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Unenforceable Contracts and Unjusticiable Contracts: Secs. 32–33 of the Contracts (General Part) Law, 1973

Published online by Cambridge University Press:  16 February 2016

Gabriela Shalev
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Extract

The Contracts (General Part) Law, 1973, is the fundamental statute in Israeli contract law, and will in the future serve as the basis for the codification of Israel civil law. The Law was enacted following a decade of meticulous preparatory work by a committee headed by Professor Tedeschi. Prof. Tedeschi was the leading intellectual force in this committee; his influence is apparent in the approaches, principles and concepts of the Law, as well as in its particular provisions. Prof. Tedeschi also devoted a part of his prolific writings to the realm of contracts law. This article, dealing with only two sections of the wide-ranging Contracts (General Part) Law, is dedicated with admiration to the father of Israeli modern contract law.

Type
Research Article
Information
Israel Law Review , Volume 21 , Issue 3-4 , Summer–Autumn 1986 , pp. 425 - 449
Copyright
Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 1986

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References

1 27 L.S.I. 117. Referred to hereafter as the General Contracts Law.

2 Bazak, , “Games of Chance in Jewish Religious Law and in Israel State Law” (1960) 16 HaPraklit 47–52 Google Scholar.

3 See the sharp and hostile depiction of the “plague” of lotteries and betting in Savitsky v. Minister of Finance (1965) 19(ii) P.D. 369, at 376-377.

4 Ibid.

5 See secs. 224-235 of the Penal Law, 1977 (L.S.I. Special Volume).

6 For a demonstration of this approach see the judgment of H. Cohn J. in Gonschiorowitz v. Mifal HaPayis (1965) 19(iii) P.D. 286, at 305-306.

7 The authorized L.S.I, translation uses the phrase “rather than” – however, “more than” reflects more accurately the Hebrew. This phrasing is of significance, see sec. II D. infra.

8 Cf. the definitions in sec. 224 of the Penal Law, 1977. However, note that these definitions do not include the term “contract”. See also sees. 1965-1967 of the French Code Civile and secs. 1933-1935 of the Italian Code. And cf. the definition of a betting contract in the English judgment Carlill v. Carbolic Smoke Ball (1892) 2 Q.B. 484, at 490. This definition includes a number of cumulative elements which do not necessarily characterize betting contracts in our legal system, and was subject to criticism even in England. See Treitel, , The Law of Contract (London, 6th ed., 1983) 388–391 Google Scholar.

9 Cf. Anson's, Law of Contract (Oxford, 25th ed., 1975) 335 Google Scholar.

10 22 L.S.I. 107.

11 Treitel, supra n. 8, at 391.

12 Anson, supra n. 9, at 336.

13 Compare with the definition of wager in Carlill v. Carbolic Smoke Ball, supra n. 8, at 490.

14 Ibid.

15 Anson, supra n. 9, at 336; Treitel, supra n. 8, at 390.

16 Anson, supra n. 9, at 336.

17 35 L.S.I. 91.

18 (1976) 30(ii) P.D. 365.

19 Ibid., at 368. And see Friedmann, D., “The Effect of Divorce and Remarriage of the Insured on the Rights of Beneficiaries in Life Insurance Policy” (1978) 6 Iyunei Mishpat 413–414 Google Scholar; Goldstein, P., “‘Insurable Interest’ – Re-evaluation of an Accepted Concept” (1976) 4 Iyunei Mishpat 67, at 68, 69 Google Scholar.

20 Although remnants of this demand, or a “shadow” of it, in ProfessorYadin's, U. words (in his book The Insurance Contract Law, 5741–1981, in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1984, in Hebrew) 26–27)Google Scholar, can be found in the provision of the Insurance Contract Law: sec. 42 regarding life insurance and sec. 55(a) regarding property insurance.

21 Cf. Yadin. supra n. 20, at 26.

22 See n. 7 supra.

23 Cf. Hilu v. State of Israel (1979) 33(ii) P.D. 461. In that judgment it was held in the criminal context that the game of open poker is not a game of pure chance.

24 Cf. Note of Explanation to sec. 33 of the Bill (sec. 32 of the Law): “This section prescribes that a contract for these matters is not cause for enforcement … or compensation, even when the conditions for criminal conviction and punishment are not fulfilled”. H.H. (1970) no. 880, p. 129 Google ScholarPubMed.

25 Friedmann, D., “Consequences of Illegality in Israeli Law in Light of Sections 30–31 of the Contracts (General Part) Law” (1977) 5 Iyunei Mishpat 618 (part one)Google Scholar; (1978) 6 Iyunei Mishpat 172 (part two)Google Scholar.

26 With the exception of the judicial rescission mentioned in sec. 14(b) of the General Contracts Law.

27 25 L.S.I. 11.

28 Sec. 21 of the Contracts (General Part) Law, 1973, and sec. 9 of the Contracts (Remedies for Breach of Contract) Law, 1970.

29 Cf. Zandbank v. Danziger (1976) 30(ii) P.D. 262, at 266-267.

30 See Tedeschi, G., “Aspects of Unjust Enrichment” (1981) 11 Mishpatim 385, at 395, n. 25Google Scholar: in gambling, lottery or betting contracts the winner is exempt from restitution.

31 See Rabello, A.M., The Gift Law 5728–1968, in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1979, in Hebrew) 55–56 Google Scholar.

32 21 L.S.I. 142.

33 Savitsky v. Minister of Finance, supra n. 3, at 376-377.

34 Gonschiorowitz v. Mifal HaPayis, supra n. 6, at 286.

35 Ibid., at 305.

36 Ibid., at 292.

37 And primarily the determination of policy, as opposed to its performance.

38 See Witkon, , Politics and Law (Jerusalem, 1965, in Hebrew)Google Scholar; and Witkon, , “Justiciability” (1966) 1 Is.L.R. 40 Google Scholar.

39 Supra n. 24.

40 State of Israel v. Krasnianski (1966) 20(ii) P.D. 283.

41 Albalada v. Hebrew University (1966) 20(i) P.D. 204.

42 To use Chief Justice Smoira's phrase in Jabotinsky v. Weizman (1951) 5 P.O. 801.

43 As Shamgar J. stated in Zandbank v. Danziger, supra n. 29, at 266-267. For the position in English law see Treitel, supra n. 8, at 12; Anson, supra n. 9, at 69. All these authors refer to the separate and independent requirement of intent to enter a contract in addition to the requirement of consideration. As to U.S. law, see Farnsworth, , Contracts (Boston, 1982) 116 Google Scholar.

44 Zeltner, , Laws of Contract of the State of Israel (Tel-Aviv, 1976, in Hebrew) 40–42 Google Scholar.

45 An interesting question is where in our legal system is this condition grounded. In Zandbank v. Danziger, supra n. 29, at 267, the Supreme Court expressed its opinion that the requirement of intent to create legal relationships is based on the term “resolve”, which appears in secs. 2 and 5 of the General Contracts Law as an essential element for the making of a binding offer and acceptance and a valid contract. See also the judgment of Justice I. Kahan in Marom v. Tel-Aviv University (1983) 37(iii) P.D. intention, namely, the intention to enter a specific contract with a specific party (this is supported also by the language of sec. 2, which requires that the resolve be directed to entering into a contract “with the offerree” and speaks of “the contract” [our emphasis]. The condition of intention to create binding legal relations is an essential and preliminary requirement for the making of a valid contract and is grounded in the general conception of contract law in our legal system. According to this conception, a contract is the product of the freedom to make it, i.e., the freedom of contract. A contract needs the combined will of the two parties to make it; otherwise the contract does not come into existence ab initio. In the absence of the element of intention to create a contract, there is no point in talking about the application of the contract laws, since the phenomenon in question is not a contract and is therefore not subject to the law of contract. The demand to create legal-contractual relations is consequently a preliminary requirement for entry into the field of contracts. The General Contracts Law, which opens with the words “A contract”, constitutes a sieve for contractual and non-contractual phenomena, by means of the aforesaid requirement. Therefore, in the case of an agreement which is not characterized by the intention to create legal-contractual relations, there is no point in going any further and asking whether a “contract” was made by way of offer and acceptance in accordance with the General Contracts Law.

46 Cf. the words of Halevi J. in State of Israel v. Krasnianski, supra n. 40, at 283.

47 For a brilliant philosophical discussion of this principle, see Gans, C., “Academic Freedom” (1987) 12 Iyunei Mishpat 415 Google Scholar.

48 12 L.S.I. 217.

49 See Nuriel v. Board of Examiners of the Commission of State Service (1975) 29(ii) P.D. 6.

50 Connelly v. University of Vermont, 244 F.Supp. 156 (D.Vt. 1965).

51 See Sudai v. Hebrew University (1981)(ii) P.M. 333; but see Marom v. Tel-Aviv University, supra n. 45, at 518, where it was held that in the particular circumstances no contract was made concerning acceptance to studies.

52 Albalada v. Hebrew University, supra n. 41, at 204.

53 Cf. Atiyah, P.S., The Rise and Fall of Freedom of Contract (Oxford, 1979) 716 Google Scholar; but see the judgment of Landau J. in the Albalada case, supra n. 41, at 210, rejecting the argument raised by the university that it was not bound by the contracts, on the ground that this argument could be raised only by public state bodies.