Property Litigation · Legal briefing
Agreed Damages in Property Contracts
By Adv. Yechiel Rachamim Menahemov & Adv. Assaf ShpigelPublished:
The practical dilemma
The agreement specifies 10% compensation after a fundamental breach. The defendant argues the amount is disproportionate.
The legal position
Section 15 of the Contracts (Remedies) Law permits agreed damages without proof of actual loss. The court may reduce them if there was no reasonable relationship to the loss foreseeable at formation as a likely consequence of breach. Neither 10% nor 15% is statutorily guaranteed. Remedies must be selected or combined lawfully, without double recovery for the same loss. Identify precisely which breach the clause covers. Official source 1
Your next step
Present the clause, formation circumstances and actual breach. Compare agreed damages with proven-loss and enforcement alternatives, including mitigation issues. A customary percentage in a template is not itself a reasoned demand.