Using distress of a party to an agreement in order to achieve an unfair advantage is grounds for rescission of the contract

A person purchased an apartment and later sold it at a price lower by a third than the market value after being unable to meet the mortgage payments and suffering from a poor emotional state, including due to drug use, and was even admitted to a mental health institution shortly after signing the agreement.
The Court held that the sale agreement should be rescinded. Israeli law allows for the rescission of an agreement on grounds of unconscionability where a party took advantage of a distress, mental or physical incapacity or inexperience in order to achieve an agreement with terms unreasonably worse than customable. Here, the seller suffered from a poor emotional state, was unable to fully understand the full terms and meaning of the transaction and was under distress due to his financial situation. The purchaser knew of the seller’s poor economic state and even held an assessment showing that the apartment is being sold at less than its real value. Thus, the agreement should be rescinded due to unconscionability.