Cancellation due to oppression:
- Another dispute that has been abandoned between the parties relates to the question of whether it can be proven that the deceased signed a gift agreement, whether the deceased entered into a gift agreement due to the exploitation of the deceased's distress or weakness, and in circumstances that give rise to grounds on the part of the deceased's heir, to cancel the agreement due to oppression?
Section 18 of the Contracts Law (General Part), 5733-1973 (hereinafter: "the Contracts Law"), which deals with the cancellation of an agreement due to oppression, states:
"A person who entered into a contract due to exploitation by the other party or another on his behalf by taking advantage of the contractor's distress, his mental or physical weakness or his lack of experience, and the terms of the contract are unreasonably worse than what is customary, may cancel the contract."
The cause of oppression is based on three pillars:
- The state of the oppressed;
- the behavior of the oppressor;
III. The terms of the contract created as a result of the exploitation are unreasonably worse than is customary.
(See: Civil Appeal 2041/05 Makhkashvili v. Mikhakashvili [published in Nevo, November 19, 2007] hereinafter: "The Makhkashvili case").
- In the Makhakashvili case, it was ruled that the aforementioned elements are intertwined, and there is interdependence between them in the sense that the more clearly one of the elements exists, the more the scales will tip to the conclusion that the other elements exist (see also: Civil Appeal 403/80 Sassi v. Kikaon, IsrSC 36(1) 762, 769 (1981)). The third element, with regard to the unreasonableness of the terms of the agreement, is an objective element and requires clarification of what is "acceptable" and what is an "unreasonable measure" (see: the Mahakkashvil case, supra, at paragraph 13). The question arises, how do you examine the basis of a gift transaction? Prof. Friedman's opinion is that in gift transactions of a considerable size, the third element exists by itself (see: D. Friedman and N. Cohen Contracts (Vol. 2, 1992, p. 1003). However, different scholars disagreed on the question of whether it is possible to examine a gift transaction with glasses Article 18 of the Contracts Law. In the Makhakashvili case, it was held that the provisions of the clause can be applied to agreements of this type 18 to the Contracts Law, when in such a case the "The burden of proof, if not the burden of persuasion...To show that despite the same opening figure, still in the specific case in question, the conditions are reasonable".
- Prior to the enactment of The Contracts Law The doctrine of "unfair influence" dominated the dome (Undue Influence) that was absorbed into our legal system from common law. However, the use of this ground was discontinued in the contractual context with the enactment of the The Contracts Law (until the Eden Hotel judgment, which we will refer to below), although this doctrine still has a foothold in Israeli law, such as in the provisions of the Article 30 of the Inheritance Law, 5725-1965, which states that a will made due to unfair influence is null and void (see: Makhkashvili, paragraph 4 of the opinion of the Honorable Deputy President Rivlin).
This doctrine can offer considerable advantages to a litigant seeking to attack a legal action committed by a person suffering from a medical or cognitive disability, such as a claim of the application of a presumption of unfair influence, in certain circumstances (for the presumption of unfair influence in all matters relating to the signing of a will, see: Additional Civil Hearing 1516/95 Marom v. Attorney General, IsrSC 52(2) 813 (1998)). Although the case law held that suspicious circumstances are not sufficient to prove unfair influence, in order to prove the circumstances that establish the presumption, circumstantial evidence is sufficient, and thus the burden of persuasion shifts to the beneficiary of the will to bring evidence that there was no unfair influence (see: Civil Appeal Authority 617/08 Eden Hotel Nahariya v. Kessel [published in Nevo][21.9.2014], hereinafter: "the Eden Hotel case").
- As mentioned, after the enactment of the The Contracts Law The rulings focused on the prescribed conditions In section 18 of the Contracts Law. However, in the Eden Hotel case, the Supreme Court discussed the doctrine of unfair influence in a contractual context, when it ruled that "There is no impediment to applying, in appropriate cases (and subject to the fulfillment of the required conditions), the presumption of the existence of an unfair influence, to its implications at the evidentiary level, when we are dealing with consumer contracts based on a relationship of trust or special dependence (Including: Assisted Living Agreements), In particular, in circumstances in which the "consumer" – the "affected" – has passed away."
The Supreme Court considered the grounds of exploitation of distress, against the background of a consumer contract, as a suitable import pipeline for the laws of unfair influence, and also applied them to contractual relations after the Contracts Law came into effect . In my humble opinion, the same rationale can be applied to gift agreements between relatives that have been proven that at the time of giving the gift there was a special dependence, and the giver of the gift was an elderly and exhausted person, especially when the giver of the gift passed away. Thus, prior to the enactment of the Contracts Law, a case was discussed in which an 80-year-old man, who was sick and bedridden, drafted a power of attorney in which he confirmed that he had sold his lands to his nephew. It was proven in that case that a year before he signed the power of attorney, the deceased was taken out of his home where his wife and daughters were secretly dragged, and transferred to his brother's home, where he was held isolated from the rest of the family. In that case, it was held that the documents were signed under unfair influence (see: Civil Appeal 66/64 Ghanem v. Ghanem, IsrSC 18(2) 553 (1964)).