This doctrine prevailed for many years, and this was the way of the courts to interpret contracts that came before them for interpretation. See, for example: Civil Appeal 554/83 "Ata" Textile Company inTax Appeal v. Estate of the late Zolotulov Yitzhak, IsrSC 41 (1) 282, 304; Civil Appeal 406/82 Nachmani v. Galor, IsrSC 41(1) 494, 499; Civil Appeal 832/81 Relfo (Israel) inTax Appeal v. Norwich Union Fair Insurance Society Ltd., IsrSC 39(1) 38, 43; Civil Appeal 170/85 Zaken Brothers Contracting Company in Tax Appeal v. Mizrahi, IsrSC 34(2) 635, 638; Civil Appeal 539/86 Klir v. Elad, IsrSC 34(1) 602, 610-611; Civil Appeal 650/84 Stern v. Ziuntz, IsrSC 41(1) 380, 384.
- This was the case until the Apropim Rule came, the law that in the blow of the sword lost the theory of the "two stages" that are graded – the first language and the circumstances after it – and crowned the theory of the one stage of interpretation, in which both language and circumstances are examined. According to this doctrine, the language of the written contract, in and of itself, does not have the power to testify conclusively to the intentions of the parties to the contract, and as a rule, the interpreter is forbidden to satisfy himself with the language of the written contract, even if it seems to him that it is clear and unequivocal. If it is only required to do so, the court must turn to the circumstances of the conclusion of the contract, to clarify and interpret the language of the contract and to determine the intentions of the parties. Thus, only at the end of an interpretive proceeding in which both the language and the circumstances have been examined, will the interpreter be entitled to interpret the written contract before him according to the intentions of the parties. President Barak noted this approach of the commentator inParashat Apropim, and these were his words (ibid., 299-300):
The first stage (deriving the intention from the clear language) may be the starting point of the interpretive process. It must not be an end point. The interpreter must move on to the second stage (deriving the intentions out of external circumstances), and return to the first stage and from there to the second, back and forth, without any restrictions of "clear language" or "vague language", until he is satisfied that he has been able to formulate the intentions of the parties to the contract. With this vital "fact", we will proceed to retrieve the legal meaning from the various linguistic meanings of the text. Only then will he have peace of mind, because the language of the contract is clear.
- This halakha has obligated itself to be criticized by sages. See, for example: Shalev, Contracts, 400-413; G. Shalev, Contracts and Tenders of the Public Authority, (5760-1999), 35 (Shalev, Contracts and Tenders); Friedman, Contracts, 231-249; Friedman, The Law; M. Deutsch, "Contract Law: Review and Development," Yearbook of Israeli Law 5756 (1997) 167, 176-179; Mautner, 53 ff.; G. Shalev, "The Triumph of the Spirit over the Written Letter," in: The Court, Fifty Years of Judgment in Israel (Ministry of Defense Publishing and Courts Administration, 1999), 204. However, the courts adopted the rule to the extent that the Apropim rule became "[the] most cited rule in the field of contract law" (Shalev, Contracts, 425). We, too, do not intend to disagree with the rule of Apropim in any way; on the contrary, we agree with its principles. At the same time, we believe that the spirit of the halakha has spread far and wide, by interpreting the halakha in areas that were not originally intended for it. Our interest now is to do our best in order to restore the security and certainty to contract law, a certainty that has been undermined quite a bit in the wake of what was accepted – erroneously, in our opinion – as the Apropim rule.
Ways of Interpreting a Contract - Language and Circumstances
- Let us first speak of the language of a written contract and the depreciation that occurred in the status of the language following the Apropim ruling. In the judgment in the Apropim case, the Vice-President Barak ruled that "there are no 'clear' words per se" (Apropim, 298). This statement – a statement that can be accepted and can be disputed – was accepted in its plain sense, and as required by this, the rule of Apropim – contrary to the intention of its creator – was interpreted as stating that the language of the contract is never "clear" and that it can always be interpreted. An interpretation in this vein – in such an extreme way – is unacceptable to us. It is, in our opinion, a severe violation of the principle of freedom of contract and the autonomy of the parties to the contract, since it places the court as a party to the contract instead of an external interpreter to it. It causes uncertainty and creates "a feeling or 'atmosphere' whereby no contract is clear, everything is open, and any result can be achieved through interpretation" (Friedman, Contracts, 245). It imposes a heavy burden on the court, which is always required to examine evidence, hear witnesses and cross-examinations, and it is no longer entitled to cling to the plain language of the contract. Moreover, this interpretation does not even coincide with the doctrine of interpretation presented in the Apropim case, a doctrine that sought to remove a barrier placed in the interpreter's development – in his search for the intentions of the parties to the contract – when moving from the language of the contract to the circumstances, but did not seek to remove the language from its primacy. President Barak explained this, in retrospect, inBarak, Interpretation of the Contract, 497:
The Apropim rule did not determine that the contract and the circumstances are sources of equal status in formulating the intentions of the parties... Greater weight should be given to the intention, as it arises from the language of the contract over the intention, as it arises from the circumstances. The reason for this is that it can be assumed that the parties gave expression to their intentions in the language they adopted. Moreover, it is safer to assume that the intentions that arise from the language of the contract – language adopted by the parties themselves – is the "true" intention and not the intention that arises from circumstances, most of which precede the critical moment of entering into the contract or are later than that moment.