Statement of Work in Israel: Template, Key Clauses and Local Law (2026)

What a statement of work is A statement of work (SOW) is the document that says exactly what will be delivered on a specific project: the scope, the deliverables, the timeline, the acceptance tests, and the price. It usually sits under a master services agreement (MSA) or framework contract that holds the legal terms once, so each SOW can stay focused on the work itself. Think of it this way: the MSA is the rulebook, the SOW is the match. The MSA covers liability, IP, confidentiality, and payment mechanics; the SOW covers what, when, and how much for this particular job. This is a general guide to Israeli practice and law. It is not legal advice; see the note at the end. ## How the SOW fits with Israeli contract law Israel has no statute called a statement of work law. An SOW is a commercial contract (or a schedule to one) and is governed by general Israeli contract law, principally the Contracts (General Part) Law, 5733-1973, which sets the duty of good faith in negotiation and performance, and the rules of offer, acceptance, and interpretation. Where the SOW covers the supply of goods, the Sale Law, 5728-1968 can apply; for services, general contract principles govern. Two features of Israeli law matter in practice: - Good faith (sections 12 and 39). Parties must negotiate and perform in good faith. This shapes how courts read gaps and conduct, so vague scope is risky.

• Interpretation. Israeli courts read a contract by its language and purpose together, so make the SOW say plainly what each side must do. ## Does the SOW override the MSA? Only as far as the MSA allows. A well-drafted MSA states the order of precedence, usually that the MSA governs unless a signed SOW expressly varies a named clause. Put the precedence rule in the MSA and have each SOW reference the MSA by date, so there is no doubt which terms apply. ## Key clauses in an Israeli statement of work ### 1. Reference to the master agreement Name the MSA and its date, and confirm the MSA terms apply except where this SOW expressly varies them. ### 2. Scope and deliverables Describe the work and each deliverable precisely. This is the heart of the SOW and the clause most likely to be fought over, so be specific about what is in and out of scope. ### 3. Timeline and milestones Set start and end dates, milestones, and dependencies, including what the client must provide for the supplier to proceed. ### 4. Acceptance criteria Define how deliverables are tested and accepted, the review window, and what happens if a deliverable fails acceptance. Clear acceptance criteria prevent most payment disputes. ### 5. Price and payment State the fee model (fixed price, time and materials, milestone-based), the amounts, the invoicing schedule, and tax. Israeli VAT commonly applies to services; the standard rate is 18 percent as of 2026, so handle it expressly. ### 6. Change control Say how scope changes are requested, priced, and approved in writing. Without this, scope creep becomes a good-faith dispute. ### 7. Personnel and subcontracting Name key people or roles, and state whether the supplier may subcontract. ### 8. Intellectual property Cross-refer to the MSA IP terms, and confirm who owns deliverables. Remember that under the Israeli Copyright Act, 5768-2007, the author is the default first owner of a commissioned work unless assigned in writing, so if the client is to own the output, the MSA or SOW must assign it. ### 9. Service levels and acceptance remedies Where relevant, set performance standards and the remedy if they are missed. ### 10. Assumptions and dependencies List the assumptions the price and timeline rely on, so a changed assumption triggers change control rather than a dispute. ## A simple SOW structure you can reuse 1. Reference to the MSA

2. Project overview and objectives
3. Scope and deliverables (and out-of-scope list)
4. Timeline and milestones
5. Client dependencies and assumptions
6. Acceptance criteria and process
7. Price, payment schedule, and tax
8. Change control
9. Personnel and subcontracting
10. IP and confidentiality (cross-referenced to MSA)
11. Service levels, if any
12. Signatures and effective date ## Worker classification: a quiet Israeli risk If an SOW engages an individual contractor who works like an employee, Israeli labour law may treat them as an employee regardless of the contract label, with consequences for social benefits and severance. Keep genuine contractor arrangements genuinely independent, and take advice where a long-term individual engagement looks employment-like. ## Common mistakes - Vague scope and no out-of-scope list, which good-faith duties will not rescue.

• No acceptance criteria, so payment turns on whether the client is happy rather than on a test.
• No change-control clause, so every variation becomes a negotiation.
• Assuming the client owns deliverables by default, when the Copyright Act makes the author the first owner of a commissioned work absent a written assignment.
• Treating every contractor as outside labour law. ## Keeping SOWs aligned with the master agreement Most teams run one MSA and then many SOWs under it, and the recurring problem is an SOW that quietly contradicts the MSA on IP, liability, or payment, or a deliverable that was accepted without anyone checking the criteria. The work of drafting each SOW from a house template, checking it against the MSA for conflicts, surfacing the acceptance and change-control gaps, and tracking milestones and renewals can live in one AI contract workspace rather than a chain of email attachments. Adira is an AI legal operating system that drafts, reads, and tracks contracts in one place, tuned to how your company contracts and built on frontier AI; its deepest jurisdiction support today is India, with other jurisdictions including Israel on the roadmap, so confirm local-law depth before relying on it. ## Not legal advice This page is a general explanation of statements of work under Israeli law in 2026. It is not legal advice. Scope, IP ownership, and contractor classification depend on your facts, so take advice from a qualified Israeli lawyer before you sign.