Abstract and Keywords
Biblical law forbids exaction of interest by a creditor and payment of interest by a debtor in loans between Jews. This article focuses on a device to avoid the prohibition against interest-bearing loans. Although in biblical days the economic structure of society was predominantly agrarian and loans were sought primarily for personal purposes, the strictures against usury apply with equal force to loans extended for commercial purposes. Since interest was not permitted, ways and means had to be found to facilitate commercial endeavors without violation of either the letter or the spirit of Jewish law. Keeping this in mind, the hetter iska was drafted. The hetter iska is a document that specifies the terms and conditions under which money is advanced by one individual to another. Its legal purpose is to create a partnership arrangement as distinct from a debtor creditor relationship. A detailed analysis of promissory and mortgage loans concludes this article.
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