Sale Law, 5728-1968

A sale is the transfer of an asset for a price.

A contract for the supply of an asset that is to be produced or manufactured shall be regarded as a contract of sale, unless the person placing the order undertook to supply the principal materials required for the production or manufacture of the asset.

The provisions of this Law shall apply, with the necessary modifications, to exchange as well.

An obligation arising from a contract of sale must be performed in the customary manner and in good faith; and the same applies to the exercise of a right arising from the contract.

The seller is obliged to deliver the subject matter of the sale to the buyer and to transfer ownership thereof to the buyer.

The seller has not performed his obligations if he delivered —

The buyer is not entitled to rely on non-conformity of the subject matter of the sale as referred to in section 11 (hereinafter — non-conformity) if the buyer knew of it at the time of conclusion of the contract.

Where the non-conformity was not discoverable by reasonable examination, the buyer is entitled to rely on it notwithstanding the provisions of section 14, provided that the buyer gave the seller notice thereof immediately after discovering it; however, in the sale of a movable asset the buyer is not entitled to withdraw from the contract if notice as aforesaid was given after two years have elapsed from delivery of the subject matter of the sale, and the buyer is not entitled to the other remedies for breach of contract if notice was given after four years have elapsed from delivery of the subject matter of the sale.

Where the non-conformity arose from facts that the seller knew or ought to have known at the time of conclusion of the contract and did not disclose to the buyer, the buyer is entitled to rely on it notwithstanding the provisions of sections 14 and 15 or any agreement, provided that the buyer gave the seller notice thereof immediately after discovering it.

The buyer is obliged to pay the seller the price and to accept the subject matter of the sale.

The price shall be paid at the time of delivery of the subject matter of the sale and at the seller's place of business, and if the seller has no place of business — at his permanent place of residence.

The seller's duty to deliver the subject matter of the sale and the buyer's duty to pay the price therefor are concurrent obligations that must be performed simultaneously.

The expenses of delivery of the subject matter of the sale shall be borne by the seller; the expenses of receipt of the subject matter of the sale shall be borne by the buyer.

A party who has incurred expenses incumbent upon the other party is entitled to their reimbursement together with shekel interest, as defined in the Interest and Linkage Law, 5721-1961, from the day on which they were incurred until the day on which they are reimbursed, and the provisions of that Law shall apply in respect of such interest, with the necessary modifications.

The provisions of this Law with respect to delivery and receipt of the subject matter of the sale apply also to the delivery and receipt of documents relating to the subject matter of the sale.

The provisions of this Chapter are in addition to any other law with respect to remedies for breach of contract.

Where the seller has breached an obligation as referred to in section 11 and has not remedied the matter within a reasonable time after the buyer gave him notice thereof, and the buyer does not wish to claim performance of the contract or to rescind it, the buyer is entitled to deduct from the price the amount by which the value of the subject matter of the sale has diminished as a result of the non-conformity as against its value under the contract.

Where the seller has delivered to the buyer assets in a quantity exceeding that agreed upon, and the excess quantity is capable of being separated without unreasonable expense or effort, the buyer is not entitled to rescind the contract on that account, but is entitled, within a reasonable time, to notify the seller that he rejects the excess quantity; if he does not do so, he shall pay the price therefor at the agreed rate.

Debts owed by the parties to each other by virtue of a single sale transaction may be set off.

Ownership of the subject matter of the sale passes to the buyer upon delivery thereof, unless the parties have agreed upon a different time or a different manner of transferring ownership.

Where a movable asset is sold by a person who deals in the sale of assets of the kind of the subject matter of the sale and the sale was in the ordinary course of his business, ownership passes to the buyer free of any charge, attachment and other right in the subject matter of the sale, even if the seller was not the owner of the subject matter of the sale or was not entitled to transfer it as aforesaid, provided that the buyer purchased and received it into his possession in good faith.

Where an asset is sold by a court, the Execution Office or another authority pursuant to law, ownership passes to the buyer free of any charge, attachment and other right in the asset, except for a right which, under the conditions of the sale, is not extinguished, and a right that does not serve as security for a monetary obligation.

A charge, attachment and other right in an asset that serve as security for a monetary obligation and which, pursuant to section 34 or section 34a, may not be relied upon against the buyer, shall apply to the proceeds of the sale.

In the Torts Ordinance [New Version], in section 53, the passage beginning with "in good faith in a free market" until the end of the section shall be replaced by "in good faith in accordance with section 34 of the Sale Law, 5728-1968".

The First Book of the Mejelle is repealed.

This Law shall commence on the 9th day of Tishrei 5729 (1 October 1968); the previous law shall continue to apply to a sale made before the commencement of this Law.