Terms of the contract

Contracts consist of various statements, promises, stipulations, etc. grouped together under the word "terms". The terms may be expressed or implied. It is the terms of the contract which determine the extent of each party's rights and duties and the remedies available if the terms are broken are determined by the comparative importance of the terms.

Certainty. A contract may be void if the terms are not reasonably certain. In commercial transactions, the court may be prepared to enforce an ostensibly vague agreement by reference to trade custom or any previous dealing between the parties. It is possible that the parties themselves may provide the machinery for resolving an apparently uncertain terms, such as where the price of land is to be fixed by valuers appointed by the parties.

If an uncertain term is actually meaningless, then exceptionally the court may be prepared to sever the provisions if it is clearly superfluous.

Parole evidence rule. There is a general rule, "the parole evidence rule", that where a contract is embodied in a written document, then extrinsic (parole) evidence is not admissible to add to, vary, subtract from or contradict the terms of the written document. Extrinsic evidence is not confined to oral statement but can extend to written matter such as draft contracts and correspondence. This rule proved to be rather inconvenient and even unjust and the courts have evaded it by creating a number of exceptions.

The main exceptions to the parole evidence rule are: 1) custom; 2) operation of the contract; 3) validity; 4) evidence as to supplementary terms; 5) rectification; 6) collateral contract.

Notes

terms – условия договора

stipulation – условие, оговорка; соглашение, пункт соглашения

express terms – прямо выраженные или явно выраженные условия

implied terms – подразумеваемые условия

extent – объем, диапазон, степень, размер

break the terms – нарушать условия

remedy, remedies – средство судебной защиты; средство защиты права

certainty – несомненность; несомненный факт; уверенность

transaction – сделка

enforce – принудительно осуществлять/взыскивать в судебном порядке; обеспечивать соблюдение» исполнение; принудительно приводить в жизнь; обеспечивать санкцией; принуждать

enforce an agreement –обеспечивать соблюдение/выполнение договора

trade custom – торговый обычай

dealing – сделка, операция

provide the machinery for – обеспечивать механизм для чего-л.

apparently – очевидно, явно

sever – отделять/отделить; разрывать/разорвать

provision – условие, постановление, положение договора

superfluous – излишний

parole evidence – устные доказательства (не содержащиеся в документе за печатью)

be embodied in a written document – быть воплощенным в письменном документе

extrinsic – посторонний; не присущий, несвойственный

vary – менять, изменять

sabtract – вычитать, вычесть; неправомерно отказать в предоставлении прав или имущества

contradict – противоречить, опровергать

draft contract – проект контракта

operation of the contract – юридическая сила/юридическое действие контракта

validity – юридическое действие/срок действия

supliinentary terms – дополнительные условия

rectification – исправление, поправка; внесение поправки, исправления; устранение ошибки

collateral contract –дополнительный контракт

Exercises:

1. Find the equivalents of the following word-combinations:

1. определять средства судебной защиты; 2. быть недействительным (о контракте); 3. коммерческая сделка; 4. обеспечивать соблюдение контракта; 5. неопределенные условия; 6. устное заявление; 7. ограничиваться; 8. несправедливое правило; 9. избегать

2. Find the meaning of the following words in the text and translate the sentences with these words into Ukrainian:

statement; stipulation; remedy; machinery; provision

3. Find in the text the synonyms of the following words and translate the sentences with these words into Ukrainian:

deal/bargain

condition/provision

excessive/unnecessary

to dispute/oppose

to deduct/takeaway

4. Make your own sentences using the following words and word-combinations and translate them into Ukrainian:

to enforce an agreement; to determine remedies; to break the contract terms; to provide information; draft contract; operation of contract

5. Answer the following questions:

1. What does a contract consist of?
2. What do the terms of a contract determine?
3. When can a contract be void?
4. How can an ostensibly vague agreement be enforced?
5. What is a "Parole Evidence Rule"?
6. What are the main exceptions to the parole evidence rule?

Text 6

REPRESENTATION AND TERMS

Statements made by the parties in the course of negotiations leading up to the formation of the contract are classified by the court as either representations or terms, A representation is a statement which induces the contract but does not form part of it, whereas a term is a promise or undertaking that is a part of the contract itself. If a representation proves to be false, the remedy will lie in an action for misrepresentation, whereas if a term is broken the remedy will lie in an action for breach of contract. In some cases, a misrepresentation later becomes incorporated into the contract as a term. In such a case the injured party will have two causes of action; one for misrepresentation and the other for breach.

Whether a statement is a representation or a term is primarily a question of intention. If the parties have indicated that a statement is to be regarded as a term, the court will implement their intention. In other cases, the following guidelines may be applied:

1. A statement is not likely to be a term if the person making the statement asks the other party to check or verify it, as where the seller of a boat stated that it was sound but asked the buyer to have it surveyed. If the statement is made with intention of preventing the other from finding a defect and succeeds in this, the court may consider it to be a term.

Where there is a distinct interval of time between the making of the statement and conclusion of the contract, this may indicate that the patties do not intend the statement to be a term.

A statement is likely to be a term if it is such that the injured party would not have entered into the contract had it not been made.

Where one of the parties possesses superior knowledge and skill relating to the subject-matter, the court may conclude that any statement made by such a party is a term.

Where the agreement has been reduced to a written document, statements appearing in the written contract will normally be regarded as terms. Subject to the matters discussed above, statements excluded from the written contract are likely to be regarded as representations. Nevertheless, the court will look to the intention of the parties to see whether they intended a contract partly written and partly oral.

Notes

statement – заявление, изложение, утверждение

representation – только сообщение/информация

induce – вызывать; индуктировать; побуждать

undertaking – обязательство, гарантия

undertake – обязываться; брать на себя

remedy – средство судебной защиты; средство защиты права

action – иск; судебное преследование

misrepresentation – введение в заблуждение

incorporate – включать; инкорпорировать, предоставлять права юридического лица

injured party – пострадавшая сторона

cause of action – основание для предъявления иска

have a cause of action – иметь основания для предъявления иска

intention – намерение, умысел, цель

indicate – показывать, указывать

implement – выполнять, осуществлять

guideline – директива

verify – проверять, выверять, сверять

verification – проверка, подтверждение

survey – осматривать

conclusion of a contract – заключение договора

conclude a contract – заключать договор

subject-matter – предмет спора, договора и т.д.

conclude (about) – решать, делать вывод

be reduced to written document – быть составленным в качестве письменного документа

Exercises:

1. Find the equivalents of the following word-combinations:

1. заключение контракта; 2. в ходе переговоров; составлять часть контракта; 3. обязательство; 4. введение в заблуждение; 5. средство судебной защиты; 6. иметь основания для предъявления иска; 7. выполнять намерения; 8. пострадавшая сторона

2. Find the definitions:

1. intention a. the process of taking a case or a claim to a court of law

2. undertaking b. something that you plan to do

3. to implement statement c. to find out if a fact, statement, etc., is true or correct

4. to survey d. to inspect or examine the condition of something

5. action e. a promise to do something

6. to verify f. to take action or make changes that you have officially

decided should happen

3. Fill in the gaps with prepositions where necessary and translate the sentences into Ukrainian:

____ the cause of negotiations; the remedy will lie ____ an action ____ misrepresentation; a misrepresentation later becomes incorporated ____ the contract; the injured party will have two causes ____ action; one ____ misrepresentation and the other ____ breach; the statement is made ____ intention ____ preventing the other ____ finding a defect; succeeds ____ the agreement has been reduced ____ a written document

4. Answer the following questions:

1. What is a statement?

2. What is a representation?

3. What will be the remedy if a representation proves to be false?

4. What will be the remedy if a term of a contract is broken?

5. What causes of action can an injured party have if misrepresentation is incorporated into the contract as its term?

6. Give examples when a statement is likely to be a term of a contract.

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