Fields of Practice

Commercial, Banking and Financial

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Supply of full and personal guidance to businesses, corporate law, commercial agreements, license and distribution agreements, labor law, structured finance and "over-the-counter" financial derivatives.

Our firm deals with any issue related to commercial or financing issues. Included in such area are corporate governance, internal control, negotiating and drafting commercial agreements, licensing transactions, distribution agreements, import and export transactions, loan agreements, structured finance and "over-the-counter" financial derivatives, including negotiating and drafting agreements based on the ISDA form agreement, labor issues, tax structures and the negotiating and drafting of international transactions.

Any lawyer specializing in mergers and acquisitions will agree that the Number One enemy of any transaction are the businesspeople. Indeed, they are the client, they know what they want to achieve, but they are also emotionally involved in the transaction and even if they assumedly speak the same language, each might mean different things. It is thus customary to initiate transactions with a general document, mostly non-binding by nature, defining the transaction’s business terms. Whether we call it a Letter of Intent or Memorandum of Understanding, or describe it by any other name, its main role is to define the boundaries so that the professionals will be able to prepare the set of agreements. However, in some cases, a document like this might unintentionally be deemed binding, with all the ramifications of this.
Israeli law requires only two pre-conditions for the creation of a binding agreement: an offer by one party and an acceptance by the other. Where it is unclear whether the two conditions were met, the intent of the parties will be examined in hindsight and the manner in which the Court construes it based on the document, the circumstances and other terms, may differ from what the parties, or any of them, actually intended in origin. The document’s title (e.g. Letter of Intent), is indeed an indicator for the parties’ intent, but it is not the sole indicator. A document may be titled Letter of Intent and yet contain all of the elements of a binding contract and be deemed as such, whether due to its content or because of the parties’ conduct in real time or thereafter, demonstrating the manner in which they interpreted the document. Thus, for example, a short memorandum of understanding by which the parties acted for a long time without bothering to prepare a comprehensive agreement, may later be deemed an agreement, even where the document noted that it is an interim non-binding document and the parties will yet negotiate a binding agreement.

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