Understanding contracts

Exercise 18. Read and translate the text below.

Lawyers are usually involved at the formation stage of a contract, which includes advising, drafting and negotiating. Drafting is commonly carried out with the help of contract templatesorforms. Nevertheless, legal counsel must advise on the inclusion or omission of clauses and their wording. To do this, familiarity with common clause types and the language typically used in them is necessary. As a rule the contract contains a number of clauses (articles) arranged in definite sequence.

Table 1

1	Preamble – Names of the parties	Преамбула контракта
2	Definitions and Interpretation	Определения и толкование
3	Subject of the Contract	Предмет контракта

4	Price and Total Cost of the Contract / Price and Total Amount (Sum / Value) of the Contract / Price	Цена и общая стоимость (сума) контракта / Цена
5	Dates of Delivery / Dates and Terms of Delivery / Basis of Delivery / Deliveries	Сроки поставки товаров / Сроки и условия поставки / Базисные условия поставки / Поставки
6	Payment / Terms of Payment / Conditions of Payment	Платеж (Оплата) / Условия платежа
7	Packing and Marking	Упаковка и маркировка
8	Guarantees / Warranty	Гарантии
9	Sanctions and Claims / Penalties	Санкции и претензии / Штрафные санкции
10	Insurance	Страхование
11	Force-Majeure Circumstances	Форс-мажор
12	Applicable Law and Arbitration	Применимое право и разрешение споров
13	Confidentiality and Publicity	Конфиденциальность и публичность
14	Other Conditions / Miscellaneous	Прочие (Дополнительные) условия
15	Concluding Wording	Заключительная формулировка
16	Legal Addresses and Signatures (Accounts) of the Parties	Юридические адреса и подписи (реквизиты) сторон

Standard contracts are not a must. In the case of a contract sophisticated machinery and equipment there may be other clauses, which may be included in the contract itself or in the Appendices to the contract which are an integral part of it. Some clauses may be altered and supplemented. They are used to represent specific demands to the subject of the Contract and to the order of the fulfillment of the obligations.

Table 2

1	Quality of Goods	Качество товара
2	Entire Contract	Контракт в целом
3	Liability	Ответственность
4	Property in the Goods	Право собственности на товар
5	Quality and Quantity of Goods	Количество и качество товара
6	Inspection and Tests	Инспектирование и проверка
7	Shipping Instructions	Инструкции по погрузке
8	Delivery and Acceptance of Goods	Сдача и приемка товара
9	Drawings and Technical Documents	Чертежи и техническая документация

Exercise 19. Read the above text and find the equivalents of the following expressions and word-combinations.

Форма (бланк) контракта; юрисконсульт; формулировка; статья (2); стандартное соглашение / типовой контракт; приложение; неотъемлемая часть контракта; изменить; дополнить; предмет контракта.

Exercise 20. Match these types of contract clauses (1 – 10) with their definitions (a – j).

1) Acceleration a) clause stating that the written terms of an

agreement may not be varied by prior or oral agreements because all such agreements have been consolidated into the written document

2) Assignment b) clause designed to protect against failures to

perform contractual obligations caused by unavoidable events beyond the party's control, such as natural disasters or wars

3) Confidentiality c) clause outlining when and under which

circumstances the contract may be terminated

4) Consideration d) clause concerning the treating of information

as private and not for distribution beyond specifically identified individuals or organisations, nor used other than for specifically identified purposes

5) Force Majeure e) clause in a contract requiring the obligor to

pay all or a part of a payable amount sooner than as agreed upon the occurrence of some event or circumstance stated in the contract, usually failure to make payment

6) Liquidated Damages f) clause setting out which party is responsible

for payment of costs related to preparation of the agreement and ancillary documents

7) Entire Agreement g) clause expressing the cause, motive, price or

impelling motive which induces one party to enter into an agreement

8) Severability h) clause referring to an amount predetermined

by the parties as the total amount of compensation a non-breaching party should receive if the other party breaches a part of the contract

9) Termination i) clause prohibiting or permitting assignment

under certain conditions

10) Payment of Costs j) clause providing that, in the event that one or

more provisions of the agreement are declared unenforceable, the balance of the agreement remains in force

Exercise 21. Match these types of contract clauses (1 – 13) with their definitions (a –m). Then arrange them so that everything is in the right place.

1) Arbitration a) clause defining the exact dates and terms of

delivery

2) Concluding Wording b) clause including the legal title of the

contracting parties and their addresses

3) Delivery c) clause including the legal addresses of the

contracting parties, the numbers of their phones, FAXes and the signatures of the parties

4) Guarantees d) clause including the main terms of insurance:

what is insured; what risks the goods are insured from; who insures; in whose favour the insurance is made

5) Insurance e) clause naming the product for sale or

purchase and also indicating the unit of measure generally employed in foreign trade for special commodities

6) Legal Addresses and f) clause including the cases of breach of the

Signatures of the Parties Contract in which case the sufferer makes a claim on the party which fails to meet its obligation

7) Names of the Parties g) clause defining exact packing and marking

terms

8) Other Conditions h) clause saying that the Seller guarantees the

quality of the delivered merchandise in conformity with the latest technical achievements and the period of guarantee will meet the requirement stated in the Contract

9) Packing and Marking i) clause including the order of the entry of any

alterations and amendments, and the order of

the transfer of the parties rights and obligations to a third party

10) Payment j) clause stating the price of the contract

11) Price and Total Cost k) clause saying that the contracting parties will

of the Contract take every measures to reach friendly settlement of any differences and disputes connected with the contract

12) Sanctions and Claims l) clause showing the language in which the

contract is drawn up and the number of copies that have the same legal force

13) Subject of the Contract m) clause including terms of the payment and

defining the currency of payment and the order of the payment between contractors

Exercise 22. Read the text and translate it into Ukrainian.

Text 4

Even if the contract is in writing, you should make sure that it includes all the necessary provisions.

1. The article «NAMES OF THE PARTIES»includes the legal title of the contracting parties and their addresses.

2. The article «SUBJECT OF THE CONTRACT»names the product for sale or purchase. It also indicates the unit of measure generally employed in foreign trade for special commodities.

3. «PRICE AND TOTAL COST OF THE CONTRACT». The price stated in a contract may be fixed, firm and sliding. Fixed price is the price governing in the market on the day of delivery or for a given period. Firm prices are not subject to change in the course of the fulfillment of the contract. Sliding prices are quoted for machinery and equipment which require a long period of delivery.

4. The exact dates and terms of «DELIVERY»are defined in this clause of the Contract.

5. The clause «PAYMENT»includes terms of the payment. Defines the currency of payment and the order of the payment between contractors. The form of the payment may be different:

   1. cash payment

   2. payment by cheque

   3. bank money order

   4. payment by a letter of credit

   5. encashment

6. «PACKING AND MARKING»The packing must protect the goods against any damage during the carriage. The marking should be clearly made with indelible paint on the top of the box and on its two opposite sides.

7. The article «GUARANTEES»says, that the Seller guarantees the quality of the delivered merchandise in conformity with the latest technical achievements and the period of guarantee will meet the requirement mentioned in the Contract.

8. The clause «SANCTIONS AND CLAIMS»includes the cases of breach of the Contract. In this case the sufferer makes a claim on the party which fails to meet its obligation. Most often the Buyer makes quality and quantity claims on the Seller. The party which fails to meet its contract obligation is penalized.

9. The article «INSURANCE»includes four main terms of insurance:

1) what is insured

2) what risks the goods are insured from

3) who insures

4) in whose favour the insurance is made.

10. The article «FORCE MAJEURE»includes the obligations of the contracting parties in case of coming the Force Majeure circumstances. The parties have the right to extend the time stipulated for the fulfillment of the contract by a period equal to that during which force majeure circumstances last. The formulation of this article is rather universal.

11. The article «ARBITRATION»says that the contracting parties will take every measures to reach friendly settlement of any differences and disputes connected with the contract. If the parties fail to reach an agreement the dispute will be at the written request of one of the parties submitted for the consideration of the Arbitration Court.

12. The article «OTHER CONDITIONS»includes the order of the entry of any alterations and amendments, and the order of the transfer of the parties rights and obligations to a third party.

13. As a rule the article «CONCLUDING WORDING»shows the language in which the contract is drawn up and the number of copies that have the same legal force.

14. The part of the Contract «LEGAL ADDRESSES AND SIGNATURES OF THE PARTIES»includes the legal addresses of the contracting parties, the numbers of their phones, FAXes and the signatures of the parties.

Exercise 23. Read the above text and find the equivalents of the following expressions and word-combinations.

Cторона в договоре; не исполнить обязательства по контракту; условия контракта (2); фиксированная цена; твердая цена; скользящая цена; банковский перевод; получение наличными деньгами; несмываема краска; в соответствии с; нарушение контракта; споры и разногласия; изменения (2); передавать свои права; третья сторона; иметь юридическую силу; юридический адрес; арбитражный суд; предъявлять иск к кому-либо; караться законом (налагать штраф); риски; представить на рассмотрение.

Exercise 24. Identify the type of clause listed in the above Exercises.

1. The seller's liability for damages shall in no case exceed the purchase price of the particular quantity delivered with respect of which damages are claimed.

2. All disputes and differences which may arise out of or in connection with the present Contract will be settled as far as possible by means of negotiations between the Parties. If the Parties do not come to an agreement, the mater, without recourse to Court of Law, is to be submitted for settlement, to Arbitration, with its seat in Stockholm, Sweden.

3. Whenever, within the sole judgment of Seller, the credit standing of Buyer shall become impaired, Seller shall have the right to demand that the remaining portion of the contract be fully performed within ten (10) days.

4. Neither party shall be liable in damages or have the right to terminate this Agreement for any delay or default in performing hereunder if such delay or default is caused by conditions beyond its control including, but not limited to, acts of God, government restrictions (including the denial or cancellation of any export or other necessary licence), wars, insurrections and/or any other cause beyond the reasonable control of the party whose performance is affected.

5. The present Contract has been signed in two legally equal copies in English and Russian (the Russian version is basic in all the differences for the explanation of the text of this Contract) and comes in force on the date of signing.

6. This Agreement may not be assigned without the prior written consent of the other party, except that Buyer may assign the Agreement to a subsidiary or related corporation so long as the owners of at least seventy-five per cent (75%) of the stock of such corporation are either Buyer or the shareholders of Buyer.

7. In the event Operator defaults in the performance of any covenant or agreement made hereunder, as to payments of amounts due hereunder or otherwise, and such defaults are not remedied to the Supplier's satisfaction within ten (10) days after notice of such defaults, the Supplier may thereupon terminate this agreement and all rights hereunder of the Operator but such termination shall not affect the obligations of the Operator to take action or abstain from taking action after termination hereof, in accordance with this agreement.

8. The goods have to be shipped in export package corresponding to the type of product and to the Supplier's country standard.

9. This Agreement, including the Schedules and Exhibits attached hereto, constitutes and contains the entire agreement of the parties with respect of the subject matter hereof and collectively supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof. No party is relying on or shall be deemed to have made any representations or promises not expressly set forth or referred to in this Agreement.

10. "XXX", in the person of Mr. XXX , acting on the ground of the Power of Attorney of 25.03.2002, hereinafter referred to as the "Supplier", and “YYY” (Kharkov, Ukraine), in the person of Mr YYY, the Director, hereinafter referred to as the “Buyer”, hereinafter collectively referred to as the “Parties”, have concluded the present Contract as follows.

Exercise 25. In your own words, explain the following words and expressions in italics from the clauses in Exercise 24.

1. liability for damages (clause 1)

2. without recourse (clause 2)

3. within the sole judgment of Seller (clause 3)

4. delay or default (clause 4)

5. legally equal copies (clause 5)

6. prior written consent (clause 6)

7. In the event Operator defaults in the performance ... (clause 7)

8. abstain from taking action (clause 7)

9. Schedules and Exhibits (clause 9)

10. deemed (clause 9)

Exercise 26. Fill in the blanks with the necessary words.

1. The Seller shall d … the m … to the Buyer in dates indicated in the A … to the present Contract. 2. With the equipment the Seller shall send to the Buyer the following s … d … . 3. Any a … and a … to the present Contract shall be made in writing and signed by the c … p … . 4. Neither p … is entitled to t … their r … and o … to a t … party without a written consent of the c … p … . 5. Copies of the documents received by fax h … equal l … f … . 6. The goods delivered under this Contract shall be i … full c … w … the standards accepted in Ukraine. 7. The t … s … of the Contract is not limited. 8. If the P … cannot come to the consent, the discord in question shall be s … by the A … C … . 9. The A … shall be carried out i … a … w … the rules of ‘UNCITRAL’ A … in force at the moment of this Contract signing, excepting the cases when the above-said rules are in contradiction with the A … p … of the present Contract. 10. All the d … and d … arising out or in connection with the p … Contract shall be s … as soon as possible.

Exercise 27. Choose the correct word.

1. All claims should be made / filedin writing. 2. At that point, stars and studiosfulfill / undertaketheir initial contractual obligation and are free to negotiate with other parties. 3. Both companies will meet with a neutralthird / courtparty to resolve the disagreement. 4. Both sides in the dispute have agreed to go to arbitration / legislation. 5. Clause 5.2runs / statesthat the tenant is responsible for any damage to the property. 6.Dispute / disagreementresolution techniques include negotiation, mediation,court / arbitration and litigation. 7. Fixed-price contracts can give the manufacturer an unfair share ofdangers / risks and costs. 8. It is alleged that the companycancelled / breached the terms of the merger agreement. 9. It is part of a document explaining arbitrationmethods / proceduresat the International Centre for Arbitration in Cairo. 10. New laws willpunish / penalize firms that continue to pollute the environment. 11. Nochange / alteration to the contract shall be binding on the Seller unless agreed in writing. 12. Policyholders will have to pay a 10 per cent charge on earlybilling / encashment. 13. Some rights cannot be removed even by agreement between theparties / sidesto the employment contract. 14. Statute takes precedence over contract and otherlawful / legal obligations. 15. Such personal guarantees become effective if and when the company itself cannotmeet / realizeits financial obligations. 16. The agreement includes acondition / provision for each side to check the other side's weapons. 17. The case has beenfiled / submitted for international arbitration. 18. The company will operate practically inconformity / agreementwith cultural expectations. 19. The contract is subject to theprovisions / conditionsof the Supply of Goods and Services Act. 20. The contract wasdrawn / draftedup last year. 21. The goods are insured against allrisks / dangers. 22. The government put down numerous extensivecorrections / amendments to the Bill. 23. The insurer cannot unilaterallychange / alter the terms of the contract. 24. The parties are under nocontractual / agreedobligation to allow each other to make representations to the auditor before he issues his certificate. 25. The plan will be submitted forconsideration / reflectionby the Board of Supervisors on Jan. 23. 26. The two sides have agreed to submit thedifference / dispute to arbitration. 27. They have put in a penaltyarticle / clause which specifies that late delivery will be fined. 28. Underarticle / part112, the finance minister must approve all supplementary expenditure. 29. We are committed to fulfilling ourobligations / dutiesto our creditors. 30. We are suing the company forbreak / breach of contract.

Exercise 28. Fill in the blanks with the necessary prepositions.

1. I put … a claim … a piece of luggage damaged at the airport. 2. I would like to make some slight amendments … clause 3. 3. In addition, the legal expenses incurred … the dispute … the partners were incurred to protect and preserve the partnership's assets. 4. Repudiation of a claim … this clause can cause serious problems. 5. She has filed a claim … the company … breach … contract. 6. The company is trying to find a buyer … its toiletries business. 7. The directives are proposed … article 118A, which is subject … qualified majority voting. 8. The online retailer will be the exclusive seller … the equipment. 9. The policy offers protection … the risk of damage. 10. There should be an annual Taxes Management Bill to deal with technical alterations … tax law. 11. They will, … conformity … domestic law and international obligations, continue to take effective measures to this end. 12. This section lists long-term debt owed to banks or other creditors and any obligations … capital leases. 13. … clause 8, the employer is responsible for the safety of employees. 14. … the provisions … the Act, employers must supply safety equipment. 15. We have an obligation … our customers. 16. Will he confirm that curfews constitute collective punishment, which is punishable … article 33 … the fourth Geneva convention?

Exercise 29. Translate into English.

1. Поставщик поставляет по настоящему Контракту Товар. 2. Поставляемый по настоящему Контракту Товар должен полностью соответствовать нормам, принятым по конкретному виду товара в стране производителе товара. 3. Количество поставляемого Товара согласовывается Сторонами и определяется Приложениями к Контракту, являющимися его неотъемлемой частью. 4. Поставка Товара производится в адрес Покупателя, который указывается в заказе, предварительном счете-фактуре и товаросопроводительных документах. 5. Отгрузка Товара Покупателю должна производиться не позднее 10 рабочих дней от согласованной Сторонами даты. 6. Цены поставляемых Товаров должны быть согласованы Сторонами. 7. Все споры и разногласия, возникающие из настоящего Контракта или в связи с ним, должны быть разрешены как можно быстрее путем переговоров между Сторонами. 8. Если эти обстоятельства и их последствия будут продолжаться более двух месяцев, то каждая из Сторон будет иметь право отказаться от исполнения своих обязательств по настоящему Контракту и не будут нести ответственность за потери и убытки, возникшие в этой связи. 9. Настоящий Контракт вступает в силу с момента подписания и действует до момента выполнения Сторонами своих обязательств по Контракту. 10. Продавец несет ответственность за любое невыполнение своих обязательств по настоящему Контракту в соответствии со статьей 8 настоящего Контракта. 11. Покупатель или его представитель имеет право потребовать у Продавца приостановления разгрузочно/погрузочных процедур, если он посчитает, что показатели качества и состояния Товара (произведенного как указано в пункте 4 «Количество и качество товара» настоящего Контракта) не соответствуют указанным требованиям настоящего Контракта.

Exercise 30. The text below is an example of the previously mentioned type of document known as a contract form, which is often used by lawyers at the formation stage of a contract. Read the text more carefully. What types of clauses are 2b, 3, 5 and 6?