Caselaw

Civil Appeal 4628/93 State of Israel v. Apropim Housing and Development (1991) Ltd. IsrSC 49(2) 265 - part 42

June 4, 1995
Print

The two-stage theory is not required by section 25(a) of the Contracts (General Part) Law.15 The claimant will argue: The two-stage theory is anchored in section 25(a) of the Contracts (General Part) Law.  The interpreter is not entitled to deviate from the provisions of the law.  Indeed, if the two-stage doctrine had been enshrined in a provision of the law, we, as the faithful interpreters of the law, would have been obliged to obey its provisions.  In my opinion, there is no anchoring to the theory of the two stages in the provision of the law, which is as follows (  section 25(a):

"A contract shall be interpreted according to the intentions of the parties, as it is implied in the contract, and to the extent that it is not implied by it – from the circumstances."

An examination of this provision shows that it does not relate to the distinction between clear language and non-clear language.  It does not say that the interpreter learned about the intentions of the parties from the clear language of the contract.  It does not say that "if the language is clear, then the purpose is also known."

It does not say that "a contract whose language is so clear as to leave no room for doubt as to its intention,  the opinion of the parties must be assessed from it, and the circumstances of its conclusion should not be relied upon for this purpose."  The clause does not create two evidentiary stages, the distinguishing line between them is the clear/unclear language of the contract.  Section 25(a) of the Contracts (General Part) Law does not deal at all with the laws of evidence.  It is not a section that deals with the admissibility of information.  He does not take any position as to the sources (the language of the contract or external circumstances) from which the commentator learned about the intentions of the parties.

  1. The normative message that arises from section 25(a) of the Contracts Law (General Part) is twofold: first, the main criterion for the interpretation of a contract is the intentions of the parties to the contract.

This intention is the goals, purposes, objectives and interests (subjective, which found external expression) that the parties sought (jointly) to achieve through the contract.  This intention can be implied from the contract, and it can be implied by the circumstances.  Second, if after examining the language of the contract and the external circumstances, there is still a conflict between the intentions of the parties as implied in the contract, and the intentions of the parties as implied by the circumstances, the intentions of the parties implied by the circumstances shall prevail.  Indeed,  section 25(a) of the Law establishes a rule of decision, according to which full preference is given to the intentions implied in the contract over the intentions implied by the circumstances external to the contract.  To be precise:  Section 25(a) of the Law does not stipulate that in formulating the intentions of the parties (which is implied in the contract), one should not refer to the circumstances external to the contract.  Section 25(a) of the Contracts Law does not prohibit resorting to external circumstances in order to better understand the intentions implied in the contract.  All that is set forth in section 25(a)

Previous part1...4142
43...67Next part