In our case, I do not believe that it is possible to identify a moral impropriety in the defendant's manner of conduct, or to determine that he acted in a manner whose purpose is to deceive the plaintiff or to deliberately conceal relevant factual data from her. The defendant's resignation was made at the stage of the negotiations, even before a full conclusion and certain conclusions had been perfected. The plaintiff claimed that the defendant "did not present any justified reason for his refusal to sign the agreement and carry out the transaction" (p. 11 of the summaries). I cannot accept this argument. The defendant refused to sign the agreement because he could not find an alternative apartment that would suit his economic capabilities. After the defendant and his wife realized that the consideration they would be able to receive for the sale of their apartment was only ILS 2,030,000, instead of the original sum that they believed they could receive for the apartment, the mortgage consultant made it clear to them that this limited budget would not allow them to purchase the apartment they desired in the first place. Therefore, the defendant and his wife tried to locate an alternative apartment at a price that matched their financial resources, but this was not to their assistance. It cannot be said that the refusal to sign the agreement in these circumstances is irrelevant or unjustified, given that at that time there was no complete discretion and certainty.
Notwithstanding all of the above, even though I found that the defendant did not act by way of deliberate representation or deception, I am of the opinion that in the relationship between him and the plaintiff, his conduct in the negotiations is unacceptable and does not amount to the good faith required between the parties and the parties prior to the conclusion of a contract.
In other words, the defendant believed in good faith, even if inadvertently, that as long as the parties did not sign the agreement, the exchange of drafts of an agreement between the attorneys does not ripen the engagement into a binding contract. In this regard, I found the defendant's testimony to be reliable. However, in accordance with the customary rule, the measure of the good faith of the parties is not examined on the basis of their subjective intentions, but rather in accordance with the external and objective expression of their conduct, including the content of the document, the conduct of the parties, their words, the circumstances of the negotiations and the relationship they established between the draft and the future agreement. In the present case, the defendant did not instruct his counsel to clarify to the plaintiff's counsel that the exchange of drafts was intended to enable only drafting progress and that she was not authorized to undertake on his behalf. Indeed, I have already determined that the plaintiff's counsel was aware that the comments made by the defendant's counsel were only in her mind, and therefore no foreseeable authorization was created in our case. However, this conclusion does not stem from an action initiated by the defendant, but rather from the fact that his counsel took the trouble to clarify this on her own initiative, without the defendant instructing her to do so in advance.