In this case, a woman tried to cancel a real estate sale agreement after signing the contract, claiming the buyers misled her into thinking the apartment was in a building deemed unsafe. However, the court found no evidence of deception or undue influence. Because the seller agreed to all terms—including a clause making the deal conditional on safety clearance—and the agreed price was not altered, the court ruled in favor of the buyers and ordered the sale to be completed.

Edited by Adv. Amit Raz with assistance from Ofir Madmoni

A contract is formed through offer and acceptance—when one party agrees to the proposal of another. In Israel, contract law applies to any legal agreement between two or more parties, written or verbal. These laws form the foundation that courts rely on when resolving contract disputes.

Contract law reflects the meeting of minds between parties and emphasizes freedom of contract—since “agreements must be upheld.” However, the law also provides grounds for canceling a real estate agreement or other contracts after they’ve been signed, particularly if the contract was formed under false pretenses.

One such ground is deception, defined under Section 15 of the Israeli Contracts Law (General Part), 1973. If one party was misled—actively or by omission—into signing an agreement, and this affected their decision, they may cancel a real estate agreement. Deception can interfere with a person’s free will, making the contract legally flawed.

This article examines a decision by the Haifa District Court, where a seller tried to cancel a real estate agreement after claiming the buyers misled her into thinking her building was designated unsafe. The court had to determine whether the cancellation was lawful—or if the buyers were entitled to enforce the contract.

Case Background:

This case involved a dispute in the Haifa District Court over the enforcement of a signed apartment sale. A property owner agreed to sell her apartment to a young couple, who were represented by a real estate agent. Before signing, the buyers did due diligence, including checking with the Haifa Municipality. They discovered a file had been opened classifying the building as potentially “dangerous.”

Such classifications are made by certified municipal engineers and indicate serious safety concerns. As a result, both sides agreed to include a condition in the contract: the sale would only go through once the “dangerous building” file was closed.

The contract was signed and the buyers paid the first installment. The seller carried out the necessary repairs, and the municipality officially closed the file. A warning note (he’arat azhara) was registered in the buyers’ favor. But then, the seller refused the second payment and declined to sign mortgage papers—blocking the transaction.

She claimed the buyers acted deceitfully and had misrepresented the building’s status to lower the sale price. She argued that there was no formal “dangerous building” designation at the time and that the internal file didn’t justify the condition in the contract. The seller, an elderly and disabled woman, claimed she was taken advantage of and sought to cancel the real estate agreement, delete the warning note, and demand compensation.

The buyers responded that everything had been done in good faith. They noted that the seller voluntarily added the condition to the contract, which clearly stated that the deal would go forward only once the building’s status was resolved. Since that condition was met, they argued, her attempt to cancel the real estate agreement was invalid and constituted a serious breach of contract.

Court Ruling:

The court rejected the seller’s claims, finding no evidence of deceit, false representation, or manipulation by the buyers. It concluded that the seller had freely agreed to the contract terms and had knowingly performed her obligations, including the repairs.

The court noted there was no evidence that the seller’s age or health compromised her legal ability to enter the agreement. The price hadn’t changed, and the apartment sold for market value. While the building wasn’t formally declared dangerous, a professional opinion had been submitted and a municipal file opened—so there was no false information.

The judge ruled that the seller’s attempt to cancel the real estate agreement was unjustified and amounted to a fundamental breach of contract.

The buyers were granted full ownership rights, and the court ordered the seller to transfer the apartment and sign all necessary documents. The decision reinforced the principle that unjustified attempts to cancel a real estate agreement won’t be tolerated—and that contract enforcement remains a key remedy under Israeli law.

(Source: Civil Case, Haifa, 64545-03-23 Sagiv Israeli v. Yulia Faibish)