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In this page: Business Contract | Intellectual Property | Legal Framework of Business | International Dispute Resolution


Business Contract

General Observation
In principle, a contract can be concluded orally. This is, for example, made between diamond merchants, and in purchase or products or goods in a store.
Law Applicable to the Contract
The contracts are not always written. In any case, in Israel, there is a contract after offer by one party and its acceptance by the other, as soon as sufficient details are exchanged. It is thus necessary to be wise at the time of negotiations and not to promise anything without thinking. If the contract is written, it is paramount to insert all the conditions, without which it will be difficult to fulfill them later. It should be emphasized that even during the negotiations, the parties should show good faith and hence should not cheat the other party. Specially in case of an important contract (for example rent or purchase of building), it is wise to take advice from an advocate and do not fall into a trap that is sometimes hidden in the standard contracts; remember that in Israel it is for the advocates to draw them up (even for buildings).
Advisable Incoterms
It is preferable to choose an FOB or CIF incoterm. Avoid EXW, if you do not want to deal with transport on Israeli territory which can turn out to be complicated.
Language of Domestic Contract
The written contract can be drawn in Hebrew or in any other language, by the parties themselves or by a third party, in Israel or abroad, between two or more parties, contractual freedom remains as the basic principle. Which means that the parties are free to insert any condition, under sole reserve of their legality in a broad sense.
Other Laws Which Can Be Used in Domestic Contracts

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Intellectual Property

National Organisations
Israel Patent Office of the Ministry of Justice for patents and copyrights.
Regional Organisations
Israel is a signatory to the European Convention on the International Classification of Patents for Invention, the European Convention relating to the Formalities required for Patent Applications, as well as the Universal Copyrights convention and the Lisbon Agreement. Nonetheless, it is best if foreign patents are registered in Israel.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law Validity International Agreements Signed
Law on patents (1967)
Validity period: 20 years
Trade Marks Ordinance (1972)
Validity period: 10 years Trademark Law Treaty
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Law on industrial designs (1992)
Initial validity period: 5 years  
Israeli Copyright Law
the life of its author and for 70 years after his/her death, 50 years from the date of its making for sound recordings WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty

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Legal Framework of Business

Equity of Judgments

Equal Treatment of Nationals and Foreigners
Foreign nationals receive equal legal treatment.
The Language of Justice
Hebrew is the country's legal language; however, Arabic is also used officially by Arab minorities in the country .
Recourse to an Interpreter
Legal Similarities
Israel does not have a written constitution. Certain functions of the constitution are fulfilled by the Declaration of Establishment (1948), the Basic Laws of the Parliament and the Israeli Nationality Law. The legal system is a blend of English Common Law and British Mandate regulations. Israel no longer accepts the compulsory jurisdiction of the International Court of Justice.

The Different Legal Codes

Company law Common Investment Company law, 5754-1994,
Law on commercial practices,
Company law
Labor Law Law on collective conventions, Employment law
Contract and property rights Contract law of 1964, Laws on intellectual property
Consumer's right Consumer protection law
Checking National Laws Online
Lexadin, the World Law Guide
Other Useful Resources
Ministry of Justice
Ministry of Welfare and Social Affairs
Israel Competition Authority
Country Guides
Practical Law Company, Guide to doing business in Israel: legal system.

The Jurisdictions

Supreme Court Acts as a further appellate court, hearing both criminal and civil cases. The Supreme Court re-evaluates decisions by the lower, district courts. Sitting as the High Court of Justice, it acts as a court of first instance, often in matters concerning the legality of decisions regarding state authorities. The High Court of Justice or otherwise the Israeli Supreme Court acts sometimes not as an appellate body to the district court but as an overseer of justice against the lower courts
District Courts The District Courts constitute the middle level courts of the judicial system, and have jurisdiction in any matter not within the sole jurisdiction of another court
Magistrate courts The Magistrate courts serve as basic trial courts. In criminal matters, they hear cases where the accused faces up to seven years imprisonment, and in civil cases, have jurisdiction over matters up to two and a half million shekels. They also have jurisdiction over the use and possession of real property
Labour courts There are five Regional Labor Courts in Israel as a tribunal of first instance, and one national labour court in Jerusalem hearing appeals and few cases of national importance, as first tier. They are vested with exclusive jurisdiction over cases involving employer-employee relationship, pre-employment, post-employment strikes and labour union disputes, as well as labour related complaints against the National Insurance Institute.
For more information, consult the Israeli Labour courts law
Differences related to labour Conciliation board

Court Officials


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International Dispute Resolution

As it falls within the competence of jurisprudence, the tribunals are inclined to consider each case on the basis and in the practice of the tribunals to adjust the rights of the parties based on the business circumstances. However, the disputes will not be always judged by the Court. It is often stipulated in the distribution or agency agreements that the parties should submit to arbitration to settle the dispute. This solution consists of intervention of an arbitrator who shall take the final decision.
Arbitration Law
Law governing arbitration in Israel is the Arbitration Law of 1968.
Conformity to International Commercial Arbitration Rules
Party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Party to the Geneva Protocol on Arbitration Clauses.
Party to the Geneva Convention of the Execution of Foreign Arbitral Awards.
Appointment of Arbitrators
The law allows any individual to be named are arbitrator and it does not impose special capabilities or qualifications. The Parties are inclined to name an impartial person as arbitrator and prefer one who has an expertise in a particular field. The parties can stipulate in the arbitration agreement, the procedure for nomination of an arbitrator or a special arbitration group. The Israel Institute of Commercial Arbitration situated at Tel-Aviv is an organisation which is specialized in commercial arbitration for multinational companies.
Arbitration Procedure
Arbitrations are carried out in a very efficient manner, and in most of the cases, they come to an end within 6 to 9 months.
Permanent Arbitration Bodies
Israeli Institute of Commercial Arbitration (IICA) (Sectors Covered: All sectors)

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Latest Update: July 2024