Israel: Construction

This country-specific Q&A provides an overview of Construction laws and regulations applicable in Israel.

  1. Is your jurisdiction a common law or civil law jurisdiction?

  2. What are the key statutory/legislative obligations relevant to construction and engineering projects?

  3. Are there any specific requirements that parties should be aware of in relation to: (a) Health and safety; (b) Environmental; (c) Planning; (d) Employment; and (e) Anti-corruption and bribery.

  4. What permits/licences and other documents do parties need before starting work, during work and after completion? Are there any penalties for non-compliance?

  5. Is tort law or a law of extra contractual obligations recognised in your jurisdiction?

  6. Who are the typical parties to a construction and engineering project?

  7. What are the most popular methods of procurement?

  8. What are the most popular standard forms of contract? Do parties commonly amend these standard forms?

  9. Are there any restrictions or legislative regimes affecting procurement?

  10. Do parties typically engage consultants? What forms are used?

  11. Is subcontracting permitted?

  12. How are projects typically financed?

  13. What kind of security is available for employers, e.g. performance bonds, advance payment bonds, parent company guarantees? How long are these typically held for?

  14. Is there any specific legislation relating to payment in the industry?

  15. Are pay-when-paid clauses (i.e clauses permitting payment to be made by a contractor only when it has been paid by the employer) permitted? Are they commonly used?

  16. Do your contracts contain retention provisions and, if so, how do they operate?

  17. Do contracts commonly contain delay liquidated damages provisions and are these upheld by the courts?

  18. Are the parties able to exclude or limit liability?

  19. Are there any restrictions on termination? Can parties terminate for convenience? Force majeure?

  20. What rights are commonly granted to third parties (e.g. funders, purchasers, renters) and, if so, how is this achieved?

  21. Do contracts typically contain strict provisions governing notices of claims for additional time and money which act as conditions precedent to bringing claims? Does your jurisdiction recognise such notices as conditions precedent?

  22. What insurances are the parties required to hold? And how long for?

  23. How are construction and engineering disputes typically resolved in your jurisdiction (e.g. arbitration, litigation, adjudication)? What alternatives are available?

  24. How supportive are the local courts of arbitration (domestic and international)? How long does it typically take to enforce an award?

  25. Are there any limitation periods for commencing disputes in your jurisdiction?

  26. How common are multi-party disputes? How is liability apportioned between multiple defendants? Does your jurisdiction recognise net contribution clauses (which limit the liability of a defaulting party to a “fair and reasonable” proportion of the innocent party’s losses), and are these commonly used?

  27. What are the biggest challenges and opportunities facing the construction sector in your jurisdiction?

  28. What types of project are currently attracting the most investment in your jurisdiction (e.g. infrastructure, power, commercial property, offshore)?

  29. How do you envisage technology affecting the construction and engineering industry in your jurisdiction over the next five years?

  30. What do you anticipate to be the impact from ongoing supply chain issues and the escalation of material costs over the coming year?