Legal Updates

In a set of agreements, it is possible to learn about the intention of the parties from the previous agreementsנ

March 19, 2019

A landowner sold part of his land in a transaction at a net price. After about 11 years, a second agreement was executed in which the identity of the purchaser was changed, and after that, a third agreement was executed between the purchaser and the landowner, however, instead of a “net” transaction in which the tax charges are imposed on the purchaser, the transaction was defined as a "gross" transaction.
The Supreme Court held that the final agreement should be read in light of the previous agreements and therefore the definition of the transaction is a clerical error to be fixed. In a series of agreements, the last one signed is the binding one. However, the last agreement cannot be detached from the previous ones, which may be used to understand the subjective intent of the parties. A material contradiction between the final agreement and the previous ones may indicate the a clerical error.