Vocabulary 3–4 and Exercises 3a–4a in case of difficulties.

TEXT 3

Classification of Contracts. Unilateral and Bilateral Contracts. In a unilateral con-

tract, there is only one promise, and it is contained in the offer. The offer is accepted by

performance of the thing called for in the offer.

In a bilateral contract, the parties make mutual promises which are sufficient consid-

eration for each other. Offer, acceptance, and consideration are present at the outset, even

though the promises have yet to be performed. Each party may have a cause of action for an

attempted disavowal of the agreement by the other party, or even for an expected (anticipa-

tory) breach of the contract. That is, if it seems clear that a party is not going to perform its

part of the bargain, even though the time for performance has not arrived, the other party

may seek a remedy in court.

Express and Implied Contracts. The terms of an enforceable contract are usually spe-

cific enough that it is an express contract. Sometimes, neither party really specifies what the

terms are, but their actions are such that the conditions of the contract can be inferred. In

such a situation, there may be an implied contract. More often, the contract and some of its

terms will be express, but other terms must be implied. For example, a continuing contract

for certain kinds of supplies may be somewhat vague as to the price for each delivery. As-

sume that a printer regularly buys a specific kind and quantity of paper, but the price of the

paper fluctuates with supply. Because the contract is express in most respects and regularly

performed, there is no doubt that it exists. In a dispute, however, a court may have to decide

whether an implied condition was to continue to deliver the supplies at the original price,

or to make each delivery at the current price without notice.

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TEXT 4

Written and Oral Contracts. With some important exceptions, it does not matter

whether a contract is written or oral. If the basic elements are present, an oral agreement is

just as valid as a written agreement and enforceable in the same ways.

There are some instances where a contract must be in writing. First, a contract should be

written where the parties have come to an understanding in negotiations that the final agree-

ment will be in writing. (In this situation the contract should be reduced to writing even if it

is a type of contract which would be valid and enforceable even if it was an oral contract.)

Second, the law requires that certain types of contracts be in writing. These are:

(1) contracts to answer for someone else’s debt, default, or wrongful act or omission;

(2) contracts by the executor or administrator of an estate to use his (the executor’s or

administrator’s) own estate to pay for damages attributable to the estate in which he is a

fiduciary; (3) prenuptial agreements or contracts between engaged couples settling various

questions of property and rights in consideration of marriage; (4) contracts for the sale of

land or any interest in land; and (5) contracts which will not be fully performed (by at least

one party) within one year.

There are some other types of contracts which must be in writing. One of the most im-

portant of these is a commercial contract for the purchase and sale of goods involving $ 500

or more. Further, most loan agreements must be in writing and signed by the debtor.

The requirement that a contract be written does not mean that the contract must be

formal. The contract can be plain or fancy. It might be many pages long, and printed or it

might be just a few sketchy notes on the back of an old envelope.

Exercise 9. Work in pairs. Study the Vocabulary below and then translate the fol-

lowing texts into English.