Therefore, since it has not been agreed between the parties that the receipt of financing by a third party is a condition for the existence of the transaction, such a condition should not be created out of thin air (see Civil Appeal 409/78 Golan v. Farkash, IsrSC 34(1) 813 (1979), where it was held with respect to a real estate transaction that since it was not stipulated in the contract that the payment of the consideration was subject to taking a mortgage-backed loan from the bank, the buyer could not depend on not receiving the loan from the bank for the purpose of avoiding payment of the consideration on time, and he should be considered a breach of contract).
It should be added that at the end of the day, after the Patriarchate's negotiations with the third party (the Sofer Group) were unsuccessful, the Patriarchate was able to sell the rights in the land to an alternative third party for a considerable sum. In this situation, if, according to the patriarchate, it was the issue of funding by a third party that thwarted the contacts between it and Himanuta, it is possible to wonder why the patriarchate did not see fit to act to fulfill the agreement after it was able to enter into an agreement with a third party, since the issue of funding was ostensibly resolved.
- The Patriarchate wishes to hold on to the words of Adv. Elhanani, who testified that if the Patriarchate had revealed in real time that it intended to transfer the rights to the land to a third party, then Himanuta would have opposed the deal. However, even this does not help the patriarchy in its appeal. Adv. Elhanani, Himanuta's attorney, testified that they did not want to make a deal that would "dig a hole" for them down the road, in the sense that the transaction would grant the third party who would purchase the land "a permit to extort" them when the original lease period would end in the future, around 2050 (transcript of December 14, 2017, p. 146). On the other hand, Duvdevani, who was an associate chairman of the JNF during the relevant period, was less decisive and testified that he did not know what they would have done and what they would have said or not said if they had known about the Patriarchate's intention to grant the rights in the land to a third party (transcript of March 4, 2019, p. 126). In any event, the hypothetical question of how the JNF and Trustee would have acted if they had known that the Patriarchate intended to sell the rights to a third party does not detract in any way from the Patriarchate's obligation to fulfill its obligations by virtue of the particular, which, as stated, stood as a binding contract in its own right, and the right of the JNF and Trustee to demand that it do so (and needless to say, there was no reference whatsoever to the issue of funding by a third party). and certainly not to the issue of the sale of land rights from the patriarchate to a third party, an issue that the JNF claimed to have found out about only a decade after the documents were reviewed).
- Another point of contention involving the issue of financing the payment by a third party relates to the "Letter of Convenience" that was attached as an appendix to the settlement agreement in its final version. In essence, after the detail was cut off, following the Patriarchate's desire to finance the payment through a third party, the JNF sought to ensure that the funding party was not hostile to Israel. For this purpose, a draft was exchanged between the parties, and in the text attached to the settlement agreement in its final version, a declaration by the Patriarch appeared, in which he confirms that the third party is "a private person, a Jew, who is not hostile to the goals of the Jewish National Fund." The District Court rejected the Patriarchate's attempt to hinge on the question of whether or not this version of the Letter of Comfort was agreed upon by the parties in order to justify its failure to sign the Settlement Agreement, and the law did so. As stated, the whole issue of the letter of comfort arose following the Patriarchate's desire to finance the payment through a transaction with a third party. Once it has been determined that the issue of financing was not made a condition for entering into an engagement in the settlement agreement, in any case the letter of convenience should not be regarded as a condition that retroactively expropriated the binding validity of the particular.
- To sum up this point, the alleged disputes that arose between the parties after the conclusion of the particular, do not retroactively expropriate its validity, and the obligation of the Patriarchate to sign the settlement agreement remained in place. The choice of the Patriarchate to refrain from doing so constitutes a failure contrary to the contract, and as such amounts to a breach of contract (Section 1 Law The Contracts (Remedies for breach of contract), התשל"א-1970).
The Remedy
- As may be recalled, the District Court was of the opinion that the detail itself was not a binding contract. According to the trial court, the Patriarchate's refusal to sign the settlement agreement amounted to a breach of The Duty of Good Faith in Negotiations Prior to the conclusion of a contract, which justified the award of subsistence damages in favor of the injured party in the circumstances at hand:
"In these circumstances, against the background of the protracted negotiations with the aim of reaching a compromise in connection with the land affair, given the representations of the Patriarchate regarding its commitment in detail, and the fulfillment of all the conditions for the signing of the Settlement Agreement, and its final wording, without a clear and justified pretext for refraining from signing the Settlement Agreement, and without being convinced that its enforcement would harm public policy or a significant power disparity between the parties, all of which, as stated, are all represented by the best lawyers in Israel and act and are motivated by both commercial, economic and political interests - all of these, lead me to the conclusion that the exceptional conditions that were set for the award of subsistence damages were met, due to the degree of guilt rooted in the conduct of the patriarchy and the 'cry of fairness' that arises from the circumstances of the case (see and compare: Civil Appeal 8234/09 Shem Tov v. Kaduri Peretz [Nevo] (March 21, 2011))" (paragraph 170 of the judgment, emphasis in original).