Certain formalities are usually followed in the formation of other than the simplest kinds of written agreements. While a law may necessitate nothing more than the briefest written disclosure of promises, conditions, and terms, plus the signature(s) of the obligated party or parties, usually contracts in general commercial and consumer use are carefully written, researched for legal compliance, and signed. Furthermore, leases and contracts for the sale of real property may have additional requirements of content and formality that extend beyond these formalities.
Written agreements should be, but need not be, signed by both parties. If signed by only one party, any obligation on the agreement would be limited to that party alone.
Witnesses are required in the signing of a will, but in most other documents their signatures are at the option of the contracting parties. To ensure that no misunderstanding will arise as to the acceptance and signing of a written agreement, the use of witnesses is advised. Certain official documents, such as a certificate of title to a motor vehicle, require the owner's signature and an acknowledgment by a notary public when transferring ownership. The notary witnesses the signing of the document and then acknowledges this act by signing the document and adding the official seal to it. A notary is not authorized to read the document being signed and may be prevented from doing so. The notary's legal authority includes the act of acknowledging another's signature to be the result of this person's own free act and deed before the notary.
Some jurisdictions still make use of a seal when a formal contract is signed.
As a protection to lenders and to persons selling goods through installment contracts and the like, the law provides that certain documents be recorded in a public office for inspection by anyone wishing to know about them. For example, when money is loaned on a motor vehicle, the lender may record that transaction in the appropriate public office to protect his or her interest in the vehicle.
Exercise 1. Comprehension questions:
1. What are the forms of agreements?
2. What are the most important rules involving written contracts?
3. What are the exceptions to the parol evidence rule?
4. Explain what condition precedent is.
5. When is the use of witnesses advised?
6. When is acknowledgement by a notary public required and what for?
Exercise 2. Find in the text English equivalents to the following:
Подтверждение; попечитель над наследственным имуществом; требование представления наилучших доказательств; предварительное условие; правило равного достоинства; лишение стороны права возражения по причине ее предшествующего поведения; исполнитель завещания; правило, исключающее устные доказательства; частичное исполнение.
Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:
Письменная форма договора; устная форма договора; простая письменная форма; государственная регистрация договора; нотариальная форма договора.
Exercise 4. Be ready to talk on one of the following topics:
1. Identify the types of agreements that must be in writing.
2. List the essential information that should be included in a written memorandum.
3. Explain what is meant by the parol evidence rule.
4. Compare the best evidence rule with the equal dignities rule.
5. Illustrate some methods of writing a signature and discuss the use of a seal.
Exercise 5. Make up your own dialog on the case: In American parts Co. v. American Arbitration Association, the parties had initially reached an oral understanding. The seller had thereafter sent a conforming form which purportedly recited the contract terms (including quantity), added an arbitration clause, and provided that the entire form would become controlling if the "buyer accepts delivery of all or any part of the goods herein described." The buyer allegedly refused to accept some of the goods, and the seller then sought arbitration. The buyer sought a stay, and the seller moved for summary judgment. In denying summary judgment the court assumed that a conforming form can constitute an "acceptance" even where there has already been an oral offer and acceptance. As a corollary, certain additional terms in the confirmation may become (retroactively, as it were) a part of the original contract.
Unit 9
Third Parties in Contract Law
Третьи лица в договорном праве
Договором в пользу третьего лица признается договор, в котором стороны установили, что должник обязан произвести исполнение не кредитору, а указанному или не указанному в договоре третьему лицу, имеющему право требовать от должника исполнения обязательства в свою пользу (статья 430 ГК РФ).
List of key terms and word combinations:
– assignee – правопреемник; цессионарий, уполномоченный; агент; назначенное лицо
– assignment – передача права; уступка требования; цессия; перевод долга; отчуждение, ассигнование; предназначение, назначение
– assignor – лицо, совершающее передачу (вещи, права); цедент
– beneficiary – лицо, в интересах которого осуществляется доверительная собственность; бенефициарий; выгодоприобретатель
– creditor beneficiary – бенефициар-кредитор
– delegation – передача, делегирование (полномочий), перевод долга
– donee beneficiary – дарополучатель, лицо, распределяющее наследственное имущество по доверенности
– incidental beneficiary – случайный бенефициар
– intended beneficiary – намеренный; умышленный бенефициар
– novation – новация; перевод долга; цессия прав по обязательству
– obligor – лицо, принявшее на себя обязательство; должник по обязательству, дебитор
– warranty – гарантия, ручательство
A third party is a person who may, in some way, be affected by a contract but who is not one of the contracting parties. A third party, also known as an outside party, is at times given benefits from a contract made between two other parties. A third party receiving benefits from a contract made by others is known as a beneficiary. Although not obligated by the agreement made between those in privity, third parties may have the legal right to enforce the benefits given them by such agreements.
A beneficiary in whose favor a contract is made is an intended beneficiary. With exceptions in some jurisdictions, an intended beneficiary can enforce the contract made by those in privity of contract. Those who are most frequently recognized to be intended beneficiaries and who have the right to demand and enforce the benefits promised are creditor beneficiaries, donee beneficiaries, and insurance beneficiaries.
A creditor beneficiary is an outside third party to whom one or both contracting parties owe a continuing debt of obligation arising from a contract. Frequently, the obligation results from the failure of the contracting party or parties to pay for goods delivered or services rendered by the third party at some time in the past.
A third party who provides no consideration for the benefits received and who owes the contracting parties no legal duty is known as a donee beneficiary. However, the contracting parties owe the donee beneficiary the act promised; if it is not forthcoming, the donee beneficiary may bring suit. The consideration that supports this type of agreement is the consideration exchanged by the parties in privity to the contract.
An individual named as the beneficiary of an insurance policy is usually considered a donee beneficiary. The beneficiary does not have to furnish the insured with consideration to enforce payment of the policy. In some cases, an insurance beneficiary may also be a creditor beneficiary. This situation occurs in consumer or mortgage loans when the creditor requires the debtor to furnish a life-term insurance policy naming the creditor as the beneficiary. The policy will pay the debt if the debtor dies before the loan has been repaid.
An incidental beneficiary is an outside party for whose benefit a contract was not made but who would substantially benefit if the agreement were performed according to its terms and conditions. An incidental beneficiary, in contrast to an intended beneficiary, has no legal grounds for enforcing the contract made by those in privity of contract.
When people enter into contracts, they receive rights and they incur duties that may be transferred to others. An assignment is a transfer of a contract right. A delegation is a transfer of a contract duty.
Three parties are associated with any assignment. Two of the parties are the ones who entered the original agreement. The party who assigns rights or delegates duties is the assignor. The outside third party to whom the assignment is made is the assignee. The remaining party to the original agreement is the obligor.
Consideration is not required in the creation of an assignment. When there is no supporting consideration, however, the assignor may repudiate the assignment at any time prior to its execution.