A client who contacted a service provider specializing in raising non-bank loans refused to pay the full fees despite undertaking to pay it upon receiving a principal approval / approval for the loan.
The Court accepted the supplier's claim and held that the terms of the engagement were reasonable and that the client should pay the fees in full. Under Israeli law, one who entered into a contract due to exploitation by the other party or another on its behalf of the contractor's distress, mental or physical weakness or lack of experience and the terms of the contract are unreasonably worse than usual, may terminate the contract. Here, the client was not exploited, but was aware of the material sections of the contract and its essence at the time of signing, and he was the one who contacted the supplier on his own initiative after he found himself in a difficult financial situation while he knew that he would not be able to receive a loan under 'regular' interest terms. Although a number of financial institutions refused to provide financing to the client, the supplier acted skillfully and managed to obtain the client a loan on the best terms for him (even if the interest rate was higher compared to a "regular" client). A clause in the contract that stipulates that 100% of the consideration will be paid after receiving a principle approval for the loan is reasonable and reflects a clear business rationale, as the main work of the supplier assisting in locating non-bank financing is to obtain approval for the granting of the loan and it is unlikely that the assisting supplier will invest its time and energy, obtain approval for the client to grant a loan from some financing institution, and at the end of the day, the client will regret it and all the work of the assisting supplier will go down the drain. Therefore, there was no oppression and the client must bear the full payment of the supplier fees.