According to the The Buyers, the cancellation notice should be invalidated for several main reasons: First, since Form 4 was received more than a year after the date of the conclusion of the agreement, the approval in principle to receive a mortgage that the bank gave them at the time (in accordance with the time limit set by the bank in the said approval) expired. Therefore, the buyers were forced to restart the process of receiving the mortgage, and accordingly required more than ten business days to pay the balance of the consideration. In the meantime, it was argued that they could not have expected that it would take a long time to receive Form 4, as actually happened, in view of the misrepresentation presented to them by the seller regarding the planning status of the apartment. Second, given that the parties changed their behavior in the provisions of the agreement, and in fact applied a new contractual regime, against the background of the forgiveness they showed in relation to a number of delays in completing various undertakings (hereinafter: The Claim of Changing the Agreement); Third, in light of the delay in receiving Form 4, which in turn required an extension of the period of time set for the payment of the balance of the consideration, by virtue of the general practice that exists in such cases (the practice according to which payment dates must be extended when more than a year has passed since the conclusion of the agreement) and when the issue was not settled in the agreement (hereinafter: The claim of completion by virtue of custom); andFourth, because the seller exercised the right of cancellation in bad faith, and was waiting for the first opportunity that would arise in his way to bring about the cancellation of the agreement (hereinafter: The Claim of Bad Faith).
The seller, on the other hand, believed that the cancellation of the agreement was done lawfully, and in the process rejected all of the buyers' claims. Among other things, the seller claimed that he did not misrepresent the planning status of the apartment; that the provisions of the agreement were not affected by its planning situation in any case; and that the delay in issuing Form 4 was caused by the COVID-19 pandemic, which affected the work procedures of the Planning and Building Committee, as well as due to the purchasers' travel abroad (in a manner that triggers clause 7 of the appendix, according to which if the delay in receiving Form 4 was caused by an act or omission of the purchasers, it is not a fundamental violation). The seller's main argument was that the failure to pay the balance of the consideration on time constitutes a fundamental breach of the agreement, and therefore he had the right to cancel it. According to the seller, he warned the buyers that they must pay the balance of the consideration according to the agreement, and was even willing to give them a number of grace days to fulfill it (beyond the grace period set out in the agreement in the first place), but neither they nor their attorney contacted him or acted in order to advance the payment. The seller further claimed, inter alia, that the purchasers did not respond to his inquiries dealing with the difference between the amount of the mortgage they planned to borrow and the amount of the balance of consideration (when, as stated, the amount of the mortgage is less than the amount of the balance of consideration); Accordingly, they did not discover that the said difference was planned to be paid out of their equity, which they had in their hands; Nor did they transfer this sum to him (for the purpose of initiating execution), even though they knew that they were in breach of the agreement at the time. Finally, the seller claimed that the purchasers did not prove their claims at all in relation to the time they needed to obtain the mortgage.