The Electric Knife

One day, Barry received a package in the mail containing an elec­tric knife from the Super–Knife Corporation. A letter was enclosed that said he was getting the knife for a free 10–day trial. Barry used it once and then forgot about it. Three weeks later, a bill came for $39.95 Must Barry pay?

Barry does not have to pay for the knife, nor does he have to re­turn it. Under federal law, all unordered merchandise received by mail may be kept as a gift. Sending unordered merchandise is un­lawful, and such activity should be reported to the U.S. Postal Ser­vice or the Federal Trade Commission. It is lawful to send free samples and to ask for charitable contributions, but the receiver of the goods cannot be forced to pay.

Problem–solving:

Shannon receives a mailing announcing a special introductory offer for persons who join a popular music club. As part of the promotion she can get six cassettes for only $1, plus shipping. In smaller print the offer says that she will also be required to purchase at least three cassettes per year for two years. The additional cassettes are sold at the club’s regular members’ price, plus shipping.

The club publishes a catalogue of new releases every other month. The catalogue is mailed to each member with one cassette preselected. A member who does not want that cassette must return a card to the company within two weeks of receiving the catalog. Otherwise the cassette will automatically be sent.

a. Is this mailing legal?

b. If Shannon takes advantage of this introductory offer, how many cassettes will she have to purchase?

c. What are the advantages and disadvantages of membership in this club?

Match the words on the left with the correct definition on the right:

Convenient	meet.
Ship	an agreement to pay a sum of money.
Comply	examine.
Monitor	transport.
Subscription	the state of belonging to a group.
Membership	suitable.
Inspect	observe.

Unit 15.

Contracts

Read and translate the text.

A contract is an agreement between two or more persons to exchange something of value. In a contract, each person is legally bound to do what is promised. If one party to a contract does not carry out the promise, the other party is entitled to a remedy.

The law of contracts reaches into many aspects of our daily lives. To protect yourself as a consumer, it is important to understand how contracts are formed and how they affect your rights.

Elements of a Contract

A legally binding contract must have certain elements. There must be an offer by one party and an acceptance by the other. In addition, the two parties must agree exactly to the terms of the con­tract. This is called mutual agreement. To have mutual agree­ment, the parties do not always have to say “we agree.” The law infers agreement from certain actions, such as signing a contract or beginning to carry out the terms of the bargain.

In every valid contract, there must also be an exchange of consideration. This means something of value is given for something else of value. For example, when you buy an item at a store, your consid­eration is the money you pay, and the merchant’s consideration is the item you are buying. The values of the items being exchanged do not have to be the same. The law allows consumers to make both good deals and bad deals.

People entering into a contract must be legally competent to make contracts. This means they cannot be mentally ill or intoxicated. Also, agreements to do something illegal or against public policy are not enforceable in court.

If Lorenzo says to Sally, “I will sell you my motorcycle for $150,” this is an offer. If Sally says, “OK,” if she pays the $150 to Lorenzo, or if she signs an agreement to pay $150, there is an acceptance. They have agreed to the exact terms. The motorcycle being exchanged for the money is the exchange of consideration. Both parties are compe­tent, and the agreement is not illegal or against public policy. There­fore, a contract has been made.

You should not be too quick to enter into a contract. Be sure you understand and agree with all the terms before you accept; other­wise, it may be too late to back out of the deal.

Minors and Contracts

A minor is a person under the age of legal majority (18 in most states). Minors may make contracts. However, as a general rule, they cannot be forced to carry out their promises and may cancel or refuse to honor their contracts. Minors who cancel contracts usually must return any goods or consideration still in their possession. This rule is designed to protect minors from being taken advantage of be­cause of their age and lack of experience. However, minors may have a tough time getting credit because of this rule. Many stores require minors to have a parent or other adult cosign any major contract. The adult cosigner is responsible for making payments if the minor backs out of the deal.

Minors may, however, be held to contracts that involve necessities, such as food, clothing, shelter, or medical aid. Minors can be required to pay for the reasonable value of such goods and services.

In most states, a minor who continues making payments on a con­tract after reaching the age of majority is considered to have rati­fied the contract. Once the contract has been ratified, it can no longer be canceled.

Find the equivalents of the following words and expressions in the text.

Выполнять обещание; затрагивать чьи–то права; условия контракта; взаимное соглашение; подразумевать; компенсация; дееспособный; заключать договор; уклониться от сделки; совершеннолетие; выполнять условия контракта; защитить несовершеннолетних; лицо, подписывающее контракт вместе с другим лицом; медицинская помощь; ратифицировать контракт.

Answer the questions:

1. What is a contract?

2. What happens if one party to a contract does not carry out the promise?

3. Why is it important to understand how contracts are formed and how they affect your rights?

4. What are the elements of a contract?

5. What is mutual agreement?

6. What is an exchange of consideration? How does it work? Give your own example.

7. Why must people entering into a contract be legally competent?

8. What kinds of agreements are not enforceable in court?

9. Why shouldn’t you be too quick to enter into a contract? Why is it important to read a contract before signing it?

10. Can minors make contracts? What is special about such contracts?

11. What is an adult cosigner responsible for?