According to the Halacha
Contractor Agreement Law for Israel
1. What is a Contractor Agreement
A contract for services is an agreement for the performance of work or the provision of services for remuneration, where the contractor is paid for the completed work rather than for the time invested, and the contractor is not an employee of the client.
Civil Law
A contract for services is an agreement for the performance of work or the provision of services for remuneration, where the contractor is not an employee of the client.
2. Obligations of the Parties
The contractor is obligated to perform the work or provide the service, and the client is obligated to pay the remuneration, all in accordance with the terms agreed upon by the parties.
Civil Law
The contractor is obligated to perform the work or provide the service, and the client is obligated to pay the remuneration, all in accordance with the terms agreed upon by the parties.
3. Defect
(a) If the work or service is not in accordance with the agreed terms (hereinafter: defect), the client must notify the contractor of the defect after discovering it or after he should have discovered it, and if the defect can be remedied – provide the contractor with a reasonable opportunity to repair it.
(b) The client is not entitled to rely on the defect if the defect resulted from a cause for which the client is responsible.
Civil Law
(a) If the work or service was not performed in accordance with the agreed terms (hereinafter: defect), the client must notify the contractor of the defect within a reasonable time after discovering it or after he should have discovered it, and if the defect is repairable – provide the contractor with a reasonable opportunity to remedy it.
(b) The client is not entitled to rely on the defect –
(1) If the client has not fulfilled his obligations under subsection (a), unless the contractor was aware of the defect;
(2) If the defect resulted from a cause for which the client is responsible.
4. Remedies for Defect
(a) If the contractor has not remedied the defect within a reasonable time after the client has acted as stated in Section 3(a), the client shall be entitled to:
(1) Repair the defect and demand reimbursement from the contractor for reasonable expenses incurred;
(2) Deduct from the payment, for as long as the defect remains unremedied, the amount by which the value of the work or service has decreased due to the defect, compared to the agreed payment.
(b) If the defect is so urgent that it would be unreasonable to require the client to wait for the contractor to repair it, the client may repair the defect as specified in subsection (a)(1) without first acting as stated in Section 3(a).
(c) If the defect cannot be remedied, the client is entitled to deduct from the payment, with the contractor bearing the lesser share.
Civil Law
(a) If the contractor has not remedied the defect within a reasonable time after the client has acted as stated in Section 3(a), the client shall be entitled to:
(1) Repair the defect and demand reimbursement from the contractor for reasonable expenses incurred;
(2) Deduct from the payment, for as long as the defect remains unremedied, the amount by which the value of the work or service has decreased due to the defect, compared to the agreed payment.
(b) If the defect is so urgent that it would be unreasonable to require the client to wait for the contractor to repair it, the client may repair the defect as specified in subsection (a)(1) without first acting as stated in Section 3(a).
(c) If the defect cannot be remedied, the client is entitled to deduct from the payment as stated in subsection (a)(2).
5. Right of Lien
The contractor shall have a right of lien over any property delivered to him by the client for the purpose of performing work or providing a service, as security for the payment of amounts owed to him by the client under the contract.
Civil Law
The contractor shall have a right of lien over any property delivered to him by the client for the purpose of performing work or providing a service, as security for the payment of amounts owed to him by the client under the contract.
6. Acceptance of the Property and Transfer of Risk
(a) Once the contractor has performed the work or service on the property, the client is required to accept it; and if the client does not take possession and the item sustains damage, the client shall bear responsibility.
(b) If the property is lost or damaged while in the contractor’s possession –
(1) The contractor shall be liable, in accordance with the Guardianship Law, as a paid guardian. If he has notified the client that they may collect the item, he shall be liable as an unpaid guardian.
(2) The client shall be exempt from payment, unless the property was lost or damaged after the client was able to receive it, or due to a cause for which the contractor is not responsible.
Civil Law
(a) Where the work or service has been completed on the property by the contractor, the client must accept it at the agreed time, or if no time was agreed—within a reasonable period after the contractor has notified the client that the work or service has been completed.
(b) If the property is lost or damaged while in the contractor’s possession –
(1) The contractor shall be liable, for the purposes of the Guardianship Law, 1967, as a paid guardian, provided the custody of the property is not incidental to the main purpose of its possession;
(2) The client shall be exempt from payment, unless the property was lost or damaged after the client was obligated to accept it, and for a cause for which the contractor is not responsible.
7. Preservation of Remedies
Nothing in the provisions of this Law shall derogate from any other remedy available for breach of contract.
Civil Law
Nothing in the provisions of this Law shall derogate from any other remedy available for breach of contract.
8. Application
(a) The provisions of this Law shall apply where no other law contains specific provisions regarding the matter in question, and where there is no other implied intention arising from the agreement between the parties.
(b) In a contract for the supply of an asset to be extracted or manufactured, where the contractor has undertaken to provide the principal materials required, if the contractor has performed the work and manufactured the asset, and the client does not accept it, and the contractor cannot sell it to another and thereby suffers loss, the client is obliged to accept the asset and pay the agreed remuneration.
Civil Law
(a) The provisions of this Law shall apply where no other law contains specific provisions regarding the matter in question, and where there is no other implied intention arising from the agreement between the parties.
(b) In a contract for the supply of an asset to be extracted or manufactured, where the contractor has undertaken to provide the principal materials required, the provisions of the Sale Law, 1968, shall apply.
Sections 9–11 are repealed
Civil Law
- Non-Application of the Mejelle
In matters governed by this Law, the Second Book of the Mejelle shall not apply.
- Independence of the Law
In matters governed by this Law, Section 46 of the Palestine Order in Council, 1922–1947, shall not apply
- Commencement and Transitional Provisions
This Law shall come into force on 1 Heshvan 5735 (October 17, 1974); contracts for works entered into prior to its commencement shall continue to be governed by the previous law