Adv. Levy: So what did I want to do?
The Defendant: ... to start a business), (to say how big it is, I've never done big business, I don't know what it is" (Protocol, p. 46, paras. 32-35).
Given the totality of the circumstances behind the engagement - the trust that prevailed between the plaintiff and the defendant in light of their prior acquaintance, their desire to advance the business idea quickly, under conditions of uncertainty and when the chances of success are in doubt - the decision to enter into an oral agreement, while postponing the writing of the agreements to a later stage, is reasonable and consistent with the logic of the matter.
- The result of this conclusion is that the defendant's argument that the requirement of specificity was not met due to the absence of material details should also be rejected (paragraph 11 of the defendant's summaries). In this context, the defendant argues, inter alia, that there is no anchoring of the claimed receipt rate of 20% or that this rate will be calculated from the profits, that the basis of the calculation or the currency in which the payment will be made was not agreed, that the dates or place of distribution were not agreed upon, and that it was also not agreed upon who would bear the tax payment. I am of the opinion that although no agreement was formulated with respect to these or other details, in the circumstances described the consent of the parties included the material details necessary for the purpose of concluding the agreement. The missing details that the defendant discussed can be filled in by means of legal tools outlined in case law, including by virtue of the principle of good faith and the practice between the parties.
The conclusion is that The necessary conditions for concluding an agreement have been crystallized, even in light of correspondence that was exchanged about three weeks after the start of the joint activity. Thus, around March 29, 2020, After the plaintiff asked to put the agreement in writing (pp. 85-86 of the plaintiff's affidavit), the defendant refused and offered him an "exit point", which included quantifying the value of his investment and recognizing the remuneration for locating a supplier (Chen Saban). The defendant's proposal in fact attests to recognition of the existence of a binding agreement and the fact that the decision whether to exercise the "option" that he offered to the plaintiff is in the hands of the plaintiff alone.
- Before concluding this chapter, I will clarify that I have not lost sight of the defendant's argument, according to which the plaintiff took only "fairly simple actions and his contribution to the site was almost nil" (paragraph 30 of the statement of defense). However, this claim has not been proven, is inconsistent with the parties' correspondence from real time and with the scope and duration of the plaintiff's contribution and even contradicted by the defendant himself on a number of different occasions. Similarly, the defendant's argument that he did not see the plaintiff as a friend, but rather a "past seller" in a manner that negates the existence of a sufficient level of trust for the purpose of entering into an agreement in this manner. This is because this claim was contradicted by him on a number of other occasions.
1.b. The content of the agreement entered into
- Once it has been determined that a binding agreement has been entered into between the parties, the question of its content must be addressed. The testimonies of the parties paint a clear picture, according to which a business cooperation agreement was formulated with the aim of generating mutual profits. In addition, from the parties' versions and their actual conduct, as reflected in the correspondence, it can be learned that a clear division of duties was defined between them. In this framework, the defendant, the initiator of the idea, was responsible for managing the activity, financial investment, locating investors, managing the operation and making business decisions. The plaintiff was responsible for the technical aspect of the construction and maintenance of the sites, while investing personal time and knowledge. The defendant confirmed in his statement of defense that during the initial negotiations, a rate of 20% of the profits was discussed (paragraph 9 of the statement of defense). This admission is reinforced by correspondence, in which the parties reaffirmed the plaintiff's entitlement to part of the profits; Thus, for example, on August 31, 2020, the defendant wrote to the plaintiff: "But you are a partner in the profits. Where do you pay if there are no profits, you idiot" (p. 430 of the plaintiff's affidavit, correspondence dated August 31, 2020, at 2:33 p.m.).
Thus, it has been proven that the parties agreed on the plaintiff's entitlement to part of the profits, and that the rate of 20% is the rate discussed between the parties in the initial negotiations and which the defendant confirmed in his statement of defense. This determination will serve as a starting point for the second stage of the proceeding, if it exists. However, the final determination of the rate of remuneration, including the basis of the calculation to which it will apply, i.e., the definition of the "profits" from which it will be derived, and the question of whether circumstances justifying a deviation from the aforesaid point of departure have been proven, will be made in the second stage, after receiving and analyzing the accounts, taking into account all the evidence and the arguments of the parties.