Текст книги "Английский язык для юристов. Предпринимательское право"

Unit 3
Offer and Acceptance
Оферта и акцепт

Офертой (глава 28 ГК РФ) признается такое предложение, которое: а) должно быть достаточно определенным и выражать явное намерение лица заключить договор; б) должно содержать все существенные условия договора; в) должно быть обращено к одному или нескольким конкретным лицам. Акцептом признается согласие лица, которому адресована оферта, принять это предложение, причем не любое согласие, а лишь такое, которое является полным и безоговорочным. Акцептом считается также совершение лицом, получившим оферту, в срок, установленный для акцепта, действий по выполнению указанных в ней условий договора. Будучи полученными, оферта и акцепт порождают юридические последствия для совершивших их лиц.

List of key terms and word combinations:

– acceptance – акцепт, акцептование

– cost-plus contract – договор на условиях оплаты фактических расходов с начислением определенного процента от этих расходов

– counteroffer – встречное предложение; контроферта

– current market price contract – договор на условиях оплаты по текущим рыночным ценам

– firm offer – предложение товара или ценных бумаг по твердой цене; твердое предложение

– invitation to trade – приглашение сделать оферту

– mirror image rule – правило зеркального отображения

– offer – предложение; оферта

– offeree – адресат оферты; лицо, которому делается предложение

– offerer – оферент; лицо, делающее предложение

– option contract – опционный контракт

– output contract – договор о продаже всей произведенной продукции

– public offer – оферта, обращенная к неопределенному кругу лиц

– rejection – отклонение, отказ

– requirements contract – контракт «на все потребности покупателя» (предусматривающий закупку покупателем только у одного поставщика)

– revocation – отмена, аннулирование; ревокация

The first element of a valid contract is the existence of an offer. An offer is a proposal made by one party to another indicating a willingness to enter into a contract. The person who makes an offer is called an offeror. The person to whom the offer is made is called the offeree. An offer is valid only if it has serious intent, has clear and reasonably definite terms, and has been communicated to the offeree.

An offer is invalid if it is made as an obvious joke, during an emotional outburst of rage or anger, or under circumstances that might convey a lack of serious intent. The offerer's words or actions must give the offeree assurance that a binding agreement is intended. Serious intent is determined by the offerer's words and actions and by what the offeree believed was intended by those words and actions.

The offerer's words must give the offeree assurance that a binding agreement is intended.

The terms of an offer must be sufficiently clear to remove any doubt about the contractual intentions of the offerer.

The communicated terms of an offer must be sufficiently clear to remove any doubt about the contractual intentions of the offerer. No valid offer will exist when terms are indefinite, inadequate, vague, or confusing.

In general, an offer should include points similar to those covered in a newspaper story – who, what, when, where, and how [much] – if it is to be clear, definite, and certain. In other words, the offer should identify the parties involved in the contract, the goods or services that will be the subject matter of the contract, the price the offerer is willing to pay or receive, and the time required for the performance of the contract.

Sometimes laws permit offers to omit certain information. They can state that even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. For example, cost-plus contracts, output contracts, requirements contracts, and current market price contracts are enforceable even though they are not complete in certain matters. A cost-plus contract does not include a final price. Instead, that price is determined by the cost of labor and materials plus an agreed percentage markup. An output contract is an agreement in which one party consents to sell to the second party all the goods that party makes in a given period of time. A requirements contract is an agreement in which one party agrees to buy all of the goods it needs from the second party. Finally, a current market price contract is an agreement in which prices are determined with reference to the market price of the goods on a specified date.

An offer must be communicated to the offeree to be valid. The communication of the offerer's intentions may be by whatever means is convenient and desirable. It may be communicated orally or by letter, telegram, or any other means capable of transmitting the offerer's proposal. It may also be implied. Acts and conduct of the proposing party are, in many cases, successful in communicating an intention to make an offer to another party witnessing them. When acts and conduct are sufficient to convey an offerer's intentions, an implied offer results.

At times, an offer must be communicated to a party whose name, identity, or address is unknown. In such cases, a public offer is made. A public offer is made through the public media but is intended for only one person whose identity or address is unknown to the offerer. The classic example of a public offer is an advertisement in a lost-and-found column in a newspaper.

By contrast, invitations to trade are not offers. An invitation to trade is an announcement published for the purpose of creating interest and attracting a response by many people. Newspaper and magazine advertisements, radio and television commercials, store window displays, price tags on merchandise, and prices in catalogs are included within this definition. In the case of an invitation to trade, no binding agreement develops until a responding party makes an offer that the advertiser accepts.

The second major element in a binding contract is acceptance of the offer. An acceptance means that the offeree agrees to be bound by the terms set up by the offerer in the offer. Only the offeree, the one to whom the offer is made, has the right to accept an offer. If another party attempts to accept, that attempt would actually be a new and independent offer.

Unilateral contracts do not usually require oral or written communication of an acceptance. When the offerer makes a promise in a unilateral contract, the offerer expects an action, not another promise in return. Performance of the action requested within the time allowed by the offerer and with the offerer's knowledge creates the contract.

In bilateral contracts, unlike unilateral ones, the offeree must communicate acceptance to the offerer. Bilateral contracts consist of a promise by one party in return for a promise by the other. Until the offeree communicates a willingness to be bound by a promise, there is no valid acceptance.

An offer may be accepted by either express or implied means of communication. In an express acceptance, the offeree may choose any method of acceptance, unless the offer states that it must be made in a particular manner. A stipulation such as «reply by Federal Express» or «reply by certified mail» in the offer must be carried out to complete an acceptance.

To be effective, an acceptance must be unequivocal, which means that the acceptance must not change any of the terms stated in the offer. Under common law, this stipulation is known as the mirror image rule.

Under the mirror image rule, the terms stated in the acceptance must duplicate the terms in the offer. If the acceptance changes or qualifies the terms in the offer, it is not an acceptance but a counteroffer. A counteroffer is a response to an offer in which the terms of the original offer are changed. No agreement is reached unless the counteroffer is accepted by the original offerer.

In contracts for the sale of goods, as long as there is a definite expression of acceptance, a contract will result even though an acceptance has different or additional terms. If both parties are not merchants, the different or additional terms are treated as proposals for amendment to the contract. If the parties are both merchants, however, the different or additional terms become part of the contract unless (a) they make an important difference, (b) the offerer objects, or (c) the offerer limits acceptance to its terms.

Acceptance may result from the conduct of the offeree. Actions and gestures may indicate the offeree's willingness to enter into a binding agreement.

As a general rule, silence is not an acceptance. If, however, both parties agree that silence on the part of the offeree will signal acceptance, then such an acceptance is valid.

Another exception to the general rule occurs when the offeree has allowed silence to act as acceptance. The offerer cannot force the offeree into a contract by saying silence will mean acceptance. The offeree, however, can force the offerer into a contract if the offerer established the silence condition.

A rejection comes about when an offeree expresses or implies refusal to accept an offer. Rejection terminates an offer and all negotiations associated with it. Further negotiations could commence with a new offer by either party or a renewal of the original offer by the offerer. Rejection is usually achieved when communicated by the offeree.

A revocation is the calling back of the offer by the offerer. With the exception of an option contract and a firm offer, an offer may be revoked anytime before it has been accepted. The offerer has this right, despite what might appear to be a emphasis moral obligation to continue the offer. An offer may be revoked by communication, automatic revocation, passage of time, death or insanity of the offerer, destruction of the subject matter, or the subsequent illegality of the contract.

An offer may be revoked by the offerer communicating that intention to the offeree before the offer has been accepted. Revocation is ineffective if the acceptance has already been communicated, as by mailing the acceptance in response to a mailed offer. Direct communication of revocation is not required if the offeree knows about the offer's withdrawal by other means.

When the terms of an offer include a definite time limit for acceptance, the offer is automatically revoked at the expiration of the time stated.

An option contract is an agreement that binds an offerer to hold open an offer for a predetermined or reasonable length of time. In return for this agreement to hold the offer open, the offerer receives money or something else of value from the offeree. Parties to an option contract often agree that the consideration may be credited toward any indebtedness incurred by the offeree in the event that the offer is accepted. Should the offeree fail to take up the option, however, the offerer is under no legal obligation to return the consideration.

Option contracts remove the possibility of revocation through death or insanity of the offerer. The offeree who holds an option contract may demand acceptance by giving written notice of acceptance to the executor or administrator of the deceased offerer's estate or to the offerer's legally appointed guardian.

A special rule has emerged in international law. This rule holds that no consideration is necessary when a merchant agrees in writing to hold an offer open. This is called a firm offer.

Exercise 1. Comprehension questions:

1. What is an offer?

2. What is to be done in order to remove any doubt about contractual intentions of the offer?

3. What information should the offer include?

4. What is a cost-plus contract?

5. What does a current market price contract suppose?

6. What are the ways to transmit the offerer's proposal?

7. What is a public offer?

8. In what cases are acts and conduct of the proposing successful?

9. Who has a right to accept an offer/ how is an offer rejected?

Exercise 2. Find in the text English equivalents to the following:

Договор на условиях оплаты фактических расходов с начислением определенного процента от этих расходов; договор на условиях оплаты по текущим рыночным ценам; предложение товара или ценных бумаг по твердой цене; приглашение сделать оферту; адресат оферты; оферент; оферта, обращенная к неопределенному кругу лиц; отклонение; аннулирование.

Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:

Отзыв акцепта; публичная оферта; извещение об отзыве оферты; безотзывность оферты; приглашение делать оферту; акцепт, полученный с опозданием; отказ от акцепта.

Exercise 4. Be ready to talk on one of the following topics:

1. Identify the three requirements of a valid offer.

2. Differentiate between a public offer and an invitation to trade.

3. Explain acceptance of an offer in the cases of a unilateral contract and a bilateral contract.

4. Discuss the mirror image rule.

5. Relate the various means by which an offer can be revoked.

6. Explain what is meant by a firm offer.

Exercise 5. Make up your own dialog on the case: In Universal Oil Products. v. S.C.M. Corp., the seller sent a written offer to the buyer that did not contain a provision for arbitration of any disputes. The buyer responded with a written purchase order that did contain a provision for arbitration. The court treated the buyers order as a counteroffer, rather that as an acceptance with a proposal for additional terms. Since the seller shipped the goods pursuant to the buyers order, the court found that the seller thereby accepted the counteroffer and became bound to arbitrate.

Exercise 6. Resume in industry buzz: Offer: commitment communicated to identified offeree & containing definite terms

1. Commitment: reas. person hearing words under these circum.

believes speaker intends to enter into K (OBJECTIVE) (Public ad to identified offeree, 1st 10, is an offer)

–> Code's way of objectively determining is course of dealing – worst is actual words used

2. Communicated to ID'd Offeree (ACTUAL KNOWLEDGE)

–> Another can tell him; public offer accepts & is ID'd at same time

3. Containing Definite Terms: must address s/matter of K w/ certainty to be valid a. Real Estate (desc. & price)

b. Goods (quantity, except offers for total requiremts based on past hx or offers for total outputs are based on last yr output or most mfrs)

c. Services (term of e/mt by task or time, unless not stated then at will)

–> All other material terms supplied by ct, but if offer tries to address material term, must do so w/certainty or offer is INVALID

4. Limits on Terminating Offers a. Merchant Firm Offer Rule: Merchant who puts offer in writing & it says will hold open Xtime or indefinitely (Rrrevocable for time stated but not open more than 3 mos. w/o consideration b. Option K (like a mini-K): consideration to hold open or consideration substitute; substitute when offeree detrimentally, reas. & foreseeably relies on offer (sub bid) (detrimental reliance or prom. estoppel used)

c. Offer to Make Unilateral K: to give time to perform. Reasons can't terminate (best to worst) (1) stay open reas. time if perf. Begun (2) reliance by offeree – supplies (3) doctrine of divisibility – reas. time to complete any «in works» (4) implied bilateral prom. to complete by commencing perf.

5. Ways to Terminate b/4 Acceptance a. Revocation by Offeror

(1) Express w/ ID'd offeree efftv when receives it (not read or actually knows of) w/ delivery to offeree, anyone offeree's control

Express w/ public offer revocation same or comparable medium as offer

(2) Implied when offeror does act preventing perf. and when offeree learns of act from reliable source b. Rejection by Offeree (refusal or counteroffer)

(1) Express when offeror receives or anyone in his control (no actual knowledge); can never be revived

(2) Implied (conduct) letting offer lapse past time stated or reas. time c. Operation of Law: s/matter destroyed b/4 accept; supervening illegality; death or incapacity of either offeror or offeree terminates OFFER

Unit 4
Mutual Assent and Defective Agreement
Обоюдное согласие и юридически дефектный договор

Для заключения договора необходимо выражение согласованной воли двух сторон (двустороння сделка) либо трех или более сторон (многосторонняя сделка) (раздел I ГК РФ, глава 9 «Сделки»). Сделка, совершенная под влиянием заблуждения, обмана, насилия, угрозы, злонамеренного соглашения представителя одной стороны, а также сделка, которую лицо было вынуждено совершить вследствие стечения обстоятельств на крайне невыгодных для себя условиях, или в тот момент, когда данное лицо не было способно понимать значение своих действий или руководить ими, может быть признана судом недействительной.

List of key terms and word combinations:

– business compulsion – понуждение

– concealment – сокрытие, укрывательство; утаивание, умалчивание

– duress – принуждение

– fiduciary relationship – фидуциарные отношения

– fraud – обман; мошенничество

– liable – подлежащий ответственности

– material fact – существенный факт

– misrepresentation – введение в заблуждение; искажение фактов

– mutual assent – обоюдное согласие, совпадение намерений сторон

– nondisclosure – неоглашение, нераскрытие

– rescission – аннулирование, расторжение, прекращение

– undue influence – злоупотребление влиянием; недолжное влияние

Each party to a contract is protected from the chicanery of the other or from certain mistakes that may have crept into their agreement and destroyed mutual assent. If mutual assent has been destroyed, the contract is said to be a defective agreement, and that party is no longer bound to the terms of the agreement. A defective agreement can arise as a result of fraud, misrepresentation, mutual mistake, duress, or undue influence.

A wrongful statement, action, or concealment pertinent to the subject matter of a contract knowingly made to damage the other party defines fraud. If proved, fraud destroys any contract and makes the wrongdoer liable (i.e., legally responsible) to the injured party for all losses that result.

To destroy mutual assent on a claim of active or passive fraud, the complaining, or innocent, party must prove the existence of five elements:

1. The complaining party has to show that the other party made a false representation about some material fact (i.e., an important fact, a fact of substance) involved in the contract. A material fact is very crucial to the terms of the contract.

2. It must be demonstrated that the other party made the representation knowing of its falsity.

3. It must be revealed that the false representation was intended to be relied upon by the innocent party.

4. The complaining party must demonstrate that there was a reasonable reliance on the false representation.

5. It must be shown that the innocent party actually suffered some loss by relying on the false representation after entering the contract.

When one party to a contract makes a false statement intended to deceive the other party and thus leads that party into a deceptively based agreement, active fraud occurs.

To be fraudulent, statements must involve facts.

In contrast, passive fraud, which is generally called concealment or nondisclosure, occurs when one party does not offer certain facts that he or she is under an obligation to reveal. If this passive conduct is intended to deceive and does, in fact, deceive the other party, fraud results.

A fiduciary relationship is a relationship based upon trust. Such a relationship exists between attorneys and clients, guardians and wards, trustees and beneficiaries, and directors and a corporation. If one party is in a fiduciary relationship with another party, then an obligation arises to reveal what otherwise might be withheld when the two parties enter an agreement.

A false statement made innocently with no intent to deceive is called misrepresentation. Innocent misrepresentation makes an existing agreement voidable, and the complaining party may demand rescission. Rescission means that both parties are returned to their original positions before the contract was entered into. Unlike cases based on fraud, which allow rescission and damages, cases based on innocent misrepresentation allow only rescission and not money damages.

When there has been no real meeting of the minds because of a mistake, mutual assent was never achieved and the agreement may be rescinded. As in misrepresentation, mistake permits rescission.

Some mutual mistakes are universally accepted as grounds for rescission. Others can give rise to lawsuits but not in all courts or in all jurisdictions. Among them are:

1. Mistakes as to Description. When both parties are mistaken in the identification and description of subject matter, a mutual mistake exists, and rescission will be granted.

2. Mistakes as to Existence. Proof that the subject matter had been destroyed before agreement was made also gives grounds for rescission. The agreement would be voidable if it were proved that just before acceptance the subject matter had been destroyed.

3. Mistakes as to Value. When two parties agree on the value of the subject matter and later find that they were both mistaken, a mutual mistake of opinion, not of fact, has occurred. Mutual mistakes of opinion are not grounds for rescinding a contract.

4. Mistakes Through Failure to Read a Document. Failure to read a document or the negligent reading of a document does not excuse performance on the ground of a mistaken understanding of the document's contents.

5. Mistakes of Law. Misunderstandings of existing laws do not give grounds for rescission; in other words, ignorance of the law is no excuse. Rescission may be allowed, however, when mistakes have related to the law of another jurisdiction.

Duress and undue influence rob a person of the ability to make an independent, well-reasoned decision to enter a contractual relationship freely. Duress may be viewed as an action by one party that forces another party to do what need not otherwise be done. Duress forces a person into a contract through the use of physical, emotional, or economic threats. In contrast, undue influence involves only the use of excessive pressure, and also requires the existence of a confidential relationship. Undue influence should not be confused with persuasion or a subtle form of inducement.

Either violence or the threat of violence against an individual or that person's family, household, or property is physical duress. Emotional duress arises from acts or threats that would create emotional distress in the one on whom they are inflicted.

A threat of a business nature that forces another party without real consent to enter a commercial agreement is called economic duress, or business compulsion. The court will rule the contract voidable on grounds of economic duress if the plaintiff can prove the existence of three elements:

1. The complaining party must first show that the other party was responsible for placing the complainant in a precarious economic situation and that the other party acted wrongfully in doing so.

2. The complainant must also show that there was no alternative other than to submit to the wrongful contractual demands of the party.

3. The innocent party must also show that he or she acted reasonably in entering the contract.

Exercise 1. Comprehension questions:

1. In what cases the wrongful statement is not a fraud?

2. What is the main difference between active fraud and passive fraud?

3. What is fiduciary relationship?

4. What does rescission mean?

5. What are the kinds of mutual mistakes?

6. What is the difference between duress and undue influence?

7. What do duress and undue influence have in common?

8. What does undue influence require?

9. Are persuasion and subtle inducement considered to be undue influence?

Exercise 2. Find in the text English equivalents to the following:

Понуждение; укрывательство; принуждение; фидуциарные отношения; мошенничество; существенный факт; введение в заблуждение; искажение фактов; обоюдное согласие, совпадение намерений сторон; злоупотребление влиянием; недолжное влияние.

Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:

Обоюдное согласие сторон; расторжение договора по обоюдному согласию; изменение отдельных пунктов договора; лицо, уполномоченное собственником; предусмотрены любые формы взаимозачетов; вправе изменить размер платы; критерии ничтожности и оспоримости сделок; заинтересованное лицо; отсутствие согласия; нарушение прав и законных интересов; отсутствие вещных прав; неуполномоченное лицо; конклюдентные действия; распространяется на отношения; оспариваемый договор.

Exercise 4. Be ready to talk on one of the following topics:

1. List the elements that must be proved to establish fraud.

2. Identify situations that can give rise to claims of passive fraud.

3. Distinguish between fraud and misrepresentation.

4. Discuss the difference between unilateral and bilateral mistakes.

5. Judge which types of mistakes provide appropriate grounds for getting out of a contract.

6. Differentiate among physical, emotional, and economic duress.

Exercise 5. Make up your own dialog on the case: In Weaver v. American Oil Company, the Indiana Supreme Court held that clauses exculpating an oil company from liability for its negligence and obligating the station operator to indemnify the oil company for damages attributable were unconscionable:

The facts reveal that Weaver had left high school after one and a half years and spent his time, prior to leasing the service station, working at various skilled and unskilled labor oriented jobs. He was not one who should be expected to know the law or understand the meaning of technical terms. The ceremonious activity of signing the lease consisted of nothing more than the agent of American Oil placing the lease in front of Mr. Weaver and saying «sign», which Mr. Weaver did. There is nothing in the record to indicate that Weaver read the lease; that the agent asked Weaver to read it; or that the agent, in any manner, attempted to call Weaver's attention to the «hold harmless» clause in the lease. Each year following, the procedure was the same…The evidence also reveals that the clause was in fine print and contained no title heading which would have identified it as an indemnity clause.