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Module 2

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Can you say what a contract is? Why do we need contracts? List the main attributes of the contract.

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2.1 Contracts

A mere agreement is not yet a contract. The term “c ontract” is used to convey the idea of the responsibility whish arises from the voluntary engagement of one person to another. A contract gives rise to certain rights and obligations, which cannot arise except between the parties to the contract. A contract may be binding upon one party to the contract and upon another.

An offer is a proposal. One may revoke a simple offer at any time before it is accepted, and in order that it may become binding it must be accepted as made and not with variations or conditions. A person that makes an offer is called an offerer; a person to whom an offer is made, an offeree. If the offeree accepts the offer, he is called an acceptor.

Consideration is the very essence of a contract. An offer can be withdrawn at any time before acceptance because there is no consideration for keeping it open.

In order to make a valid contract one must observe certain necessary conditions.

Voidable means capable of being affirmed or repudiated by one or other of the parties, according to his wishes. Void means destitute of all legal effect. An illegal contract is a mutual agreement to do something contrary to law or public policy.

An executed contract is one in which the object of the contract is at once performed, whilst an executory contract is one in which one of the parties finds himself to do, or not to do, a given thing at some future date.

Vocabulary notes

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1.Contract – договор,

2.Agreement – соглашение, договор, договоренность,

3.Party to a contract – сторона по договору,

4.Binding – обязательный,

5.Be binding upon smb. – быть обязательным для кого-л.,

6.Bind somebody – обязывать кого-л.,

7.Offer – оферта, предложение,

8.Make an offer – сделать оферту,

9.Accept an offer – принять предложение, акцептовать оферту,

10.Revoke/withdraw an offer – отозвать оферту,

11.Acceptance – акцепт,

12.Acceptor – акцептант,

13.Offerer – лицо, делающее предложение, оферент,

14.Offeree – лицо, которому делается предложение, адресат оферты,

15.Consideration – встречное удовлетворение,

16.Valid – действительный, имеющий законную силу,

17.(Un)enforceable – ( не)имеющий исковую силу, (не)могущий быть принудительно осуществленным,

18.Enforce – исполнять принудительно через суд, придавать исковую

силу,

19.Voidable – оспоримый, могущий быть аннулированным,

20.Void – ничтожный.

21.(Il)legal – ( не)законный,

22.Executed – исполненный.

23.Executory – неисполненный, подлежащий исполнению.

Match the words with their definitions:

1.Contract

2.Offer

3.Acceptance

4.Binding

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5.Valid

a.Imposing an obligation or duty,

b.A formal agreement between two or more parties,

c.A proposal made by one person that will create a binding contract if accepted unconditionally by the person to whom it is made,

d.Legally acceptable,

e.Words or conduct by which a person signifies his assent to the terms and conditions of an offer or an agreement.

Answer the following questions:

1.What is the difference between a contract and an agreement?

2.What person is called an offerer and what person is called an offeree?

3.What must a person do to make a contract valid?

4.Explain the difference between an executed contract and an executory

contract.

Translate the following into Russian:

1.When one person writes an offer to sell and another person at the same time writes an identical offer to buy, there might appear to be an acceptance before the offer. This, however, is not true. We here have two offers and no acceptance.

2.Illegal considerations will not make a binding contract. A contract containing an agreement to do anything immoral, indecent or contrary to law is void, as for example contracts to commit, conceal or compound a crime. If only part of the consideration is contrary to law the entire contract is void. A contract founded on a consideration naturally or physically impossible is also void.

3.A contract is an enforceable agreement between two or more competent persons, embodying an offer by one person to do or not to do a certain thing and an acceptance by another. This definition, like most definitions, fails adequately to define as comprehensive a term as a contract. The reason is that it is impossible to compress into one sentence all the requirements and circumstances attending the formation of a valid contract. Where the thing agreed upon has been done, as in case of an article sold and delivered and payment made on the spot, it is

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called an executed contract. Executory contracts, on the contrary, are those where something remains to be done as to do an act on or before a future day.

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What types of contracts do you know? What is the difference between

them?

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2.2 Contract of Sale

Business consists essentially of making and discharge of contracts. Certain contracts shall not be enforceable unless they are in writing and are signed by the party to be charged or his agent; for example, contracts not to be performed within a year. A contract under seal is generally called a specialty contract, or a deed. Three things are essential to a deed – writing, sea ling and delivery.

A simple contract is often called a “parol” contrac t, and it makes no difference whether it is in writing or only made orally. Contract is the result of a combination of two ideas – an agreement and an obli gation. A unilateral offer is one that is accepted by performance of an act. A bilateral offer is one that is accepted by means of a promise.

The definition of a contract of sale of goods, which includes a bargain and sale as well as a sale and delivery is one “whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price”.

By “property” is meant the complete ownership in th e goods, the subject matter of the contract. It is important to determine the exact time when the property, that is, the ownership in the goods, passes from the seller to the buyer.

The term “goods” includes all chattels personal oth er than choses in action and money. Chose in action is a right to receive or recover a debt or damages for breach of contract, or for a wrong connected with a contract which cannot be enforced without suit.

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The consideration for a contract of sale must be money. If the consideration for the transfer of goods is other goods, the contract is not one of sale, but of exchange and barter.

The price is generally fixed by the parties. However, it is not absolutely necessary that the price should be fixed beforehand. It may be left to the valuation of a third person.

When goods are sold by description, it is an implied condition that the goods shall correspond with the description, if the buyer relies upon it.

When the sale is by sample then the bulk shall correspond with the sample in quality; the buyer shall have reasonable opportunities for comparing the bulk with the sample.

A condition is a term of a contract but for which the party would not have entered into the contract; so that the breach of the condition will entitle the injured party to repudiate the contract and claim damages.

Hire – purchase agreements are arrangements by whic h it is agreed that goods are to be transferred in consideration of a certain number of periodical payments.

When there is an unconditional contract for the sale of specific goods which are ready for delivery, the property passes to the buyer when the contract is made, the fact that the time of payment or delivery is postponed is immaterial.

Where there remains something to be done by the seller in order to put the goods into a deliverable state, or where the goods have to be measured, weighed, or tested, the property does not pass, until the act required is done and notice of it has been given to the buyer.

The goods which form the subject of unascertained or future goods by description, and goods of that description in a state ready for delivery are unconditionally appropriated to the contract by either party with the express or implied assent of the other, the property in these goods passes at once to the buyer. Such an appropriation is made when goods are delivered to a carrier for transmission to the buyer.

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Vocabulary notes

1.Make a contract (enter into a contract, conclude a contract) –

заключить договор, вступить в договорные отношения,

2.Discharge of contract – прекращение обязательств из договора.

3.Contract under seal (specialty contract, deed)– договор за печатью,

4.Simple contract (parol contract) – простой договор, договор не за

печатью,

5.Unilateral – односторонний,

6.Bilateral – двусторонний,

7.Contract of sale – договор продажи,

8.Bargain and sale – договор купли-продажи,

9.Sale and delivery – договор продажи и доставки,

10.Property – собственность,

11.Ownership in the goods – право собственности на товар,

12.Goods – товары,

13.Chattels personal – движимое имущество,

14.Chose in action – имущество в требованиях, права, могущие быть основанием для искового требования (акции, патенты, долги),

15.Breach of contract – нарушение договора,

16.Contract of exchange and barter – договор товарообмена,

17.Valuation – определение ценности, стоимости, оценка,

18.Sell goods by description – продавать товары по описанию,

19.Sale of goods by sample – продажа товара по образцу.

20.Condition – существенное условие в договоре продажи/нарушение существенного условия дает право на расторжение договора,

21.Hire – purchase agreement – соглашение о покупке в рассрочку.

22.Specific goods – товар, определенный индивидуальными признаками,

23.Deliverable state – состояние, годное для сдачи,

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24.Put the goods into a deliverable state – привести товар в состояние,

годное для сдачи,

25.(Un)ascertained goods – ( не)индивидуализированный товар,

26.Appropriate goods to the contract – предназначать или выделять товар для исполнения договора,

27.Appropriation - предназначение или выделение товара для исполнения договора.

Match the words with their definitions:

1.Unilateral

2.Valuation

3.Chattels personal

4.Bilateral

5.Condition

a.An item of movable personal property, such as furniture, domestic animals, etc.

b.Made by, affecting, or binding one party only and not involving the other party in reciprocal obligations,

c.The act of valuing, esp. a formal assessment of the worth of property,

jewelry,

d.A declaration or provision in a will, contract that makes some right or liability contingent upon the happening of some event,

e.Affecting or undertaken by two parties, mutual.

Answer the following questions:

1.What things are important for a deed?

2.What is a “parol” contract?

3.Can you name the main features of a contract of sale?

4.What is “property”?

5.What does the term “goods” include?

6.What is consideration for a contract of sale?

7.Is it obligatory to fix the price beforehand?

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8.In what case does the buyer need the description of goods?

9.What can the breach of condition result in?

10.Explain what hire-purchase agreements are.

11.In what case does the property pass or not pass to the buyer?

12.What are goods appropriated to the contract?

Translate the following into Russian:

1.A contract of sale is an agreement by which one of two contracting parties conveys a thing and passes a title to it in exchange for a certain price to another who on his part either pays the price or agrees to pay it. It differs from a barter and exchange in that the consideration is money instead of goods or property. However, if the consideration for transfer consists partly of goods and partly of money, it seems that the contract is a contract of sale.

2.The term “goods” also includes emblements, that is, industrial growing crops, and things attached to or forming part of the land, which are agreed to be served before sale or under the contract of sale.

3.The buyer and the seller of goods have a personal remedy, the one against the other, if the contract of sale is broken by the default of one of the parties.

4.In the case of an unconditional contract for the sale of specific goods in a deliverable state, the property usually passes when the contract is made, so that in this and similar cases it is never possible to repudiate the contract for breach of condition, unless an express stipulation to that effect is made.

Read the following contract paying attention to the highlighted words.