Legal Updates

One cannot demand a foreign company debt from a private person who acted on its behalf in Israel

January 15, 2024
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A provider of software development services demanded that the COO pay the debt of a foreign company with which it contracted.

The Court rejected the claim and held that the contract is with the foreign company and the debt cannot be demanded from a private person. A service provider must distinguish between a company - a legal entity of a very specific type, and a business or private contractor. Here, the service provider was asked to provide the service to the foreign company - not to the COO personally - and knew that the foreign company was responsible for paying for the service. Despite this, the service provider demanded the money from the COO only because the conduct regarding the financial aspect of providing the service was through him and because he signed the order on behalf of the foreign company. This is an improper attempt to be enriched at the expense of a private person, without a real reason, in order to avoid filing a lawsuit against a foreign company.