It must, therefore, be held that Shmulik's reliance on the AS-IS clause was in bad faith, as Werber claimed, that they did not intend to take the risk that Shmulik sought to transfer to them. As Friedman and Cohen point out, "In many cases, a person will be willing to take upon himself the risk of a mistake, but will not agree to take upon himself the risk that the other party is misleading him" (pp. 269-270). Indeed, "the expression 'AS-IS' cannot defend the deception, but it is clear that it will protect the party that acted in good faith" (Friedman and Cohen (vol. 2), at p. 119, note 470, and see also at pp. 122 and 270).
It is not inconceivable, in view of the exchange of messages between the parties regarding the AS-IS stipulation as aforesaid, that it would have been appropriate to determine that this was also a contractual condition which in itself should have been cancelled due to deception or at least due to an error that the other party knew or should have known about, according to section 14(a) of the Contracts Law (cf. Friedman and Cohen (vol. 2), at p. 269), but this argument was not raised explicitly and therefore I do not make any conclusions on this question.
- Accordingly, there is also no room to accept Froimovich's argument that this is a mistake in the feasibility of the transaction under section 14(d) of the Contracts Law. The accepted test in case law for examining the question of whether it is a mistake in the feasibility of the transaction lies in the question of whether it is a mistake in relation to the risk that a party to the contract assumes or that it should be attributed to him to take it, and that it is therefore not appropriate to allow him to rely on a claim of error in respect of it (see Civil Appeal 7920/13 Carmel v. Talmon (February 29, 2016); The Suissa case, at paragraph 12). And Werber did not take the risk, as stated, and they should not be attributed to taking the risk according to the circumstances of the case.
Rejection of Froimovich's argument that Werber should be credited with the reasons raised in the initial correspondence
- As detailed above, Werber did not immediately announce the cancellation of the agreement. In their letter dated June 1, 2018 (Appendix 41 at p. 505 of Werber's evidence), they initially asked Froimovich to purchase his share in the joint company, stating that they believed in the venture and noting that they could not remain partners because it "harms our personal and family health." Later, after Froimovich rejected this offer, in a letter dated June 4, 2018 (p. 507 of Werber's evidence), they wrote that they asked Froimovich to "buy them out" because they felt that they were "unable to express our perceptions, opinions and beliefs. We thought that the cooperation would be based on understanding and agreement, but in practice, our proposals and our work were rejected in the absolute majority," and noted that they were clearing the way for Froimovich to manage the company on an ongoing basis. On June 17, 2018, in a laconic letter, they announced the cancellation of the agreement "in light of fundamental violations on your part in the engagement between us, including, but not limited to, the share purchase agreement."
- I cannot accept Promovitz's claim that this correspondence indicates that Werber simply regretted joining the venture and are trying in retrospect to place their trust in the system in order to "get out of the investment".
In the cross-examination (pp. 143-144 of the transcript), Yonit explained that she and Tzachi understood that they had been deceived as early as June 2018. Despite this, they did not raise claims about the maturity of the system and the violation of the representations presented to them, but rather asked Froimovich to "buy them out" as a strategy they hoped would enable them to get their money back. This is a logical and satisfactory explanation, in the circumstances of the case, and taking into account the relationship between the parties and the fact that we are dealing with conduct in a joint company.