Thus, the language of the agreement and Ben's own understanding are sufficient to conclude that Draco was given exclusive permission to offer the products of the Mocha Lease project.
- Beyond that, it should be noted that during all of Ben and Micha's correspondence, Micha refers to the authorization letter as an exclusivity agreement and in the language of the correspondence "EXCLUSIVITY", and then it is not clear how it is possible to ignore the many references in the emails, because the reference is to an exclusivity agreement.
- Moreover, there is already a contradiction in the affidavit of Ben's main testimony when his affidavit shows that he received an explanation that the agreement regarding Cellcom indicates exclusivity for one customer in one project (paragraphs 34 and 41, of his affidavit), and when an identical letter was sent to him in relation to the Yes project, and it was stated in Micha's email that he wished to sign an exclusivity agreement and specifications - the same letter as last time with adifferent project name." Ben does not understand that the meaning of that letter is also exclusivity.
- Thus, in accordance with what is stated in the authorization letter, Luster confirmed that Draco is its sole licensor in the matter of Project Mocha.
- However, the terminology in the letter "Project Mocha" is unclear. A mocha is a device that enables the provision of internet communication services over the communication that exists in the home. Draco herself has been marketing the Mocha Liss product for about 8 years (p. 64, paras. 25-26). As such, it is clear that the term mocha is an umbrella term for different products, different versions, and different capabilities from device to device.
- Ben explained the difference between Mocha and Wii.According to Mocha without Wi-Fi: "The product is different and the price is accordingly, there is a very large difference, it ranges between 30 or 40% difference in price" (p. 159, paras. 32-33).
Micha himself confirmed that the Mocha product was exempted from the need to rely on wireless internet (Wi-Fi), which is known to be less reliable and may even be useless (paragraph 1 of Micha's affidavit), and then indicates the difference between the two products.
- It is also clear that in 2019, when Luster signed the authorization letter, the parties cooperated with respect to Mocha 2 with a VPN: all of Draco's correspondence with Luster from 2019 refers to "another Mocha opportunity with Wi-Fi" when it is clear that the product at the time was Mocha 2 (as is evident from the email that Micha sent to Ben on July 24, 2019, which referred to the specifications of the product - Mocha 2 with VP - p. 60 of Ben's affidavit).
- The question is, which project did the authorization letter refer to? Is it a Mocha 2 project with a Wi-Fi, as claimed by Luster and Axel, or is it a single project that started as a Mocha 2 version with Wi-Fi and ended with a Mocha 2.5 product with no Wi-Fi as the Draco version.
- In the absence of an understanding from the authorization letter which project the parties referred to, the contract must be examined in accordance with its language and external circumstances, as well as the conduct of the parties, in accordance with the case law
OTHER MUNICIPAL APPLICATIONS 136/14 DAN OP IN TAX APPEAL CORNUCOPIA EQUITIES LTD (PUBLISHED IN NEVO, 6/9/17)-"In our case law it was determined that a contract shall be interpreted in accordance with its language and external circumstances (see: Civil Appeal 4628/93 State of Israel v. Apropim Housing and Development (1991) Ltd., IsrSC 49(b) 265 (1995) (hereinafter: the Apropim case); Civil Appeal 2553/01 Vegetable Growers Organization - Cooperative Agricultural Association in Tax Appeal v. State of Israel, IsrSC 59(5) 481 (2005)). Within the framework of the external circumstances of the contract, which can be examined for the purpose of interpreting it, we can enumerate: the exchange during the negotiations between the parties; the conduct of the parties after the conclusion of the contract; additional contracts that exist between the parties; the known commercial practice, and more (see: Apropim, p. 312; Additional Hearing 32/84 Estate of the late Walter Nathan Williams v. (In Liquidation) (London) Israel British Bank, IsrSC 44(2) 265, 274 (1990); Friedman, pp. 239-242.
- In addition, other municipal applications 327/85 Yehuda Kudler v. Israel Lands Administration, IsrSC 42 (1) 97, 102. It was held that "the interpretive directive formulated in the case law of this Court is therefore that where there is difficulty in the understanding or implementation of a provision of a contract, one must, first of all, review the entire contract in order to learn about the purpose and purpose underlying it, and then return to the narrow provision and give it the meaning, which will be consistent with the main points of the contract that were previously identified."
- A month before Micha contacted Lavan about the project with Yes, he contacted him about the project with Cellcom. The correspondence shows Ben's reluctance to sign an exclusivity agreement, and Micha himself explains to him that exclusivity is in relation to a specific project and does not bind him to another product or customer.
- This means that Draco itself relates to the letter of authorization in the Cellcom case and the identical letter in the case of Yes, similarly, as a restrictive letter regarding exclusivity in one product.
- This also arises from Draco's business logic, when it claims that a product should be introduced into the market in a short time (paragraph 29 of Micha's affidavit), and then the signing of the authorization letter means that shortly thereafter, the product on which the parties are working will be introduced to the market, and in our case, there should have been a project at the beginning of 2020.
- The long period of time between the signing of the authorization letter on 10/19 and the execution of the project on 1/21 shows that this is not the same product and then the authorization letter does not apply to it, another conclusion undermines the business logic for which short exclusivity agreements are signed, such as the agreement in question.
- To this it should be added that in accordance with the provisions of section 25(b1) of the Contracts (General Part) Law, 5733-1973, a contract that is given different interpretations and one party has priority in shaping its terms, an interpretation against it is preferable to an interpretation in its favor, and since Draco is the drafter of the letter, it should be interpreted against it - in a restrictive manner.
- Moreover, the question of whether there was a Mocha project in 2019 that started as Mocha 2 with Wi-Fi and evolved into Mocha 2.5 without Wi-Fi is a question that Draco had to prove. However, Draco did not summon any Yes representative who could provide an answer to this question. And if that wasn't enough, in the cross-examination of Shai Levy on behalf of Yes by Draco's attorney, he was asked: "Is it true that there was one Mocha project that started with Moka 2 and continued to Mocha 2.5? He replied: "I don't know how to answer what one project is" (p. 181, paras. 10-13) The lack of further investigation in this context and the absence of an investigation at all with regard to the question of the Wi-Fi solution and whether this solution constitutes another project, works to Draco's obligation.
- In his interrogation, Gilad did not know how the project was presented with Yes in 2019 and why he did not attach correspondence with Yes from that period (p. 75, paras. 13-15). The lack of answers to these questions reinforces the conclusion that there was a different project and Draco refrained from presenting documents relating to the project.
- Draco also strangely did not present its engagement documents and exclusivity agreements with the manufacturers it worked with in 2020. From these documents, insofar as they were presented, it was possible to learn whether this was indeed a project that began in 2019 as she claimed.
- To all of the above, we must also add the conduct of the parties. On 12/19, Luster informed Draco that it intended to develop the Mocha 2.5 product with Wi-Fi regardless of whether Yes would need the product and that the product would be ready on 4/20. Micha, for his part, replied that we will be in touch when the product is ready in order to see if it is suitable for potential projects. However, despite this, Draco did not make any contact with Ben on 4/20 in order to find out if the product was ready, which shows that the development of another product - Mocha 2.5 was not on the agenda at the time, and even if it is clear that the Corona virus caused delays in the world, it still does not explain why they did not contact Luster in order to find out on 4/20 whether the product was ready. This certainly does not explain why, as soon as Miss received the announcement of a new project on 7/20, Draco did not contact Luster, which was supposed to finish the development of the product as early as 4/20, but approached other companies.
- This conduct indicates that the parties themselves did not treat the development of Luster as the same product that was required in 2019.
- In his interrogation, Gilad tried to explain this as if Luster had said they would come back to update Draco and so they waited for them, but the emails between the parties show exactly the opposite. When Micha was the one who told Luster that we would be in touch when the products were ready in order to test optional projects and not the other way around (email message dated December 2, 2019 - pp. 23-24 of Gilad's affidavit).
- Only after Draco realized that Luster was working with Axel, on 19/8/2020 did Draco contact her and even then she asked to find out, "Does Luster have the product?"After all, since this is the same product for which the letter of authorization was signed and its development was made in 2019, why was this question asked? When Micha was asked to explain the email, he replied, "No, I asked, it was Assaf, ask him" (p. 106, s. 25).
However, Assaf Roth of Draco was supposed to be brought to testify by Draco in order to explain the message he wrote that contradicted the claim that it was the same product. Thus, the actual conduct of the parties also shows that the same project was not discussed.
- From all of the above, it appears that the authorization letter does not apply to the products supplied in the transaction between Yes, Excel and Luster.
- Ostensibly, the aforesaid is sufficient to dismiss the claim, however, since this is a claim for the provision of accounts, I will not suffice with the interpretation of the letter of authorization and examine whether, taking into account the relationship of the parties, it was even possible to petition for the provision of accounts, even if the letter of authorization applied to the products that are the subject of the claim.
Claim for Provision of Accounts
- First of all, it should be noted the manner in which a claim for the provision of accounts should be clarified, as determined by the Civil Appeal Authority 8266/11 UBM v. Maoz Travels in a Tax Appeal and 10 Others, (published in Nevo, 16/8/12) (hereinafter: "the UBM case"):
"An action for the provision of accounts is conducted in two stages: in the first stage, the court determines whether the plaintiff is indeed entitled to accounts from the defendant. If the court decides that the plaintiff is entitled to the accounts, the court issues an order for the provision of accounts and moves on to the second stage, in which the defendant is required to convince that the accounts provided are sufficient and reliable. Only then will it be determined whether he is obligated to pay according to the bills. (Civil Appeal 127/95 Fruit Production and Marketing Council v. Mehadrin Ltd., IsrSC 51(4) 337 (1997) (hereinafter: "the Fruit Council case"); Civil Appeals Authority 7220/09 will save funds in a tax appeal v. Cohen ([published in Nevo], given on November 24, 2009).