The courts have decided that the State of Israel owes millionaire Nissim Gaon hundreds of thousands of shekels for a breach of "contract" by former Minister of Housing Ariel Sharon.

In 1991 Ariel Sharon, as Housing Minister (before he became Prime Minister), promised his friend Nissim Gaon that they would be approving development of housing in an area in the Negev. They agreed that Gaon would build 3000 housing units for the State. They never signed a contract, but Sharon made it clear that Gaon would be given the contract and the work would be approved.

Gaon, based on Sharon's promises, went out and hired staff and equipment and made plans. The construction never received the necessary approval of the Finance Ministry and the plans were killed.

Gaon sued the State based on the promises of a minister for the losses he incurred. He claimed, and the courts found in his favor, that the promise of a government minister is as good as a contract, and therefore there was a breach of contract.

Justice Drori decided that the testimony finds that Sharon gave a "clear message to Gaon that he should begin working immediately and not wait for formalities such as signed contracts."

It was also found that Sharon commonly would simply not sign contracts for work he ordered on behalf of the ministry. That was his modus operandi. "Sharon would open his window and say to the contractor (in negotiations) "Why do I not hear the sounds of your tractors and bulldozers - we agreed you would build so what are you waiting for?!"

Another witness, who was a functionary in the Housing Ministry at the time, testified that Sharon would commonly stop working with contractors who did not begin working immediately but waited for contracts.

I wonder if the State of Israel can sue the estate of Sharon for acting in such a negligent and undisciplined manner. How is it acceptable for a minister to hire contractors without a tender and promise them work in a manner that obligates the State even when the job is not approved? The normal method in goverance is a minister proposes a new project and the cabinet/government votes on whether to approve it or not. The courts are saying that Sharons promise was basically at the level that it was more important than actual government approval. I do not know why Sharon, or any minister, has a right to promise work that is really dependent on government approval.