Bava Basra, Chapter 10, Mishnah 5. The real subject of this Mishnah is the concept known as asmachta.
What is the concept of asmachta:
Asmachta is a statement where a person commits to do something - for example, to pay a sum of money - if a certain condition is met, except that he does not expect that condition to be met at all. Because of this, he does not truly make up his mind to commit in practice, and his words were largely said out of boasting and as a sort of rhetorical effect, without a genuine intention to fulfill them.
The Tanna'im disagree on this question: Is "asmachta kanya" - meaning the person is bound by his commitment, or is "asmachta la kanya". The halachah is ruled that in normal situations asmachta la kanya: even though he said the words, he did not really intend for them to materialize, since he was certain the condition would not be met, and therefore he did not truly make up his mind to commit. This is the subject that the Mishnah addresses.
Background of the case - partial payment:
Reuven lent Shimon one hundred, and Shimon only has forty, and therefore he makes a partial payment. In the next Mishnah we will learn what the options are for the parties in such a case: to write a new document for the missing amount (sixty), or to give the borrower a receipt for the forty he paid, so that he can protect himself. However, our Mishnah deals with a case where the parties did not take either of these paths.
Instead, they appoint a third party to guard the document. The promissory note essentially acted as a sort of bank check: the lender can bring it to court and obligate the borrower to pay the full amount. Since a portion of the debt has already been paid, the parties come to an agreement to deposit the document in the hands of a third person trusted by both of them, who guards the interests of both: the document remains valid and the lender can collect with it, while the borrower who already paid part of the debt will not be forced to pay the full amount again.
"Mi shepara miktzas chovo vehishlish es shtaro" - If someone paid part of his debt and deposited his document with a third party:
Shimon paid part of his debt to Reuven: the document was for one hundred, and Shimon only brought forty, leaving sixty. The parties give the document to a third person - let us call him Levi - and tell him: "Hold this document in your hand until Shimon pays the balance of his debt to Reuven."
Both parties believe they are protected:
Reuven: The document exists and is in the hands of the trusted Levi, and through it he will collect the missing amount; and since the document stands for the full one hundred, he has nothing to lose.
Shimon: He relies on Levi, that he will not let Reuven collect the whole one hundred again; he paid a portion, and he will pay the remaining portion.
"Ve'amar lo: im lo nasasi lecha mikan ve'ad yom ploni - ten lo shtaro" - And he said to him: If I have not given it to you from now until such-and-such day - give him his document:
To guarantee Reuven a quick and easy repayment, Shimon says: If I do not transfer the missing amount, those sixty, by a certain date, I instruct Levi the trustee to return Reuven's document to him - which means that Reuven will be able to collect the full hundred all over again.
It turns out, then, that the first payment of forty essentially becomes a gift. It is as if Shimon said: "I commit that by that day I will have the money, and if not - the initial payment was a gift." This is not interest, nor is it payment for waiting, nor is it payment for any delay, but rather a sort of penalty payment given as a gift. And of course, in saying this, Shimon does not really mean what he says: he is absolutely certain that he will get the sixty, for otherwise he would not have made such a promise.
"Higi'a zeman velo natan" - The time arrived and he did not pay:
The date arrived, and Shimon does not have the money, and he did not repay Reuven. Reuven approaches Levi and says: "You heard what he said - if he does not pay by that day, you must give me the document." And if the document is given, the initial payment of forty will become a gift to Reuven, and he will collect the full hundred all over again.
And the question is: must Levi do as Shimon said and take his words literally, even though this is an asmakhta and this was not his true intention - meaning, to treat his words as "asmakhta kanya", so that Shimon is bound by his commitment? Or perhaps Levi will say: True, Shimon said this, but he never intended to commit to a double payment - something that is unreasonable - and since he did not fully resolve to commit, asmakhta lo kanya.
A dispute among the Tanna'im:
"Rabbi Yose omer: Yiten" - Rabbi Yose holds that an asmakhta is binding. Shimon said it, and therefore he is obligated, and Levi must act according to the literal meaning of his words and return the document to Reuven, so that he can collect the full amount with it.
"Rabbi Yehuda omer: Lo yiten" - According to Rabbi Yehuda, Levi must not return the document to Reuven. It is true that Shimon committed to repay by that date, but he never truly intended that if he failed to do so he would pay double; this is neither fair nor just. And since he did not intend it, he is not obligated - an asmakhta is not binding.
The halachah follows Rabbi Yehuda: an asmakhta is not binding. Therefore, Levi does not return the document to Reuven, and Shimon is not forced to supposedly pay twice. And this is the halachah.
It is worth noting that there are exceptions: when dealing with an official situation, where the two parties come before a beis din that is expert in the laws of asmakhta, and there the borrower takes upon himself an asmakhta commitment - it is clear that his intention is truly to commit, for he said his words before a beis din that deals with this and is expert in it, and therefore he will be bound by his words. However, under normal circumstances, we rule that an asmakhta is not binding.