In the Thirty Years’ War waged in Europe between 1618 and 1648, millions of people lost their lives; it ended with the Peace of Westphalia, and until World War I, it was considered the most destructive war in history. In contrast to this brief and marginal conflict, a "War of Contracts" has been waging in Israel for 30 years (starting on April 6, 1995)—an uncompromising war lacking any peace treaties—between the Knesset and the Supreme Court, and within the Court itself. In January 2026, this war may have reached its end with a declaration of victory by the Government, accompanied by triumphant fanfare.
How is a contract interpreted? The simple answer is: according to what is written in it—i.e., the language of the contract. Only when the contract’s language is lacking or unclear does one attempt to trace the parties' intent by examining external circumstances. This intuitive answer was also the manner in which the courts applied the interpretation provision of the Contracts Law from its enactment in 1973 until 1995. In 1995, the Supreme Court ruled in the Apropim Precedent that the language and circumstances must be examined together. It established that even if the language is clear, preference may be given to the way the judge interprets the parties' intent over the contract’s actual language. In effect, the Court could interpret a contract according to its understanding of the parties' intent, even contrary to the contract's text. In other words: a death sentence for contractual certainty in Israel.
After much public and academic criticism, and after ten years had passed, an opportunity arrived to overturn the Apropim ruling. Instead, an expanded panel of the Supreme Court merely moderated it slightly, finding that the contract's language serves as the indication of the parties' intent. Subsequent findings tended to prioritize the unequivocal language of an agreement, yet in practice, they provided no clear solution to the uncertainty. Instead, they merely shifted the question from "What result does the judge want?" to "Who will the judge be?" The war continued until the Knesset decided in 2011 to amend the Contracts Law and clarify that the contract's language is decisive, only for the Court to find that despite the amendment, the Apropim ruling remained valid.
In recent years, the Supreme Court effectively overturned the Apropim ruling in the Bibi Roads case at the end of 2019. There, it was determined that in the case of a business contract between sophisticated and represented parties, the language of the contract is the sole determinant, as opposed to personal contracts between individuals without legal representation. Many subsequent rulings cemented this precedent, and in practice, it could be clearly stated that the Apropim ruling - at least regarding contracts between sophisticated and represented parties - had passed from the world.
All this held true until the Government declared its success in defeating the court system in January 2026 via a further amendment to the Contracts Law (as part of the judicial revolution the Government is working to implement). And what does this amendment stipulate? Essentially, it is the Bibi Roads ruling, as it has been applied for 6 years, clarifying that the parties themselves are entitled to determine within the contract how it shall be interpreted.
So (putting aside unnecessary and media-heavy wars), what is the legal situation in Israel regarding contract interpretation as of early 2026? It is quite identical to the situation at the end of 2025, with the clarification that parties can determine for themselves the method by which the contract will be interpreted (something that applies in any case if the contract's language is respected and the contract is professionally drafted). Especially in the AI era, where agreements can be generated via a simple web query, it is of utmost importance to be represented by a lawyer with expertise in the field[8]. One should not settle for a lawyer lacking experience in this area, because ultimately—certainly between sophisticated parties—the importance of drafting the contract's provisions is augmented by the ability, through careful and professional drafting, to determine how they will be interpreted. Poor drafting is liable to lead to results the parties never intended.