In the Thirty Years' War waged in Europe between 1618 and 1648, approximately 8,000,000 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 "short and marginal" conflict, a "War of Contracts" has been waging in Israel for 30 years (commencing April 6, 1995) - an uncompromising war lacking any peace treaties between the Israeli parliament (the Knesset) and the Supreme Court. In January, 2026, this war may have reached its end with a declaration of victory accompanied by the trumpets of the Government.
How is a contract construed? The simple answer is: according to the contract language. Only when the contract's language is lacking or unclear does one attempt to trace the parties' intentions by examining external circumstances. This intuitive answer appeared in the text of the Israeli Contracts Law of 1973 and was applied by Israeli Courts until 1995, when the Supreme Court decided in the Apropim case that language and circumstances are to be reviewed together. Even if the language is clear, preference may be given to how the judge construes the subjective or objective intent of the parties. In other words, the Court could interpret a contract retrospectively as it sees fit, even contrary to the parties' intent and contrary to the language of the contract - 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 had passed from the world.
That is, until the sixth Netanyahu government declared (combined with a massive media offensive) in January 2026 its success in defeating the Court system via another amendment to the Contracts Law (as part of the "Legal Revolution"-some might say the "Fascist Revolution," or perhaps not a revolution at all but merely propaganda moves to delegitimize the Court system to assist Bibi Netanyahu in surviving the criminal proceedings being conducted against him for serious criminal offenses). And what does this amendment establish? Exactly the Bibi Roads ruling that has already existed for 6 years! So what really changed (except for a "victory" on paper in a battle that never took place)? A fascinating question!
So (putting aside unnecessary but highly publicized wars waged by the Netanyahu government against the Court system), what is the legal situation in Israel regarding contract interpretation as of early 2026? Identical to the situation at the end of 2025. Especially in the AI era, when agreements can be generated via an internet query, it is extremely important to be represented by a lawyer with expertise in the field, and not to settle for an inexperienced lawyer. Ultimately, certainly between sophisticated parties, the language of the contract is of the utmost importance, and poor drafting is liable to cause results the parties never intended.