Civil Case (Herzliya) 52139-06-23 Avichai Bar Or v. Shmuel Cohen - part 2

On March 5, 2025, the evidentiary hearing was held on the method of recording.  The parties submitted written summaries.

From here to the judgment.

17. Basic concepts are that a contract is concluded by way of offer and acceptance (section 1 of the Contracts (General Part) Law, 5733-1973). The main thing is to examine the finality of the parties to the contract and the existence of a meeting of desires between them.  The element of "finality" is a main and fundamental condition for the creation of a contract, and in its absence a binding agreement between the parties is not perfected.  The test for the existence of finality is as an objective-external rule, so that the emphasis is placed on the external disclosure of the consent in a way that is understandable to a reasonable person, and as it is learned from the totality of the circumstances of the case, including the conduct and words of the parties before and after the conclusion of the contract.  This is done, inter alia, in order to provide protection to the contractor's reliance and to maintain business certainty and commercial security (Gabriela Shalev and Effi Zemach, Contract Law (Fourth Edition 2019) 159-163).
18. Signing the agreement is a significant indication of the parties' intention to enter into a contract, but it is not a condition without which there is no one. Even when we are dealing with a contract for the sale of real estate, it is possible to conclude the existence of a final decision by means of other evidence, if it clearly indicates an intention to establish a binding legal relationship and if it objectively attests to the intention of the parties to enter into a contract (for a broad overview of the issue, see Civil Case (Central District) 13887-06-19 Meir Sassi Initiation and Investments in a Tax Appeal v.  Yona Egozi [Nevo] (February 27, 2025), paragraphs 76-89 of the judgment).
19. Section 12(a) of the Contracts Law (General Part) 5733-1973 establishes a person's duty to act in an acceptable manner and in good faith in negotiations prior to the conclusion of a contract. The case law noted a number of cases whose existence in certain circumstances may indicate that a party to the negotiations violated the duty of good faith imposed on it, even though it is not a closed list.  These cases include non-disclosure of facts, conducting parallel negotiations with a third party without informing the other party thereof, conducting negotiations without the intention of engaging or withdrawing from negotiations for irrelevant motives in a manner that harms the reasonable expectation of the other party (Civil Appeal 8143/14 Halfon v.  Mortgage Discount Bank, [Nevo], January 29, 2017).

From the general to the individual

20. After reviewing the evidence and testimonies, I came to the conclusion that the parties had decided to enter into a binding agreement for the sale of the property, and that all the specific requirements for the maturity of the transaction were met. The defendants withdrew from the negotiations in bad faith, without reasonable justification, right on the verge of formally signing the agreement.
21. There is no real dispute between the parties that from the negotiation stage until the final agreements were reached, and even afterwards, the contacts were conducted between the plaintiffs and their counsel, Adv. Balaish, and between defendant 1 and Adv. Lapid on the other side. The other defendants were not directly involved in the negotiations (see the testimony of defendant 1 at p.  82 of the transcript).
22. The evidence shows that on December 19, 2022, at 11:01 a.m., Adv. Balaish forwarded to Adv. Lapid a final version of the agreement (all of the emails are in Appendix 2 to the affidavit of Plaintiff 1). He emphasized that the comments of the sellers (the defendants) were accepted and incorporated into the agreement.
23. On the same day, at 12:02 p.m., Adv. Lapid replied that the sellers were "willing to sign the agreement immediately and ask that the buyers sign as well, when the sellers asked me to announce that if the buyers do not agree to close the transaction immediately, they will consider themselves free from the engagement with them."
24. Balaish replied to him by email that day at 8:34 p.m. and asked to coordinate a date for the signing of the agreement as early as that week.  The email was sent on Monday and suggested that the agreement be signed as early as Thursday of that week, although the plaintiffs noted that they preferred the signing to be in early January 2023, for their own reasons.
25. On the same day, at 9:11 p.m., Attorney Lapid sent an email to Attorney Blaish with the following words: "The seller asked to announce that as far as he was concerned, and I quote, 'the transaction is null and void.' Unfortunately, I have nothing to add but to suggest that the parties try to talk to each other" (Appendix 3 to the plaintiffs' affidavits).
26. Tal Or, from Adv. Balaish's office, responded to Adv. Lapid's message by email sent at 00:13 and wrote, among other things, that the transaction is valid and exists, and that a date for signing should be arranged the next day (Appendix 4). Plaintiff 1 stated that he sent the defendants' counsel a signed copy of the agreement and checks for the first payment on account of the consideration for the criminal appeal of the agreement (paragraph 12 of his affidavit).
27. The next day, on December 20, 2022, Adv. Lapid sent an email to Adv. Balaish at 20:18 and confirmed that his office had received the agreement signed by the buyers as well as the checks (Appendix 5).
28. Plaintiff 1 held talks with defendant 1 and clarified that no meeting had been arranged between the parties, as claimed by the defendants, and that the first payment had already been transferred and there was no concern in terms of the plaintiffs' financial ability (Appendices 6-7 to the affidavit of plaintiff 1).
29. On December 21, 2022, defendant 1 sent a handwritten letter, in which he set two conditions for the fulfillment of the agreement. The first condition is a valid confirmation by the lending bank, and the second condition is that a meeting between the parties is held (Appendix 8).  The parties have since exchanged additional text messages (see Appendix 10 to the plaintiff's affidavit).
30. Balaish noted in his affidavit, among other things, that the negotiations between the parties took time and included 22 drafts of a sale agreement. On December 19, 2022, a final and agreed version was transmitted between the parties, which was sent by him to Adv. Lapid.  Adv. Balaish confirms that he received Adv. Lapid's message that the parties wanted to close the deal immediately, but as stated, Adv. was later surprised and announced that the sellers had withdrawn their agreement, as detailed above.
31. Thus, the plaintiffs presented with evidence a clear picture of everything that was the text of the contract agreed upon between the parties, while representing the discretion on the part of the sellers, by Adv. Lapid, their agent, as well as certain aspects of the contract, in view of a final and agreed wording, which the parties worked on for several months. As stated, the proposal and acceptance by the parties were completed, but Adv. Lapid unexpectedly informed Adv. Blachim of the cancellation of the agreements.  Two days after the withdrawal of the defendants, they demanded, through defendant 1, that two additional conditions be fulfilled for the purpose of perfecting the transaction, and these conditions (below) were also not violated by the purchasing plaintiffs.
32. The defendants' arguments and arguments that the agreement was not perfected and that the defendants withdrew from the negotiations while making justified arguments cannot be accepted.
33. Defendant 1 claimed in his affidavit, inter alia, that he was involved in negotiations with the plaintiffs. Lapid acted contrary to the defendants' instructions, and the draft he forwarded was not binding (paragraph 7 of his affidavit).  He claimed that Attorney Lapid did not meet with the other defendants (who are brothers).  Defendant 1 announced that Adv. Lapid had agreed to receive a draft on behalf of the buyers, even though the brothers had informed him that the transaction was null and void, and that he was not allowed to receive the checks on behalf of the buyers.
34. However, this version of defendant 1 is not supported by any additional evidence, beyond the claim, and even contradicts the exchange between the counsel as presented in the plaintiff's evidence.
35. The defendants did not bring Adv. Lapid to testify, even though he was on their list of witnesses. This is a fundamental omission, since Adv. Lapid was able to confirm or deny the correctness of defendant 1's version, whether or not he acted in deviation from the authorization, and shed light on all the circumstances of the transaction.  According to case law, this omission should be attributed to the defendants' duty "...  This is in accordance with the rule according to which when a party refrains from bringing evidence that is in his possession, a presumption arises that if the evidence had been brought, it would have acted against him" (Civil Appeal 548/78 Sharon v.  Levy, IsrSC 35(1) 736, 760 (1980); Civil Appeal Authority 3489/09 Migdal Insurance Company in Tax Appeal v.  Emek Zevulun Metal Coating Company in Tax Appeal [published in Nevo] (April 11, 2013)).
36. Defendant 1 claimed that Adv. Lapid "sold us", but did not provide a convincing reason as to why they did not bring the testimony to complete the picture, and why Adv. Lapid would act against the permission of his clients, and what is his interest in doing so. If he had indeed acted in contravention of the license, it would have been expected that the defendants would have sued him or at least filed a notice against him to a third party.
37. The defendants did not give a satisfactory explanation as to why Adv. Lapid announced the cancellation of the agreement to sign the agreement that evening. The defendants confirmed that on the same day (December 19, 2022), they were supposed to meet with Adv. Lapid to receive an explanation of the agreement.  They claimed that Adv. Lapid did not show up for the meeting, but spoke with defendant 1 on the phone and told him that the plaintiffs had no money for the transaction, and in this conversation it was decided to terminate the negotiations (affidavits of defendants 1, 2, and 5; p.  93 of the transcript).
38. The argument should not be accepted. First, this conversation was not mentioned in the statement of defense, and it is a version that was mentioned for the first time in the affidavit of the main witness.  When a certain version that is first heard at trial is not given at the first opportunity when the witness could have given it, the assumption is that the person who accepts his testimony in the absence of a satisfactory explanation is suspected of its veracity.  Other Municipal Applications 8650/08 Binyamin Rafalov v.  State of Israel Israel Prison Service (Nevo, July 17, 2013), the court ruled that it was sufficient that a party to the proceeding raised a claim for the first time only in the affidavit of his main witness in order to bring about the rejection of his claim.  Similarly, other Municipality Applications 78/04 HaMagen Insurance Company in Tax Appeal v.  Shalom Gershon Moving Ltd., 61(3) 18 (2006) it was held that it was sufficient that a claim was absent from the letter of claim and the letter of reply, and that it appeared for the first time in the affidavit of the main witness in order to bring about its rejection.  Second, there is also no mention of this in Attorney Lapid's email message to Attorney Balaish.  Third, Adv. Lapid was not brought to testify, as stated, which could have shed light on the circumstances of the cancellation notice on the part of the defendants (testimony of defendant 1 at p.  94, paras.  9-15).  In light of the above, I determine that this is a suppressed claim that should not be given any evidentiary weight.
39. In addition, defendant 1's version is contradicted by the very letter he sent to the buyers on December 21, 2022 (Appendix 8 to plaintiff 1's affidavit), in which he in fact confirms that the transaction was not canceled, but only conditioned it on two additional conditions; In practice, it appears from this letter that he is interested in the deal. In addition, in the letter itself, defendant 1 admits that the agreement was supposed to be signed on December 19, 2022, but that the plaintiffs breached the agreement by not transferring the payment, i.e., they did not meet the terms of the agreement, according to him.  This is in fact an explicit admission that defendant 1 considered the agreement reached by the parties to be a binding agreement, but the defendants violated it, according to him.  However, it was proven that the plaintiffs did not breach the agreement.  Lapid announced the cancellation of the agreements, and therefore the intended meeting did not take place, but the plaintiffs immediately sent the agreement signed with the first payment addendum (Appendix 5 to the plaintiffs' affidavit) without any reservation or condition, and thus expressed their opinion that the agreement existed and even acted to fulfill it in kind.  The addition of conditions by defendant 1 thereafter, is the addition of new conditions after everything has already been agreed.
40. I was persuaded that there was discretion on both sides that the agreement was already valid on December 19, 2022, but that according to the defendants, the plaintiffs violated it, which was proven to be false. The parties took the trouble to reach contractual agreements through their representatives, and when they reached this, with the approval of the lawyers in written notices, the defendants suddenly withdrew and did not agree to sign the agreement on their part, and without warning the plaintiffs that progress in the negotiations until the signing does not mean that they are committed to the agreement, or that they are negotiating with other parties.  The agreement is signed by the plaintiffs but also 'finalized' by the defendants by means of written notices by Adv. Lapid on their behalf.  There is no dispute that the agreement includes all the commercial terms of a transaction of the type in question.  With regard to the claim that the transaction was not reported to the tax authorities, and that an irrevocable power of attorney was not signed, and the like, it is clear that there is nothing to report until the transaction is technically signed by both parties, and this does not prejudice the plaintiffs' claim of discretion, and at the very least, withdrawal from negotiations in bad faith.

If so, all the evidence leads to the conclusion that the parties have reached a binding agreement.

41. Lapid's announcement that "the transaction is null and void", in circumstances in which the draft is final and that the defendants require a signature from the plaintiffs, constitutes a clear lack of good faith. As stated, the defendants' version that the plaintiffs failed to comply with the terms of the agreement was proven to be incorrect.  The plaintiffs presented evidence that they had received approval in principle for the mortgage (Appendix 7 to the affidavit).  In addition, this matter did not arise as a matter of principle at any stage of the negotiations between the parties for a period of nine months, and no evidence was presented to this effect.
42. In this regard, it is appropriate to dwell on Adv. Lapid's statement, as stated above, and the spirit that arises from it. This is what he wrote to Adv. Balaish:
43. From the words of the words, it can certainly be understood that as far as Adv. Lapid is concerned, the transaction was already at an advanced stage, apparently "closed and ready" for execution, and then it was canceled. He puts it in the words: "He asked me to announce that and as far as he was concerned"; In other words, this is no longer an open negotiation stage as far as he is concerned.
44. The use of the words "null and void transaction" shows that Adv. Lapid, as the person who represented the defendants, viewed the situation at the time of writing as an existing agreement that he was required to announce its cancellation, and not only as negotiations that failed. The phrase used indicates that binding consent has already been reached.  If the deal was only in preliminary negotiations, it is more likely that he would have written "the parties did not reach agreements" or "the negotiations are over." Here there is language of cancellation of a contract, not of failure in negotiations.
45. The statement that "I have nothing to add" also shows that there are no other topics open for discussion, a situation that usually occurs only when a party to the deal sees the deal as closed in principle. This indicates that there are no clauses left for negotiation or discussion, meaning that everything has already been agreed, and only the execution action (actual signature) is not underway.  Otherwise, Lapid would have been expected to point out what stumbling blocks remained or what had not yet been agreed upon.
46. In other words, the spirit of the announcement indicates that the transaction was ready to be executed, but it was the sellers who asked to cancel it surprisingly and without explanation. The letter conveys that the deal has passed the negotiation stage, reached binding agreements, and only the signing stage remains, but it was canceled just before the signing.  At this stage, therefore, it can be determined that this is not a failure negotiation, but rather a real cancellation of an undertaking on the part of the defendants.  In the spirit of the matter, it is clear that Adv. Lapid remains helpless and that things are no longer dependent on him, in terms of the professional legal service, and that in practice, everything was already closed and agreed upon and he had nothing to add.
47. When an intensive and advanced negotiation takes place, the party seeking to terminate it must notify the other party of its intention, specify the reason for the termination of the negotiations, and give a fair possibility of repairing the obstacle in order to fulfill the contract. A unilateral notice without informing the other party, which has begun to develop reasonable expectations for the conclusion of the contract, does not meet the expected standard of conduct (see, for example, Civil Case (Hai District) 10103-11-13 Shani Uliel v.  Talia Zehava Adler [Nevo] (December 9, 2013)); Civil Case (Hai District) 28877-03-16 Gidi Barber v.  Eran Amor [Nevo] (April 20, 2017)).
48. As noted, the email sent by Attorney Lapid did not give the plaintiffs an explanation that the defendants had withdrawn their agreements, after Attorney Lapid approved the agreement.
49. However, in his interrogation and in response to the question of what happened that day that deterred the defendants from moving forward with the transaction, or whether it was a misunderstanding, he answered clearly: "I will tell you why I didn't think there was no misunderstanding? Because there were other clients in the pipeline, so I said, 'If they go, more will come,' you understand, the fear that I wouldn't get the money wasn't as serious for me as getting into trouble later, you understand?" (p. 109, paras.  8-10).
50. First, this is a testimony that is contrary to the interest of defendant 2 and the other defendants. The rule is that the testimony or confession of a litigant, including a defendant, which is given contrary to his interest, will have more weight than testimony that serves this interest.  The logic behind this determination is that in the case of testimony contrary to interest, the testimony can only be explained by the witness's desire to tell the truth, whereas in the case of testimony that serves an interest, there is a concern that the witness will skew his testimony in order to serve his cause.  The basic assumption is that a person does not admit to matters that are contrary to his personal interest, and therefore his words contain a kernel of truth (see: Yaniv Vaki, The Law of Evidence, Vol.  1 (2020), p.  444).  Therefore, a high evidentiary weight should be attributed to the words of defendant 2.
51. Second, according to defendant 2, there were other potential purchasers for the property. At a stage when the parties were already on the verge of signing, it is unreasonable to withdraw from negotiations, just because there were additional potential buyers, and this amounts to a lack of good faith in conducting negotiations.  While withdrawing from negotiations due to other potential buyers is not considered bad faith in itself, as a seller is allowed to maximize profits and choose the best offer.  However, such withdrawal may be considered bad faith if it occurs at an advanced stage of the negotiations, without a justifiable substantive reason, or without informing the other party of the existence of parallel negotiations or a higher offer, thus preventing it from being able to improve its offer.  While in the early stages there is no obligation to require the disclosure of parallel negotiations, in the advanced stages such disclosure is required in order to enable fair rules of the game and to prevent damage to the reliance of the other party.  If the only reason for withdrawing is to accept a higher offer, and this is not disclosed to the buyer to allow him to improve his offer, this may be considered bad faith.  However, if the decision to retire was based on another significant reason, even if a higher offer was made, the withdrawal will not necessarily be considered bad faith.  Civil Case (Shalom Chai) 29919-12-11 Gilit Menchel Sharon v.  Uriel Heiman [Nevo] (01.02.2015); Civil Case (Shalom Rishon LeZion) 11938-06-18 Shani Meira Sacks v.  Yaniv Moshe Efrati [Nevo] (January 20, 2020)).
52. In the circumstances of the case, when the sellers' attorney, Adv. Lapid, informs the buyers' attorney in an email that the agreement can be signed, it means that the negotiation stage is over and all that remains is to sign the agreement. In light of the words of defendant 2, there is no choice but to conclude that the real reason for refraining from signing the agreement was that there were other buyers in the reed.

Are the defendants all liable to the plaintiffs?

53. The defendants claim in their summaries that Adv. Lapid acted without their authorization vis-à-vis the plaintiffs and that they should not be liable for his actions. The plaintiffs admit that they conducted themselves only with defendant 1 and Adv. Lapid, but claim that defendants 2-6 authorized Adv. Lapid and defendant 1 to represent them in the negotiations, and that according to the laws of emissary, they are jointly and severally liable.
54. Indeed, the person who stood before the plaintiffs (in front of their attorney, Adv. Balaish) was Adv. Lapid, with defendant 1 being the dominant and active figure among the defendants. Defendant 1 was the person involved in the transaction from beginning to end, according to his testimony.  Thus, in his affidavit, he states, inter alia, in paragraph 6 that he was involved in negotiations with the plaintiffs and that he corresponded with them in various ways.  He also stated in paragraph 7 of his affidavit that Adv. Lapid acted on behalf of the defendants and accompanied the transaction, but acted in contravention of the instructions.  He also stated in paragraph 12 of his affidavit that he conducted the negotiations with the plaintiffs directly and also through Attorney Lapid.  With regard to the letter in his handwriting (Appendix 8), he noted that it was written solely on his own opinion and not a letter from the other defendant brothers (as well as in paragraph 43 of his affidavit; his testimony at p.  91, paras.  33-34).  Therefore, it is clear that defendant 1 himself is certainly liable to the plaintiffs.
55. With respect to the other defendants 2-6, there is no dispute that none of them had any contact with the plaintiffs. The question is whether, in the circumstances of the case, they are also liable to the plaintiffs.  In my opinion, the answer is yes, and this is by virtue of the principle of foreseeable mission.
56. This is a real estate transaction in which a number of sellers, with defendant 1 dominating while the other defendants are less involved. According to the evidence, Adv. Lapid acted against the plaintiffs and their counsel on behalf of all of them.  This conduct establishes impediments in favor of the buyers - the plaintiffs, by virtue of the defendants' conduct that created a representation of authorization.
57. Such a situation, also known as "external authorization" or "objective", was created by virtue of section 3(a) of the Mission Law, 5725-1965. This section states that courier is granted not only with explicit authorization (written or oral) from the sender to send, but also "by the sender's conduct towards one of them" (the sender or the third party).  It is a settled rule that objective authorization may create a binding mission relationship between the sender and the third party, even if no internal authorization was granted between the sender and the sender, or even if the sender exceeded his internal authority.  This emissary is considered a "real" emissary, and not just a claim of estoppel (see: Civil Case (Hai District) 32857-04-16 Sana Mushlav v.  Salim Hassan Abbas [Nevo] (01.10.2020); Civil Case (Shalom J.M.) 34727-09-12 Brent Rotenberg v.  Serge Tartur [Nevo] (May 4, 2022); Civil Case (Shalom Tel Aviv) 3978-08-18 Hadar M.A.I.A.  Entrepreneurship in Tax Appeal v.  Kfar Chabad Workers' Moshav of Lubavitch Hasidim for Cooperative Agricultural Settlement in Tax Appeal [Nevo] (04.12.2023)).
58. The fact that all sellers are represented by the same lawyer, even if only one of them is dominant and the others are less involved, can create an objective representation of authorization on their part towards buyers. The actions and statements of the lawyer, who represents all the sellers, are perceived as actions that are binding on all the senders.  In such a case, even if in the internal relationship between the sellers and the lawyer the lawyer has exceeded the boundaries of his mission towards some of them, the third party (the buyers) can still create a representation of a presumptive mission.  It is not superfluous to note that a mission to execute a real estate transaction does not require a written document and can be done orally or by the conduct of the sender (see: Civil Case (Jerusalem District) 58201-12-20 Nabil Muhammad Morad v.  Maged Hamdan [Nevo] (February 29, 2024); Civil Case (Tel Aviv District) 60603-01-12 David Shemesh v.  Afridar Initiative and Investments in Tax Appeal [Nevo] (04.01.2018); Civil Appeal 2159/19 Aharon Diva v.  Uri Saban [Nevo] (09.03.2020)).
59. In order for a foreseeable mission to bind the sender to the third party, the third party must rely in good faith and reasonably on the representation presented to it, and it must not know, or should have known, as a reasonable person, about the lack of authorization of the sender. If the buyers knew or should have known that the lawyer was acting without authority vis-à-vis some of the sellers, then they would not have a claim of preclude by virtue of the principle of foreseeable mission (Hadar A.I.A., supra; Kfar Chabad case, supra; Civil Appeal 10489/09 A.  Netz Management and Holdings in Tax Appeal v.  Hari Aluf [Nevo] (06.09.2011); Civil Appeal 480/90 Moshe Agadi v.  Yosef Ben-Shlosh [Nevo] (July 9, 1991))
60. It is important to note that the idea of a foreseeable mission is determined by the manner in which it is foreseen or perceived by the third party, and this is based on the objective behavior of the sender, this representation can be created by the act or omission of the sender, and any such representation from which the third party is entitled to conclude that the agent is acting with authorization, grants the mission and binds the sender in its relationship with the third party (Civil Appeal 1286/90 Bank Hapoalim in Tax Appeal v. Vered Clothing [Nevo] (December 29, 1994); Civil Appeal 3526/11 Karadi Avraham v.  Censor - Grain and Fodder Import Company in Tax Appeal [Nevo] (06.05.2013) Civil Case (Shalom Hertz) 7563-09-15 Shlomo Avshalom v.  Oded Weksler [Nevo] (08.05.2018)).
61. As stated above, Adv. Lapid dealt with Adv. Blaish throughout the entire process over several months, exchanging many drafts, dozens in number. A reading of Adv. Balaish's lengthy testimony shows that at no stage did Adv. Balaish know or should have known or suspected, in real time, that Adv. Lapid acted without the authorization of all the defendants or that he deviated from this authorization, as alleged.  This is clearly evident from the email dated December 19, 2022 at 12:02 p.m., that Adv. Lapid sends to Adv. Balaish on behalf of the sellers willing to sign the transaction.  This email is in fact the final line of the negotiation stage, which indicates that the deal is ready to be signed.  Therefore, in terms of the presentation of the matter as perceived by Adv. Balaish, and also by the plaintiffs in the sense, Adv. Lapid acted on behalf of all the defendants.
62. As may be recalled, Adv. Lapid was not summoned to testify (even though he was on the list of defendants' witnesses!) in order to prove that he acted in an unusual manner or without permission, and that the plaintiffs or their counsel knew about it in real time, to the extent that this was indeed the case. This omission lies at the defendants' doorstep, since it is an important claim from their point of view (at least in relation to defendants 2-6, who claimed lack of involvement), and the rule is that a party who makes an important claim for his legal position bears the burden of bringing evidence to prove that claim ( Shalom Gershon Moving, supra).
63. The plaintiff confirmed in his testimony that he was in contact with defendant 1 and not with the other defendants (pp. 70, 26-32) and that as far as defendant 1 and Adv. Lapid were concerned, defendant 1 was the representative of the family with whom he was in contact (p.  70, s.  1).  However, it did not emerge from his affidavit or testimony that he knew or should have known that defendant 1 was acting on his own initiative, or that Adv. Lapid was not acting on behalf of all the defendants, to the extent that this was indeed the case.
64. Defendant 1 confirmed in his testimony that the defendants appointed him to sell the property and be involved (p. 82, paras.  21-26).  In Appendix 8 to the plaintiffs' affidavit, which is a letter sent by defendant 1 to Adv. Lapid, Adv. Lapid is crowned as a "representative of the sellers" and it is worded entirely in language that leaves no room for doubt that defendant 1 acted on behalf of the others and that such a representation was created outwardly.  Appendix 161 to the defendants' evidence, which is a sheet of principles, is also worded in such a way that defendant 1 acts and represents on behalf of the other defendants, and when asked about this, he replied: "...  I represent my brothers, I'm not a power of attorney, I'm not recognized by them, no one is my patient, everyone comes as 6, like they come 2, we're 6, I was, I wrote it down so we don't waste our time and more or less that I'm going to go somewhere,.." (p.  86, paras.  12-14).  Later in his testimony, he tried to evade the question of whether he acted and committed on behalf of the other defendants, or only on his own, but his answers were evasive.  In any event, there is no doubt that this document created a representation to the plaintiffs that defendant 1 acted with the permission of the other defendants, and it was not proven that the plaintiffs knew or should have known about a dispute or lack of authorization on the part of defendant 1 on the part of the other defendants, or deviation from authorization to the extent that it was.  In any event, in accordance with the case law above, even if in the internal relationship between the sellers and the lawyer Adv. Lapid, or defendant 1 himself, exceeded the boundaries of their mission vis-à-vis some of the sellers, the third party (the buyers) can still create a representation of a presumptive mission.
65. The testimonies of the other defendants also lead to the conclusion regarding the existence of authorization. Defendant 5 said: "I have no idea, and as far as I'm concerned, I appointed my brother to examine all our options, meaning that there is no point in six talking to this buyer, another buyer, who was supposed to gather all the data." (p.  104, paras.  13-15) and later "...  As long as things didn't come up that we were about to close, that we had something to express an opinion, we didn't intervene, we didn't know what he was doing, not when he met, not who he met, not how much he costs, not from the division, nothing, as far as I'm concerned, I can testify about myself that I didn't know..." (Q.  26-29) Later: "...  There is no point in making comments as long as nothing has progressed, as far as I'm concerned, until Adv. Lapid came and explained, it's nothing, even if they had given me 10 million shekels that day, I wouldn't have signed it (p.  105, paras.  22-24).  From these words it appears that defendant 1 acted with the permission of the other defendants and that they chose not to be involved but to leave it to him to lead the matter; It also emerges that Adv. Pi is indeed the one who represented everyone in the transaction.
66. The testimony of defendant 2 and defendant 6 and their affidavit also do not raise an argument that Adv. Lapid or defendant 1 acted on their own. Although it is clear from the testimony of defendants 2-6 that they were not familiar with the details and did not know where things stood at any point in time, it is clear from their statements that the plaintiffs had no reason to know or suspect that defendant 1 and/or Adv. Lapid were acting on their own initiative.  On the contrary, I was persuaded that they acted on behalf of all the defendants.  In this way, the other defendants should be seen as creating a representation that Adv. Lapid is acting with their permission.

Compensation

67. Even if the agreement was not signed in the end, the conduct of the defendants, who conducted lengthy negotiations, exchanged many drafts and set dates for signing, while presenting a clear representation to the plaintiffs that the transaction would be signed, and then announcing its cancellation, amounts to conducting negotiations in bad faith. Only the bad faith behavior prevented the improvement of the agreement, and it was it that prevented the signing of the agreement.  Breach of the duty of good faith entitles the injured party to compensation for the damage caused to it as a result of the negotiations in the amount of compensation agreed upon in the agreement (Civil Case (Tel Aviv District) 8967-07-18 Boaz Gross v.  Aryeh Gottlieb [Nevo] (July 28, 2019); Civil Case (Shalom Bat Yam) 43068-09-22 Ira Vinitsky v.  Ilana Shirazi (Nevo 14.1.2025)).
68. The rate of the agreed compensation is 10% of the amount of the transaction, and this rate is an accepted rate in real estate sale agreements, and I have not found it to intervene, and moreover, the courts have given validity to agreed compensation even at higher rates (see: Yitzhak Amit, Agreed Compensation - Issues and Aspects, Din Ve-Devarim, Vol. 10, 2, Faculty of Law, University of Haifa, p.  22; the Gross case, supra, paragraph 10 of the judgment).
69. In light of the totality of the aforesaid, the claim is accepted.
70. I order the defendants to pay the plaintiffs the sum of ILS 790,000 plus the court fees paid, and attorney's expenses and fees in the total amount of ILS 60,000.

The amounts will be paid within 30 days.