Real estate10/11/2026

The Memorandum Did Not Establish Shulman Holdings’ Right to Three Apartments

The District Court dismissed Shulman Holdings’ lawsuit against Be'er Glob seeking the transfer of ownership of three five-room apartments or payment of their value. The court ruled that the preliminary letters did not amount to a binding contract and that the option to purchase the land cited by the plaintiff did not in fact exist.

Key facts

•Plaintiff: Shulman Holdings
•Defendant: Be'er Glob
•Court: District Court; its exact name was not specified
•The lawsuit was valued at approximately NIS 5 million
•Legal costs: NIS 100,000
•Legal basis: Section 2 of the Contracts Law

The Essence of the Dispute

Be'er Glob planned a residential and commercial project and sent Shulman Holdings letters concerning the allocation of three five-room apartments, conditional on concluding a transaction with the land sellers. Shulman Holdings claimed that this undertaking was breached after the project was carried out and valued its lawsuit at approximately NIS 5 million. According to its account, Be'er Glob concealed a subsequent agreement with the owners and gave the impression that it had abandoned the project.

Why No Contract Was Formed

The court viewed the letters as merely a preliminary stage in the negotiations, conditional on the successful completion of a legal review. The documents did not satisfy the requirement of specificity under Section 2 of the Contracts Law: they did not state the apartments’ area or the floor on which they would be located, nor did they identify the specific building among the four planned buildings. The parties also did not sign a detailed plan showing the locations of these apartments.

It Emerged That No Option to Purchase the Land Existed

The landowners stated that they had not granted Shulman Holdings a purchase option. The court determined that the company’s representative had wrongly led Be'er Glob to believe that such an option existed; this emerged, among other things, from recorded conversations. Because there was no option, the transaction’s cost rose from approximately NIS 15 million to more than NIS 25 million, and the commercial basis for the promise to allocate three apartments therefore collapsed.

Outcome of the Legal Proceeding

The court dismissed the lawsuit and ordered Shulman Holdings to pay Be'er Glob NIS 100,000 in legal costs. It also noted that even if the letters were considered a binding contract, the false representation that a purchase option existed would have given Be'er Glob grounds to withdraw from the preliminary undertaking. The source did not provide the case number, the exact name of the District Court, or the date of the decision.

What this means for you

A preliminary letter or memorandum in a real estate transaction does not always confer a right to an apartment; the court examines whether the essential terms were agreed upon and whether the expressly stated preconditions were fulfilled. If the property cannot be precisely identified and the transaction’s commercial basis rests on unreliable information, the document may not be recognized as a binding contract.

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Case analysis based on court rulings