apply, it similarly does not apply to Jews, since they entered the auction with this understanding and acceptance, especially if the auction is conducted according to the law of the land” (Sho’el U’maishiv, vol. IV, 3:137; Mishpat Shalom 227:15).

“Others explain that the common commercial practice not to apply onaah to auctions overrules the default halacha, especially when dealing with something whose value is not known; or that a purchase through auction is not meant to be according to the item’s value” (Pischei Choshen, Onaah 10:15).

“Thus, Mordechai does not have to accept the Slurpee back.

“Nonetheless,” concluded Rabbi Dayan, “Nesivos (109:5) writes that if the bidder mistakenly added beyond the item’s value based on an erroneous evaluation by the appraiser, he can claim onaah.”

Verdict: Several Acharonim rule that onaah does not apply to a public auction, certainly of specialty items, and even of standard items.

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Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, headed by HaRav Chaim Kohn, a noted dayan. To receive BHI’s free newsletter, Business Weekly, send an e-mail to subscribe@businesshalacha.com. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, call the confidential hotline at 877-845-8455 or e-mail ask@businesshalacha.com.