Moreover. The defendant and his wife did not inform their counsel that a condition for the sale of their apartment lies in receiving approval in principle for a mortgage from the bank, for the purpose of purchasing an alternative apartment. Moreover, even after the mortgage consultant made it clear to the defendant and his wife that they would not be able to purchase the apartment they wanted, the defendant informed only Mr. Sapir, the realtor, and not his attorney. This is despite the fact that the defendant knew that under these circumstances he might not be able to find another apartment suitable for the needs of his family members. Had the defendant informed his counsel both of the condition for signing the mortgage in principle and of the significant revelation that he had discovered in a conversation with the mortgage consultant, it is not impossible that the plaintiff and her counsel would have taken a different step at an earlier stage.
The defendant and his wife testified, as stated, that they hoped that the mediator on their behalf would pass on to others the information they had given him. However, wishful thinking should not be replaced by proper conduct. It is not enough to hope that material information will be transferred through a third party, and this should not replace the duty of a party to the negotiation to act actively and clearly. The defendant could have known that the information he provided to the mediator was material information, which could affect the continuation of the contacts between the parties and their conduct. In these circumstances, even though the defendant was not obligated to give up his economic interests, he should have positively ensured that the information was brought to the attention of the parties concerned.
The duty to act in good faith at the negotiation stage is set forth in section 12(a) of the Contracts Law. The consequences of the breach of duty are set forth in section 12(b) of the Contracts Law, "A party who did not act in an acceptable manner and not in good faith, owes the other party compensation for the damage caused to it as a result of the negotiations..."