Caselaw

Civil Appeal 4628/93 State of Israel v. Apropim Housing and Development (1991) Ltd. IsrSC 49(2) 265 - part 33

June 4, 1995
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"The preference for objective representation over the implicit subjective intention is intended

To promote business certainty and commercial security.  As such, the emphasis in the objective representation is on the protection of the party that relies on the situation of the other party, and therefore if such reliance has not existed, there is no reason to prefer the objective representation..." (Civil Appeal 685/88 Koterman v. Keren Torah Ve'Avodah [30], at p. 602).

Isn't it necessary from this that the language of the contract should be interpreted according to the common subjective intentions that arise from the external circumstances, and not according to the objective intentions that arise from the clear language of the contract? 8 Take Reuven, who says to Shimon: I propose to sell you a horse that I own for a certain price.  Shimon replies that he wants to buy Reuven's horse at the same price.  Both sides were referring to an old machine in the hands of Reuven, which in the lexicon of both is called "horse."  What is the contract that is made? Suppose that from the clear language of the contract – which deals with the purchase and sale of a horse – it appears that the intention of the parties is the sale of a four-legged animal, which is known in Hebrew as a horse.  This was the understanding of any reasonable (objective) reader.  What is the point of recognizing a contract with this content, when both parties have decided to sell an old machine, which external circumstances indicate that they called a "horse"? The rule is that –

"In determining the range of linguistic meanings of the contractual text...  The Interpreter Verb

As a linguist.  He asks himself, what are the meanings that can be given, in the language in which the contract was concluded

- And if the parties have their own lexicon, within the framework of this lexicon – according to its language" (Civil Appeal 708/88 Shlomo Shepes & Sons in Tax Appeal v. Ben Yakar Gat Engineering and Construction Company in Tax Appeal [31], at p. 747).

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