A: I assume there is.
Q: Where is he?
A: I don't know where he is, I don't know if it came out of me or it came out of someone else or it came out at all or maybe at the level of the phone to say we approved it in the management and the matter is over, that's happening too..." (See: Minutes of the hearing of July 16, 2023; p. 97, paras. 24-25 - p. 98, paras. 4-8).
Later on, Shlomi was asked again about this issue:
"Q: You mean you approve of me, I'm asking a question, that there is no such document that Shufersal issued to the Shem, whose proposal is acceptable to us?
A: Again, I don't know how to say that there is no such document.
Q: OK.
A: I also don't know how to say that there was no such phone call.
...
A: You are asking whether I sent such an email or such a message, I am not" (See: Minutes of the hearing of July 16, 2023; p. 99, paras. 6-8).
- Yael was also asked about this in her interrogation and answered as follows:
"Q. Can you refer me to the approval that was received, or did you transfer to Shem a confirmation from the Shufersal management for the same document?
A: A lease has been issued.
Q: A detailed lease is the approval.
A: Clearly" (see: Minutes of the hearing of July 16, 2023; p. 131, paras. 11-15).
- I am of the opinion that sending a draft of a detailed agreement cannot be considered as a notice of acceptance of the commercial terms document. To this, it should be added that section 8(a) of the Contracts Law states that a proposal must be received within the period stipulated therein, and if no period is set - within a reasonable time. The first draft that was presented to me was sent on January 6, 2021, about a year and a half after Geshem signed the commercial terms document, and this period cannot be considered a reasonable time to give a notice of acceptance in the circumstances of the matter.
- Therefore, the witnesses on behalf of Shufersal could not testify to any act of acceptance of the commercial terms document in a written or oral notice. In practice, even in the summaries on its behalf, Shufersal did not point to any acceptance notice, but rather claimed that it can be inferred from the parties' conduct that they viewed the commercial terms document as a binding agreement and that acceptance was made in conduct (see: paragraph 47 of Shufersal's summaries and paragraph 23 of the response summaries). I will address this matter later.
- Shufersal did not sign the commercial terms document - while Geshem signed the commercial terms document, Shufersal did not sign it. The case law held that the absence of a signature on a memorandum of understanding strengthens the conclusion that the parties did not intend to commit themselves to it (see: the Elhadad case, at paragraph 27; Friedman and Cohen, at p. 341). See in this regard the words of the Honorable Justice Bach Other Municipality Applications 571/79 Maxim Apartments in Tax Appeal v. Jerbi, IsrSC 37(1) 589, 604 (1983):
"The parties to any written contract usually sign the contract in a more or less festive ceremony, and most people will not see themselves bound by the mutual obligations they intended to accept in writing, as long as the two parties have not signed the contract. Therefore, if we come across an unsigned contract, and one of the parties to the written contract claims that the parties have not reached a final agreement and therefore the wording of the contract is invalid, then the absence of the signature will usually be far-reaching, and perhaps almost conclusive, proof in favor of his version. But there may be exceptions, albeit rare, in which the court will be persuaded, on the basis of the evidence brought before it, that there was indeed a final agreement between the parties, despite the fact that their signature or the signature of one of them is missing on the written agreement..." [Emphasis added]
- In our case, too, Shufersal did not perform an act of "acceptance" by signing the commercial terms document. The fact that Shufersal did not sign the commercial terms document strengthens the conclusion that it did not believe that this was a binding contract. In this regard, I will note that in the framework of the detailed draft contracts that were exchanged between the parties at a later stage, Shufersal stated that "only an agreement that is approved by Shufersal's authorized organs and signed by Shufersal's authorized signatories will bind Shufersal." This reservation - which was drafted by Shufersal - attests to the importance it gives to the signature act as one that binds it.
- Therefore, Shufersal did not sign the commercial terms document and I was not presented with any other document from which it can be learned that Shufersal approved the commercial terms document to Geshem, in a manner that can be viewed as "acceptance" of the offer.
- 2. Language of the Commercial Terms Document
- In addition to a list of commercial terms, the document includes, as stated, a number of provisions from which it is possible to learn about the intention of the parties. In light of their importance, we will mention them again:
"16. This summary is subject to an examination of economic feasibility and a feasibility study by Shufersal
- This summary is subject to the approval of Shufersal's management
- This summary is also subject to the approval of the Antitrust Commissioner.
The agreement is valid for 90 days."
- Thus, the main reference within the framework of the commercial terms document to the question of its validity is in the words - which were even emphasized by Shufersal - that "the agreement is valid for 90 days only". In other words, in accordance with the language of the commercial terms document, the agreements in it - to the extent that they have indeed been perfected - expire within 90 days.
- As may be recalled, not only was a detailed agreement signed between Shufersal and Shem after 90 days, but as appears from the evidence before me, the first draft of a detailed contract was replaced about a year and a half after the signing of the commercial terms document (the first draft presented to me is dated January 6, 2021). Thus, a linguistic interpretation of the Commercial Terms document leads to the result that the "Agreement" expires after 90 days, since a binding contract was not signed between the parties during this period. At the very least, it can be said that the language of the commercial terms document with regard to its validity is vague and unequivocal.
- In this context, I will note that, in contrast to the parties, who believed that the commercial terms document did not contain a contact formula, I am of the opinion that the words "the agreement is valid for 90 days" can be seen as the relationship formula. It is clear that the purpose of this sentence is not to describe the duration of the lease period, and this provision can be interpreted as an agreement according to which the agreements between the parties will be valid to the extent that you enter into a detailed agreement within 90 days.
- I will note that although Shufersal did not make this claim, I pondered whether it is possible to interpret the commercial terms document in such a way that the words "the summary is valid for 90 days only" refer to the fact that Shufersal is entitled to present the fulfillment of the suspension conditions within 90 days only (regarding the question of the fulfillment of the suspension conditions, see chapter G5 below). This may be a possible interpretation of this clause given that it appears shortly after the suspension terms. However, this interpretation is not the only one that is probable, and in fact, an interpretation according to which the document is valid for only 90 days, with the intention that during this period a binding contract will be signed between the parties, is more likely.
- According to Shufersal, despite the language of the commercial terms document, the conduct of the parties after its formulation indicates that they did not believe that the agreements had expired (see: paragraphs 64-65 of the summaries on behalf of Shufersal). In other words, Shufersal does not dispute the claim that according to the language of the document, the commercial terms expire after 90 days. In fact, Shufersal did not present any interpretation based on the language of the commercial terms document, from which it can be learned that the agreements in the document are valid even after 90 days. Shufersal's argument therefore focuses on the conduct of the parties after the document was formulated.
- I did not find a place to accept Shufersal's arguments in this matter. As I will detail below, the conduct of the parties after the signing of the commercial terms document is not unequivocal and it cannot necessarily be inferred from it that they believed that there was a binding agreement between them. On the contrary, there are even indications from which it can be learned that the parties did not believe that a binding agreement had been entered into between them. In other words, I am of the opinion that there are no indications in the conduct of the parties - as detailed below - that indicate agreements that can overcome the language of the commercial terms document or its ambiguity.
- Another claim raised by Shufersal is that Geshem did not inform it that the agreements in the commercial terms document had expired. I also did not find this argument acceptable, since it would not have been obligatory for Gamen to notify of the expiration of the commercial terms document, since, according to his words, the summaries in it expire on their own without any notice after 90 days.
- 3. The conduct of Shufersal and Shemesh after the formulation of the commercial terms document
- The parties elaborated on their arguments regarding the conduct of Shufersal and Geshem after the formulation of the commercial terms document. While Shufersal claims that the conduct of the parties is an expression of the fact that they viewed this document as a binding agreement, the defendants claim that the conduct of Shufersal and Geshem indicates that they believed that they were not obligated to each other. As will be detailed below, an examination of the conduct of Shufersal and Geshem raises expressions here and there, and it is not possible to draw an unequivocal conclusion from it regarding the legal implications that they granted in real time to the commercial terms document.
- Continued negotiations: The mere fact that the parties continued to negotiate does not necessarily indicate that they believed that they were not bound by the ostensible agreements in the commercial terms document. In this regard, the case law held that the exchange of drafts after signing a memorandum of understanding does not indicate that a binding agreement was not signed between the parties. See the words of the Honorable Justice Vogelman in the Rosenberg case:
"As a rule, a memorandum of understanding that constitutes a binding contract that stands on its own - but includes a 'relationship formula' according to which a final agreement will be signed - requires negotiations after signing in an attempt to formulate agreements on issues that remain open. It is even possible that one of the parties will seek to conduct negotiations in an attempt to change the terms of the agreement - in the form of a new proposal - and if there is a meeting of desires on one matter or another, a new agreement will be concluded to replace the previous one. Therefore, conducting negotiations after signing a memorandum of understanding does not necessarily lead to the conclusion that there was no intention to enter into it at the time it was signed. Each case will be examined according to the totality of its circumstances" (ibid., at paragraph 21).
- At the same time, the nature of the negotiations, their length, and the statements made by the parties during them can certainly be an indication of the question of their intentions (compare: Adani case, at paragraph 15).
- In our case, the parties conducted very lengthy negotiations, for about two years after the formulation of the commercial terms document (the commercial terms document is dated May 8, 2019, and the last correspondence between the parties is dated February 17, 2021). Yossi claimed in his interrogation that this was an unusually long period:
"It's as if we've been negotiating with Shufersal for two years. Not a month, not half a month, and not a period during which it is customary to hold negotiations" (see: Minutes of the hearing of February 12, 2024; p. 52, paras. 22-23).