38 No. 59 JUSTICE implies a unique requirement that reflects a negative moral attitude toward the oppressor. Furthermore, in contrast to the other causes of action in Chapter 2, which deal only with procedural critique, the oppression provision of the Contracts Law contains also a component of substantive critique of the content of the contract.3 The uniqueness of the oppression cause of action results in ambiguity regarding its conceptual basis, the interpretation of its components, and the relationship between them. Israeli legal literature holds conflicting positions on these matters. Some emphasize the flaw in the will caused by distress, weakness, or lack of experience. Others4 believe that the oppression cause of action should focus on the fairness of the contract.5 According to an intermediate position, the provision combines the issue of finalizing a serious commitment with the substantive problem. For example, in their book Contracts, Daniel Friedmann and Nili Cohen expressed the following position: The characteristic of the laws at the focus of this chapter is the connection between the idea of the fairness of the contract and the issue of flaws in the will. The unfairness of the contract does not fulfill merely an evidentiary function, but rather constitutes a substantive element of the cause of the cancellation. But it is not alone in this function, otherwise contractual certainty would be undermined too severely. It is joined by a demand for a flaw in the will. But the requirement for a flaw in the will in the oppression and in the unfair influence causes is moderate and much more lenient than that which exists with regard to traditional causes of action (mistake, deception, coercion.) The combination of bad or unfair terms with a flaw in the will, even a moderate one, is what justifies the causes for cancellation.6 In the spirit of the intermediary position, case law has also established a pendulum principle, according to which the flaw in the will and the fairness of the contract ought not to be examined in their own right, but rather in combination, so that in the event of a serious problem with the will, it is possible to reduce the threshold of the unfairness of the contract that makes its cancellation possible, and vice versa. B. On the Meaning of Exploitation in the Oppression Provision We have noted that according to Friedmann and Cohen, the oppression provision is not based on the behavior of the oppressor, but rather on a combination of the flaw in the parties’ will and the unfairness of the contract. The authors were therefore required to explain the role of the exploitation element within the framework of the oppression provision. The requirement for exploitation by the other party, or by someone on its behalf, reflects the objective test in contract law. In the case of the oppression cause of action, it is sufficient if the other party (or someone on its behalf) knew about the flaw in the party claiming the oppression (knowledge about its distress, lack of experience, etc.), and in view of that made a contract whose terms are unfair. The exploitation is expressed in the fact that the other party knew about the distress and derived a benefit from it (by signing a contract whose terms are greatly advantageous to it).7 Thus, Friedmann and Cohen, as well as other scholars, equate the requirement of exploitation with that of knowledge. They argue that the exploitation is not an independent component, but rather a result of knowing about the additional ones. Case law, as well as some scholars, have noted that exploitation and oppression express immoral behavior,8 but ultimately the practical application of the cause of action focused on the questions of the flaw in the drafting of the contract and on objective measures for determining unfairness, with the moral component and the terms 3. For the source of the distinction between substantive and procedural critique, see Arthur A. Leff, Unconscionability and the Code: The Emperor’s New Clause, 115 UNIV. PA. L. REV. 485 (1967). 4. See Sinai Deutsch, Economic Duress in Contract Law, 2 BarIlan Law Studies 1, 5-17 (1982) (Hebrew) (hereinafter, Deutsch). 5. See Eyal Zamir, INTERPRETATION AND GAP FILLING IN CONTRACTS 43-45, 99 (1996) (Hebrew). 6. See Daniel Friedmann and Nili Cohen, CONTRACTS, vol. 2, 970-971 (1993) (Hebrew). 7. Id., 983. 8. See, for example, Gabriela Shalev, CONTRACTS LAW 247 (2nd ed., 1995) (Hebrew) (hereinafter, Shalev), which emphasizes the immoral aspect inherent in the oppression provision. According to Shalev, "The terms exploitation and oppression have a negative connotation of immoral or unfair conduct." See also Sassi, supra note 2, 769-768: "There is no doubt that the word exploitation implies such knowledge, as it also implies a measure of immorality on its part."
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