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Forty Years of Contract Law
Published online by Cambridge University Press: 16 February 2016
Extract
With the establishment of the State of Israel and the enactment of sec. 11 of the Law and Administration Ordinance, 1948, Israeli law absorbed the Mandatory law which had applied prior to independence. Israeli contract law of forty years ago was comprised of two main components: Ottoman law and English law.
The component of Ottoman law consisted primarily of the Mejelle and of the substantive provisions of the Ottoman Code of Civil Procedure. Some of the books of the Mejelle regulated important contractual transactions, such as sale and lease. The Ottoman Code of Civil Procedure included provisions concerning compensation for damage, but the most important and significant provision was sec. 64, which established, in our law, the principle of freedom of contract. By virtue of this section, validity was conferred upon all contracts made in Israel, except those contrary to statutory law, to morality or to public order, and the power of the parties to a contract to contract out of the provisions of the Mejelle was accorded recognition.
- Type
- Contract Law
- Information
- Israel Law Review , Volume 24 , Issue 3-4: Israel Law—Forty Years , Summer–Autumn 1990 , pp. 657 - 673
- Copyright
- Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 1990
References
1 1 L.S.I. 7.
2 See State of Israel v. Hidna (1960) 14 P.D. 926.
3 See Fuchs v. Ezioni (1957) 11 P.D. 358, at 361; Yahad v. Shimansky (1962) 16 P.D. 2341; Reisenfeld v. Jacobson (1963) 17 P.D. 1012, at 1016; 5 S.J. 96.
4 Zim v. Maziar (1963) 17 P.D. 1319; 5 S.J. 120.
5 Ibid., at 1332, and see also the opinion of Landau J., ibid., at 1334-5.
6 See Amal v. Schindler (1952) 6 P.D. 710.
7 See Aharonst v. Neuman (1956) 10 P.D. 1121.
8 Cf. Friedmann, The Effect of Foreign Law on the Law of Israel (The Israel Law Review Association, Jerusalem, 1975) 65.
9 Zeltner, Z., “The Development of Contract Law in Israel in the Twenty-Five Years since the Establishment of the State” (1974) 29 HaPraklit56, at 62–67Google Scholar.
10 16 L.S.I. 106.
11 19 L.S.I. 231.
12 23 L.S.I. 283.
13 25 L.S.I. 175.
14 19 L.S.I. 58.
15 27 L.S.I. 117.
16 25 L.S.I. 11.
17 37 L.S.I. 6.
18 21 L.S.I. 41.
19 21 L.S.I. 44.
20 21 L.S.I. 49.
21 22 L.S.I. 107.
22 22 L.S.I. 113.
23 23 L.S.I. 277.
24 25 L.S.I. 152.
25 28 L.S.I. 115.
26 35 L.S.I. 91.
27 34 L.S.I. 181.
28 Cf. Barak, A., Judicial Discretion (Tel Aviv, 1987, in Hebrew) 465Google Scholaret seq.
29 The principle of good faith was also applied in the area of public law. See below.
30 Cf. Halawi v. Mifal Hapayis (1973) 27(i) P.D. 38, at 45, and see Zeltner, Z., “The Abolition of Consideration — And What Then?” (1961) 17 HaPraklit 39Google Scholar.
31 Cf. Explanatory notes to sec. 1 of the Contracts (General Part) Bill, 1970, H.H. 880.
32 This situation was characterized by confusion also with respect to the application of the concept of a contract for the benefit of a third party. Cf. State of Israel v. Hidna, supra n. 2.
33 Cf. Anson, , Law of Contract (Oxford, 25thed., 1975) 411Google Scholar.
34 Cf. Anson, ibid., at 389 et seq.
35 Jacobs v. Kartoz (1955) 9 P.D. 1403; Aaronst v. Neuman, supra n. 7, at 1121.
36 Cf. Zeltner, Z., “Contract Law in Israel (General Provisions)” (1973) 28 HaPraklit 329Google Scholar, who, on the basis of these changes, advocated the application of the principles that were reflected in the Contracts (General Part) Bill even before it became law.
37 Holmes, , The Common Law(1881) 298Google Scholar.
38 For a discussion of the question what is the concept that characterizes the phenomenon of a contract, a promise or an agreement, see Tedeschi, , “Some Aspects of the Concept of Contract” (1966) 1 Is.L.R. 223Google Scholar.
39 See Zamir, E., Sale Law, 1968 in Commentary on Laws Relating to Contracts, Tedeschi, G., ed. (Jerusalem, 1987, in Hebrew) 3–4Google Scholar.
40 See the Preface to the Contracts (General Part) Bill, 1970, H.H. 880.
41 Cf. Friedmann, supra n. 8, at 101.
42 Cf. Friedmann, id.The position of Jewish law on an illegal contract is, however, different from that of the Law. Under Jewish law, an illegal contract is usually valid as regards its civil implications (see Elon J. in Howard v. Miara (1981) 35(ii) P.D. 505, at 519, and see Schochetmann, E., “Ma'aseh Haba Ba'averak”—An Act Performed in Violation of the Law —The Consequences of Illegality in Jewish Law (Jerusalem, 1981, in Hebrew) 172et seq.)Google Scholar. Under sec. 30 of the General Contracts Law, on the other hand, an illegal contract is void.
43 Japhet v. Eastwood (1969) 23(i) P.D. 604, at 613; Hai v. Cohen (1971) 25(ii) P.D. 339.
44 State of Israel v. Krasnianski (1966) 20(ii) P.D. 281; Albalada v. Hebrew University (1966) 20(i) P.D. 204.
45 Howard v. Miara, supra n. 42, at 512.
46 Sec. 24 of the General Contracts Law is a modest shelter for an important principle, and it expresses only one aspect of the principle of freedom of contract, i.e. the freedom to determine the contents of the contract. The other, more important aspect, of the freedom of contract, i.e. the freedom to contract, will hopefully find expression in a future constitution of the State of Israel. See sec. 8 of the Basic Law: Human and Civil Rights Bill (H.H. 1085, p. 448) stipulating that “every person is entitled to make contracts and to acquire property: this right may not be limited except by law”.
47 See Yekutiel v. Bergman (1975) 29(ii) P.D. 757, at 762-763; Dicker v. Moch (1978) 32(ii) P.D. 141, at 146; Novitz v. Leibowitz (1982) 36(i) P.D. 537, at 542; Ma'ayanot Hagalil Hama'aravi v. Tabouri (1986) 40(iv) P.D. 349.
48 Cf. Cohen, N., “Contract Rules and Good Faith in Bargaining: Formalism v. Principles of Justice” (1986) 37 HaPraklit 13Google Scholar.
49 See Sussman, Y., “Good Faith in the Law of Contracts — The Link with German Law” (1979) 6 Iyunei Mishpat 485Google Scholar.
50 See the words of Barak J. in Raviv v. Beth Yules (1983) 37(i) P.D. 533, at 544; the words of Asher J. in Spector v. Zarfati (1978) 32(i) P.D. 231, at 241; and Dalia Ltd. v. Shapira (1984) 38(iii) P.D. 462; Kaplan v. Novogrozki (1984) 38(iii) P.D. 477.
51 Kot v. Organization of Tenants, Commercial Centre, Ramat Yosef (1976) 30(iii) P.D. 813.
52 For a description of this situation in Germany in the 1920s, see Dawson, J.P., The Oracles of the Law (Ann Arbor, 1968) 461Google Scholaret seq.
53 Magda Leibl v. Authority for Victims of the Nazi Persecution (1981) 35(iii) P.D. 29.
54 Kossoy v. Feuchtwanger Bank (1984) 38(iii) P.D. 253, at 285; 7 S.J. 183.
55 Public Transportation Services, Beer Sheba v. National Labour Court (1981) 35(i) P.D. 828; Elco v. National Labour Court (1977) 31(ii) P.D. 197.
56 Simonoff v. Baruchim (1983) 37(iii) P.D. 808; Zol. Bo Ltd. v. Zeideh (1983) 37(iv) P.D. 737.
57 Shiloh v. Razkowski (1981) 35(iii) P.D. 449, at 461.
58 Amrani v. Supreme Rabbinical Court (1983) 37(ii) P.D. 1; Paz v. Paz (1984) 38(ii) P.D. 736.
59 Azarnikov V. State of Israel (1977) 31(i) P.D. 270; Bronowski v. Director of Customs and Excise (1978) 32(ii) P.D. 75.
60 Sussman, , “A Forecast of Problems in the Law of Contracts” (1976) 2 T. A.U. Stud. L. 17Google Scholar, and supra n. 49.
61 See Shalev, G., Government Contracts in Israel (Jerusalem, 1985, in Hebrew) 58Google Scholaret seq., 80 et seq.
62 Lugassi v. Minister of Communications (1982) 36(ii) P.D. 449.
63 ibid., at 455, 465.
64 ibid., at 465.
65 See Shalev, G., Formation of Contract in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1978, in Hebrew) 86–87Google Scholar.
66 See Shikun Ovdim v. Zafnik (1983) 37(i) P.D. 579, at 584.
67 See Pnidar v. Castro (1983) 37(iv) P.D. 673, at 682-683.
68 See Kessler v. Meirov (1987) 41(ii) P.D. 547. In this, the scope of the application of the principle of good faith differs from that of the doctrine of culpa in contrahendo — fault in contracting — of the scholar Jehring. This last doctrine applies only when no contract is made at the end of the negotiations, which have been tainted with lack of good faith.
69 See Pnidar v. Castro, supra n. 67, at 697; Zanani v. Agmon (1984) 38(iv) P.D. 141.
70 Supra n. 67.
71 Pnidar v. Castro, supra n. 67, and see Hushi v. The Technion (1984) 38(i) P.D. 640.
72 Shikun Ovdim v. Zafnik, supra n. 66.
73 Deutsch, S., “Section 12 of the Contracts Law: A Panacea for All Ills?” (1986) 4 Mehkarei Mishpat 39Google Scholar.
74 N. Cohen, supra n. 48.
75 State of Israel v. The Eilat Shipping Services Company (1986) 40(ii) P.D. 785, at 789; Sonnenstein v. Gabasso (1988) 42(ii) P.D. 278.
76 (1984) 38(ii) P.D. 237.
77 Ibid., at 250.
78 Ibid., at 262.
79 Kleine Bick v. Goldberg (1987) 41(ii) P.D. 757.
80 Ken-Tour v. Elon (1986) 40(ii) P.D. 533, at 553; Bank Leumi v. C.I.S. (1986) 40(ii) P.D. 673; Rabinowitz v. Shelev (1986) 40(iv) P.D. 533; Lodait v. Shirlib Investments (1987) 41(iii) P.D. 645.
81 See The Drawing Up of a Codex of Monetary Law Bill, 1980, H.H. 1448.