Contract law. Учебное пособие

Whenyouarriveatthehairsalonforyourusualcut,itisexpected that you will pay for the services rendered. That is an implied in fact contract. The common understanding based on the conduct of the parties serves as a contract to pay for your new ‘do!

Now, implied in law contracts work a bit differently. In fact, they are really not contracts at all. That is why the law gives them a clever name like «quasi-contracts». This is because the court determines whether this type of contract existed after performance or non-performance as a means to determine whether one party can collect restitution for a service they performed.

An example will help. Suppose you choked on a fish bone at your favorite seafood restaurant. Lucky for you, there was a doctor in the house. After the doctor performed the Heimlich maneuver to dislodge the obstruction, he handed you a bill for his services.

An implied in-law contract, also known as a quasi-contract, works differently. In this type of contract, the elements are not specifically written or expressed. In fact, this type of contract is used as a remedy in a situation when one party to the quasi-agreement received unjust enrichment resulting from not paying for a product or service rendered. This sounds confusing but it really boils down to this — if a product or service is rendered to a party without paying, it becomes inequitable for the rendering party.

An example will help to explain how a quasi-contract works. Sandi Brown took her car into the shop to have her tires rotated. As the mechanic performed the agreed upon service, he noticed that there were a few questionable lug nuts. If he leaves the existing lug nuts, it could cause a tire to fall off while Sandi is driving. The mechanic changes the cracked lug nuts for a few new ones and completes the job. When Sandi returns, she learns that the bill is higher than she originally agreed upon because of the extra charge for the parts. While Sandi never agreed to the additional repair, it was necessary and needed to be done at the time of the repair to prevent a driving disaster.

If Sandi does not pay for the lug nuts, it is an unjust enrichment under the law. She is unfairly receiving a benefit from the repair

21

shop that she did not pay for.This is not equitable for the repair shop because they paid for the lug nuts in their inventory.

Vocabulary

аn expressed contract — выраженный (сформулированный) контракт

implied contract — подразумеваемый или предполагаемый контракт (договор на основании действий)

quasi-contract — частичный контракт

surrounding circumstances — окружающие обстоятельства to be stated in words — быть выраженным словами unjust enrichment — несправедливое обогащение

mental capacity — умственные спосбности based on the conduct — основан на поведении used as a remedy — средство защиты rendered service — оказываемые услуги unfairly receivе — получить незаконно

Exercises

1.The elements of an expressed contract include: a) offer and acceptance,

b) consideration,

c) mutual assent and capacity, d) legally accepted terms,

e) all choices make up the elements of a contract.

2.Don wants to buy a new car. He doesn’t have enough cash to pay for, it so he decides to take out a loan.The loan states the offered price and includes other important things like the payments, the term of the loan and Don’s signature. What type of the contract is this?

a) expressed contract, b) implied contract, c) quasi-contract.

22

3. Answer and discuss the problems.

a)Under a written contract, Vince bought new car. On the way to work he phoned his friend and asked him for some money, bought some petrol and fruit juice by inserting coins into a vending machine. What kinds of contracts were there?

b)Ann is an executor of her uncle’s estate. Before his death he owed Jack, the neighbor, $2 000 and gave a receipt. Now Jack needs money and asksAnn to pay a debt. What contracts are these? Is this promise enforceable?

Read and translate the text

EXECUTEDAND EXECUTORY CONTRACTS

The main difference between an executed and executory contract is how quickly the contract’s promise must be fulfilled. An executed contract must be satisfied immediately, while an executory contract has terms that will be fulfilled later.

You’ve been eyeing that 60-inch television in the appliance store window for weeks. Finally, it’s the payday, and you sprint to the store and make the purchase. It’s simple. Fork over the cash and walk away with your own television. See, the promisor, the appliance store, promised to give you a spanking new TV for $500, and you, the promisee, promised to pay for it. Done!

This is an example of an executed contract; a contract in which the promises are made and completed immediately, like in the purchase of a product or service. On the other hand, an executory contract means that the promises of the contract are not fully performed immediately. An example of an executory contract would be an apartment lease.

When you enter into a lease agreement, you are promising to pay the rent for a period of time. Until the term expires, the contract promises have not been fulfilled. Put another way, a landlord generally rents an apartment under a lease contract. This agreement identifies the name of the person leasing or renting, the name of

23

the landlord, the terms and conditions, the length of lease and the monthly rental fee for occupying the space.

A lease cannot be fulfilled in one single transaction, like buying a television. Since a lease is usually written for a period of one year, it is an executory contract, because it is fulfilled over time. In general, an executed contract is a done deal. On the other hand, an executory contract isn’t fulfilled right away, leaving time for things to go wrong.

Vocabulary

an executed contract — срочный контракт, договор с исполнением в момент заключения

an executory contract — долгосрочный контракт, договор с исполнением в будущем

promise must be fulfilled — обещание должно быть выполнено a done deal — заключенная сделка

must be satisfied immediately — должен быть выполнен немед-

ленно

a lease contract — договор аренды

a single transaction — единственная сделка

Exercises

1.Mary visited Joe’s Used Scooter lot. She wanted to purchase a zippy new scooter. Since she does not have the money to pay for the scooter, Joe allows her to pay it off over a period of one year. Mary zipped away with a new scooter and a loan. What type of contract did Mary and Joe have?

a) executory contract, b) executive contract, c) expressed contract, d) executed contract.

2.Penelope wanted her curly locks to be straightened for her big date with Julio. She made an appointment with New Look Hair Salon.After washing, drying and ironing, Penelope’s hair looked as

24

straight as a pin! Thrilled with her new do, she promptly pulled out her credit card and paid her bill. What type of contract did Penelope have with New Look Hair Salon?

a)executed contract,

b)executory contract,

c)expressed contract,

d)implied contract.

3. Sheila rented a storefront for her business, Sheila’s Schnauzers. She plans on renting for a period of one year. What will Sheila and the landlord sign?

a)a lease agreement,

b)a loan agreement,

c)an executed contract,

d)an implied contract.

Read and translate the text

UNILATERALAND BILATERAL CONTRACTS

While strolling along the beach, you notice a sign tacked to a palm tree that reads, «Lost wallet, brown with several hundred dollars in it. Return to owner and receive a $50 reward». This piques your interest, and you begin sifting through the sand, turning over seashells and flipping beach towels in search of the missing wallet.

So, you find the wallet under a coconut tree and contact the owner, return the wallet, and collect on the cash reward. What you really did was enter into a unilateral contract with the owner of the missing wallet. A unilateral contract requires that only one party make a promise that is open and available to anyone who performs the required action, like collecting the reward for finding a lost pet. This sometimes applies to advertisements to an extent.

A bilateral contract works differently. In this type of contract, two parties enter into an agreement where both parties promise to do something. However, the elements of either contract remain the same:

25

•offer by the promisor,

•acceptance by the promise,

•consideration or support for the offer, like money,

•of legal capacity, meaning both parties are free from mental illness or addiction,

•lawful terms.

Vocabulary

a unilateral contract — односторонний контракт bilateral contract — двусторонний контракт cash reward — вознаграждение наличными

Exercises

1. Match the words in column A with the words in column В and make sentences with the phrases.

2. Match the following.

a)bilateral contract;

b)unilateral contract;

c)valid contract;

26

d)void contract;

e)voidable contract;

f)executed contract;

g)executory contract;

h)express contract;

i)implied contract;

j)quasi contract;

k)formal contract;

1) simple contract.

1)Acontract that has no legal effect and cannot be enforced in a court by either party.

2)In this contract only one of the parties makes a promise.

3)Acontract that may be avoided by only one of the parties.

4)This contract is legally effective and has all essential items.

5)When the offerer makes and communicates an offer to the

offeree.

6)The contract, which is immediately performed.

7)In this contract an agreement is shown by conduct or circumstances.

8)Acontract in a special written form.

9)The contract which is not fully performed.

10)When the agreement of the parties is spoken or written.

11)This contract has no special form.

12)When the obligation is done in the absence of an actual agreement between the parties.

3.Translate from Russian into English:

1)Согласно подписанному договору, компания должна внести предоплату $3 000 в течение двух недель.

2)Контракты на продажу и приобретение недвижимости должны осуществляться только в письменной форме.

3)Некоторые контракты заключаются как в устной, так и

вписьменной форме и являются положительно выраженным договором.

27

4)Контракт, выраженный в поведении или какими-либо обстоятельствами, называется подразумеваемым.

5)Подпись на контракте может быть отгравирована, напечатана или выполнена ручкой.

6)Страхование жизни является долгосрочным договором.

7)Контракты на покупку товаров на сумму от $500 и свыше могут быть заключены только в письменной форме.

8)Письменный контракт содержит следующие основные пункты: предмет договора, время, место и способ доставки, а также условия оплаты.

9)Законным двусторонним контрактом является контракт, заключенный по взаимному согласию двух сторон.

10)В случае банкротства контракт может быть аннулирован одной из сторон.

Read and translate the text

TYPES OF REAL-LIFE BUSINESS CONTRACTS

While all valid contracts must include certain elements — particularly an offer, consideration, and acceptance — there are several different kinds of contracts addressing various business scenarios. Most small businesses will end up using the same kinds of contracts at various times, such as employment contracts or purchase orders, and will become quite familiar with these.

To get a sense of what contracts typically look like, you can have a look at this collection of real-life business contracts used by some well-known corporations. Some of the more common types of business contracts that you may enter into are included in the following list.

Sales-Related Contracts

Bill of Sale — transfers ownership of a good from one party to another.

Agreement for the Sale of Goods — a contract for the sale, may be confirmed by a bill of sale after the transaction goes through.

28

Purchase Order — first official offer made by a buyer to a seller. Warranty — any conditions or actions that would void the con-

tract.

Limited Warranty — warranty limited to just one or a few parts. Security Agreement — сontract between a lender and borrower

of a loan.

Employment-Related Contracts

Employment Agreement — а contract for employment, including details about payment, job responsibilities, etc.

Employee Noncompeting Agreement — аn agreement to not work for a direct competitor for a specified period of time after termination.

Independent Contractor Agreement — similar to an employment agreement, but outlines the terms to which the limited work contract applies.

Consulting Agreement — оutline of the tasks and responsibilities (and compensation in return) for a consulting relationship.

Distributor Agreement — defines the relationship with a distributor.

Sales Representative Agreement — typically used to define the amount of commission, and how it’s tabulated, for a salesperson.

Confidentiality Agreement — аgreement to not disclose certain information to third parties.

Reciprocal Nondisclosure Agreement — nondisclosure agreement in which both parties agree not to disclose certain trade secrets.

Employment Separation Agreement — аlso referred to as a termination agreement, this formally ends the employment relationship.

Leases

Real Property Lease — а contract to lease office, manufacturing, or commercial real estate between the landlord and the business.

Equipment Lease — аgreement to lease equipment for a specified period of time.

29

General Business Contracts

Franchise Agreement — оutlines the relationship between the franchisor and the franchisee, such as support, advertising, use of brand, etc.

Advertising Agency Agreement — еstablishes the scope of duties to be performed by the agency, duration, payment, etc.

IndemnityAgreement — аn agreement to transfer risk from one party to another.

Covenant Not to Sue — оne party claiming damages agrees not to sue the responsible party.

SettlementAgreement — аgreement between two parties to end a lawsuit in exchange for certain concessions (usually cash paid to the plaintiff).

Release — typically refers to a release from liability (which are common for businesses where customers assume a reasonable risk of some sort).

Assignment of Contract — a legal transfer of the benefits and obligations of a contract from one party to another.

Stock Purchase Agreement — contractual agreement to sell a certain amount of stock to a name individual (often used for stock options at private companies).

Partnership Agreement — official agreement among two or more partners, including responsibilities of each.

Joint Venture Agreement — lays out the obligations, goals, and financial contributions of all parties involved in a joint venture.

Agreement to Sell Business — documents the terms of a business sale.

Exercises

1. Give the equivalents in English:

1)договор купли-продажи,

2)гарантийное обязательство,

3)договор обеспечения,

4)трудовое соглашение,

5)договор оказания консалтинговых услуг,

30