Advertisement

Three Modes of Regulating Price Terms in Standard-Form Contracts—The Israeli Experience

  • Eyal ZamirEmail author
  • Tal Mendelson
Chapter
Part of the Ius Comparatum - Global Studies in Comparative Law book series (GSCL, volume 36)

Abstract

Regulation of the content of standard-form contracts usually focuses on the invisible terms that customers hardly ever read. It does not refer to the price, because price is a salient component of the transaction, to which customers usually pay attention and sometimes even compare between suppliers. However, it is often difficult to draw the line between the price and price-related, invisible terms.

This chapter analyzes the Israeli experience concerning the regulation of prices and price-related terms. The Israeli experience is interesting for several reasons. These include the fact that in 1964, Israel was the first country to enact a specific Law regulating the content of standard-form contracts, which established both a framework for ex post judicial supervision and a mechanism for ex ante, administrative/quasi-judicial supervision; the various reforms made in these mechanisms throughout the years, including the de facto abolition of the administrative/quasi-judicial mechanism in 2014; and the activist policy adopted by the Israeli Banking Supervisor. While Israeli law—much like other systems—has long imposed strict disclosure duties on banks, insurers, and other suppliers, unlike some other systems, it has always regulated the content of contracts, as well. This regulation was vital during the 2008 subprime crisis, in which Israel suffered little, and recovered.

Notes

Acknowledgments

We thank Hila Davidovich, Ronnie Neubauer, and Reut Ofek for helpful comments.

References

  1. Atamer YM (2017) Why judicial control of price terms in consumer contracts might not always be the right answer. Insights from behavioural law and economics. Mod Law Rev 80:624–660CrossRefGoogle Scholar
  2. Bachar A (2007) Unauthorized use of credit cards. Eroding consumer protection. HaMishpat (Coll Manag Law Rev) 11:321–356Google Scholar
  3. Bachar A (2012) Bank services contracts. Regulation of information and content. Doctoral thesis, Hebrew University of JerusalemGoogle Scholar
  4. Bakos Y, Marotta-Wurgler F, Trossen DR (2014) Does anyone read the fine print? Consumer attention to standard-form contracts. J Leg Stud 43(1):1–35CrossRefGoogle Scholar
  5. Barak A (1994) The tradition and culture of the Israeli legal system. In: Rabello AM (ed) European legal traditions and Israel. The Harry and Michael Sacher Institute for Legislative Research and Comparative Law, Jerusalem, pp 473–492Google Scholar
  6. Barak A (1996) Constitutional human rights and private law. Rev Const Stud 3(2):218–281Google Scholar
  7. Bar-Gill O (2012) Seduction by contract. Law, economics, and psychology in consumer markets. Oxford University Press, OxfordCrossRefGoogle Scholar
  8. Becher SI, Gelbard M (2013a) Asymmetric pricing mechanism in standard form contracts. An unfair contractual term? Online Isr J Legislation, September 2013. https://ssrn.com/abstract=2625159
  9. Becher SI, Gelbard M (2013b) The standard form contracts law. Re-review following amendments. Hukim (Isr J Legislation) 5:19–57Google Scholar
  10. Ben-Oliel R (2005) The Attorney General v. Bank Leumi. A lengthy appraisal by an Israeli court of a banking account. Bank Fin Law Rev 21:61–79Google Scholar
  11. Ben-Shahar O, Schneider CE (2014) More than you wanted to know. The failure of mandated disclosure. Princeton University Press, PrincetonCrossRefGoogle Scholar
  12. Berg KF (1979) The Israeli Standard Contracts Law 1964. Judicial controls of standard form contracts. Int Comp Law 28(4):560–574CrossRefGoogle Scholar
  13. Bin-Nun A (1987) The law of standard contracts, 5743–1982. The Harry and Michael Sacher Institute for Legislative Research and Comparative Law, JerusalemGoogle Scholar
  14. Comment: administrative regulation of adhesion contracts in Israel (1966) Colum Law Rev 66(7):1340–1350Google Scholar
  15. Deutch S (1980) Standard Contracts Act. Failure and recommendation. Mehkarei Mishpat (Bar-Ilan Law Stud) 1:62–133Google Scholar
  16. Deutch S (1985) Controlling standard contracts. The Israeli version. McGill Law J 30:458–477Google Scholar
  17. Deutch S (1986) Standard contracts. Methods of control: the conceptual framework of the 1982 Law. Tel-Aviv Univ Stud Law 7:160–194Google Scholar
  18. Deutch S (1990) Control of unfair terms in consumer contracts in Israel. Law and practice. J Consumer Policy 13(2):181–199CrossRefGoogle Scholar
  19. Deutch SA (1993) Contract law and consumer protection in Israel. N Y Law Sch J Int Comp Law 14(2–3):261–292Google Scholar
  20. Elman P (1972) Restrictive terms in a standard contract. Isr Law Rev 7(3):433–441CrossRefGoogle Scholar
  21. Engel C, Klement A, Weinshall Margel K (2017) Diffusion of legal innovations. The case of Israeli class actions. MPI Collective Goods Preprint, No. 2017/11; Hebrew Univ Jerusalem Legal Res Pap No. 17-38Google Scholar
  22. Gelbard M, Adar Y (2013) The reform of the Standard Contracts Statute. A critical commentary. Hukim (Isr J Legislation) 5:99–178Google Scholar
  23. Haim L (2013) Bank fees – banks’ responsibility in setting and collection. Following PCA 4619/08 Bank Mercantile Discount v. Ezrat Israel Dormitories. Mishpatim Online 5:51–86Google Scholar
  24. Hecht A (1968) The Israel law on standard contracts. Isr Law Rev 3(4):586–594CrossRefGoogle Scholar
  25. Hondius EH (1978) Unfair contract terms. New control systems. Am J Comp Law 26(4):525–549CrossRefGoogle Scholar
  26. Lando O (1966) Standard contracts. A proposal and a perspective. Scand Stud Law 10:127–148Google Scholar
  27. Lusthaus V, Spanic T (1994) Standard contracts. Nevo Publishers, JerusalemGoogle Scholar
  28. Marotta-Wurgler F (2008) Competition and the quality of standard form contracts. A test using software license agreements. J Empirical Leg Stud 5:447–475CrossRefGoogle Scholar
  29. Messika G (2001) The Standard Contracts Tribunal in reality. Much ado about nothing. Mishpatim (Hebrew Univ Law Rev) 32(1):95–130Google Scholar
  30. Navot S (2007) Constitutional law of Israel. Kluwer Law International, The HagueGoogle Scholar
  31. Plato-Shinar R (2007) An angel named ‘the bank’: the bank’s fiduciary duty as the basic theory in Israeli banking law. Common Law World Rev 36(1):27–49CrossRefGoogle Scholar
  32. Plato-Shinar R (2014) Banking regulation in Israel. Systemic stability vs. consumer protection. http://ssrn.com/abstract=2480036
  33. Plato-Shinar R (2016) Banking regulation in Israel. Prudential regulation versus consumer protection. Kluwer Law International, The HagueGoogle Scholar
  34. Porat A (2003) Standard contracts. In: Friedmann D, Cohen N (eds) Contracts, vol 3. Aviram Publishing House, Tel-Aviv, pp 729–777Google Scholar
  35. Portnov BA, Ingene C, Akron S (2016) Long-term natural cycle momentum and housing price changes in Israel, 1995–2013. J Real Estate Res 38(3):393–422Google Scholar
  36. Rabello AM (1996) Culpa in contrahendo and good faith in the formation of contract. Pre-contractual liability in Israeli law. In: Rabello AM (ed) Essays on European law and Israel. The Harry and Michael Sacher Institute for Legislative Research and Comparative Law, Jerusalem, pp 245–348Google Scholar
  37. Rabello AM, Lerner P (2007) The project of the Israeli Civil Code. The dilemma of enacting a code in a mixed jurisdiction. In: Andenas M et al (eds) Liber amicorum Guido alpa. Private law beyond the national systems. British Institute of International and Comparative Law, London, pp 771–814Google Scholar
  38. Rakoff TS (1983) Contracts of adhesion. An essay in reconstruction. Harv Law Rev 96(6):1173–1284CrossRefGoogle Scholar
  39. Razin A, Rosefielde S (2016) Israel and the 1990–2015 global developments. Riding with the global flows and weathering the storms. NBER working paper no. 22567, AugustGoogle Scholar
  40. Shalev G (1990) Standard contracts under Israeli law. Tel-Aviv Univ Stud Law 10:229–238Google Scholar
  41. Shalev G (1995) The law of contract, 2nd edn. Din Publishers, JerusalemGoogle Scholar
  42. Shalev G (2005) The law of contract. General part: towards codification of the civil law. Din Publishers, JerusalemGoogle Scholar
  43. Tedeschi G, Hecht A (1960) The problem of standard contracts. Hapraklit (Isr Bar J) 16(2):132–153Google Scholar
  44. Wasserstein Fassberg C (2003) Language and style in a mixed system. Tulane Law Rev 78(1–2):151–174Google Scholar
  45. Zamir E (1993) The 1990 amendment to the sale (housing) law – a critical analysis. Iyunei Mishpat (Tel-Aviv Univ Law Rev) 18(1):201–234Google Scholar
  46. Zamir E (1998) Free will, economic efficiency, and equality in exchange. Mishpatim (Hebrew Univ Law Rev) 29(3):783–799Google Scholar
  47. Zamir E (2014) Private law codification in a mixed legal system. The Israeli successful experience. In: Rivera JC (ed) The scope and structure of civil codes. A comparative analysis. Springer, Berlin, pp 233–248Google Scholar
  48. Zamir E (2016) Procedural and substantive fairness in contract law. Exploitation and duress as test cases. Alei Mishpat (Coll Law Bus Law Rev) 13:7–35Google Scholar
  49. Zamir E, Teichman D (2018) Behavioral law and economics. Oxford University Press, New YorkCrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.The Hebrew University of Jerusalem, Faculty of LawJerusalemIsrael

Personalised recommendations