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Shabbat Parashat Vayeishev 5777

P'ninat Mishpat: Responsibility for Electricity Infrastructure part II

(based on ruling 73056 of the Eretz Hemdah-Gazit Rabbinical Courts)

Case: The plaintiff (=pl), a company that produces electricity for the electric company (=IEC) from solar panels, rented rooftops to place the panels from the defendant (=def), a settlement. Def supplies electricity for their residents through bulk supply (the electric company is not connected to each home). The same electricity room and closet transfers electricity both ways between def/pl and IEC. The involvement of IEC made it necessary to begin work before the contract was complete. IEC carried out three inspections of the electricity room. After the last, they claimed mortal danger and demanded redoing the electricity closet, with a threat of otherwise rejecting pl’s project and shutting down def’s electricity. Pl and def disagreed as to who should be responsible for the renovations, and it was decided that pl would perform them, and beit din would rule on possible reimbursement. Pl claims that their agreement requires def to provide electrical infrastructure and that def knew this was expected to include layouts of money. Def also benefitted from the replacement of their very dangerous electrical room with a quality one at an under-market price. Def claims that pl should have checked that def’s infrastructure was sufficient before beginning work. At the time the agreement was signed, pl, which is in the field and met with IEC, were aware of the expense, while def was not. The improvements are not particularly beneficial for them, as def is in the process of phasing out the bulk supply system and will not need the electrical room. Therefore, the deal, as pl presents it, is unprofitable for def, and they would not have agreed to it.

 

Ruling: The contract states that def is obligated to fix any problem that arises in the electrical system before construction is complete. It also states that def will allow pl to make use of the bulk supply meter. Pl claim that these provision prove that def was required to provide a reliable infrastructure at its expense. Def responded that it was its responsibility to do the upkeep of what existed, but pl was to check if what existed met its needs. Pl adds that the problem with the electric room was not specifically in regard to pl’s needs but for def’s own needs. In this regard, beit din agrees with pl that the lack of feasibility for even its own purpose was def’s responsibility.

On the other hand, it appears that def could get out of its obligations through a different contract provision. One of the agreement’s conditions is that IEC will give its approval to the electrical system. The main purpose of the provision was certainly to allow pl out of the rental from def if IEC did not end up buying electricity from them. However, there is no reason the provision should not protect def as well. Therefore, if IEC rejects the electrical system as it stands, def could have backed out of their agreement with pl rather than do major repairs. (Minor repairs would probably be a requirement of def.) While both sides contemplated scuttling the deal, it was probably wise to continue, but the above is significant for determining payment for the repairs performed.

We will finish our presentation next time.

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