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Exploitation as a Reason for Canceling a Contract in Israel

Michael Decker

Stuart Safft

I am delighted to report that my wife and I have just obtained our Israeli citizenship. We will be forever grateful for all of the help, guidance and support which Ariel Galili of Decker, Pex, Ofir & Co. provided through this process.
I am a Jewish, 80-year-old American, and my wife is not Jewish. We had started the process on our own back in November 2020 via the Jewish Agency and Nefesh B’Nefesh, but soon became entangled in the delays and often-changing regulations due to Covid-19. The pandemic also caused delays in obtaining the required apostilles for various documents from various state agencies and the US State Department.
We found Decker, Pex, Ofir & Co. On the internet and began working with Ariel in late November 2021. Ariel did a superb job of leading us through the process, helping us to understand which documents were essential, which would most likely be required, and which, though included on the list of required documents, were rarely required. He helped us several times to understand what was likely and unlikely to occur as “the next step.” Helping us manage our expectations was extremely useful to us.
Besides his knowing the laws, regulations and procedures, Ariel also made us feel that he was truly interested in helping us to successfully work through this process in as smooth, timely, and frustration-free manner as possible.
My wife and I strongly recommend anyone planning to go through this process seriously consider hiring Decker, Pex, Ofir & Co. and, specifically, Ariel Galili.

Can an unfair or exploitative phrasing of an agreement or specific clauses within an agreement constitute a valid reason for canceling a contract in Israel? Attorneys specializing in company law at our office deal with various cases, and we always have our client’s best interests in mind. In cases of clients wanting to cancel an agreement or purchase due to exploitation, it can be difficult to prove, but we are happy to say that we do have success in court.

What is exploitation?

Exploitation is when an individual is taken advantage of, typically financially in these cases, for the benefit of someone else. For instance, the elderly are generally an easy target for salespeople to exploit, which results in them spending large sums of money on products they do not need nor want. Unfortunately, this phenomenon has become common in Israel and lately gained more public attention.

Civil Appeal

A civil appeal (in Hebrew: “Irur Ezrachi”) in the case of an exploitative contract can rely on the precedent set by Chai Sassi v. Naaima Kikayon. In this case, a young couple convinced an elderly person who was not 100% coherent but was legally competent (capable of making decisions) to exchange apartments. The elderly victim’s apartment was naturally valued at a much higher rate than the young couple’s.

The elderly person’s family brought this case to court in an attempt to cancel the agreement, and the court ruled in favor that as the contract was based on exploitation of vulnerabilities, it should be cancelled.

Is it easy to raise a claim based on exploitation?

No. It is difficult to raise this claim because exploitation can be argued in pretty much every case. In the current market, some products are simply valued very highly, but that doesn’t necessarily mean it is legally defined as exploitation.

While it is possible to win a case due to exploitation, it is certainly not easy. Another key component of these cases is whether the person who signed the agreement actually had the legal capacity to sign an agreement of this sort. For instance, individuals with dementia, mental disorders, or who need a guardian are not in a position to sign any agreements.

Concluding Thoughts

It is crucial to be aware of your surroundings and to think twice before signing legally binding agreements. Although we are professionals at helping our clients get out of bad situations, it is always best if these situations are avoided in the first place. For more information on our services, you may visit our website.

If any of this is relevant to you, feel free to reach out with any inquiries or questions you may have.

Reason for Canceling a Contract



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