Q: of the whole package.
A: of everything. And... We presented our candidacy - - - We submitted our candidacy to be an importer of JIC. We were told that there was another candidate, or candidates, who... Interested; and entered into a process that JAC had expanded; They asked for a profile of traffic devices; They asked to receive... business plan; Uh... And so on. These contacts continued until, uh... January, and... In the end, uh... The last step was that we received a draft agreement from JIC to be the... To be their distributors in Israel. This is where it stops.
Q: All this while JAC has a valid franchise agreement with Automax and its trustees. Are you aware of this?
A: I'm aware of that - - -
Q: that has not been canceled to this day.
[...]
Q: Only on the private car. The draft agreement you received is only for private or also for trucks?
A: Also to the private.
Q: Also for private. So I repeat my question. There is a valid franchise for Automax trustees (for private vehicles). In the process, you are engaged in lively negotiations and receive a draft contract, without finding out whether this agreement has been cancelled or not. Private.
A: True, I... (not clear) that I received; Anyone can request a franchise for all... Any manufacturer; Oh, God forbid not... We hinted, we didn't suggest, we didn't ask, that they cancel the existing agreements with JAC."
(p. 13, verses 20-32; p. 14, verses 7-13 of the transcript) (emphasis added)
- In other words, with the economic collapse of direct imports, Traffic Vehicles canceled the agreement with it, but it was not satisfied with that. It began to deal with the manufacturer in order to obtain a "package deal" that would entitle it both to a franchise for private vehicles (instead of direct imports) and to a franchise for trucks. All this while the concession of direct imports for the marketing of private vehicles has not yet been canceled, and when the concession for the marketing of trucks held by China Israel has remained in place. After all, it was Direct Import, and no one else, that gave Direct Import the channel of direct communication with the manufacturer from the outset in view of the fact that Direct Import held a franchise for the distribution of private vehicles. For this, direct import traffic devices have been rewarded for bad for good. In this sense, traffic devices behaved like a guest who tended to stay in another's home, and the next morning, when he found the house comfortable for his needs, the guest sought to expel the host from his home and sit in his place.
- Moreover, and this is the main point: the cancellation of the agreement by Traffic Devices did not invalidate clause 16.3 of the agreement, which prohibits traffic devices from receiving a franchise from the manufacturer for the marketing of trucks, and this prohibition is still in place even after the agreement was canceled.
What is this supposed to mean? As is well known, the cancellation of the contract does not indiscriminately expropriate all of its obligations, but only those obligations that are intended to ensure the continuation of the life of the contract and which do not relate to the arrangement of its termination. The case law distinguished between "first-order" obligations whose purpose is to realize the purpose of the engagement between the parties, and "second-order" obligations intended to regulate their legal relationship in the event that the engagement between the parties comes to an end, i.e., obligations that were intended in advance to survive the cancellation of the contract: