CHAPTER 3: Export and Import Transactions Pre-session task: Find TWO definitions of a contract (use any English sources, but please cite them) plus requirements for a contract to be valid (essential elements) and write a short comparison of 150 words (not counting the cited definitions). Use suitable linking expressions, e.g. While Definition A focuses on, Definition B stresses Although both definitions mention, Definition A concentrates on Unlike Definition A, which specifies, Definition B gives examples of Created by the team of authors. Seminar Session: 1. Contracts - essential elements and breach of contract Fill the gaps in the text with the following expressions: acceptance enforced assent entitled defective sue subject-matter determine offeror price The law of contracts reflects the extent to which society will bind a promisor to his or her promises. A contract is a special type of agreement that the law will enforce. The elements of a contract are mutual (1) of the parties, contractual capacity, consideration, and legal (2). If these elements all exist, the contract will generally be (3). The mutual assent of the parties is generally evidenced through an offer and (4). An offer reflects the intention of the (5) to create a power in the offeree to create a legally binding agreement through acceptance. The offer is required to be definite, and it must be communicated to the offeree to be valid. Consideration is the (6) of the contract. In keeping with its function to facilitate exchange, contract law will not enforce contracts where there is no consideration because no exchange is taking place. As a general rule, the courts will not examine the bargain to (7) whether the consideration is sufficient. Many commercial agreements contain express provisions for remedies. For example, in a contract for the sale of goods, the buyer may be (8) to require the seller to reduce the price or replace (9) items. Fundamental breach means any breach to a contract that is very serious. Any fundamental breach allows a party to 1
terminate the performance of a contract. This also entitles a party to (10) for damages. Based on: Chromá, Marta et al. /New Introduction to Legal English, Revised Edition. Volume I./ Univerzita Karlova, 2011. 2. a) Translate into English: závazný vynutitelný navrhnout smlouvu uzavřít smlouvu splnit smlouvu porušit smlouvu ukončit/vypovědět smlouvu smluvní strany předmět smlouvy smluvní podmínky v souladu se smlouvou b) Translate into Czech: contract of sale contract of carriage insurance contract consideration clause remedy damages c) Explain: fundamental breach remedy damages to terminate the contract Created by the team of authors. 3. Listen to the following podcast and notice important vocabulary connected to International Trade: http://www.youtube.com/watch?v=jqqsfezuqxo Match the English and Czech terms: 1. Merchandise (freight/cargo) 2. Certificate of manufacture 3. Pro forma invoice A. Pro-forma faktura B. Akreditiv C. Zboží 2
4. Letter of credit 5. Bill of lading 6. Shipment 7 Bonded warehouse 8. Customs duty D. Osvědčení výrobce/osvědčení o shodě E. Zásilka/náklad F. Celní skladiště G. Clo H. Konosament, nákladní list Created by the team of authors. 4. Reading: Contract of sale - shipment clause a) Read the clause from a contract and answer below. 2 a The buyer shall nominate the date of shipment. The buyer shall give the seller at least two weeks notice of probable readiness of vessel(s) and of the approximate quantity to be loaded. b Upon notification of probable readiness of vessel(s),_the seller shall nominate a port for the loading of goods. c Shipment is required no later than 22 May 2012. 1 Which word means ship or boat? 2 What does the clause deal with? 3 What words are used to refer to each party to the contract? 4 What do you think probable readiness means? 5 What does the word shall mean in the context of this clause? b) Complete these lists of obligations using your own words. Buyer must: 1 2 3 Seller must: 4 Source: A. Krois-Linder, M. Firth: Introduction to International Legal English. CUP, 2008, Unit 2 3
5. Listening: Conditions and warranties You are going to hear a conversation between a lawyer (Mr Dawe) and his client (Mr McKendrick, Director of Export Threads, the seller referred to in the contract extract). Listen to them discussing the case and answer these questions. 1. What is the name of the buyer in this dispute? 2 Why does Export Threads want to terminate the contract? 3 Does a breach of contract automatically allow one party to terminate the agreement? 4 Does the lawyer think that Export Threads has a strong case? 5 What legal grounds might Export Threads have for terminating the contract? Source: A. Krois-Linder, M. Firth: Introduction to International Legal English. CUP, 2008, Unit 2 6. Writing: Email of advice a) This email summarises the discussion between the lawyer, Mr Dawe, and his client. Complete the blanks with appropriate sentence openers: I am writing to The legal issue here is whether I will write a letter to Please do not hesitate to contact me Thank you for coming to see me You told me that You now wish to Recent case law suggests that I will request Dear Mr McKendrick on 30 May when we discussed the termination of your contract with Drexler Inc. summarise our discussion and to confirm your instructions. Drexler Inc. agreed to purchase a large quantity of goods from your firm, Export Threads. Under clause 2a of the contract; Drexler were to give you two weeks' notice of the date of shipment so that you could arrange a port for the transportation of the goods. You were unable to arrange this because Drexler failed to let you know by the agreed date. terminate the 4
contract. or not Drexler s breach is enough to allow Export Threads to terminate the contract. If the contract term in question can be shown to be a condition, you will be able to terminate the contract without fear of damages being awarded against you. If the term is simply a warranty, you will be able to claim damages, but may not actually terminate the contract. if you do choose to terminate the contract, and if Drexler subsequently decide to sue you, the courts would rule in your favour. Your contract involves a chain of sales, and in such cases, the need for certainty is very important. You were unable to arrange the loading of the goods as a direct consequence of Drexler s breach of' clause 2a, and this term would be interpreted as a condition. Drexler Inc. outlining the above and notifying them of your intention to termonate the contract. confirmation from Drexier that they accept our interpretation both of the events and of the relevant law, and that your termination of the contract will not lead to any unnecessary legal action on their part. I will be in touch again shortly. if you have any questions. With kind regards Charles Dawe b) The email follows a standard pattern for an email of advice. Match each paragraph with its correct label. Opening paragraph Proposed action Advice Summary of the facts The legal issue(s) c) Read through the email again and highlight any phrases that would be useful in your own legal correspondence. 5
Based on: A. Krois-Linder, M. Firth: Introduction to International Legal English. CUP, 2008, Unit 2 6