1 25 L.S.I. 11 (hereinafter referred to as the Remedies Law).

2 (1976) (I) 30 P.D. 367.

3 (1976) (III) 30 P.D. 581.

4 (1977) (II) 31 P.D. 85.

5 Remedies Law, sec. 8.

6 Ibid., sec. 7(b).

7 Ibid., sec. 6.

8 Supra n. 2.

9 Sec. 10 provides: “The injured party is entitled to compensation for the damage caused to him by the breach and its consequences and which the person in breach foresaw or should have foreseen at the time the contract was made, as a probable consequence of the breach.”

10 Peretz v. Biton, supra n. 2, at 370.

11 Two judges, Agranat P. and Berinson J., concurred with Witkon J. without adding any comments.

12 Peretz v. Bikon, supra n. 3 at 586.

13 See supra n. 9.

14 This was emphasized by H. Cohn J. in his opinion in Hershko v. Wachter, supra n. 4 at 94.

15 See the remarks to this effect of Haim Cohn J., Ibid.

16 Thus we cannot share Berinson J.'s feeling of certainty that reasonable men do not enter into contracts if they foresee delay in payment. In Hershko v. Wachter, supra n. 4 at 97, Berinson J. asks: “Which reasonable seller would make a contract of sale if he knew at the time of contracting that the buyer would not meet his obligation regarding payment on time, without at least ensuring that he would have some suitable external security?” This question was meant to be rhetorical, but still it deserves an answer: any reasonable seller who got an excellent price for the property, and was not obliged to convey title until he was paid, and knew that the buyer's financial standing was solid.

17 See Shalev, G., “Breach and Rescission of Contracts” (1970) 2 Mishpatim 652, 654.Google Scholar

18 On the attitude of English law see Cheshire, and Fifoot, , Law of Contract (9th ed.) 568.Google Scholar

19 This was the view taken by Judge S. Levin in the Tel Aviv District Court: Mizrachi v. Khalef (1975) (2) P.M. 438.

20 See Sladitz, , “Discharge of Contract by Breach in Civil Law” (1953) 2 Am. J. Comp. L. 334.Google Scholar

21 This explains the difference between the rescission provision and the damages provision in sec. 10, which explicitly adopts the reasonable foreseeability criterion (see supra n. 9). The measure of damages can be settled at some date after the breach and does not effect the certainty of the legal position of the two parties at the time of breach. Whether the contract is still binding or not must be determined immediately as it effects the future actions of each party, vis-à-vis each other, and vis-à-vis third parties.

22 See supra n. 4

23 See supra n. 2 at 371.

24 See supra n. 4, at 92–93. Witkon J. who preferred to base his opinion on another point, nevertheless expressed agreement with Landau D.P.'s view: ibid., at 97.

25 Ibid., at 98. Berinson J. gave two examples of such “special circumstances”: serious illness of the party in breach or of one of his close family at the relevant time which prevented him from dealing with his own affairs, and a period of mourning for a close relative at the time of payment.

26 Ibid., at 97. This idea of improving the morality of payment is a popular theme of Berinson J.: see Yardenia v. Achim Ofer Ltd. (1976) (I) 30 P.D. 29, 41 where he used the idea to support his ruling that the date for assessing damages should be the date of judgment, and not the date of damage.

27 Remedies Law, sec. 11(b). The rate of interest is the rate according to the Adjudication of Interest Law, 1961 (at present 26%), unless the court sets another rate. There is no reason why the court could not set the rate according to the standard bank debit rate of interest.

28 See Remedies Law, sec. 12.

29 Berinson J. rejected the compensation approach as an answer to the morality of payment problem. In replying to Haim Cohn J. who had stated that the sellers remedy for delayed payment was compensation, Berinson J. stated: “Given the prevailing situation in the courts, a compensation suit cannot serve as an efficient alternative to the right of rescission. A compensation suit takes a long time. In the meantime the value of money drops, and even if one is successful in the end—and one can never be sure that one will be—the court has no way of properly compensating for the real drop in the value of the money” (supra n. 4, at 98). This view calls for a number of comments: 1) In most contracts of sale—especially sale of land—the seller retains the object sold until payment. If he is entitled to interest or compensation sec. 31 of the Sale Law, 1968 gives him a lien on the thing sold until such interest or compensation is paid. Such a lien is a powerful weapon and may relieve the innocent party of the necessity of turning to court. 2) As we noted, sec. 11 (b) enables the courts to set a rate of interest which makes up for the drop in the value of money. 3) As we have stated above the criterion adopted by Berinson J. will force many an innocent party into court for a declaration that the rescission of the contract was valid. 4) An innocent party does not have to sit and wait while he watches the value of money drop. He may grant an extension to perform and then rescind if the other party fails to perform.

30 Zilberman v. Kiryat Haim (1967) (I) 21 P.D. 269. (The opposite rule applied in the case of an anticipatory breach).

31 Supra n. 4, at 90. “Such an interpretation [advocated by the majority] will, in my opinion, only increase bewilderment and uncertainty, as we will have to keep returning to the basic question: how would the innocent party have reacted at the time the contract was made, if he had foreseen a delay in payment of a week, two weeks, etc… If the vendor is worried about the value of his money, he will protect his rights either by stipulating in the contract that payment on time is essential or by granting an extension when a delay does occur”.