Interim Summary
- In summary: A contract is interpreted according to the intentions of the parties. This intention is the goals, objectives, interests, and plan that the parties have jointly sought to achieve. The interpreter learned about the intention from the language of the contract and from the circumstances external to it. Both of these sources are "admissible." With their help, the commentator formulates the parties' common intentions. The transition from the internal source (the language of the contract) to the external source (the external circumstances) is not contingent upon the fulfillment of any preconditions
. No prior examination is required, whether the language of the contract is clear or not. This question will be clarified only at the end of the exegetical process. I discussed this in one of the passages, noting:
"The purpose of the contract can be learned from it and from the nature of its arrangements and structure, as well as from sources external to it, such as the course of negotiations between the parties and their conduct after the conclusion of the contract, other contracts that exist between them, the commercial practice that they know or presumably knew about, and other sources that can point to the purpose and purpose of the contract" (Additional Hearing 32/84 Estate of the late Walter Nathan Williams v. Israel (in Liguidatim) (London) [40], British Bankat p. 274).
See also Civil Appeal 154/80 [28], supra, at p. 223.
After the interpreter has formulated the (joint) intentions of the parties, he examines whether this intention is "implied" – that is, it has an anchor – from the contract. If the answer is in the affirmative, the contract will be interpreted according to this intention, which was used in its formulation in a mixture of data coming from and outside the contract.
- Before concluding this part of my judgment, I would like to make two comments: first, in this judgment – as in case law in general – the expressions "intentions" of the parties and the "purpose" of the contract are used in a mixture (see, for example: Civil Appeal 832/81 [29], at p. 15; Civil Appeal 631/83[15], at p. 572; Civil Appeal 655/82 [36], at p. 747; Civil Appeal 627/84 [11], at p. 482; The Ata case [1], at p. 305; High Court of Justice 306/86 State of Israel v. National Labor Court et al. [41], at p. 664; Civil Appeal 783/86 Reuven Gross in Tax Appeal et al. v. Tel Aviv-Jaffa Municipality [42], at p. 597; Civil Appeal 719/89 Haifa Quarries in Tax Appeal v. Han-Ron in Tax Appeal and Counter-Appeal [43], at p. 312). Within the framework of this judgment, we do not need to clarify these concepts. I will say only this: a contract is interpreted according to its purpose (see the judgment of Justice Difloc in case 201, at[72] (1985), Antaios Compania S.A. v. Salen a.b. in which he states that the purposive construction has been transferred from the interpretation of legislation to the interpretation of the contract). This purpose is a normative concept. It's a legal construction. It includes a subjective purpose and an objective purpose. The subjective purpose is the intentions of the parties. These are the goals, interests and purposes that the parties had in their hearts and gave external expression to them in their conduct (and therefore not secrets and whispers of the heart: Civil Appeal 5597/90, 5607[24], supra, at p. 218). Section 25(a) of the Contracts (General Part) Law deals with this intention. However, the interpretation of the contract should not be limited only to the standard of the parties' intentions. Section 25 of the Law does not constitute a closed list of rules for the interpretation of a contract. The vast majority of the rules of interpretation in contracts are halakhic, and are outside the framework of section 25(a) of the Law. Indeed, sometimes we are unable to formulate the intentions of the parties. It should always be remembered that the relevant intentions are not the subjective intentions of one of the parties, but rather the subjective intentions shared by both of them, or at least the (subjective) intention of one of the parties, of which the other party is aware and knows is the basis for the understanding of the contract by the other party (see: Civil Appeal 154/80 [28], at p. 223; The Ata case [1], at p. 305; Civil Appeal 819/87
Development Company Part 9 in Block 9671 in Tax Appeal et al. v. Haaretz Newspaper Publishing in Tax Appeal [44], at p. 344; Civil Appeal 5187/91 [34], at p. 186 ("A meeting of desires also requires a common intention