A subcontractor and the main contractor negotiated and exchanged drafts of an agreement regarding the termination of their engagement and the completion of the subcontractor's obligations by the main contractor before the completion of the works that were the subject of the current agreement between them. However, while the formula for calculating the consideration for the subcontractor remained in dispute, the parties executed the separation and transferred the actual execution of the project under the provisions of the unsigned agreement.
The Court held that the agreements between them constitute a binding contract due to the strength of the contractual intent on the one hand, and the intensity of the defect in the specificity requirement on the other. In order to conclude that an agreement has been perfected into a binding contract, it is necessary to examine the existence of the elements of contractual intent on the part of the bidder and the specificity of the offer alongside the contractual intent of the offeror. The conclusion is examined in an objective-external test, which is learned from the reviewing circumstances of the case, the content of the document and the conduct of the parties before and after its writing. While these elements are separate and independent, there are strong interrelationships between them, where a strong indication of contractual intent may compensate for a certain weakness in the element of specificity. An agreement shall be deemed to have sufficient specificity even if it lacks all the essential conditions for the transaction, provided that such details can be completed in accordance with the provisions of the law or practice and therefore the absence of certain particulars does not constitute grounds for releasing one from obligation taken with contractual intent, if it can be completed as aforesaid. Here, the parties acted in accordance with the unsigned agreement, the subcontractor relied on it, cleared the area and delivered materials worth millions of shekels to the main contractor for the purpose of completing the project by it. Therefore, the subcontractor's demand to pay for its expanses up until the date of its departure is a logical demand and in the spirit agreed upon between the parties, even though they failed to agree on the mechanism for making the calculations.