Many rulings have been written about these two types of compensation. In their book "Contract Law" (4th edition, 2019), p. 125, authors Gabriela Shalev and Effi Zemach define the interest of reliance as follows:
"The interest of reliance is the interest of a party to the contract not to be harmed as a result of the decision to enter into a contract and to invest in reliance on it. A remedy that protects the interest of reliance is intended to place the injured party in the economic situation in which he would have been if he had not entered into an agreement with the other in the first place. This interest is protected by the ruling of "negative damages", i.e., compensation at the rate of the loss suffered by the injured party as a result of the engagement with his partner, so that he will be compensated for his investments. The protection of the reliance interest includes both compensation for reasonable expenses incurred by the injured party in reliance on the contract and compensation for the loss of opportunities that the victim lost in engaging withthe infringer."
The interest of expectation/existence is defined in their book as follows:
"The expectation interest expresses the interest that the party has in the contract in the fulfillment of the contract and in the realization of the expectations deriving from each other's obligations. A remedy that protects the expectation interest is intended to place the victim of the breach in the situation he would have been in had the contract been fulfilled as agreed. This interest may be protected by the enforcement of the contract or by the ruling of "positive damages", i.e., compensation at the rate of profit that would have fallen to the injured party if the contract had been fulfilled as a contract.
- This is the case on the contractual level. On the tort level, the compensation remedy aims to restore the injured party's situation to its previous state had it not been for the tort committed against him. It is not intended to fulfill the expectations of the injured party, including the production of profits, which were not fulfilled as a result of the tort (see the words of the Honorable Justice Or Other Municipality Requests 5610/93 Zalesky et al. v. Local Planning and Building Committee, Rishon Lezion [Nevo] (April 7, 1997), pp. 68, 80-83 (hereinafter "The Zalesky Affair"), as well as the remarks of the Acting President of the Supreme Court, the Honorable Justice Yitzhak Amit Other Municipality Requests 4948/13 Adv. Yaakov Harkabi v. Michael Avni et al. [Nevo] (March 15, 2015), pp. 19-21).
In light of this goal, some saw a similarity between the reliance interest protected in contract law and that protected in tort law, but it is appropriate to cite the words written by the scholars Friedman and Cohen, and which were quoted in the Harkabi case by the Honorable Justice Amit as follows: