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Commercial Contracts in Israel
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Commercial Contracts Lawyer in Israel
· By Adv. Reut Eliyahu, Notary
Drafting, reviewing and negotiating all types of commercial agreements in Israel - from service contracts and NDAs to complex cross-border and joint venture agreements. Personal service by Adv. Reut Eliyahu, practising law since 2007.
Contract drafting, review, negotiation and disputes for businesses in Israel and abroad
For Israeli companies, foreign businesses entering Israel, founders and investors - with the whole service available in English and fully remote.
A commercial contract in Israel is any legally binding agreement governing a business relationship - between companies, between a business and its suppliers or clients, or between founders and investors. Israeli contract law imposes obligations of good faith on all parties, making precise drafting essential. Our firm drafts, reviews and negotiates all categories of commercial agreements, protecting your interests from the moment of signature.
Our Contracts Practice
Adv. Reut Eliyahu has practised civil and commercial law in Israel since 2007, and commercial agreements are at the centre of the practice. They run through the firm's corporate and commercial work: the founders' agreement when a company is formed, the supply and distribution agreements that let it trade, the NDA before a first meeting with an investor, and the dispute when a counterparty does not perform.
As a registered arbitrator, she drafts with an eye to how each clause will be read if a dispute ever reaches a judge or an arbitrator. As a licensed notary, she certifies signatures and translations in the office when a contract needs them. Her MBA means the commercial logic of the deal is read alongside the legal text.
✍️Drafting
Agreements written for your transaction, in English or Hebrew, from the term sheet to the signature page. No generic templates.
🔍Review
A marked-up draft with a written memo on each risk, missing protection and point worth negotiating.
🤝Negotiation
We negotiate with the counterparty or its lawyers through every round, until the text matches what you agreed.
What makes a commercial contract in Israel binding?
A contract binds once the parties agree on its essential terms, in any form, and both must act in good faith - Sections 12, 23 and 39 of the Contracts (General Part) Law, 5733-1973.
Define the deal: parties, deliverables, price and payment terms.
Allocate the risk: liability caps, indemnities and warranties.
Plan the exit: term, termination rights and what happens after.
Choose the forum: governing law, court or arbitration.
Contracts (Remedies for Breach of Contract) Law, 5731-1970: enforcement or cancellation, plus damages (Section 2)
Good faith
In negotiations (Section 12) and in performance (Section 39). Earlier, in the Sale Law, 5728-1968 (Section 6)
Form and language
Any form, unless a law or the parties require one (Section 23). No Hebrew requirement
Interpretation
By the parties' intention, from the contract and the circumstances (Section 25); gaps filled from custom (Section 26)
Liquidated damages
Paid without proof of loss; reduced only if set without any reasonable relation to foreseeable loss (Section 15, Remedies Law)
Standard-form contracts
Standard Contracts Law, 5743-1982: a court can void or modify an unfair term
Limitation period
Seven years for a contract claim (Section 5, Limitation Law, 5718-1958)
Arbitration
Arbitration Law, 5728-1968
Electronic signature
Electronic Signature Law, 5761-2001
Why Review Matters
The risk no business can afford to ignore
Most commercial disputes in Israel are not the result of bad faith - they are the result of contracts that were drafted without legal review. Ambiguous delivery terms, missing liability caps, unclear IP ownership and absent termination rights: these are the clauses that become the subject of costly litigation years after a deal was signed. Israeli courts read a contract by the parties' intention as it appears from the contract and the circumstances (Section 25 of the Contracts (General Part) Law, 5733-1973), and fill in what the contract left out from the parties' custom and trade practice (Section 26), meaning a poorly worded contract can bind you in ways you never intended.
Adv. Reut Eliyahu has drafted and reviewed commercial contracts in Israel since 2007, and at Eliyahu & Co. Law Office she still handles them herself. Every file is handled personally - no templates, no junior associates, no generic documents. Whether you are entering a new supplier relationship, structuring a joint venture, protecting your business with an NDA, or reviewing a contract from a foreign counterpart, you receive senior legal counsel tailored to your specific transaction.
Our commercial contracts practice covers the full spectrum: service and consulting agreements, supply contracts, distribution and agency arrangements, NDAs and non-competes, founders' agreements, investment documents, franchise agreements, employment and contractor agreements, commercial leases, cross-border contracts, and commercial disputes arising from any of them.
All Contract Types
Commercial Contracts We Draft, Review & Negotiate in Israel
Every commercial relationship involves a legal agreement - whether formal or informal. Our practice covers the complete range of commercial contracts used in Israeli business. The eight agreements below are the core of that work, and the ones where drafting quality most directly affects your risk exposure.
📑Service & Consulting Contracts
Agreements defining the scope, deliverables, fees and IP ownership for professional services relationships - consultants, service providers, technology vendors and external specialists. Includes limitation of liability, IP assignment and confidentiality provisions critical for technology and knowledge-based businesses.
📦Supply & Procurement Agreements
Contracts governing ongoing supply of goods or materials - including pricing mechanisms, quality standards, delivery timelines, acceptance procedures, warranties, indemnification for defective goods and rights upon supply failure. Essential for manufacturers, distributors and retail businesses, and read in Israel alongside the Sale Law, 5728-1968.
🔄Distribution & Agency Agreements
Agreements appointing Israeli distributors or agents for foreign products, or appointing overseas distributors for Israeli products - covering exclusivity territory, minimum performance obligations, term and termination, IP licensing, and the critical distinction between an agent, who acts on your behalf under the Agency Law, 5725-1965, and a distributor, who buys and resells in its own name.
🤫NDAs, Non-Competes & Trade Secrets
Non-disclosure agreements for preliminary negotiations, partnership discussions, investor meetings and employee relationships. Non-compete and non-solicitation clauses - including guidance on enforceability under Israeli labour and contract law. Trade secret protection frameworks.
🤝Joint Venture & Cooperation Agreements
Structuring and documentation of joint ventures between Israeli and international parties - defining contribution, ownership, governance, IP rights, profit distribution, deadlock resolution and exit mechanisms. Includes both contractual JVs and entity-based arrangements.
💼Founders' & Shareholders' Agreements
Founders' agreements defining equity splits, roles, vesting schedules and IP assignments at company formation. Shareholders' agreements governing voting rights, transfer restrictions, dilution protections, dividend policy and exit provisions. These documents prevent many of the corporate disputes between partners in startups and SMEs.
📊Investment & Financing Documents
Term sheets, convertible note agreements, SAFE agreements adapted to Israeli law, investment agreements and subscription documents for seed and growth-stage companies. Review of investor-provided documents for Israeli legal compliance and founder protection.
🌐Cross-Border & International Agreements
Commercial contracts between Israeli parties and foreign counterparts - including governing law selection, jurisdiction clauses, enforcement considerations and adaptation of foreign template agreements (US, UK, EU) to Israeli legal requirements.
Also part of the practice:
🏪 Franchise Agreements
Franchisor and franchisee agreements. Israel has no franchise-specific statute, so the agreement itself carries the whole relationship: fees, territory, the brand and know-how licence, operating standards and exit.
💻 Technology & SaaS Agreements
Software licensing, SaaS terms of service, technology development agreements and data processing arrangements for Israeli and international tech companies.
🏗️ Construction & Project Contracts
Commercial construction contracts, contractor and subcontractor agreements, EPC and turnkey project documentation, read with the Contract for Work Law, 5734-1974.
⚠️ Israeli contract law note: The Contracts (General Part) Law, 5733-1973 imposes a duty of good faith during both negotiation (Section 12) and performance (Section 39). A party that negotiates in bad faith must compensate the other side for the damage caused by the negotiations, even though no contract was signed (Section 12(b)). Letters of intent and term sheets can also bind the parties if they already contain the essential terms - which is why early legal review matters.
How We Work
How We Handle Your Commercial Contract
Every commercial contract engagement follows a structured process designed to give you maximum legal protection with minimum disruption to your business schedule. You speak directly with Adv. Eliyahu throughout - not with staff or associates.
1
Free Initial Consultation
We discuss the nature of the agreement, the counterparty, the commercial goals and any specific risks or concerns you have identified. This takes 20-30 minutes by phone or video call - at no charge.
2
Legal Assessment & Scope
We review any existing draft, identify the key legal issues and provide a clear written scope and fixed fee estimate. For standard contract types we typically provide a same-day or next-day estimate.
3
Drafting or Detailed Review
Adv. Eliyahu personally drafts the agreement or reviews the counterparty's draft in detail - identifying risk clauses, missing protections and negotiation priorities. You receive a marked-up document with a clear legal memorandum explaining each issue.
4
Negotiation & Revision
We negotiate with the counterparty's legal counsel or directly with the counterparty, handling all rounds of revision until the agreement reflects your agreed positions. We advise on which points to hold firm and where commercial flexibility is legally safe.
5
Signing & Post-Signature Support
We advise on execution formalities, electronic signature under the Electronic Signature Law, 5761-2001, and any post-signature obligations (registration, notification, regulatory filings). We remain available for interpretation questions during the contract's term.
Have a contract on the table?
Send us the draft or describe the deal. We reply within one business day with a scope and a fixed fee.
Two agreements that came to us as the other side's standard draft, and what we changed before our clients signed. Names and identifying details are left out to protect our clients.
Case 1 · Distribution agreement
A US manufacturer appoints an Israeli distributor
The draft: the manufacturer's standard US agreement. It gave the distributor exclusivity for the whole of Israel with no minimum purchases, allowed either side to end it on 30 days' notice without saying what happens to stock and customers, and sent every dispute to a court abroad.
What we negotiated: exclusivity tied to annual minimum targets, with the right to end exclusivity if they are missed; a clear distributor structure, in which the distributor buys and resells in its own name rather than acting as an agent; stock buy-back and a transition period on termination; and a forum where a judgment or award can actually be enforced against the Israeli party.
The result: the agreement was signed on these terms, to the client's full satisfaction - a distribution arrangement that protects its market in Israel for years to come.
Case 2 · Services agreement
An Israeli tech company signs a customer's template
The draft: a large foreign customer's master services agreement, with unlimited liability, an indemnity for any third-party claim, an IP clause assigning to the customer every "development" - including improvements to the supplier's own core product - and automatic renewal at a frozen price.
What we negotiated: a liability cap linked to the fees paid in the preceding twelve months, with the usual exceptions; an indemnity limited to claims the supplier actually controls; a split between customer-specific deliverables and the supplier's own technology, which is licensed rather than assigned; and renewal on updated pricing.
The result: the agreement was signed with these protections in place, to the client's full satisfaction - a contract the company can grow under for years, without putting its own technology at risk.
Every agreement turns on its own terms and on the bargaining position of each side. These cases do not predict the outcome of another negotiation.
Israeli Legal Framework
Understanding Israeli Commercial Contract Law
Commercial contracts in Israel operate within a distinct legal framework that differs meaningfully from US, UK and EU contract law. Understanding these differences is essential for any business operating in or with Israel. The full Hebrew texts of the Contracts (General Part) Law and the Remedies Law are on our site.
📜The Contracts (General Part) Law, 5733-1973
The primary statute governing all commercial contracts in Israel. It imposes a broad duty of good faith during negotiations (Section 12) and during performance (Section 39) - a standard that is more expansive than good faith in most common law systems. A party that breaches good faith during negotiations can be liable to the other side even without a signed agreement.
⚖️Remedies for Breach (Law 5731-1970)
The injured party may demand enforcement of the contract or cancel it, with damages in addition or instead (Section 2). Enforcement is the primary remedy in Israel (Section 3), subject to exceptions such as a contract that cannot be performed or one for personal services - unlike many common law systems, where it is exceptional. Damages cover the loss the breaching party foresaw or should have foreseen (Section 10), and liquidated damages can be reduced only if they were set without any reasonable relation to the foreseeable loss (Section 15).
🏛️Jurisdiction & Dispute Resolution
Parties to a commercial contract can choose the governing law and the forum, and Israeli courts generally respect that choice. Without a clause, whether a foreign party can be sued in Israel depends on the Civil Procedure Regulations and the facts, such as where the contract was made or was to be performed. Arbitration clauses are enforceable under the Arbitration Law, 5728-1968, and international arbitration is common in high-value cross-border transactions. We advise on the forum that fits your transaction.
📋Standard Form Contracts
The Standard Contracts Law, 5743-1982 regulates contracts drafted by one party and offered on a take-it-or-leave-it basis. Under Section 3, a term is unfair if, considering the whole contract and the circumstances, it prejudices customers or gives the supplier an unfair advantage likely to prejudice them. A court can void or modify such a term, and a supplier can ask the Standard Contracts Tribunal to approve its standard contract in advance. This affects many commercial agreements prepared by dominant suppliers.
🔒Intellectual Property in Contracts
Israeli law (Patent Law, Copyright Law, Trade Secrets Law) provides different default rules for IP ownership in employment and independent contractor relationships. Contracts must explicitly address IP assignment to avoid disputes. For technology development agreements especially, IP ownership clauses are among the most important provisions.
💱Foreign Currency & Payment Terms
Israeli contracts may be priced in shekels or in a foreign currency, and many cross-border agreements are. The contract should state which currency governs, which exchange rate applies if payment is made in shekels, and who bears the conversion risk. Payments to a non-resident may be subject to Israeli withholding tax unless an exemption or a treaty rate applies, so the price clause should also say whether amounts are gross or net.
Good Faith
Good faith in Israeli contract law
Good faith (tom lev) is the principle that most surprises foreign parties. In Israel it is not a general ideal but an enforceable duty that runs through the whole life of a contract, from the first meeting to the last payment.
It appears in the Sale Law, 5728-1968: under Section 6, an obligation arising from a contract of sale must be performed in a customary manner and in good faith, and the same applies to exercising a right under the contract. Five years later, the Contracts (General Part) Law, 5733-1973 made the duty general. Section 12 applies it to negotiations, before any contract exists, and under Section 12(b) a party that breaches it must compensate the other side for the damage caused. Section 39 applies it to the performance of every contract, and Section 61(b) extends it to legal acts that are not contracts and to obligations that do not arise from a contract. The Standard Contracts Law, 5743-1982 adds a separate layer: under its Section 3, a court can void or modify a term in a standard-form contract that prejudices customers or gives the supplier an unfair advantage.
In practice, conduct that a foreign lawyer might treat as legitimate hard bargaining can be challenged in an Israeli court: breaking off advanced negotiations without a reason, relying on a technicality to escape an obligation, or using a termination right in a way that defeats the purpose of the deal. Clear drafting narrows the room for that argument. It sets out the stages of the negotiation, what binds and what does not, and the circumstances in which each side may walk away.
Commercial Contracts for International Clients in Israel
Foreign businesses entering the Israeli market - whether through a local subsidiary, a distribution agreement, a technology partnership or a supply arrangement - routinely need Israeli-law contract review and drafting. We work with clients from the United States, the United Kingdom, Germany, France, Canada and Australia, among other countries, providing all services in English and handling the majority of work fully remotely.
What we do for international clients
Review foreign template agreements for Israeli law compliance
Draft commercial contracts governed by Israeli law with local parties
Advise on governing law, jurisdiction and enforcement options
Provide Israeli legal opinions for foreign counsel
Negotiate contracts with Israeli counterparties on your behalf
Support distribution, agency and franchising arrangements in Israel
Handle contract disputes with Israeli companies in Israeli courts
Where our clients are, and what changes in the contract
The Israeli law is the same for every client. What changes from country to country is the template the other side sends, the law it assumes and where a judgment can actually be enforced. Choose your country:
US companies contracting with Israeli parties
American clients usually arrive with their own template, governed by New York or Delaware law and pointing to a US court. That choice is valid, but it has a cost: a US judgment against an Israeli company does not enforce itself here, and has to go through a separate proceeding under Israel's Foreign Judgments Enforcement Law, 5718-1958. Where the counterparty's assets are in Israel, arbitration is often the better route, because Israel and the United States are both parties to the New York Convention on arbitral awards. We adapt the template so that it works on both sides, and our US line, +1 (310) 735-4210, is answered during Pacific business hours.
British templates are usually written under English law, which imposes no general duty of good faith in negotiating a contract. Israeli law does, under Section 12 of the Contracts (General Part) Law, and a British party that walks away from advanced negotiations can be surprised by the result. German and French clients find the principle more familiar, since their own laws also recognise good faith. Where an Israeli supplier will process personal data of people in the EU, the agreement needs data processing terms that meet the GDPR; the European Commission recognises Israel as providing an adequate level of data protection, which keeps those terms simpler.
For clients in Canada, Australia and elsewhere, the practical questions are distance and time zones rather than the law itself. The whole process runs remotely: we review the draft, send a marked-up version with a written memo, negotiate with the Israeli side and prepare the agreement for signature. Contracts can be signed electronically under the Electronic Signature Law, 5761-2001, and where a document must be certified for use in another country, Adv. Eliyahu certifies it as a notary. Calls are scheduled at a time that suits your time zone, by phone, Zoom or WhatsApp.
For Israeli businesses, the firm works from Herzliya Pituach and serves clients in Tel Aviv, the Sharon and across the country, in meetings at the office or by Zoom. Much of the work is for Israeli companies signing with foreign customers, suppliers and distributors: an English agreement that has to stand up under Israeli law, or a foreign template that needs Israeli protections added before signature. We draft in English or Hebrew, explain every clause in the language you prefer, and make sure the English text and what was agreed in Hebrew say the same thing.
Founder · LL.B & MBA · Licensed Notary · Registered Arbitrator · Israel Bar member since 2007
Adv. Reut Eliyahu has practised civil and commercial law in Israel since 2007, and advises businesses on commercial contracts from the first draft to the dispute. Eliyahu & Co. Law Office is built on one principle: every client works directly with the senior partner. When you submit a contract for review, Adv. Eliyahu reviews it. When you need a contract drafted, she drafts it. There are no handoffs to junior lawyers and no generic documents sent by staff.
Her commercial contracts practice spans all major agreement types - from straightforward service contracts and NDAs for early-stage businesses, to complex multi-party joint venture agreements, cross-border supply contracts and investment documentation for established companies. She advises both Israeli businesses and international clients, with all communications available in English. The same practice forms Israeli companies, registers foreign companies and advises on selling Israeli shares, so the contract is drafted with the corporate structure behind it in view.
The firm operates from Herzliya Pituach and serves clients across Israel and internationally. Most contract work - drafting, review, negotiation - can be completed entirely remotely, making it practical for overseas clients to engage Israeli legal counsel without travel. About the firm →
⚖️ Israel Bar Association🎓 LL.B & MBA🏛️ Licensed Notary📝 Registered Arbitrator🌏 English · Hebrew · Español
👩⚖️Personal HandlingSenior partner on every file
⚡Fast TurnaroundResponse within 1 business day
🌍Remote & EnglishFull English service, no travel needed
🔗Full PracticeContracts, corporate and litigation
Client Reviews
What Our Clients Say
★★★★★Google Business Profile
Reviews from the firm's clients
Each review on the firm's Google Business Profile comes from a client who worked directly with Adv. Reut Eliyahu.
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FAQ
Frequently Asked Questions
Answers to the most common questions about commercial contracts, contract review and commercial law in Israel - from Israeli businesses and international clients.
A commercial contracts lawyer in Israel drafts, reviews and negotiates all types of business agreements - including service contracts, supply and procurement agreements, distribution and agency agreements, NDAs, joint venture agreements, founders' agreements, investment documents and cross-border contracts. The lawyer identifies legal risks before you sign, tailors terms to protect your interests, and represents you if a dispute arises from a contract.
Israeli courts read a contract by the parties' intention as it appears from the contract and the circumstances, and fill in missing details from the parties' custom and trade practice (Sections 25 and 26 of the Contracts (General Part) Law, 5733-1973). A poorly drafted contract may therefore bind you in ways you did not intend, or fail to protect you when you need it most. A lawyer identifies ambiguous clauses, missing protections, unfair liability allocations and jurisdiction issues before they become costly disputes. The cost of reviewing a contract is almost always a fraction of the cost of litigating one.
We draft, review and negotiate all categories of commercial agreements: service and consulting contracts, supply and procurement agreements, distribution and agency agreements, franchise agreements, joint venture and cooperation agreements, founders' and shareholders' agreements, investment documents, non-disclosure agreements (NDAs), non-compete clauses, licensing agreements, and cross-border contracts governed by or adapted to Israeli law.
Commercial contracts in Israel are governed mainly by the Contracts (General Part) Law, 5733-1973 and the Contracts (Remedies for Breach of Contract) Law, 5731-1970, and for specific contract types by laws such as the Sale Law, 5728-1968, the Agency Law, 5725-1965 and the Contract for Work Law, 5734-1974. All of them are read together with the duty of good faith, which applies both to negotiations (Section 12) and to performance (Section 39). This makes precise drafting especially important in Israel.
Good faith appears in the Sale Law, 5728-1968: under Section 6, an obligation arising from a contract of sale must be performed in a customary manner and in good faith, and the same applies to exercising a right under the contract. Five years later, the Contracts (General Part) Law, 5733-1973 made the duty general: Section 12 applies it to negotiations, Section 39 to performing any contract, and Section 61(b) extends it to legal acts that are not contracts and to obligations that do not arise from a contract.
Yes. We regularly draft and review contracts between Israeli companies and international parties, advise on governing law and jurisdiction clauses, and adapt foreign template agreements to comply with Israeli law. We also provide legal opinions on Israeli contract law for foreign lawyers and clients. All services are available in English and can be provided fully remotely.
No. Under Section 23 of the Contracts (General Part) Law, a contract may be made orally, in writing or in any other form, unless a law or the parties' own agreement requires a specific form. Some transactions do require writing, such as an undertaking to make a real estate transaction (Section 8 of the Land Law, 5729-1969). There is no requirement that a commercial contract be in Hebrew, and many agreements between Israeli and foreign companies are signed in English. If a dispute later reaches an Israeli court, expect to need a Hebrew translation of the contract; as a notary, Adv. Eliyahu can certify it.
Every commercial contract in Israel should clearly define: the parties and their legal status, the subject matter and deliverables, price and payment terms, duration and termination rights, liability caps and indemnification, confidentiality obligations, intellectual property ownership, governing law and dispute resolution (court jurisdiction or arbitration), and force majeure provisions. Missing or ambiguous clauses in any of these areas are the most common source of commercial disputes.
Under the Contracts (Remedies for Breach of Contract) Law, 5731-1970, the injured party may demand enforcement of the contract or cancel it, and is entitled to damages in addition to either or instead of them (Section 2). Enforcement is the primary remedy in Israel, subject to exceptions (Section 3), and damages cover the loss the breaching party foresaw or should have foreseen as a probable result of the breach (Section 10). Liquidated damages are paid without proof of loss, and a court may reduce them only if they were set without any reasonable relation to the loss that could have been foreseen when the contract was made (Section 15). For breach cases, see our contract disputes practice.
Legal fees are agreed in advance as one fixed fee for the work described, not an hourly meter. After a short look at the draft or the deal, we send a written scope and fee estimate, usually on the same or the next business day for standard agreements. The first consultation is free.
Fill in the contact form below, call us at +972-74-704-7104, or email office@israel-law.co. Describe your situation briefly - the type of agreement, the parties involved, and whether there is any urgency. We will respond within one business day with a clear assessment and cost estimate. The first consultation is free and without obligation.
Call or message us directly, or fill in the form and we will respond within one business day. The first consultation is free - for Israeli businesses and international clients.
Drafting, review and negotiation of your commercial agreements under Israeli law, in English - handled personally by Adv. Reut Eliyahu, from the first draft to the signature. Free first consultation, no obligation.
