Contracts (General Part) Law, 5733-1973

A contract is formed by way of offer and acceptance in accordance with the provisions of this Chapter.

An approach by one person to another constitutes an offer if it evidences the offeror's intention to enter into a contract with the offeree and is sufficiently definite to enable the contract to be formed by acceptance of the offer; the approach may be made to the public.

An offer lapses —

Acceptance shall be by notice from the offeree delivered to the offeror evidencing the offeree's intention to enter into a contract with the offeror in accordance with the offer.

Where an offer does no more than confer a benefit on the offeree, it is presumed that he has accepted it, unless he has notified the offeror of his objection within a reasonable time after becoming aware of it.

Acceptance of an offer after it has lapsed shall have the same effect as a new offer.

The offeree may withdraw the acceptance by notice to the offeror, provided that the notice of withdrawal is delivered to the offeror no later than the time at which the notice of acceptance is delivered to him or at which he becomes aware of acceptance in the manner referred to in section 6(a).

An acceptance that contains an addition, limitation or other modification as compared with the offer shall have the same effect as a new offer.

A contract formed solely for appearance — is void; nothing in this provision shall prejudice any right acquired by a third party in reliance in good faith on the existence of the contract.

A person who entered into a contract by reason of a mistake that is the result of misrepresentation practised upon him by the other party or by another on his behalf, may avoid the contract; for this purpose, "misrepresentation" — includes non-disclosure of facts which, under any law, custom or the circumstances, the other party was required to disclose.

Where a clerical error or similar error has occurred in a contract, the contract shall be corrected in accordance with the common intention of the parties, and the error shall not be a ground for avoidance of the contract.

A person who entered into a contract by reason of the exploitation by the other party or by another on his behalf of the distress, mental or physical weakness, or inexperience of the contracting party, and the terms of the contract are unreasonably inferior to the customary terms, may avoid the contract.

Where the contract is severable into parts and the ground for avoidance relates only to one of its parts, that part alone may be avoided; however, where it is to be assumed that the party entitled to avoid would not have entered into the contract but for the ground for avoidance, he may avoid that part or the entire contract.

Avoidance of the contract shall be by notice from the contracting party to the other party within a reasonable time after he becomes aware of the ground for avoidance, and in the case of duress — within a reasonable time after he becomes aware that the duress has ceased.

Once the contract has been avoided, each party is obliged to restore to the other party what it received under the contract, and if restoration was impossible or unreasonable — to pay the other party the value of what it received.

Nothing in the provisions of this Chapter shall derogate from any other remedy.

A contract may be made orally, in writing or in any other form, unless a particular form was a condition of its validity under a law or an agreement between the parties.

The content of a contract may be whatever the parties have agreed upon.

Details that have not been determined in the contract or pursuant to it shall be in accordance with the practice existing between the parties, and in the absence of such practice — in accordance with the custom prevailing in contracts of the same type, and such details too shall be deemed agreed upon.

Where a contract was made subject to a condition and the condition was not fulfilled within the period prescribed for that purpose, and in the absence of such a period — within a reasonable time from the formation of the contract, then if it was a condition precedent — the contract is avoided, and if a condition subsequent — the stipulation is avoided.

A contract whose formation, content or purpose is illegal, immoral or contrary to public policy — is void.

The provisions of sections 19 and 21 shall apply, with the necessary modifications, also to the voidness of a contract under this Chapter; however, in the case of voidness under section 30, the court may, if it sees fit in the interests of justice and on such conditions as it deems appropriate, exempt a party from the obligation under section 21, in whole or in part, and to the extent that one party has performed its obligation under the contract — oblige the other party to perform the counter-obligation, in whole or in part.

Where a contract provides that a grade, title, prize or the like is to be awarded according to the determination or assessment of one of the parties or of a third party, the determination or assessment under the contract shall not be subject to deliberation in a court.

An obligation that a person undertook in a contract for the benefit of a person who is not a party to the contract (hereinafter — the beneficiary) conveys to the beneficiary the right to demand performance of the obligation, if an intention to convey that right to the beneficiary is implied by the contract.

The beneficiary's right to demand performance of the obligation is extinguished retroactively if the beneficiary notified one of the parties to the contract of the rejection of the right within a reasonable time after one of them notified the beneficiary of it.

Any plea available to the debtor against the creditor in connection with the obligation shall also be available to the debtor against the beneficiary.

The beneficiary's right does not derogate from the creditor's right to demand from the debtor performance of the obligation for the benefit of the beneficiary.