Dear Clients,
The Supreme Court recently adopted a precedent-setting approach to contract interpretation, in a claim by a construction company against Israel Railways. The dispute focused on monetary claims by the construction company for additional payments, beyond the amount specified in its contract to perform infrastructure work for Israel Railways. The construction company’s claim was based on additional costs that it incurred in performing the work, due to causes such as an increase in the cost of iron and the laying of extra layers of gravel.
In considering the claim, the Supreme Court expanded its review to include the fundamental questions at the basis of contract interpretation in general, and specifically the rights of parties under a construction agreement.
The impact of the Supreme Court's ruling extends well beyond the interpretation of infrastructure contracts, and without question this ruling is an important step in defining the interpretation rules which apply to Israeli contract law.
Please feel free to contact us with any questions you may have on the subject.
For the full review, please click here.
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