"Lid Technologies Ltd.... We hereby undertake to maintain confidentiality of any information regarding the project and/or part thereof, including the actual execution of the project, the planning, the materials, the technology, the suppliers, the customers.... and not to transfer any information in connection therewith to any third party without the prior written consent of Kioskay Marketing (2004) Ltd." (Section 2 of the General Comments section of the Appendix to the Understandings).
"The production line is complete... In whole or in part... will be developed and manufactured exclusively for Kioskay Marketing (2004) Ltd..." (Section 4 of the General Comments Chapter in the Appendix to the Understandings).
- Moreover, the very fact that the parties entered into a prototype agreement, which was intended to examine the feasibility of developing the machine, shows that The parties knew that this was a In development of machine NEWand that prior to entering into an agreement for the production of the overall machine, it is necessary to ensure that the defendant does indeed know how to manufacture the requested machine and succeeds in doing so. In addition, Even according to the plaintiff herself, the development of the machine was innovative, and it was a project intended to produce a new product (See: Hamami's testimony, transcript of the hearing of December 1, 2024, p. 34, lines 5-6; p. 41, lines 7-10).
- Against the background of the aforesaid, there is room to accept the defendant's argument that this is an agreement intended to develop and create a new product, from scratch, and not an agreement for the manufacture of a "shelf product". However, as will be clarified below, I cannot accept the defendant's further argument in this context, according to which the very determination that the agreements between the parties were intended to bring about the production of a unique machine leads to a sweeping conclusion that these are agreements in which the defendant's main obligation was the obligation to make an effort (See: paragraph 28 of Kiselowitz's first affidavit dated October 27, 2020). In fact, an examination of the language of the agreements and the other evidence that indicates the intentions of the parties leads to the conclusion that the defendant's main obligation was a "consequence charge", in which it undertook to supply the machine to the plaintiff within short periods of time.
- This conclusion derives, first and foremost, from the language of the agreements between the parties.
- An examination of the set of agreements between the parties reveals that the titles and content of the documents are characteristic and identical to the titles and content of standard contracting agreements of the type of quotations and order agreements. In the framework of the various agreements between the parties, the price of the ordered product, its characteristics, the agreed delivery time and the warranty for the product were specified. The parties did not include in the various agreements between them any stipulation that indicates the defendant's reservation about the supply of the machine on the date specified in the agreements, or the parties' agreement or understanding that it is an obligation Effort on the defendant's side.
- For example, the title of the quote for the production of the machine is, as mentioned, "Quote... Complete production line for cigarette rolling paper packaging + filter package...". Subsequently, as in any standard quote, the technical specifications of the machine and its various assemblies are detailed with various options, including the machine's production rate, as well as the pricing of each of the assemblies. The price quote also includes a stipulation regarding the delivery date, as follows: "Delivery date: about 8 months from the date of receipt of the order, advance payment, and samples".
- Similarly, in the agreement for the order of Whole A, the title of the document is "... Separation, folding and cutting paper for rolling cigarettes (sic)..." This agreement also includes technical specifications, payment terms, delivery date ("approximately 4 months from the date of receipt of the order, advance payment, and samples") and a stipulation regarding the defendant's warranty for the product.
- The Appendix of the Understandings also includes various technical provisions regarding the prices of the various assemblies; payment terms; updating delivery times; and the rate of production.
- Thus, the language used by the parties in the set of agreements between them indicates their understanding that the defendant would supply the machine in accordance with the detailed technical specifications, on the agreed dates and in exchange for the amounts specified in the agreements. This is similar to any standard contracting agreement. In all of the agreements entered into between the parties, there was no explicit linguistic expression indicating that this was an agreement in which the defendant's main obligation was only the obligation to make an effort (see and compare: The Hochman Affair, paragraph 42 – in this case, the parties stated in the contract as follows: "The construction plan was approved by the competent planning authorities Will do Peled... Anything in order to obtain a building permit... Will be delivered to Peled as soon as possibleSuch language teaches that the undertaking is to make efforts ("anything") in order to achieve the result, and not, as in our case – that the undertaking was to provide the machine itself. They also compared the Rubinstein case, in which the undertaking was that the municipality "will All she can do in order to collect from all the landowners" – a wording that also teaches that the obligation is to try to achieve the result and not to achieve it).
- In this situation, in which the defendant, who was the one who drafted the agreements, refrained from explicitly anchoring in the language of the agreements that its undertaking is only Acting diligently Suitable for the production of the machine, as opposed to the charge To actually produce To satisfy the plaintiff, the interpretation according to which the defendant's obligation was a "consequence obligation" should be preferred, since this interpretation is consistent with the language of the agreements.
- In addition to the aforesaid, it appears that the circumstances of the conclusion of the contract also lead to the conclusion that the parties believed that the defendant undertook to manufacture the machine and not only to try to manufacture it.
- First, as part of this proceeding, the defendant claimed that it is "a veteran company, full of experience, knowledge and reputation engaged in the development, manufacture and marketing of automatic packaging systems. During many years of activity as a leading company in its field, the company has produced thousands of packaging machines. The company's engineers have extensive experience in the development and production of a variety of packaging machines designed to pack a wide range of cartons, packaging..." (Amended statement of defense, paragraph 12; paragraph 3 of the defendant's summaries; and see also paragraph 10 of Kiselowitz's first affidavit dated October 27, 2020). The defendant's claim that her main occupation is in the development and manufacture of automated packaging systems, and that she has many years of experience in this field, is what led the plaintiff to enter into agreements with her (see: paragraph 6 of Hamami's first affidavit of August 17, 2020).
- Moreover, in his interrogation, Kiselowitz confirmed that the defendant had presented the plaintiff with a representation that she could manufacture the machine and knew how to do so:
Q: To Ziv, you said that you know how to make such a machine.