Сущность, характеристика и статус договоров

 

Нормы общих положений гражданского права (раздел I ГК РФ, глава 9 «Сделки») и института обязательственного права (раздел III ГК РФ), а именно, нормы субинститута общих положений договора (главы 27, 28, 29 ГК РФ), определяют, что договор представляет собой соглашение двух или нескольких лиц об установлении, изменении или прекращении гражданских прав и обязанностей. Субъекты права свободны в определении условий, решении вопросов заключения договора и в выборе партнеров. Заключение договора проходит две стадии: 1) оферта (предложение заключить договор); 2) акцепт (согласие заключить договор). Договор может быть заключен в устной или письменной форме.

 

 

List of key terms and word combinations:

– contract of record – договор, облеченный в публичный акт

– executed contract – договор с исполнением в момент заключения

– executory contract – договор с исполнением в будущем

– express contract – явно выраженный договор

– implied‑in‑fact contract – подразумеваемый договор

– imlied‑in‑law contract – квази‑договор (вытекающий из предписаний закона)

– obligee – лицо, по отношению к которому принято обязательство; кредитор по обязательству

– obligor – лицо, принявшее на себя обязательство; должник по обязательству, дебитор

– privity – имущественные отношения (основанные на договоре, правопреемстве и других личных отношениях)

– promisee – кредитор по договору

– promisor – должник по договору

– quasi‑contract – квазидоговор

– unenforceable contract – договор, не могущий быть принудительно осуществленным в исковом порядке

– unilateral contract – односторонняя сделка

– valid contract – надлежаще оформленный, надлежаще совершенный договор

– voidable contract – оспоримая сделка

– void contract – не имеющая юридической силы, ничтожная сделка

 

A contract is an agreement based on mutual promises between two or more competent parties to do or to refrain from doing some particular thing that is neither illegal nor impossible. The agreement results in an obligation or a duty that can be enforced in a court of law.

The contracting party who makes a promise is known as the promisor; the one to whom the promise is made is the promisee. The party who is obligated to deliver on a promise or to undertake some act is called the obligor. The contracting party to whom the obligor owes an obligation is called the obligee.

A legally complete contract will arise between two parties when all six elements of a contract are present: offer, acceptance, mutual assent, capacity, consideration, and legality. If any one of the six elements is missing, the transaction is not a legally complete contract.

1. 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 the offerer. The person to whom the offer is made is the offeree. Making the offer is actually the first step in creating the contractual relationship between the two parties. The offer must be seriously intended, clear and definite, and communicated to the offeree.

2. In most cases, only the specifically identified offeree has the right to accept an offer. Acceptance means that the offeree agrees to be bound by the terms set up by the offerer in the offer. In many situations, if the offeree changes any of those terms, the acceptance is not really an acceptance but a counteroffer.

3. If a valid offer has been made by the offerer and a valid acceptance has been made by the offeree, then the parties have agreed to the terms, and mutual assent exists between them. Mutual assent is sometimes called a meeting of the minds.

4. Capacity is the legal ability to enter into a contractual relationship. The law has established a general presumption that anyone entering a contractual relationship has the legal capacity to do so.

5. Consideration, i.e. the mutual exchange of benefits and sacrifices, is the thing of value promised to one party in exchange for something else of value promised by the other party. This exchange of valued items or services binds the parties together. If no consideration passes between the parties, then no contract exists.

6. The final element of a binding contract is legality. Parties cannot be allowed to enforce a contract that involves doing something that is illegal. Some illegal contracts involve agreements to commit a crime or to perform a tort. Other activities that are neither crimes nor torts have been made illegal by specific statutes. Among these activities are usurious agreements, wagering agreements, unlicensed agreements, unconscionable agreements, etc.

All contracts are agreements, but not all agreements are contracts. An agreement may or may not be legally enforceable. For example, an agreement to take a friend to a football game would not be legally enforceable because the friend has not given anything in exchange for that promise. To be enforceable, an agreement must conform to the law of contracts.

The general rule of contract law is that the parties to a contract must stand in privity to one another. Privity means that both parties must have a legally recognized interest in the subject of the contract if they are to be bound by it. Outside parties who do not have such an interest in the subject matter of the contract may not be bound by it. Their right to sue in the event of breach (i.e., broken or violated) of contract would also be called into question. An exception to the general rule of privity exists in cases involving warranties and product liability.

Contractual characteristics are divided into four different categories:

• valid, void, voidable, and unenforceable;

• unilateral and bilateral;

• express and implied; and

• informal and formal.

Any given contract could be classifiable in all four ways. Thus, a single contract could be said to be valid, bilateral, express, and formal.

A valid contract is one that is legally binding and fully enforceable by the court. In contrast, a void contract is one that has no legal effect whatsoever. A contract to perform an illegal act would be void. A voidable contract is one that may be avoided or canceled by one of the parties. A contract made by minors and one that is induced by fraud or misrepresentation are examples of voidable contracts. An unenforceable contract is one that, because of some rule of law, cannot be upheld by a court of law. An unenforceable contract may have all the elements of a complete contract and still be unenforceable.

A unilateral contract is an agreement in which one party makes a promise to do something in return for an act of some sort. In contrast, a bilateral contract is one in which both parties make promises. A bilateral contract comes into existence the moment the two promises are made. A breach of contract occurs when one of the two parties fails to keep the promise.

A contract can be either express or implied. An express contract requires some sort of written or spoken expression that indicates the desire of the parties to enter the contractual relationship. An implied contract is created by the actions or gestures of the parties involved in the transaction.

In some situations, laws require certain types of contracts to be in writing. A written contract does not have to be a long, formal, preprinted agreement. A written contract may take the form of a letter, sales slip and receipt, notation, or memorandum. A written contract may be typed, printed, scrawled, or written in beautiful penmanship.

One who knowingly accepts benefits from another person may be obligated for their payment, even though no express agreement has been made. Agreements of this type can be either implied in fact or implied in law.

Contracts implied by the direct or indirect acts of the parties are known as implied‑in‑fact contracts.

An implied‑in‑law contract can be imposed by a court applying reasons of justice and fairness when someone is unjustly enriched at the innocent expense of another. It is used when a contract cannot be enforced or when there is no actual written, oral, or implied‑in‑fact agreement. An implied‑in‑law contract is also called a quasi‑contract. It does not result from the mutual assent of the parties such as an express or implied‑in‑fact contract.

Under common law principles, a formal contract differs from other types in that it has to be written; signed, witnessed, and placed under the seal of the parties; and delivered.

A special type of formal contract – contract of record – is not a contract in the true sense of the word because it is court created, and it does not have all the elements of a valid contract. Often, such a contract is one that has been confirmed by the court with an accompanying recorded judgment giving the successful litigant the right to demand satisfaction of the judgment.

An oral or written contract that is not under a seal or is not a contract of record is considered an informal contract (also known as a simple contract). An informal contract generally has no requirements as to language, form, or construction. It comprises obligations entered into by parties whose promises are expressed in the simplest and, usually, most ordinary nonlegal language.

After a contract has been negotiated, all obligations must then be satisfactorily performed in order for the contract to be executed. A contract that has not yet been fully performed by the parties is called an executory contract. When a contract's terms have been completely and satisfactorily carried out by both parties, the contract becomes an executed contract. Such a contract is no longer an active agreement and is valuable only if a dispute about the agreement occurs.

 

Exercise 1. Comprehension questions:

1. How are the two contracting parties called?

2. What are the requirements of an offer?

3. Can it be called an acceptance when the offeree changes the terms?

4. What does the mutual assent suppose?

5. In what cases do people have the right to abandon their contracts?

6. What is a consideration and why is it an important element of a contract?

7. What makes the contract illegal?

8. Can quasi‑contract be called a contract in the true sense of the word?

9. What is the contract of record?

 

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

Явно выраженный договор; подразумеваемый договор; лицо, по отношению к которому принято обязательство; кредитор по обязательству; лицо, принявшее на себя обязательство; должник по обязательству, дебитор; кредитор по договору; должник по договору; договор, не могущий быть принудительно осуществленным в исковом порядке; оспоримая сделка; ничтожная сделка.

 

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

Возмездный договор; безвозмездный договор; публичный договор; предварительный договор; договор в пользу третьего лица; толкование договора; простая письменная форма договора.

 

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

1. Identify the six elements of a contract.

2. Distinguish contracts from other agreements made between different parties.

3. Explain the nature of valid, void, voidable, and unenforceable contracts.

4. Contrast unilateral and bilateral contractual arrangements.

5. Outline the difference between express and implied contracts.

6. Contrast the nature of a formal contract with that of an informal contract.

7. Explain how executory contracts differ from executed contracts.

 

Exercise 5. Make up your own dialog on the case: In Kunian v. Development Corp. of America, the seller of plumbing and heating materials entered into an installment contract with the buyer. Several months later the buyer was $38,000 behind in payments for installments of goods delivered. After the seller demanded assurance of performance from the buyer, the buyer promised that he would pay the outstanding indebtedness if the seller would continue his performance. When a month passed and the buyer had made no further payments, the seller informed the buyer that no further deliveries would be made unless the buyer deposited in escrow a sufficient amount of cash to pay for the delivered goods. The court held that the seller had «reasonable ground for insecurity» and that his suspension of performance was justified.

 

Exercise 6. Resume in industry buzz:

Types of Ks

1. Express or Implied a. Express is statemts of mutual assent; willingness to enter into a K

b. Implied is no statements; conduct

2. Bilateral, Unilateral or Code a. Code is sale of goods & no bi/uni distinction b. Bilateral formed w/mutual promises of parties, perf. of both fully executory c. Unilateral promise 1 side & fully executed perf. the other (K no formed until fully executed 1 side)

3. Telling if Bilateral or Unilateral a. Unilateral if offer warns only accept by act or if public offer b. Bilateral always if asks for return promise c. Offer indifferent (can't tell if promise or perf. requested) MAJ it's bilateral

 

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

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