Caselaw

Civil Appeal 4628/93 State of Israel v. Apropim Housing and Development (1991) Ltd. IsrSC 49(2) 265 - part 34

June 4, 1995
Print

Why should the parties not be given the opportunity to show, within the framework of reliable evidence (such as previous correspondence) about the external circumstances, that in the contract between them the word "horse" has a special meaning? If there was an error in the contract, and instead of writing "machine" the parties wrote "horse", the law allows for the correction of the mistake and the mistake is not grounds for cancelling the contract (section 16 of the Contracts (General Part) Law).  Why is it not possible to reach the same result, when the parties were not wrong at all, but according to the special language they called "horses" what everyone calls "machines"? What is the legal logic inherent in the perception that both parties should be forced into a contract, which according to their common intentions they did not want at all, and when it is possible to point to a contract that according to their common (subjective) intentions they wanted?

 

  1. As stated, harmony between the laws of interpretation and the laws of general contracts should be strived for. Take the issue of the mistake.  The mistake operates in the gap between the subjective intention of a party and the objective meaning of the contract:

"Even if a contract is concluded, according to the objective test, it is still possible that it can be cancelled by the party whose subjective intention there was a gap between its subjective intention and the intention implied in the representation that it made.  For this purpose, the laws of defects in Chapter 2 of the Law are intended" (President Shamgar, Civil Appeal 685/88 [3], supra, at p. 603).

What is the point of opening and widening this gap, when both parties have a common subjective intention, which does not arise from the clear language of the contract? What is the interest that such an interpretive approach defends? It does not protect the interest of reliance, it does not promote security and certainty.  It only allows one of the parties, for whom the terms of the transaction have ceased to be comfortable, to withdraw from it.  This result is undesirable.  A harmonious interpretation of contract law must take into account the totality of the laws.  It must create a synchronization between the rules of interpretation and the laws of error.  Such synchronization does not exist if the theory of the two stages in contract interpretation is adopted.

Previous part1...3334
35...67Next part