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1. A sale is a transfer of the ownership of a property for a price.

Nature of Sale

2. A contract for the supply of property, which is to be produced or manufactured, is deemed a contract of sale, unless the party that orders the property undertakes to provide the main materials necessary for its production or manufacture.

Supply of Property

3. The provisions of this Law also apply, mutatis mutandis, to an exchange.

Exchange

4. (a) The provisions of this Law apply to the sale of movable property and also, mutatis mutandis, to the sale of immovable property and of rights.

(b) The provisions of this Law apply when no other Law contains special provisions about the matter in question and when no contrary intention appears from the agreement between the parties.

Scope

5. (a) Particulars of a contract of sale not determined in the agreement between the parties will be in accordance with the custom that was deemed acceptable by the parties in previous transactions between them or - in the absence of such custom -in accordance with customs which reasonable parties deem applicable to transactions of this kind.

(b) When the parties use expressions or terms commonly used in trade practice, those expressions or terms are construed in accordance with the meaning attached to them in the trade in question.

Agreement and Custom

6. Any obligation arises from a sale contract will be fulfilled in the usual manner and in good faith; and same applies to fulfillment of a right originating from a sale contract.

Good Faith

7. The seller will deliver the object sold to the buyer and will transfer its ownership to him.

Duty to Deliver and Transfer

8. (a) The object sold is delivered by placing it at the buyer's disposal.

(b) If the object sold is part of a bulk mass, then delivery consists of doing everything necessary to make it possible to take possession of the object sold and its receipt by the buyer.

(c) If it has been agreed that a carrier provide carriage of the object sold, then delivery consists of placing the object sold at the carrier's disposal, provided that the carrier is liable to the buyer under the contract of carriage.

Delivery - How it is done?

9. (a) If the object sold is not delivered immediately, then it will be  delivered within a reasonable time after the contract has been concluded.

(b) If delivery within a specific period has been agreed upon, then the seller may determine the date of delivery within that period.

(c) In the cases said in Subsections (a) and (b), the seller will give the buyer reasonable advance notice of the date of delivery.

Date of Delivery

10. (a) Delivery is made at the seller's place of business or, if the seller has no place of business, at his permanent place of residence.

(b) If, at the conclusion of the contract, the parties knew that delivery of the object sold will be at a specific place, then delivery will be made at that place.

(c) If it has been agreed that a carrier provide carriage of the object sold, then delivery will be made at a place agreed upon with a carrier liable as said in Section 8(c).

Place of Delivery

11. The seller has not fulfilled his obligation if he delivered -

(1) only part of the thing sold or a quantity which is smaller or larger than that agreed upon;

(2) a different property or property of a different kind or description from that agreed upon;

(3) property that lacks the quality or characteristics necessary for its ordinary or commercial use or for a particular purpose which is implied from the agreement;

(4) property which,  in kind, description, quality or characteristics, does not conform to the model or sample which was shown to the buyer, unless it was shown without the assumption of responsibility for its conformity;

(5) property which in some other respect does not conform to what was agreed by the parties.

Nonconformity

12. The buyer is not entitled to rely on nonconformity of the object sold, within the meaning of that term in Section 11 (hereinafter: nonconformity), if he knew of it when the contract was concluded.

Knowledge of Nonconformity

13. (a) The buyer  should examine the thing sold immediately after its receipt.

(b) If carriage of the thing sold has been agreed, then the buyer should examine it immediately after its arrival at the destination or, if it was re-dispatched to some other place without the buyer having examined it, and if the seller knew or should have known of that re-dispatch, immediately after the arrival of the object sold at that other place.

(c) Upon the buyer's demand the seller will give him a suitable opportunity to examine the object sold before the time said in subsections (a) or (b).

Examination of the Object Sold

14. (a) The buyer will notify the seller of any nonconformity immediately after the time of examination said in Section 13(a) or (b), or immediately after he discovered the nonconformity, whichever is earlier.

(b) If the buyer did not give notice of nonconformity, as said in Subsection (a), he will not be entitled to rely on it.

Notice of Nonconformity

15. If it was impossible to discover the nonconformity by a reasonable examination, then the is entitled to rely on it notwithstanding the provisions of Section 14, provided that he gave notice of it to the seller immediately upon discovering it. However, in the case of the sale of movable property the buyer is not entitled to rescind the contract, if he gave the said notice more than two years after delivery of the object sold, and he is not entitled to other remedies for breach of contract if he gave notice more than four years after delivery.

Latent Nonconformity

16. If the nonconformity arises out of facts which the seller knew or should have known when the contract was concluded and which he did not disclose to the buyer, the buyer is entitled to rely on it notwithstanding the provisions of Sections 14 and 15 or of any agreement, provided that he will give notice of it to the seller immediately upon discovering it.

Concealment of Nonconformity

17. (a) A buyer who gives notice of nonconformity will specify it in reasonable detail and give the seller a suitable opportunity to  examine the object sold.

(b) If notice of nonconformity has been given in the manner customary in the circumstances, the buyer is entitled to rely on it even if its arrival at the destination was delayed or it has not arrived there at all.

Further Provisions about the Notice

18. (a) The seller will deliver the object sold free of any attachment, seizure or other third party right.

(b) The seller will immediately notify the buyer of any claim of a right in the object sold of which he knew, or ought to have known, prior to delivery.

Defect of Right

19. The buyer will pay the price to the seller and take delivery of the object sold.

Duty to Pay and Receive Delivery

20. (a) If the price or the way of setting it has not been agreed upon, a proper price will be paid.

(b) If the price is set according to weight, it will be calculated according to the net weight.

Calculation of Price

21. The price will be paid on the date of delivery of the object sold and at the seller's place of business or, if he has no place of business, at his permanent place of residence.

Date and Place of Payment

22. (a) If the object sold is lost or deteriorates before the buyer has taken delivery, then the buyer is relieved of his responsibility, unless it is lost or deteriorates from a cause for which the seller is not responsible after the seller has done what he had to do to insure delivery and the buyer infringed his duty to take delivery.

(b) If carriage of the object sold has been agreed upon and the seller has delivered it to a carrier liable as said in Section 8(c), then the buyer is not relieved of his obligations if the object sold is lost or deteriorates, after its delivery to the carrier, from a cause for which the seller was not responsible.

Passing of Risk

23. The seller's duty to deliver the object sold and the buyer's obligation to pay its price are concurrent obligations, to be fulfilled at the same time.

Concurrent Obligations

24. The expenses of delivery of the object sold are borne by the seller; the expenses of receiving of delivery of the object sold are be borne by the buyer.

Expenses of Delivery and of Receiving the Object

25. If one party incurred expenses payable by the other party, he is entitled to be reimbursed for them, plus interest at the full rate allowed by the Adjudication of Interest Law 1961, from the date on which they were incurred until the date of reimbursement.

Reimbursement of Expenses

26. The provisions of this law on delivery and on taking delivery of the object sold also apply to the delivery and to taking delivery of the documents that relate to the object sold.

Documents Relating to the Object Sold

27. The provisions of this chapter are in addition to any other Law that relates to remedies for breach of contract.

General Provision

28. If the seller infringed an obligation as said in Section 11 and has not corrected the infringement within a reasonable time after the buyer so notified him, and if the buyer wishes neither to claim performance of the contract, nor to rescind it, then the buyer is entitled to deduct from the price that amount by which the value of the object sold decreased in consequence of the nonconformity, as compared with its value according to the contract.

Price Reduction

29. If the seller delivered to the buyer a quantity of property greater than agreed, and if the excess quantity can be severed without unreasonable expense or inconvenience, then the buyer is not entitled to rescind the contract because of the excess, but he is entitled to notify the seller within a reasonable time that he rejects the excess quantity; if he does not do so, he will pay its price at the agreed rate.

Excess Quantity

30. (a) If the buyer has been given the right to set any measurement, number, weight or other particular that relates to the object sold or to the terms of sale, and if the buyer does not set it within the time agreed upon in the contract or, in the absence of an agreement on the time, within a reasonable time after being asked to do so by the seller, then the seller is entitled to rescind the contract within a reasonable time, as if it had been infringed, or else to set that particular himself, taking into account the buyer's requirements, as far as they are known to him.

(b) When the seller has set particulars as aforesaid and when he has so notified the buyer, then his decision will be binding unless the buyer sets those particulars immediately upon his receipt of the notice.

Sale According to Specification

31. (a) The seller has a lien on the object sold for the payment of the amounts due to him from the buyer in consequence of the sale transaction. Similarly the buyer has a lien for the payment of the amounts due to him from the seller, if he has taken delivery of the object sold, but must return it to the seller.

(b) A person who has alien under Subsection (a) is entitled to delay carriage of the object sold, or to reserve the right of disposal during transit and to prevent its receipt by the other party.

Lien

32. Debts which the parties owe each other in consequence of the same sale transaction may be set off.

Set Off

33. Ownership of the object sold passes to the buyer upon its delivery, unless the parties agreed upon some other time or manner for the transfer of ownership.

Transfer of Ownership

34. If a movable property is sold by a person who carries on the sale of property of the kind of the object sold and if the sale was made in the ordinary course of his business, then ownership passes to the buyer free of every attachment, seizure or other third party right in the object sold even if the seller is not its owner or is not entitled to transfer it as aforesaid, provided that the buyer bought it and took possession of it in good faith.

Market Overt

34A. When any property is sold by a court, an execution office or any other lawful authority, ownership passes to the buyer free of every  attachment, seizure and other right in the property, except a right which according to the conditions of the sale, is not terminated and a right which does not serve as security for a monetary obligation.

Sale by Authority (Added 1971)

34B. Any attachment, seizure or other right in the property, which serves as security for a monetary obligation and which, under Sections 34 or 34A, is not to be enforced against the buyer, applies to the proceeds of the sale.

Applying Right to Proceeds (Added 1971)

35. In Section 53 of the Tort Ordinance (New Version), the passage from "in good faith in an open market" to the end of the Section is hereby replaced with "in good faith in accordance with Section 34 of the Sale Law 1968".

Amendments of Tort Ordinance (New Version)

36. The first book of the Mejelle is hereby repealed.

Repeal

37. This Law will come into effect on 1 October 1968. The previous Law shall continue to apply to a sale made before this law came into effect.

Commencement and Transitional Provision

Levi Eshkol

Prime Minister

Yaacov S. Shaipro

Minister of Justice

Shneor Zalman Shazar

President of the State