This article is general information, not legal advice. Every case is examined on its own facts, and every cause of action has its own limitation period.
A contract is formed by offer and acceptance, and the Contracts (General Part) Law, 5733-1973, does not require it to be written. A contract can be made orally, in writing or in any other form, unless a statute or an agreement between the parties made a particular form a condition of its validity. So a chain of emails ending in "approved, go ahead" can be a contract in every sense, provided the offer before it was definite enough and showed an intention to be bound. The draft written afterwards does not create the contract. It decides what happens when something goes wrong. Three questions are asked of every draft that reaches our firm before signature: who exactly is signing, what happens when a party does not perform, and how it ends.
Before signature: offer, acceptance, and what has to be in writing
An acceptance that adds to, limits or otherwise changes the offer is a new offer. The draft that came back with a change to the payment clause is still waiting for acceptance, even if "agreed" had already been written on the previous version. Acceptance can also be by an act performing the contract, where the offer allows that route. Silence cannot. A stipulation by the offeror that no reply will count as acceptance has no effect. In negotiations towards a contract each party must act in the customary way and in good faith, and a party that did not owes compensation for the loss caused by the negotiations. An undertaking to carry out a transaction in land needs a written document under the Land Law, 5729-1969, and a lease of up to five years is exempt from that requirement, unless it carries an option extending the total term beyond five years. A three-year office lease with an option for three more comes back within it.
Who exactly is signing
The heading of the agreement says "A.B. Services", with no company number, and the signature line says "Avi". When payment does not arrive, the first question is who owes it: the company, which may no longer be active, or the person who signed. The law sets a presumption for where nothing else was written. Two persons who owe one obligation are presumed to owe it jointly and severally, and the creditor may demand performance from either of them separately. What moves the answer: the company number in the preamble, a separate personal guarantee, and whether the person who signed had authority to sign for the name above the line.
What happens when a party does not perform
A supply agreement with no delivery date is the example that keeps coming back. The law fills in what was not written. An obligation with no agreed time for performance is to be performed within a reasonable time after the contract was made, on a date the creditor gave the debtor reasonable advance notice of. A price that was not agreed is paid at the sum that was proper in the circumstances when the contract was made, and goods or services whose quality was not agreed are supplied at medium kind and quality. What is written saves the argument over those words: a date, what counts as late, and how long there is to put it right before the other side may terminate. The remedies themselves are set in the Contracts (Remedies for Breach of Contract) Law, 5731-1970, and have an article of their own.
A detail that was not written does not disappear. The law fills it in with the words "reasonable time", and those two words are what the argument is later about.
How it ends
A service agreement whose last clause says "this agreement shall end by mutual consent", and nothing more, binds both parties until both agree. Whoever wants to leave alone has no clause to lean on. A contract may depend on a condition precedent or end on a condition subsequent. If the condition is not fulfilled within the period set, or failing one, within a reasonable time from formation, the contract lapses. "Subject to the bank's approval" with no date is a clause of that kind. Even a termination right written out in full, say on thirty days' notice, is exercised in the customary way and in good faith, as the law requires of the use of any right arising from a contract.
Standard-form contracts: when the wording was written in advance for many
The Standard Contracts Law, 5743-1982, applies to a form of contract whose terms, all or some of them, were fixed in advance by one party to serve as terms for many contracts with people unspecified in number or identity. A software supplier's terms of engagement. A term the supplier and the customer agreed specifically for a particular contract is not a term of a standard-form contract, so the clause that was negotiated falls outside the law. An unfair term is one that, having regard to the contract as a whole and to other circumstances, is prejudicial to customers or gives the supplier an unfair advantage liable to prejudice them. The law lists terms presumed to be unfair, among them an unreasonable right for the supplier to cancel or postpone performance, a change of price at its own discretion after formation unless the change stems from factors outside its control, and a declaration by the customer of having read the contract. A term denying the customer the right to go to court is void. The court cancels an unfair term or changes it to the extent needed to remove the unfairness.
Employment agreements: what must be written, and within how many days
In employment there is a statute that requires writing. The Notice to Employees and Job Candidates Law (Terms of Employment and Screening and Hiring Procedures), 5762-2002, requires an employer to give the employee a written notice of terms no later than thirty days from the day work began. The notice sets out, among other things, the identity of the parties, the start date, the main duties, the direct supervisor, the total payments made as wages and the pay dates, the length of the working day, the weekly rest day, and the payments for social benefits together with the funds that receive them. A written employment agreement that contains all of these and is handed over in time discharges the duty. One signed on the first day with the pay line left blank does not. A change in terms requires notice within thirty days. In an employee's claim where one of these matters is in dispute and no notice was given, the burden of proof passes to the employer, provided the employee has testified to the claim. An employer that knowingly gave no notice is also exposed to exemplary damages, up to 15,000 shekels as stated in the law, a sum updated each year by the index.
The clause everyone skips, and what is checked first
The clause most drafts skip is the interpretation clause. The parties may agree how the contract is to be interpreted. An employment contract and a standard-form contract are interpreted according to the parties' intent as it emerges from the contract and the circumstances, and where a contract has more than one reading and one party had the upper hand in shaping its terms, the reading against that party is preferred. Parties who were not represented by a lawyer in drafting the contract are treated as not having agreed on a method of interpretation. At our firm the examination of a draft starts from the preamble, and from one question: is the party written there the one who will pay. From there to the dates, to what is written about non-performance, and to the termination clause. In other circumstances, when the draft arrived from the other side as a fixed form sent to every customer, the first question changes: which clauses in it are terms of a standard-form contract, and which of them the law already presumes unfair.