The court stood by the matter Barnea that the limitation in the non-competition clause is examined in three dimensions: the period; the geographical area; and the areas of occupation to which the non-competition clause applies. In this context, the judge noted Y. Amit, while emphasizing that the aforesaid is beyond necessity, because it does not rule out the possibility that there may be exceptional cases in which "Pruning the branch" by means of the non-competition clause will be intrinsically close to"Cutting down the tree". However, the judge emphasized Y. Amit Because these are exceptional cases and that: "About In order to recognize the non-compete clause as 'cutting down the tree', it must be shown that in practice, the non-compete clause neutralizes the employee's ability to reproduce fruit, at least from that 'industry''" (Name, paragraph 55 To the judge's judgment J' Associateand see at length paragraphs 49-56 of his judgment).
To complete this point, I will note that in the matter of Barnea The Judge's Comment D. Barak-Erez, that in its view, even in those exceptional cases in which the taxpayer will overcome the factual hurdle and show that the non-compete agreement "Cutting down the tree"In the vast majority of these cases, a very significant doubt may arise as to the legal validity of the non-competition clause. According to the judge D. Barak-Erez: "It is very difficult to think of a situation in which a non--Competition that leads to the severing of the source of income will receive legal validity". Therefore, in its view, in these cases the trend is to interpret the non-compete agreement as not "Cutting down the tree", in light of the principle according to which an interpretation that fulfills the contract should be preferred to an interpretation according to which it is null and void, in accordance with To the section 25(II) Law The Contracts (General Part), Hashl"C-1973 (Name, paragraphs 4-6 of the judge's opinion D. Barak-Erez).
- Third, it was determined that an additional provision that can complete the examination of capital or fruitful receipt is the provision set forth in section 89(c) of the Income Tax Ordinance:
The Law of Consideration and the Law of Capital Gain