")1) In the event that the purchase obligation is realized after the end of the performance period, the interest as stated above will be calculated only upon the end of the performance period; (2) In the event of the realization of the purchase obligation after 18 months from the end of the execution period, an amount of 2% will be deducted from the price of the apartment that will be determined as stated in clause (1) above, for each month following the end of the aforesaid 18-month period."
These two sub-clauses apply to all apartments. They are not limited but to apartments of type A. Therefore, there is also an arrangement in these sub-sections regarding the delay in the requirement to fulfill an undertaking in respect of Class B apartments, and there is no deficiency in this matter. On the other hand, giving meaning to subsection (3) as it also relates to the realization of a purchase obligation after the end of the performance period, creates, on the one hand, inexplicable duplication (which requires a reduction in the scope of application of subsection (2) to apartments of type A only, contrary to its language), and on the other hand, creates a deficiency with regard to the sanction of delay in execution – and not of a purchase requirement – in apartments in development areas (type B). The first instance was aware of this "vacuum" that was created. Its solution was this:
"And if you say, is it possible that a delay in the execution of projects of the type in question will remain without
any sanction? It is possible that the answer lies in contract law. As in any contract in which no special sanction has been set for a particular breach, the party injured by the breach is entitled to prove its damages and to compensate the violating party."
This answer is unsatisfactory. There is no basis – within the scope of the purpose of the program contract – to assume that this central matter was left only to the application of the general compensation law. What is the basis for leaving the sanction of delay in the execution of apartments in development areas for (prolonged) litigation in the courts, and on the other hand, to regulate a "civil sanction" – which has a kind of "self-help" element – for the delay in the execution of apartments in the desired areas? This distinction has no business logic, it contradicts the (objective) purpose of the program contract, and it should not be determined as the purpose of the contract.
- Indeed, an examination of the program contract according to the meaning given to it by Justice Matza leads to the conclusion that there is a deficiency (lacuna) in this contract with regard to the (civil) sanction in the event of a delay in execution in the requested areas (type A). As we have seen (paragraph 16 above), the program contract distinguished between two types of projects: the construction of apartments in sought-after areas (type A) and the construction of apartments in development areas (type B). For each of these types, execution dates have been set and dates for the realization of the state's commitment to purchase apartments that will not be sold on the free market. A mechanism of encouragement was established to expedite construction of both types. A mechanism for sanction was also established in the event of the realization of the purchase obligation after the execution date in both types. Now, with regard to the (civil) sanction in the event of a delay in execution, an arrangement was made regarding the delay in the requested areas (type A), and no arrangement was made regarding delay in execution in the development areas (type B). My colleague also noted – within the framework of the alternative argument – that he is inclined to the opinion that this state of affairs is inconsistent with the business purpose and commercial logic of the program contract. Indeed, in the contract cart the program lacks a fourth wheel. The contract – according to the interpretation given to it – is unbalanced. It has no internal logic. It doesn't make any business sense. The lines of thinking developed in it, according to their natural continuation, should have led to the existence of a civil sanction even (and mainly) in the event of a delay in the execution of construction in development areas (type II). The silence of the program contract regarding the (civil) sanction in the event of a delay in construction in development areas certainly does not indicate a negative arrangement. Likewise, it does not attest to the absence of an arrangement, which would leave the matter to the general law. This conclusion is inconsistent with the determination of a (civil) sanction in the event of a delay in construction in sought-after areas. Indeed, the silence of the program contract – according to the interpretation of my colleague, Justice Matza – with regard to the delay in the execution of construction in development areas contradicts the purpose of the program contract; The program contract is incomplete without this arrangement, and this incompleteness is contrary to the purpose of the program contract. We have before us a deficiency in the program contract.
- How will the gaps in the program contract be filled? No practice has been proven in this regard. Filling in the blanks will therefore be done in accordance with the principle of good faith. The question is what arrangement would fair parties to the program contract determine, according to the internal structure, internal logic and basic assumptions of the program contract. It seems to me that the answer is that the natural and necessary arrangement from the internal structure of the