Caselaw

Civil Appeal 4628/93 State of Israel v. Apropim Housing and Development (1991) Ltd. IsrSC 49(2) 265 - part 18

June 4, 1995
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The learned judge of the first instance examined the words of section 6(h)(3), compared them with the words that appear in the preceding sections, and as a result reached the conclusion that the literal meaning of the section is unequivocal, and therefore there is no room to rely on the "intention of the parties" and to assess their opinion.  However, we have already ruled more than once that when the court comes to interpret a stipulation in a contract, it must not be bound by the narrow literal meaning of the words, when viewing the contract as a whole, against the background of its purpose and the circumstances of its conclusion, indicates a different intention than that which arises from the ordinary literal interpretation of the words.

The trend is –

"...to unravel the morals of the written words and to arrive at the investigation of the true intention, which was before the eyes of the callers" (Civil Appeal 453/80 Ben Natan v. Negbi [9], at p.

This is what was stated in other municipal applications 46/74 Mordov v. Shechtman [10], at p. 481, by Justice Y. Cohen (as he was then called):

"A great rule in the law of contract interpretation is that it is the duty of the court to interpret the contract in a way that reflects the intention of the parties, and although the examination of intention must be approached on the assumption that the parties meant what they wrote in the contract, more than once the courts give an interpretation of contracts that is inconsistent with the ordinary meaning of the words used by the parties."

Other Municipal Applications 627/84 Nodel et al. v. Estate of the late Zvi Pinto et al. [11], I noted, at p. 482, that:

"The words used by the drafters of the document, with all their importance, are not decisive, since the document must be read in its entirety and interpreted according to its spirit, and as stated, according to its purpose, the words and idioms used by the parties must be read in a comprehensive and full context."

 

Indeed, the initial stage in the interpretive process is the language of the contract, but when the narrow literal interpretation leads to a result that is inconsistent with the overall context, it is necessary to move on and examine other interpretive possibilities.  At this stage, it is necessary to refer to the contract as a whole, as well as the purpose and purpose underlying it.

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