Contract Law: Trends and Shifts in 2010

Abstract

This paper presents an overview of some of the main developments in the general body of contract law in Israel during the 2009-2010 law-year and examines their possible impact on the rights of contracting parties. The author claims that these developments reflect a general pattern that characterized Israeli contract law in recent decades: On the one hand, a continuous, step-by-step progress is observed in numerous cases in which the Supreme Court introduced minor changes into existing rules or made an effort to clarify and improve the existing doctrine. Such developments are seen, for example, in the law on formation of contracts, the law of remedies, and the principles of public policy and good faith. On the other hand, the past law-year has also witnessed more radical shifts in contract law doctrine, which may turn out to have a far-reaching impact on our contract law. Such a potential shift may be seen in the field of interpretation, where, for first time since its enactment, the Statute on General Contract Law has been substantially amended to incorporate a more conservative element into the existing doctrine. A not less important development took place in the law of Remedies. In the case of Agrifarm Int. v. Meirson, discussed towards the end of the article, not only did the Supreme Court reaffirm its commitment to the rule allowing the award of disgorgement damages for breach of contract, but took an even more radical step forward by recognizing an innovative doctrine of deterrent disgorgement damages.