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ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ

ВЫСШАЯ ШКОЛА ЭКОНОМИКИ


Нижегородский филиал

Кафедра иностранных языков

Т.П.Попова

Legal Reading

Учебно-методическое пособие по чтению для студентов


3-го курса факультета права

Часть 1

Нижний Новгород
2007 год
Кафедра иностранных языков

Т.П. ПОПОВА

Legal Reading

Учебно-методическое пособие по чтению для студентов


3-го курса факультета права

Часть 1

Нижний Новгород
2007 год

ББК 81.2 Англ-923

2
П
Попова, Т.П. Учебно-методическое пособие по чтению для студентов 3-го
курса факультета права. Часть 1/Т.П. Попова. – Н. Новгород: НФ ГУ-ВШЭ,
2007.- с.

Учебно-методическое пособие обсуждено на заседании кафедры


иностранных языков 26.06.2007, протокол № , и одобрено Учебно-
методическим советом НФ ГУ-ВШЭ.

Настоящее учебно-методическое пособие предназначено для студентов


второго и третьего курсов факультета права НФ ГУ-ВШЭ, изучающих
английский язык в качестве первого иностранного.
Основная цель пособия – обучение различным видам чтения на базе
аутентичных текстов юридической направленности, расширение активного и
пассивного словаря студентов в области юридической терминологии. Кроме
того, преследуется цель развития умения вести дискуссию в процессе
совершенствования профессионально-ориентированной устной речи
студентов. В процессе работы над предлагаемыми текстами студенты имеют
возможность познакомиться с юридическим подъязыком, отражающим
различные аспекты британской и американской правовых систем.
Первая часть пособия включает в себя 3 раздела с тремя подразделами в
каждом. Первый подраздел (Введение в тему) включает в себя учебные
тексты и различные коммуникативные задания к ним (в зависимости от целей
чтения); второй подраздел носит название «Проверь свой профессиональный
английский» (“Test your professional English”) и включает в себя ряд
лексических тестов по пройденной теме. В третьем подразделе помещены
аутентичные статьи из английских газет и журнала «Economist» под рубрикой
«Газеты пишут» (“Newspapers write”) и задания, направленные на дальнейшее
развитие компетенций чтения и говорения на профессиональные темы.
Тексты всех трех разделов охватывают основные юридические темы,
включенные в программу 3-го курса: Company Law, Contract Law, Family
Law.
Учебные материалы пособия могут использоваться на занятиях по практике
английского языка и при самостоятельной подготовке студентов.

Рецензент: доцент, к.ф.н. Ненашева Т.А.

© Попова Татьяна Петровна, 2007


© Нижегородский филиал ГУ-ВШЭ, 2007

3
I. Company law
Reading 1: Introduction to company law
This text provides an introduction to the key terms used when talking about
companies as
legal entitities, how they are formed and how they are managed.

1 Read through the text quickly and decide which of these phrases (a–f) best
expresses the topic of each paragraph (1–6).

a directors’ duties b management roles


c company definition d company health e partnership definition
e partnership definition f company formation
1 A company1 is a business association which has the character of a legal person,
distinct from its officers and shareholders. This is significant, as it allows the
company to own property in its own name, continue perpetually despite changes in
ownership, and insulate the owners against personal liability. However, in some
instances, for example when the company is used to perpetrate fraud or acts ultra
vires, the court may ‘lift2 the corporate veil’ and subject the shareholders to
personal liability.
2 By contrast, a partnership is a business association which, strictly speaking, is
not considered to be a legal entity but, rather, merely an association of owners.
However, in order to avoid impractical results, such as the partnership being
precluded from owning property in its own name, certain rules of partnership law
treat a partnership as if it were a legal entity. Nonetheless, partners are not
insulated against personal liability, and the partnership may cease to exist upon a
change in ownership, for example, when one of the partners dies.
3 A company is formed upon the issuance of a certificate of incorporation3 by the
appropriate governmental authority. A certificate of incorporation is issued upon
the filing of the constitutional documents of the company, together with statutory
forms and the payment of a filing fee. The ‘constitution’ of a company consists of
two documents. One, the memorandum of association4, states the objects of the
company and the details of its authorised capital, otherwise known as the nominal
capital. The second document, the articles of association5, contains provisions for
the internal management of the company, for example, shareholders annual
general meetings6, or AGMs, and extraordinary general meetings7, the board of
directors, corporate contracts and loans.
4 The management of a company is carried out by its officers, who include a
director, manager and/or company secretary. A director is appointed to carry out
and control the day-to-day affairs of the company. The structure, procedures and
3
work of the board of directors, which as a body govern the company, are
determined by the company’s articles of association. A manager is delegated
supervisory control of the affairs of the company. A manager’s duties to the
company are generally more burdensome than those of the employees, who
basically owe a duty of confidentiality to the company. Every company must have
a company secretary, who cannot also be the sole director of the company. This
requirement is not applicable if there is more than one director. A company’s
auditors are appointed at general meetings. The auditors do not owe a duty to the
company as a legal entity, but, rather, to the shareholders, to whom the auditor’s
report is addressed.

5 The duties owed by directors to a company can be classified into two groups. The
first is a duty of care and the second is a fiduciary duty. The duty of care requires
that the directors must exercise the care of an ordinarily prudent and diligent person
under the relevant circumstances. The fiduciary duty stems from the position of
trust and responsibility entrusted to directors. This duty has many aspects, but,
broadly speaking, a director must act in the best interests of the company and not
for any collateral purpose. However, the courts are generally reluctant to interfere,
provided the relevant act or omission involves no fraud, illegality or conflict of
interest.

6 Finally, a company’s state of health is reflected in its accounts 8, including its


balance sheet and profit-and-loss account9. Healthy profits might lead to a
bonus10 or capitalisation issue11 to the shareholders. On the other hand, continuous
losses may result in insolvency and the company going into liquidation.

1. (US) corporation
2. (US) pierce
3. (US) generally no official certificate is issued; companies are
formed by filing the articles of incorporation and the bylaws
(see below)
4. (US) articles of incorporation or certificate of incorporation
5. (US) bylaws
6. (US) annual meetings of the shareholders
7. (US) special meetings of the shareholders
8. (US) financial statements
9. (US) profit-and-loss statement or income statement
10. (US) stock dividend
11. (US) cash dividend

4
Key terms: Roles in company management
2 Some of the important roles in company management are
discussed in Reading 1 above. Which roles are mentioned?

3 Here is a more comprehensive list of roles in company


management.
Match the roles (1–10) with their definitions (a–j).

1. auditor a) appointed by a shareholder to attend and vote at a meeting in his/her


place when the shareholder is unable to attend
2. company secretary b) company director responsible for the day-to-day operation of the
company
3. director c) elected by the shareholders to manage the company and decide its
general policy
4. liquidator d) engages in developing or taking the initiative to form a company
(arranging capital, obtaining personnel, making arrangements for
filing corporate documentation)
5. managing director e) appointed by the company to examine the company’s accounts and
report to the shareholders annually on the accounts
6. official receiver f) a company’s chief administrative officer, whose responsibilities
include accounting and finance duties, personnel administration and
compliance with employment legislation, security of documentation,
insurance and intellectual property rights
7. promoter g) member of the company by virtue of an acquisition of shares in a
company
8. proxy h) officer of the court who commonly acts as a liquidator of a
company being wound up by the court
9. receiver i) appointed by creditors to oversee the repayment of debts
10. shareholder j) appointed by a court, the company or its creditors to wind up the
company’s affairs

4 Company types (UK) The table below contains information about


five types of common UK business associations, covering the aspects
of liability of owners, capital contributions and management. In
many jurisdictions in the world, there are entities which share some
or all of these characteristics. Add these names to the table.

a private limited company (Ltd)


b general partnership
c public limited company (PLC)
d limited partnership
e sole proprietorship

5
Entity Liability of owners Capital contributions Management
1)_______ Unlimited personal liability for the Capital needed is contributed Business is managed by the sole
obligations of the business by sole proprietor. proprietor.
2)_______ Generally no personal liability of No minimum share capital Company is managed through its
the members for obligations of the requirement. However, capital managing director or the board of
business can be raised through the directors acting as a whole.
issuance of shares to members
or through a guarantee.

3)_______ No personal liability; liability is The minimum share capital of Company is managed by the
generally limited to shareholder £50,000 is raised through board of directors; shareholders
contributions (i.e. consideration issuance of shares to the public have no power to participate in
for shares). and/or existing members. management.

4)_______ Unlimited personal liability of the Partners contribute money or The partners have equal
general partners for the obligations services to the partnership; management rights, unless they
of the business they share profits and losses. agree otherwise.

5)_______ Unlimited personal liability of the General and limited partners The general partner manages the
general partners for the obligations contribute money or services business, subject to any
of the business; limited partners to the limited partnership; they limitations of the Limited
generally have no personal share profits and losses. Partnership Agreement.
liability.

Reading 2: Memorandum of association

An important document in company formation is the memorandum of


association (UK) or articles/certificate of incorporation (USA). This document
sets forth the objects of the company and its capital structure; as such, it
represents a legally binding declaration of intent to which the members of the
company must adhere.

5 Below is an extract from the articles of incorporation of a US


company. Read through the text quickly and tick the issues it
addresses.
1 appointing members of the board of directors
2 changing corporation bylaws
3 procedures for holding a vote of the shareholders
4 stipulations for keeping corporation records
The power to alter, amend or repeal the bylaws or to adopt new bylaws shall
be vested in the Board of Directors; provided, however, that any bylaw or
amendment thereto as adopted by the Board of Directors may be altered,
amended or repealed by a vote of the shareholders entitled to vote for the
5 election of directors, or a new bylaw in lieu thereof may be adopted by vote of
such shareholders. No bylaw which has been altered, amended or adopted by
such a vote of the shareholders may be altered, amended or repealed by vote of
the directors until two years shall have expired since such action by vote of
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such shareholders. [...]
The Corporation shall keep as permanent records minutes of all meetings of its
shareholders and directors, a record of all action taken by the shareholders or
10 the directors without a meeting and a record of all actions taken by a
committee of the directors in place of the Board of Directors on behalf of the
Corporation. The Corporation shall also maintain appropriate accounting
records. The Corporation, or its agent, shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders, in alphabetical order, by class of shares, showing
15 the number and class of shares held by each.

6 Read the text again and decide whether these statements are true
or false.

1 The board of directors only has the power to change the bylaws if the
shareholders in turn have the power to amend any changes made by the
board of directors.

2 The board of directors is not permitted at any time to change any bylaw
which has been altered by a vote of the shareholders.

3 Records must only be kept of decisions reached by shareholders and


directors in the course of a meeting.
4 Records of the shareholders must list the number of shares they own.

7 For each of these words or phrases, find the italicised word(s) in


the text on
that most closely matches its meaning.

1 passed
2 who have the right to
3 instead
4 on condition
5 cancelled
6 revised
7 given to

Language use: shall and may


8 Read through the text again, noting how shall and may are used.
1 Which of the following words most closely matches the meaning of shall in
each case?
7
a) will b) should c) must
2 Which of the following words most closely matches the meaning of may in
each case?
a) might b) can c) could

In legal documents, the verb shall is used to indicate obligation, to express a


promise or to make a declaration to which the parties involved are legally
bound. This use differs from that in everyday speech, where it is most often
used to make offers (Shall I open the window? ) or to refer to the future
(I shall miss you).
In legal texts, shall usually expresses the meaning of ‘must’ (obligation):
Every notice of the meeting of the shareholders shall state the place, date
and hour.
or ‘will’ (in the sense of a promise):
The board of directors shall have the power to enact bylaws.
Shall can also be used to refer to a future action or state, similar to the
future formed with will in everyday speech:
... until two years shall have expired since such action by vote of such
shareholders.
Another verb commonly found in legal documents is may, which generally
expresses permission, in the sense of ‘can’:
... any bylaw or amendment thereto as adopted by the Board of Directors may
be altered, amended or repealed by a vote of the shareholders.

Speaking: Informal presentation


When speaking briefly about a topic of professional interest, experienced
speakers will organise their thoughts in advance. A simple but effective
structure divides information into three parts:

1 introductory remarks;
2 main points;
3 concluding statement.

Similarly, the main points are best limited to three, as this is easy for the
speaker to remember and for the listener to follow.
Notes for a response to the question below might look like this:
Introductory remarks
A publikt aktiebolag is the closest Swedish equivalent to a public limited company
– most common business form for major international businesses in Sweden.
Main points
1 liability: no personal liability

8
2 management: board of directors (Swedish equivalent, styrelsen) has power to
make decisions; shareholders don’t participate in management
3 needed for formation: memorandum of association (stiftelseurkund) and
articles of association (bolagsordning)

Concluding statement
An aktiebolag is similar to a public limited company, with the most significant
difference being that its shares do not need to be listed on an exchange or
authorised marketplace.

9 Which types of companies are there in your jurisdiction? Choose


one and describe it as you would for a client from another country.
In your description, refer to some of the features given in the UK
company table. Tell your client which documents must be filed to
complete the formation process. Wherever relevant, compare and
contrast your company type with a UK
business entity.

Reading 3: Limited Liability Partnership Bill


New legislation is often proposed in order to improve a situation which many
people feel
is unsatisfactory. The article on page 27 comes from a legal journal and deals with
a bill
introduced to the House of Commons which creates a new type of company.

10 Read the first paragraph of the article. What situation is the bill
trying to improve?

11 Read through the entire article and decide which of the following
headings (a–f) would be most appropriate for each paragraph (1–6).
a Limitations of limited liability
b Drawback: accounting requirements
c Despite imperfections, long awaited
d The need for a new form of partnership
e Benefits of the new company form
f Drawback: management liability

9
Draft Limited Liability Partnership Bill circumstances. On the subject of
liability, it is worth noting that an LLP
1. The Limited Liability Partnership Bill was
member will enjoy less limited liability
introduced into the House of Commons in July
than a company director. In the
this year in response to the growing concerns
ordinary course of events, a company
surrounding large accountancy firms moving
director is not liable to a third party for
their business operations offshore. Large
his negligent acts or omissions in the
accountancy practices had expressed their
course of his duties. His liability is to
unhappiness about organising their affairs by
the company of which he is a director.
way of partnership, especially since a partner is
The position is reversed in relation to
liable under the Partnership Act 1890 for his
an LLP member. The claw-back
own acts as well as for those of his colleagues. It
provisions of the Insolvency Act 1986
is unrealistic to assume that each partner can stay
will also apply to LLPs. Thus, a
informed about his fellow partners’ actions, let
liquidator will be able to set aside any
alone control them.
transactions (drawings of salary or
2. Thus, the Bill sets out to create a new institution, repayment of money owed) within two
the limited liability partnership (LLP), in which years prior to insolvency where the
obligations accrue to the name of the partnership member knew, or had reasonable
rather than the joint names of its individual grounds for believing, that the LLP was
members. The only personal liability that an or would thereby become insolvent.
individual partner has will be in respect of his
5. Indeed, limited liability is often highly
predetermined contributions to partnership
illusory or perhaps even over-rated,
funds. This is somewhat similar to a shareholder
especially when one considers that
in a limited liability company. However, unlike a
banks often require personal investment
company, the LLP will be more flexible in terms
guarantees from directors in order to lift
of decisionmaking, and board meetings, minutes
the corporate veil which protects
books and annual or extraordinary general
company officers. The same will
meetings are not required. In addition, the LLP
undoubtedly apply to LLPs.
will enjoy the tax status of a partnership and
limited liability of its members. 6. In conclusion, the value of this new
institution has been weakened by the
3. The Bill is not without its weaknesses, however.
proposed incorporation of the
One weakness which has been observed is the
accounting requirements. That is its
fact that the accounting requirements contained
single most noticeable weakness;
in Part VII of the Companies Act 1985 are
otherwise, it could be said that the Bill
proposed to apply to the LLP. Not only are these
is long overdue and will hopefully have
rules some of the most demanding in Europe,
the effect of appeasing those businesses
they will also prove expensive to comply with
which are considering moving their
for small and medium-sized LLPs. For example,
operations overseas.
the LLP must submit an annual return to
Companies House and maintain a list of accounts
according to Companies Act formulae. Annual
accounts must be prepared, and if the turnover of
the LLP exceeds £350,000 annually, the
accounts must be professionally audited.
4. These additional requirements have made a
further restriction on the management freedom
of LLPs necessary. Each LLP will have to
appoint a ‘designated member’ who will be
responsible for administrative obligations and
may incur criminal liability in certain

10
12 Decide whether these statements are true or false.
1. The writer maintains that it is unrealistic to expect a partner to be fully
informed at all times about the activities of the other partners in the company.
2. The text states that in an LLP, a company director is not liable for
breaches of duty or mistakes made when carrying out his responsibilities.
3. The writer implies that large LLPs will be exempt from the more
complicated accounting requirements set forth in the Companies Act of 1985.
4. The article claims that it is likely that the limited liability provided by an
LLP will be restricted.

13 Do you agree that the LLP is long overdue? In your view, is there
also a need for such an institution in your jurisdiction?

Reading 4: Corporate governance


Lawyers often assist their clients in handling legal disputes involving corporate
governance. The following legal opinion addresses one such dispute.

14 Read the first three paragraphs. What does the dispute specifically
involve?

Re: Special shareholders’ meeting of Longfellow Inc.


I have now had an opportunity to research the law on this point and I can provide you
with the following opinion.
Firstly, to summarise the facts of the case, a group of shareholders of Longfellow Inc.
has filed an action in the district court seeking to set aside the election of the board of
5 directors on the grounds that the shareholders’ meeting at which they were elected was
held less than a year after the last such meeting.
The bylaws of the company state that the annual shareholders’ meeting for the election
of directors be held at such time each year as the board of directors determines, but
not later than the fourth Wednesday in July. In 2001, the meeting was held on July
10 18th. At the discretion of the board, in 2002 the meeting was held on March 20th.
The issue in this case is whether the bylaws provide that no election of directors for the
ensuing year can be held unless a full year has passed since the previous annual
election meeting.
The law in this jurisdiction requires an ‘annual’ election of the directors for the ensuing
15 ‘year’. However, we have not found any cases or interpretation of this law which
determine the issue of whether the law precludes the holding of an election until a full
year has passed. The statutes give wide leeway to the board of directors in conducting
the affairs of the company. I believe that it is unlikely that a court will create such a
restriction where the legislature has not specifically done so.
20 However, this matter is complicated somewhat by the fact that there is currently a proxy
fight underway in the company. The shareholders who filed suit are also alleging that
the early meeting was part of a strategy on the part of the directors to obstruct the

11
anticipated proxy contest and to keep these shareholders from gaining representation
on the board of directors. It is possible that the court will take this into consideration
25 and hold that the purpose in calling an early meeting was to improperly keep
themselves in office. The court might then hold that, despite the fact that no statute or
bylaw was violated, the election is invalid on a general legal theory that the directors
have an obligation to act in good faith. Nevertheless, courts are usually reluctant to
second-guess the actions of boards of directors or to play the role of an appellate body
30 for shareholders unhappy with the business decisions of the board. Only where there is
a clear and serious breach of the directors’ duty to act in good faith will a court step in
and overturn the decision. The facts in this case simply do not justify such court action
and I therefore conclude that it is unlikely that the shareholders will prevail.

15 Read the whole text and choose the best answer to each of these
questions.
1. On which grounds did the shareholders file the action?

a) On the grounds of their rights as shareholders


b) On the grounds of a violation of the bylaws
c) On the grounds of an ongoing proxy fight
d) On the grounds of their lack of faith in the board of directors
2. What does the writer of this opinion identify as the issue in the case?

a) Whether the annual shareholders’ meeting determines the term of the


board of directors
b) Whether the election of the board of directors requires a quorum
c) Whether the annual shareholders’ meeting must be held a full year after
the last one
d) Whether the bylaws define the term ‘full year’
3. What does the writer say regarding earlier cases related to this one?

a) They provide for an analysis in favour of the shareholders.


b) They give the board of directors the freedom to run the company as they
see fit.
c) They have merely provided an interpretation of the legislative intent.
d) They do not address the issue involved.
4. What reason does the writer give for his conclusion?

a) It is dubious that the shareholders will prevail.


b) The facts of the case do not support judicial intervention.
c) A court of appeal will only look at the facts of the case.
d) The board of directors has a duty to act in good faith.

12
16 Choose the best explanation for each of these words or phrases
from the text.

1 on the grounds that (line 5) 4 statutes give wide leeway (line 17)
a in the area of a statutes can easily be avoided
b on the basis of the fact that b statutes allow considerable freedom
c despite the fact that c statutes restrict extensively
2 at the discretion of (line 10) 5 to allege (line 21)
a according to the decision of a to state without proof
b through the tact of b to make reference to
c due to the secrecy of c to propose
3 the ensuing year (lines 11–12) 6 to act in good faith (line 28)
a the next year a to act from a religious belief
b the present year b to do something with honest intention
c the past year c to plan for the future carefully

13
17 Answer these questions.
1) What do the bylaws of the company stipulate concerning the date of the
election of company directors?
2) What do the shareholders claim was the reason why the annual
shareholders’ meeting was held early?
3) What role might the concept of ‘good faith’ play in the court’s decision?

18 What is your opinion of the case? Do you think the


shareholders’ claim is justified?

Text analysis: A legal opinion

19 Look at Reading 4 again and think about these questions.


1 What is the purpose of the text?
2 Why was it written?
3 Why would someone read it?
4 Looking at the text carefully, what would you say is the function of each
paragraph?

The text in Reading 4 represents a o outlines the options the client has, pointing
legal opinion, a type of text written out advantages and disadvantages of each
by a lawyer for a client. option;
o considers factors such as risk, delay,
The function of a legal opinion is to expense, etc. as well as case-specific
provide an analysis of a legal factors;
problem so that the client can make o makes use of facts, relevant law and
an informed decision concerning a
reasoning to support the opinion.
course of action.

Regarding the contents, we can say The information structure of a legal opinion
that in general a legal opinion: can be made clear by using standard
o identifies the legal issue at stake signalling phrases. The table below provides
in a given situation and explains examples of phrases used to structure the
how the law applies to the facts information in a text. These phrases serve as
presented by the client; signals, pointing to information before it is
o indicates the rights, obligations presented, thus increasing the clarity of a text.
and liabilities of the client;

20 Read through the legal opinion (Reading 4) once again and look for
11 phrases with a signalling function. Add them where appropriate to
this table.

Referring to Thank you for instructing us in relation to the above matter. You have
the subject requested a legal opinion concerning ...
matter 1).....................................................................................................................
Summarising Our opinions and advice set forth below are based upon your account of
facts the circumstances giving rise to this dispute, a summary of which is as
follows. Based on information provided to us, we understand that ...
2).....................................................................................................................
Identifying The legal issue seems to be ...
legal issue 3).....................................................................................................................
Referring to The section which is relevant for present purposes provides that ... The
relevant section makes express reference to ... As the law stands at present, ...
legislation| 4).....................................................................................................................
regulations 5).....................................................................................................................
6).....................................................................................................................
Referring to
previous The court has held that ... We have (not) found cases or interpretation of
court this law which argue that ...
decision
Drawing We therefore believe that ...
conclusions 7).....................................................................................................................
8).....................................................................................................................
.
9).....................................................................................................................
.
10)...................................................................................................................
.
11)...................................................................................................................
Indicating In light of the aforesaid, you have several courses of action / alternatives /
options options open to you.
I await further instructions at your earliest convenience. Please contact us
Closing
if you have any questions about the matters here discussed, or any other
issues.
21 In Reading 4, which deals with a dispute concerning a company’s bylaws,
different verbs are used to refer to what these bylaws and the relevant
legislation say. Complete these phrases using the appropriate verbs from
the text.
1 the bylaws of the company ...
2 the law in this jurisdiction ...
3 the law ...

Writing: A legal opinion


22 A client who is the managing partner at a small European accountancy
firm has asked you for information concerning LLPs. He would also like your
advice regarding the founding of such an LLP. Write a legal opinion in which
you should:

- say what an LLP is;


- list advantages and disadvantages connected with it;
- recommend the best course of action for his firm.

Before you write, consider the function, the expected contents and the standard
structure of a legal opinion. Refer back to Reading 3 for information about LLPs
and make use of signalling phrases from the table to help structure the information
in your text.

Vocabulary: distinguishing meaning. Which word in each group is


the odd one out?
You may need to consult a dictionary to distinguish the differences in
meaning.
1 stipulate specify proscribe prescribe
2 succeeding elapsing ensuing subsequent
3 responsibility duty discretion obligation
4 prior previous prerequisite preceding
5 margin leeway latitude interpretation
6 preclude permit forestall prevent

Word choice. These sentences deal with company formation and


management. In each case, choose the correct word or phrase to
complete them.
1. The constitution of a company comprises / consists / contains of two documents.
2. The memorandum of association states / provides for / sets up the objects of the
company and details its authorised capital.
3. The articles of association contain arguments / provisions / directives for the
internal management of a company.
4. The company is governed by the board of directors, whilst the day-to-day
management is delegated upon / to / for the managing director.
5. In some companies, the articles of association make / give / allow provision for
rotation of directors, whereby only a certain portion of the board must retire and
present itself for re-election before the AGM.
6. Many small shareholders do not bother to attend shareholders’ meetings and will
often receive proxy circulars from the board, seeking authorisation to vote on the
basis of / in respect of / on behalf of the shareholder.

Vocabulary: prepositional phrases The following prepositional


phrases, which are common in legal texts, can all be found in
Reading 3. Match the prepositional phrases (1–4) with their definitions (a–d).
1 in terms of a 1) for the purpose of; 2) by the route through
2 in the course of b as an answer to; in reply to
3 by way of c 1) with respect or relation to; 2) as indicated by
4 in response to d while, during
Vocabulary: prepositional phrases. Complete these sentences using
the prepositional phrase from Exercise 4 that best fits in each. For
some of the sentences, there is more than one correct answer.

1 ...In the course of..................... choosing the name of the company, a number of
matters
must be considered.
2 Confidential information acquired ................................................... one’s
directorship shall not be used for personal advantage.
3 I would advise that members of your project group formalise your
relationship ................................................... a partnership agreement, incorporation
or limited liability company.
4 This form of corporation is often considered to be the most flexible body
................................................... corporate structure.
5 Our company formations expert is unable to provide advice
................................................... your query as there are a number of factors which
need to be taken into account which do not relate directly to his area of expertise.
6 The relationship between management and boards of directors at US
multinational companies has been changed dramatically through a series of
corporate governance initiatives begun ................................................... corporate
scandals, the Sarbanes-Oxley Act and other requirements.
7 Shareholders and other investors in corporations tend to view corporate
governance ................................................... the corporation’s increasing value over
time.
8 Regular and extraordinary board meetings may be held by telephone,
videotelephone
and ................................................... written resolutions.
9 ................................................... the articles of association, the board has the
power to appoint board committees and to delegate powers to such board
committees.

Verb–noun collocations.
Match each verb (1–5) with the noun it collocates with (a–e). If you
have difficulty matching them, the collocations can be found in
Reading 4.

1 violate a affairs

2 call b representation

3 overturn c a meeting

4 gain d a decision

5 conduct e a law
Collocations with file.
Decide which of the following words and phrases can go with the
verb to file.
You may need to consult a dictionary.

an action an AGM an appeal an amendment a breach a brief

charges a claim a complaint a debt a defence a dispute

a document a fee an injunction a motion provisions a suit


Test your professional English
Company law
The following text introduces the area of company law. Complete the text by
using the words in the box below.

Agreements borrowcorporations court debts dividends


employees legal legislation liability limited objectives partnership
profits property registered (x2) shareholders sole trade sue

A company is a legal entity, allowed by ______ , which permits a group of


people, as ______ , to create an organization, which can then focus on pursuing
set______________________ It is empowered with legal rights which are
usually only reserved for individuals, such as the right to ______ and be sued,
own ______ , hire or loan and ______ money. The primary advantage of
a company structure is that it provides the shareholders with a right to
participate in the ______ , a proportionate distribution of profits
made in the form of a money payment to shareholders, without any personal
______ .
There are various forms of legal business entities ranging from the ______ , who
alone bears the risk and responsibility of running a
business, taking the profits, but as such not forming any association in law and
thus not regulated by special rules of law, to the ______
company with ______ liability and to multinational ______ .
In a ______ , members 'associate', forming collectively an
association in which they all participate in management and sharing ______ ,
bearing the liability for the firm's ______ and being
sued jointly and severally in relation to the firm's contracts or tortious acts.
Limited-liability companies, or corporations, unlike partnerships, are formed not
simply by ______ entered into between their first
members; they must also be ______ at a public office or
_______ designated by law or otherwise obtain official
acknowledgement of their existence.
Registration of new companies
Match the following titles from the regulations for registration to the extracts
from the details.
Titles
1 What are articles of association? c
2 Can anyone be a company director? ___
3 What company types are there? ___
4 What is the minimum number of officers a
company requires? ___
5 Who can form a company?
6 Can I choose any name I want for my company?
7 How do I form a company?
8 What is a registered office?
9 What is a memorandum of association?
Extracts from the details
a. One or more persons but a public company or an unlimited company
must have at least two subscribers.
b. It is the address of a company to which Companies House letters and
reminders will be sent.
c. This document sets out the rules for running the company's internal
affairs.
d. By sending a memorandum of association, the articles of association,
the details of the directors and the company secretary, and a
statement of legal compliance.
e. On condition that you are not:
• an undischarged bankrupt or disqualified by a court from
holding a directorship;
• over 70 years of age.
f. This document sets out the company's name, the address of the company's
registered office and the object of the company.
g. Private companies limited by shares, private companies limited by guarantee,
private unlimited companies, public limited companies.
h. You cannot:
• register the same name as another company;
• use certain words;
• use names likely to cause offence.
i Every company must have formally appointed company officers at all times.

A private company must have at least:


• one director;
• one secretary - formal qualifications are not required. A
company's sole director cannot also be the company secretary.
A public company must have at least:
• two directors;
• one secretary - formally qualified.
In most countries companies with limited liability, or corporations, are formed
by registration at a public office or court designated by law. Each country has
its own regulations for registration.
Articles of Association
The Articles of Association govern the running of a company and set out the rights and obligations of members

and directors. Below are the main sections of the Articles of Association. The details below describe the terms

and conditions in each section. Match each section to its description,

1 Share Capital g
2 Lien
3 Calls
4 Pre-emption
5 Transmission of Shares
6 Notice of Meetings
7 Proceedings at General Meetings
8 Directors
9 Notices
10 Indemnity
11 Winding up
a This allows the directors of the company to sell a shareholder's shares in
the company to repay any debt owed by the shareholder to the company.

b This provides that any shareholder who wishes to sell his shares has to first
offer them to the other shareholders at the same price as he wishes to sell to
a third party.

c This provides that the directors of the company shall not be personally
liable in any civil or criminal proceedings as long as they have carried out
their duties lawfully

d This deals with advance information that is to be given to each member


about meetings and provides that each member is allowed to appoint a
proxy to attend in his place at meetings.

d This requires all directors to be informed about meetings, whether they are
in the country or abroad.

e This allows the company to recover its costs of recovery from a late paying
shareholder.

f This sets out the share capital of the company.

g This allows the assets of the company to be distributed if the company goes
into liquidation.

h This states the number of members who must be present.

i This provides that when a shareholder dies he is deemed to give notice to


sell his shares (which allows the other shareholders to buy them for a fair
price).

j This regulates the maximum number and their conduct.


The duties of the directors
The directors of a company are responsible for its governance. Their duties are
clearly set out and, if they do not carry them out, not only may they be held
liable under the law, but they may also be banned from acting as director of any
company for a certain period of time.

Read through the duties and then answer the questions.


Except with the prior sanction of the holders of more than 50 per cent of the
issued share capital of the Company from time to time the Directors shall
procure that the Company shall not:
1 sell, transfer or otherwise dispose of the whole of its undertaking property or
(save in the ordinary course of trading) assets or a part thereof being substantial
in relation to its total undertaking, property and assets;
2 issue shares, loan stock, debentures or any other form of security of the
Company including for this purpose any issue of redeemable shares;
3 purchase any of its own shares;
4 incur or agree to incur any capital commitments in excess of £100,000;
5 engage or dismiss any person as a Director;
6 increase by more than 20 per cent the remuneration payable to any of its
Directors, officers, employees, consultants or agents;
7 dismiss any employee;
8 purchase or sell, take or let on lease or tenancy or otherwise acquire or
dispose of any real or leasehold property for any estate or interest;
9 institute any litigation save in respect of the debts owing to it in the ordinary
course of business;
10 acquire or dispose or any shares, debentures, debenture stock or other
securities in any other company.
Which clause states that the director shall, unless agreed by others, ensure that the
company does not:

a buy its own shares?


b appoint or fire another director?
c buy land?
d bring a case to court except to collect money owed?
e increase the pay to staff above a certain percentage?
f issue equities?
g spend more than a stated amount?
h buy shares in another company?
i sell the company or part of it?
j fire an employee?
Newspapers write Newspapers write Newspapers write
1 Read the article from the Economist about bosses who perform
badly but earn huge salaries. Do you think all pay should be based
on performance?
2| Read the article again and choose the best answer for each question.
1 Who refused to approve GSK's remuneration committee's report?
a the board of directors
b the shareholders
c the chief executive
2 The company is now in a difficult position because
a. it had already agreed to the new pay packages.
b. it has to decide whether to approve the report or not
c. Jean-Pierre Gamier will take legal action.
3 What annoyed shareholders most about Garnier's pay package?
a. It didn't reward his performance.
b. His annual salary was too high.
c. There was no link to performance.
4 Badly performing executives are sometimes paid large sums to
a. encourage them to perform better.
b. persuade them to leave the company.
c. stop them from going to competitors.
5 The change in public mood will mean that in future
a salaries for chief executives will be lower.
b it will be harder to recruit chief executives.
c all executive pay will be linked to performance.

On your own
1. Give a resume of the article.
2 Exchange your opinions on the problem of large executive pay packages with
your group mates.
Executive pay

The rewards of failure


The trouble with the GlaxoSmithKline pay package was its reward for failure

When the public mood Company bosses have Of course, companies may
changes, the realisation been slow to understand set up deals with bosses they
can take time to sink in. the new mood of outrage no longer want in order to
Behaviour that was once among shareholders. encourage them to go
quickly and without a legal
acceptable can overnight Shareholders have for
fight But a generous advance
come to be seen as years accepted that 'Tat promise to reward failure is
outrageous. The board of cat" bosses paid no way to encourage
GlaxoSmithKline, a big themselves more or less success. Like the
pharmaceutical company, whatever they liked. So it "guaranteed bonus" and the
has found itself at the is uncomfortable to face lifetime free dental
sharp end of such a mood criticism. But behind the treatment, it offers chief
change. Its shareholders criticism is a strong feeling executives a one-way bet
voted to reject the that many chief executives If the GSK vote makes
company's remuneration are living according to companies cautious about
such deals, that is welcome.
committee report, which quite a different set of
The market for chief
would have paid Jean- rules from everyone else. executives is far from perfect
Pierre Gamier, its Chief Although the value of There is no rate for the job,
Executive, $35m if he lost most large companies has positions are often quietly
his job and treated him and fallen considerably over filled rather than openly
his wife as three years the last few years, bosses advertised and boardroom
older than they actually are have continued to pay search committees rarely
for the purpose of themselves more. The ask, "Could we get someone
increasing their pensions. value of their pensions has equally good even if we paid
The vote is purely increased and they have a bit less?" If the board now
has to defend its
advisory, with no binding struck lavish deals in the
compensation decisions
force. But it leaves the form of "golden publicly, it may be easier to
company in a sort of legal parachute" severance deals say '"We'd love to give you a
limbo. More importantly, it to cushion their fall if they golden parachute but the
leaves Boardrooms leave. Some of the aspects shareholders would make a
everywhere in a difficult of Mr Garniefs package fuss" More fuss, please, from
position. The message of that most irritated the shareholders. It's their
shareholder discontent shareholders were ones company, after all
with large executive pay that appeared to reward
packages and poor not superior performance
corporate performance has but simply being there.
never been so clear. Lots of bosses have such
components in their pay.
II Contract Law
Reading 1.
1 Read the text and think of a suitable title for each of the two
parts. Compare them with the titles given by your group mates.

2 Give Russian equivalents to the following words:


- to commit - enforceable
- unilateral - executory (contract)
- executed (contract) - redundant
- in scope - a minor
- express (contract) - lease
- implied (contract) - deceased

1 In our daily associations and activities, we all make agreements; some are
social in nature and others commit us financially.
Contracts are agreements which create legal obligations and are enforceable in a
court of Law.
In civil law, the contract is the basic, legal concept, the foundation of all legal
relationships. Every one of our daily acts creates, in some way, a legal
obligation.
When we arise in the early morning of a winter day, turn on the light or radio,
we are a party to a contract with the electric company. It makes the electric
current available to us and we pay for the amount that we use.
Those of us who are homeowners and don't have our own wells have a similar
contract with the water company.
When our newspaper is delivered in the morning, we are purchasers under a
contract, either express or implied, to pay for that paper when the newsboy
comes around to collect.
We take a taxicab, get on a bus, go by subway; all of these acts are contractual
relationships.
These are trivial, unimportant contracts and don't cost much. How about some of
our more important transactions, - buying a car, a washing machine, a house?
Do we understand the principles which underlie our actions? Do we know the
obligations we incur and the rights and privileges that we acquire?
More important, in making a contract, are we certain that it is as binding on the
other side as it is on us?
In terms of law, a contract is a mutual obligation between two people with a
mutual right by either to demand its performance. The breach of this right, the
failure to perform that promise, creates in the other person the right to relief and
redress in a court of law.
The Uniform Commercial Code was enacted to simplify the law governing
commercial transactions and to continue the accepted commercial customs and
practices. The basic concepts of contract law are thus not affected except that
those contracts which are of a commercial nature are afforded the expanded
benefits of commercial usage.
2 A "unilateral" contract is a promise of commitment made by one party
conditioned upon the performance of an act by the other. The contract does not
become binding until the act is performed.
Illustration: "I promise to pay you a commission, if you will get me a buyer
for my car." When the person to whom the promise is made brings a willing
buyer for the car, he has earned his commission.
A "bilateral" contract is created when mutual promises are exchanged by
both parties to the transaction. The failure by either party to perform his part of
the contract in accordance with his promise may subject him a damages which
result from the breach of contract.
Illustration: "I promise to pay you 15¢ a gallon for 300 gallons of#2 grade
fuel oil, if you will promise to deliver it tomorrow morning." "I’ll deliver it”.
An "executory" contract is one which is not fully performed. It has been
partly performed but something still has to be done by either or both of the
contracting parties.
An "executed" contract is one which has been fully performed by both
sides. There is nothing further to be done. The transaction is complete.
Illustration: The 300 gallons are delivered in the morning as promised and the
buyer pays in accordance with the agreement.
A "void" contract is one which is not legally enforceable and is not
binding on either of the parties. The expression "null and void," so often used, is
redundant. It actually means "non-existent and not enforceable."
Illustration: Contracts which are illegal in scope and in purpose are void
and unenforceable.
A "voidable" contract is one which is valid, binding and enforceable.
However, there is a right available to one or, in some instances, to both of the
parties to avoid responsibility of performance. It may thus be enforceable
against one of the parties but not against the other. ( ;: Illustration: A contract
made with a "minor," also known as an "infant," a person legally under age, is
enforceable by him against the other, the adult.
Under certain circumstances, the minor may renege on his contract and
demand the return of the money he paid. Of course, if he seeks to enforce the
contract against the adult, he cannot then disaffirm.
An "express" contract is one in which all of the terms are agreed upon by
the parties and are specifically set forth in detail, as in a writing.
Illustration: A lease or insurance policy is a good example of an express
contract.
An "implied" contract is one which is created by law, imposed upon the
parties because of their actions or their behavior, despite the fact that they had
no actual or express agreement.
Illustration: Anna sued the estate of her deceased employer Gertrude. She
claimed that she was hired by Gertrude, who was aged and infirm. She was told
by Gertrude in the presence of other friends that she need not worry about
getting paid, she would be well taken care of in the will. She worked as a
companion for 11 years without pay, only for board and lodging. The will only
provided for $ 100 to be paid to Anna. She claimed her rightful compensation.
Despite the fact that there was no valid express contract between them, a
contract was implied by law. Anna was awarded reasonable compensation for
the services she ' rendered to Gertrude through the years.
A contract will be implied because of the particular relationship of the
parties. A husband is obligated to support his wife, parents to support and care
for their infant children.
A "quasi-contract," "as if there were a contract," will result and will be
implied when .one party in a transaction is in possession of money or property
belonging to another. The law creates this implied contract to prevent that
person from being "unjustly enriched."
Illustration: The previously described case of the unpaid companion, also
applies here. A person who pays money under a mistake of fact may be given
the right to recover it under an implied or quasi-contract.
Illustration: Algernon, believing that he owned a certain parcel of estate, paid
taxes on it. When he found that he did not own it, he asked that the money be
refunded to him. The city refused and he sued. The court allowed him to recover
on the theory of implied contract.

3 Complete the sentences (try not to look at the text):


1. Contracts are agreements which …
2. When making a contract we should be certain that …
3. The failure to perform a promise creates…
4. The Uniform Commercial Code…
5. A unilateral contract is …
6. A bilateral contract is …
7. An "executory" contract is…
8. An "executed" contract is…
9. A "void" contract is…
10. An "express" contract is…
11. An "implied" contract is…
12. A "quasi-contract” is …

4 Speak on the following:


1. What is a contract in terms of law?
2. Give your own illustrations for each type of contract mentioned in the text.

Reading II
5 Read the text about elements that are necessary for a valid
contract. The parts of the text are mixed up. Put them in the
correct order from 1 - 5.
The first has been done for you.
A 2
B… D…
C… E…
A VALID CONTRACT
.
A In addition to the terms of agreement, a contract, to be enforceable in a court
of law, must have the following essential elements:
The contractual obligations must be voluntarily assumed. Therefore a
contract must consist of an "offer" made by one party and an "acceptance" of
that offered by the party to whom it was made. This is called consent, "mutual
assent" or, popularly "a meeting of the minds."

B In all express contracts, as distinguished from those, implied by law, the


words and actions of the parties must reveal an intention to create a contract
which the law will recognize. This intention can be determined from the
provisions of the contract and the legal interpretation of those terms

C Each party must have contributed some consideration toward the creation of
the contract. There must be a quid pro quo, a something in exchange for
something else to make the deal a binding one. A mere gratuitous promise, not
made in reliance upon a reciprocal promise, is not binding and not enforceable.

D Illustration: A person who has been legally declared to be insane cannot


enter into a legal contract. He has no capacity to contract. Finally, the purpose
and subject matter of the agreement must be legal and not in violation of any
law or contrary to the public policy or morals of the place where the contract is
made.

E Each of the participants to the transaction must have legal capacity to


enter into the deal. They must have no legal disability which would prevent
them from making a contract. Illustration: An agreement to rent a house for the
specific purpose of operating a house of prostitution, where such is unlawful, is
void.
6 Discuss with the partner
1. Is the definition of a contract given by American law different from
that of British law? How?
2. What elements can make a contract valid?
Reading III
7 Read the text “Contract Law and Business”
and name the 6 conditions a contract must meet in order to be
enforceable
A contract is any agreement between two or more parties that is
enforceable in court. As Figure 3 shows, a contract must meet six conditions to
be enforceable. It must involve the agreement and consent of two capable
parties. It must result in some consideration to both parties. And it must be legal
and properly drawn up. If all of these conditions are met, one party can seek
legal recourse if another breaches (violates) the terms of the agreement.
Agreement of Both Parties. The simplest element of a contract,
agreement is the serious, definite, and communicated offer and acceptance of the
same terms. If an auto parts supplier offers in writing to sell a repair shop rebuilt
engines for $400 each and if the repair shop accepts the offer, the two panics
have reached agreement.
You cannot be held to a clearly joking offer to pay someone $1 million to
wash your car. Nor can you be billed $ 100,000 by a repairperson who decides
to accept your vague offer “I'll pay top dollar if you fix my air conditioner.” An
offer contained in a letter that is never mailed is not a contract. And no contract
exists if a supplier offers to sell you ten records for $ 1 and you make a
counteroffer of eight records for 75 cents, because no agreement has been
reached.
Real Consent of Both Parties. Beyond mere agreement, a legally
enforceable contract must involve real consent. That is, the contract is not
enforceable if any of the parties involved have been affected by an honest
mistake, fraud, or pressure. Consider a few possible cases.
o A manager of a small department store agrees verbally to buy ten
dresses from a designer based on a sample showing a retail price of
$50, but later learns that the dresses sell for $100.
o A manager orders a painted sign with the company's name but the
sign company delivers a neon sign instead.
o A supplier threatens to cut off a firm's credit unless the company
increases its orders dramatically.
The mistakes, fraud, and pressure (sometimes called duress) in these cases
limit the degree of real consent between the two parties and make these
contracts unenforceable.
Capacity of Both Parties. To give real consent to an agreement, both
parties must demonstrate legal capacity (competence). A person who is judged
mentally ill or incompetent by a court of law cannot be held to a contract.
Someone under the influence of alcohol or other drugs might not be judged
competent.
In addition, a person who is not of legal age cannot enter into a binding
contract. Legal age varies from state to state and with circumstances. For most
contracts, the legal age is either 18 or 21. However, some states permit 15-, 16-,
and 17-year olds to marry (a legal contract), and a number allow minors to
borrow money to pay the costs of a college education.
Consideration to Both Parties. An agreement is a legally binding contract
only if it includes an exchange of considerations — items of value. Thus, if
your brother offers to paint your room for free, you can't sue him if he doesn't do
it. But «items of value» do not necessarily entail money, changing hands. For
example, an accountant might agree to prepare a fence contractor's tax return
next year in exchange for the contractor's installing a new fence at the
accountant's home. Both the tax preparation service and the fence installation
service are items of value.
It is important to note that contract law does not require contracts to be
rational. Nor does it require a contract to provide the best possible bargain for
both sides. Enforceable contracts need only include «legally sufficient»
consideration. The terms of the contract are met as long as both parties receive
what the contract calls for. However, as the International Report «At Their
Bidding No More» shows, competitors who work together to rig prices may be
subject to legal action.
Legality of the Contract. To be enforceable, a contract must be for a
lawful purpose and must comply with federal, state, and local laws regulations.
Thus a contract to buy cocaine, which is an illegal drug in the United States,
would not be upheld by the courts. A contract between two companies to fix the
price of a product (price-fixing) is illegal and thus would not be enforceable.
And despite the popular idiom, a mobster cannot put out a legal contract to have
someone killed.
Proper Form of the Contract. A contract may be written, oral, or implied
from conduct. To be enforceable, however, a contract must be written if it
involves goods worth over $500, the sale of land, or an agreement that will take
more than one year to fulfill. For example, a valid contract to work as an
engineer on a 14-month dam project would have to be in writing. All changes to
a written contract must also be in writing.
Breach of Contract. If an agreement conforms to all six of the .conditions
just discussed, it is a legally enforceable contract. What can one party do if the
other party fails to live up to the terms of the contract? Contract law offers a
variety of remedies designed to protect the reasonable expectations of the parties
and, in some cases, to compensate them for actions taken to enforce the
agreement.

As the injured party to a breach of contract, you might simply decide to


cancel the contract and refuse to live up to your parts of the bargain, since the
other party has not kept faith. Or you might decide to sue the other party for
damages up to the amount you lost as a result of the breach. If money cannot
repay the damage you suffered, you may demand specific performance — that
the other party fulfill all the terms of the original contract.

For example
 you might simply cancel a contract for carpet shampooing if
the company's employee fails to show up to clean your carpet.
 you might sue for damages if you have to hire a different, more
expensive caterer for your wedding reception because the
company you originally hired backed out at the last minute.
 you might demand that the owner of an antique Stutz Bearcat
automobile sell you that car, as agreed - not a new Jaguar. In
some cases, dissatisfied buyers have also found recourse in tort
law.
8 Comment upon the diagram below.

Six requirements must be fulfilled for a contract to be legally enforceable.


Even if only one requirement is not met, the contract cannot be enforced
through legal channels.

2 Vocabulary. Give synonyms to the following words.

competence, competency minors

compensation (item of value) the dissatisfied party

decision, judgement (agreement) obligatory, compulsory

consent infringement, violation

3 Match the words with their definitions.

An action that is wrong but not criminal


1. a) acceptance
and can be dealt with in a civil court of
law.
b) consideration
An official decision given by a judge or
2. court of law.
c) tort
An official agreement to take something
3. that you have been offered.
d) void contract
A simple contract which is not in writting
4.
A way of dealing with the problem or
5. e) remedy
making an unsatisfactory situation better.

Something of material value given by a


6. f) capacity
party to a contract in return for some duty
taken upon himself by the other party.
g) award
An action that violates a law, rule or
7. agreement between people or groups.
h) injunction
The legal right necessary for an
8. individual to enter into a binding
i) damages
contract.

An amount awarded by a court to an j) breach


9. appellant who has suffered loss as a result
of the actions of another party. /
Compensation for breach of contract. k) specific performance

A court order to complete / to carry out a


10. l) parole contract
contract.

An order issued to prevent someone from


11. continuing to act in a certain way, or in a
manner harmful to someone else.

A contract that never existed, either


12. because it is not recognised by the law or
because there is a fundamental mistake
common to both parties.
Test your professional English

The law of contract


Here is a brief summary of the law of contract. Complete the texts using the
words in the box.

agreement breach capacity consideration damages fraud


illegal obligation oral performance property signed terms

What is a contract?
It is an agreement that creates a binding (1) obligation upon the
parties. The essentials of a contract are as follows: mutual
(2) ________ ; a legal (3) ________ , which in most instances
need not be financial; parties who have legal (4) ________ to make
a contract; absence of (5)________________ or duress; and a subject matter
that is not (6)________________ or against public policy.
What form does a contract take?
In general, contracts may be either (7) ________ or written. Certain
types of contracts, however, in order to be enforceable, must be written and (8)
________ . These include contracts involving the sale and
transfer of (9) ________ .

How does a contract end?


In case of a (10) ________ of contract, the injured party may go to
court to sue for financial compensation (or (11) ________ ), or for
rescission, for injunction, or for specific performance if financial
compensation would not compensate for the breach. Specific
(12) ________ of a contract is the right by one contracting party to
have the other contracting party perform the contract according to the precise
(13) ________ agreed.
Types of legal contracts
Link the type of contract to its description.

Type Description
1 Consultancy a This agreement is used to ensure the
agreement repayment of money borrowed, usually in
monthly instalments.
b This agreement is used where one party buys
2 Distribution goods from the manufacturer and re-sells
agreement them on his own account. He will however be
given the right to use the manufacturer's
intellectual property rights.
c This agreement sets out the terms and
3 Franchise conditions on which a business supplies goods.
agreement
d This agreement is used where one party grants
4 Loan to another the right to run a business in the
agreement name of the first party. Examples include
Body Shop and McDonalds.
e This is the equivalent of a contract of
5 Manufacturing employment for directors.
licence
agreement
f This agreement is used where one party is
6 Terms and providing services as an independent advisor
conditions of to a company.
sale agreement
g This agreement should be used where one
7 Contract of party (the licensor) owns intellectual property
employment rights in respect of a product it has developed
and wishes to. license the manufacture of the
product to a third party.
h This is intended to govern the relationship
8 Directors' between a number of shareholders in a
Service company. The agreement works as a second
agreement layer of protection preventing the company
from being run in a manner other than has
been agreed.
i This contract comes into existence as soon as
9 Shareholders' a job offer is accepted whether that offer is
agreement oral or in writing.

There are many types of legal contracts which create a legal relationship
between individuals and between companies and individuals
Full-time Employment Contract
A contract of employment comes into existence as soon as a job offer is
accepted whether that offer is oral or in writing. However, it is easier for both
parties if the offer of employment is in writing to prevent disputes at a later date.

Below is an extract from a skeleton contract of employment for a full-time


employee. The key word/phrase from each section has been removed. Complete
the text using the words/phrases from the box.

commencing salary date of commencement


duties and responsibilities grievance holiday entitlement
notice pension position probationary service
sickness pay terms and conditions

1. You have been appointed to the position of


administrative assistant.

2. Your _______________________________will be as detailed in the


attached Job Description, but this Job Description should not be regarded
as exclusive or exhaustive. There will be other occasional duties and
requirements associated with your appointment.

3. The _________________________of your continuous service with this


company is 1 January 2002.

4. Your specific_________________________________________ are


contained in the Employees' Handbook issued by the company, as well as
in existing collective agreements negotiated by this company.

5. Confirmation of your appointment will be subject to your satisfactory


completion of 3
months'___________________________________________
6. Your____________________________is £20,000 per annum, paid
monthly in arrears. Overtime is not payable.

7. Your_____________________________entitlement is 30 days in any


calendar year.

8. Your annual__________________________________ is 25 days which


cannot be carried over.

9. The minimum period of__________________________________to which


you are entitled is 3 months.

10. Your position with regard to________________________________is set


out in the explanatory booklet attached.

11. If you have a____________________________________relating to your


employment, you should refer to the complaints procedure outlined in the
booklet attached.

There are no fixed rules for combining nouns. Here are the options:
Saxon genitive, for example employees' handbook prepositional phrase,
for example confirmation of your appointment

Newspapers write Newspapers write Newspapers write

Friendly environment
Before you read the article discuss these questions:
1. Why do the G8 gather regularly? Is there usually any positive outcome of
their meetings?
2. What were the main objectives of the meeting in June 2007? If you
happen not to remember, read the article and name the 3 main aims that
Angela Merkel had set up.
Jun 8th 2007 | HEILIGENDAMM, GERMANY
From Economist.com

The G8 countries agree on climate change, and more


besides

DESPITE the row over Russian missiles that preceded it and the mob of angry protestors
outside, the G8 meeting probably helped in the quest for global stability. The top industrial
countries ended their summit in Heiligendamm on Friday June 8th with a handful of
agreements aimed at just that goal. The most positive outcome of the three-day summit was
America's apparent shift closer to the G8 mainstream.

The most important agreement was on climate change: a commitment at least to “consider
seriously” the goal of halving global greenhouse-gas emissions by 2050. There was also a
pledge of $60 billion to combat HIV and AIDS, with the aim of giving all victims access to
treatment by 2010.

The G8, without surrendering their status as the world’s most powerful countries, also invited
leaders of the strongest developing economies—Brazil, Mexico, India, China and South
Africa—to join them in four initiatives: on climate change, safeguarding intellectual property,
encouraging cross-border investment, and developing Africa. Africa was in the spotlight at
the final day of meetings.

The German hosts coined the term “Heiligendamm Process” to describe the inclusion of the
big developing countries, in some of the G8’s endeavours. The intention is to bind these
countries, particularly China, more closely to policies of the G8, and to avoid “China-
bashing”, according to German officials. It was not clear, after meetings of this quasi G13,
whether the Heiligendamm Process would catch on.

The summit, held at a wedding-cake hotel on the Baltic coast, brought a surprise offer from
Russia's president, Vladimir Putin. Russia's threat to target Europe if America put its planned
missile-defence stations there had looked as if it might overshadow proceedings. But in
bilateral talks with America's president, George Bush, Mr Putin proposed joint use of radar
stations in Azerbaijan, as an answer to American defence concerns east of Europe. Mr Bush
said he would consider the offer.

The agreement on climate change is a modest triumph for Angela Merkel, the German
chancellor and the summit's host. Although there was no firm commitment on numbers, the
agreement accepts the need to develop a global framework, under UN auspices, by the end of
next year, ready to replace the Kyoto protocol on climate change when it expires in 2012.
There had been fears that Mr Bush would reject a UN-sponsored programme just as America
has refused to ratify the Kyoto protocol whereby leading countries pledge to reduce their
greenhouse gas emissions at least 5% below 1990 levels.

Another German initiative, to introduce a code of conduct for hedge funds in the interests of
financial stability, got no further. American and British financial regulators, and the financial
firms they oversee, believe that improving best practice and their own vigilance are enough to
prevent a problem in the $1.6 trillion hedge-fund industry from triggering a wider financial
crisis.

Beyond the smooth lawns and swish setting of Heiligendamm, well-organised bands of anti-
G8 protesters kept a 16,000-strong police force busy. Several times they evaded the police
and occupied areas near a specially built perimeter fence. The protests were mainly peaceful,
though they had been heralded at the weekend in nearby Rostock by violent clashes between
police and black-clad radical protesters known as Autonomen.

The main message of the protesters was rejection of policy-making that kow-tows to “global
capitalism”. As helicopters roared overhead, and water cannon readied for action, they
pleaded for more debt forgiveness for the world’s poorest countries, as did a rock concert
against poverty in Rostock, led by the combined vocal talents Bob Geldof, Bono and Herbert
Grönemeyer. Non-governmental organisations said the G8 pledges fell short. Oxfam, an aid
group, argued that the $60 billion proffered to combat disease added only $3 billion a year to
what had already been promised up to 2010. Greenpeace, an environmental group, said that
despite the inclusion of America in work to reduce emissions, the Bush administration was
“as far away as ever” from agreeing such reductions itself.

For Ms Merkel, at any rate, such objections are swept away. The headline in Bild, a popular
daily newspaper, hailed her as “Miss World” for achieving three goals: on climate change,
more money for Africa, and détente between Mr Bush and Mr Putin. And, given the
inauspicious lead up to the meeting, she may well have earned the title.

Understanding main points


Ask your partner the following questions. Say whether you agree with the
given answers or not.
1. Where and when did the top industrial countries end their summit?
2. What was the positive outcome of the summit?
3. What was called Heiligendamm Process?
4. What surprise did the summit bring?
5. What is the main issue of the Kyoto protocol?
6. Who was against the summit? What was the main message of the protest?
Understanding details
Answer these questions
1. Why were there fears that Mr. Bush would reject the program devoted to
climate change?
2. What did the “antiglobalists” want to achieve by their actions?
3. Why did the newspaper Bild call Angela Merkel ‘Miss World’?
Vocabulary

Match these words as they occur in the text


1 global a status
2 surrender stability
3 safeguard a surprise
4 bring intellectual property
5 consider global framework
6 develop an offer
7 refuse a code
8 pledge to ratify
9 introduce to reduce
10 violent disease
11 combat clashes

On your own

1. Speak in the name of a member of Greenpeace about the summit.


Explain why you don’t believe America’s promises.

2. Speak in the name of President Putin about the possibility to use


the radar stations in Azerbaijan.

Discrimination

Before you read

Discuss these questions.


1. Employment discrimination can be based on age, gender and race - are there
other categories you can think of?
2. Are women and men employed as equals in your country, in terms of pay and
conditions?
A Understanding main points
Read the text on the opposite page about an important case about
discrimination against women in the workplace and answer these questions.
1. What is the case about?
2. Where is the case being heard?
3. Who brought the appeal - the ADA or Ms Kolstad?
4. What types of discrimination are mentioned in the text?
5. Why did Ms Kolstad sue the ADA?
6. Was there any dispute about the facts of the discrimination against Ms
Kolstad?
7. What was the lower Appeals Court's decision?
8. Which organisation is mentioned that supports the ADA?
9. If the Supreme Court decides in favour of Ms Kolstad, how much may she
receive in damages?

B Understanding expressions
Choose the best explanation for each of these words or phrases from the
text.
1 knock-on effect (line 16) 4 upholds (line 47)
a) blow to the body a) reverses
b) wider consequences / b) agrees with and
c) entry requirement supports
2 malice (line 32) c) sets a standard
a) friendliness 5 brief (line 71)
b) with bad or cruel intention a) short letter
c) unintentional b) legal document
3 reckless indifference (line 32) c) kind of case
a) driving without care 6 caps (line 85)
b) heartless and cruel a) sets an upper limit
c) not caring about the b) interferes
consequences c) is the head
Court to hear key case on discrimination
By Patti Waldmeir in But in Ms Kolstad's case an for punitive damages put
Washington Appeals Court found that the before a Jury.
ADA'S conduct was neither 'If adopted, this standard would
The US Supreme Court
today hears a case which 'egregious' nor 'truly subject employers to punitive
could have a big impact on outrageous' enough to merit damages virtually every time an
the size of damages paid by punitive damages. employee, engages in
US employers in employ At the moment there is intentional discrimination
ment discrimination lawsuits. confusion over the standard against another,' the US
The court agreed to hear the of conduct necessary to Chamber of Commerce argues
case, Carole Kolstad vs1 the attract punitive damages, in a brief filed to support the
American Dental Association with the various circuit ADA. 'Our concern is that
(ADA), to clarify what kind courts applying differing punitive damages would
of employer conduct will standards to define 'reckless become the norm, not the
give rise to punitive damages indifference'. If the Supreme exception, whereas the law
- damages awarded to punish Court upholds the Appeals clearly intends them to be the
and deter an offender - in Court's decision in Kolstad - exception,' says Stephen Bokat
lawsuits involving sex that the conduct did not meet of the National Chamber
discrimination. However, this standard of 'egregious' - Litigation Center, which has
law employment experts this would set a new standard also backed the ADA.
said that the suit was also nationwide that could limit According to Jury Verdict
likely to have a knock-on the size of both jury awards Research, which tracks jury
effect on race, age and other and pre-trial settlements. awards, 40% of verdicts in
employment discrimination gender discrimination cases in
'Our concern is that the last six years have included
suits brought under Title VII punitive damages
of the 1991 Civil Rights Act. punitive damages. The law caps
The case involves a female
would become the damages at $50,000-$300,000
lawyer employed as a norm' per plaintiff, depending on the
lobbyist for the ADA, a size of the employer.
Conversely, if Ms Kolstad A lower court jury awarded Ms
professional trade asso- wins, jury awards and
ciation. A jury found that Ms Kolstad back pay after a male
settlements could shoot up. employee in the same office
Kolstad was denied Her lawyers argue in their
promotion because of was, according to her lawyer's
brief that 'egregious' is too brief, 'preselected' for a
intentional sex discrim- high a standard, and that
ination. The issue before the promotion for which he was
employees need only show less qualified than she was.
court is not whether this is that their employers knew or
so, but whether such should have known their
discrimination must be FINANCIAL TIMES
conduct was probably World business newspaper.
'egregious'2 before punitive unlawful in order to have
damages are awarded. claims
Title VII permits such
damages where there was
'malice or ... reckless
indifference to the federally
protected rights of an
individual'.
1 an abbreviation for versus, meaning against
2 very bad indeed, disgraceful (widely used in legal terminology in American English)
Legal brief
Discrimination is unfair treatment or denial of normal privileges to people
because of their race, age, sex, nationality or religion. In this case, the US
appeal judges were asked to decide if the unfair treatment had been so bad as to
warrant an extremely stiff penalty (punitive damages), which should deter
others from similar behaviour. Note that each US state administers its own
justice system but the system of appeal is from trial court to Appeals Court and
then the Supreme Court, which is the highest appeal court in the US.

Vocabulary

A Complete the sentence


Use an appropriate word or phrase from the box to complete each sentence.
limit punitive damages egregious circuit judge Act
settlement jury lawsuit brief cap appeal federal rights

1 The amount of money awarded to a victim has a ..... limit.........


2 The courts are in session at different times during the year in different
places, so that the ................... can work in a variety of places.
3 When Parliament votes to pass a Bill it becomes an ....................
4 There is no ................... on the liability of owners in a private partnership.
5 Many people think there should be a specialist................... for complex
fraud cases.
6 American citizens should study their................... so that they know what
laws protect them
from abuse.
7 Damages set very high in order to deter others are called ....................
8 A special term for very bad behaviour in the US is ...................
behaviour.
9 Every court decision may be sent for................... if circumstances justify
it.
10 An out-of-court................... is desirable if possible.
11 Anyone can bring a ................... against someone else if they feel they
have suffered a wrong that cannot be settled easily.
12 A barrister cannot work in a court without a ................... from a solicitor.
B Opposites
Match the opposites.
a)illegal
1 lawful
b)female
2 clarify
c) unlawful
3 legal d)one-off
4 malice e) confession
5 preselection f) confuse
6 male g)token
7 punitive h)kind intentions
8 knock-on effect i) fair job promotion procedures
9 discriminate against j) act fairly
10 denial

C Prepositions
Complete these sentences with a preposition from the box.

up under against on to at

1) If she wins this case, awards and settlements could shoot ......UP...........
2) The suits are brought................... Title VII of the 1991 Civil Rights Act.
3) There maybe a knock-................... effect: other types of discrimination suits
will be affected.
4) The decision will have a major impact................... employers nation-wide.
5) Some companies may be subject................... enormous claims.
6) The law caps damages ................... a certain sum of money,
depending......:............ the size
of the company.
7) According ................... the researchers, juries often award punitive damages
in cases where
there has been discrimination ................... women in the workplace.
8) What kind of conduct could give rise ................... punitive damages?
D Different outcomes
Use an appropriate word or phrase from the box to complete each sentence.

however on the other hand if whereas

should conversely might

1. The court could decide to award punitive damages for any justified
complaint. ....However...., If that happened, companies would soon go
bankrupt.
2. On the one hand, the lower court may decide in favour of the
plaintiff;.................... the appeal court may decide differently.
3. The verdict may be to limit all types of damages..................... the verdict
may be to award the
4. maximum possible to deter others.
5. ................... they had not complained about the award, there would not have
been an appeal.
6. A successful outcome for the company involved would be a limitation on the
damages, ................... a worst-case scenario would be that they have to pay
punitive damages.
7. ................... the worst come to the worst, the ADA................... find
themselves paying Ms Kolstad punitive damages - and others too. if they file
suit!

On your own

1. Check what the law in your country says about employment and equal
opportunities. How do these affect disabled people? Write a brief report.

2. Research some advertisements on TV or in magazines. Can you find any


which use thought-provoking or socially challenging images? List the kinds
of discrimination the advertisements try to make the public aware of.
III . Family Law
Reading I.
1 Read the texts about different traditions to get married and compare the
traditional wedding in Britain and the US with that in Russia.

TRADITIONAL WEDDINGS

In Britain people get married either in church or in a registry office. In the


US people often get married in a house, a garden, a park, a hotel, or in a
wedding chapel as well as in church. Most people, when they think of a
wedding, think of people getting married in church and the many customs that
go with this type of wedding, called a white wedding. Even people who are not
religious often want to have a traditional white wedding in a church.

The main people at the wedding

There are special names for some of the people in the wedding ceremony.
The woman who is getting married is called the bride and the man is called the
bridegroom or groom. The man has a male friend with him called the best man
and the bride has some female friends called the bridesmaids. It is traditional for
the bride to wear a long white dress and a white veil and to carry flowers in a
bouquet. She is also supposed to wear 'something old, something new,
something borrowed and something blue' because this will bring her luck.
The groom wears a suit or sometimes a tuxedo /in the US/ or morning suit /in
Britain/. Everyone else wears their best clothes and the women often buy hats
specially.

Before the ceremony

The bridegroom is not supposed to see the bride on the day of the
wedding until they meet in church and this is considered to be bad luck. The
bridegroom arrives at the church first and waits inside, near the altar with the
best man. The families of the bride and bridegroom, and the wedding guests, sit
in rows in the church.
Just before the wedding ceremony begins, the bride arrives at the church
in a car with her father. The car is usually an expensive car, such a a Rolls
Royce or a, limousine, hired for the occasion and decorated with ribbons

The ceremony

It is the custom for the bride's father to 'give her away' (=officially to give
her to the bridegroom). The bride and her father walk slowly up the aisle (=
central passage) of the church, with the bridesmaids. People sometimes talk
about 'walking up the aisle' when they mean 'getting married'. When the bride
and bridegroom are together at the altar the priest or minister begins the
wedding service. The words that are said during the wedding service are very
well known to most people. During the service the bridegroom gives the bride a
wedding ring and says 'With this ring I thee wed' ('With this ring I marry you').
Sometimes the bride also gives a ring to the bridegroom in turn: "Will you have
this man/woman to be your wedded husband/wife?" The bride and bridegroom
each say ’I will'. At the end of the ceremony, the priest or minister says: 'I
pronounce you man and wife' which means that they are officially married. The
bride and bridegroom then sign the register (= a special book which is the
official record of their marriage).

After the ceremony

Outside the church, the friends of the bride and bridegroom throw confetti
(= small pieces of coloured paper or rice) over them. Photographs are usually
taken of the bride and bridegroom and their families and friends.

The reception

After the photographs everyone usually goes to a hotel for the wedding
reception, which is a special meal (wedding breakfast) and party to celebrate the
wedding. During the meal bride and bridegroom cut the -wedding cake and give
it to their guests. At the end of the meal there are speeches, usually made by the
bride's/other, the bridegroom and the best man. It is traditional for the best man
to make a speech in which he talks about funny and embarrassing things that
happened to the bridegroom in the past.
Before the reception ends the bride arid bridegroom usually drive away to
another hotel to spend their wedding night before beginning their honeymoon
(== a holiday taken by people who have just got married). The car the couple
drive away in has usually been decorated by their friends. There is often a sign
saying 'just married' and sometimes tin cans are tied to the back of the car.
Before she leaves, the bride throws her bouquet to her friends to catch.
According to custom, the woman who catches it will be the next one to get
married.

2 Give Russian equivalents of the italicized words and expressions


3 Make up a summary of the text above by answering these questions:

1. What is the usual place for Britons and Americans to get married?
2. What are the main people at the wedding?
3. What is supposed to bring the bride luck?
4. What is supposed to bring them bad luck?
5. Who is to arrive at the church first?
6. What is the wedding ceremony like?
7. What usually happens after the ceremony?

Reading II
MARRIED LIFE IN GREAT BRITAIN
4 Read through the entire text and decide which of the following headings
(A–F) would be most appropriate for each paragraph (1–6).

A The Matrimonial Causes Act 1973

B Marriage

C Legal Consequences of Marriage


D Divorce

E Nullity

F Reasons for divorce rate


1 The number of marriages in England and Wales fell by 20 per cent
between 1986 and 1997: down from 347,924 to 278,975. The largest fall in
marriages has been among those in which both partners were marrying for the
first time: 220,372 in 1986 compared with 160,680 in 1996.
The proportion of adults who are married will fall from 55 per cent to 45 per
cent by 2021. The average age of marriage continues to rise. In 1996 it was 29,3
years for bachelors (27,2 for spinsters), against 26,3 years in 1986 (spinsters
24,1). The average age in 1996 for all bridegrooms was 33.6, brides-31,1. In
1998 four-fifths of dependent children in Great Britain lived in a family with
two parents, compared with nine-tenths in 1972.
The proportion of never-married women who were cohabiting in Great Britain
has increased from 9 per cent in 1981 to 27 per cent in 1996/7.

2 The recent peak in divorces in England and Wales was in 1993, with
165,018. By 1995 the number had fallen to 155,499, then rising to 157,107 in
1996. Seventy per cent of those in 1996 were to couples where the marriage had
been the first for both parties. In Scotland the peak was in 1994, with 13,133
divorces, dropping to 12,222 in 1997. Almost one in four children born in 1979
is estimated to have been affected by divorce before reaching the age of 16. In
the past, families tended to stay together. They felt it was their duty to do this
and that marriage was for life. Divorce was not socially acceptable. It was a
commonly held view that a bad marriage was better than no marriage at all. In
Britain, as in many industrialized societies, there has been a steady rise in the
numbers of divorces. The Second World War disrupted a lot of marriages, due
to enforced separation and hasty marriages which were later regretted.
Immediately after the war there were a record number of divorces and the
proportion of marriages involving a divorced partner grew from 2% in 1940 to
32% in 1,985. Legal changes this century have made it much easier to get a
divorce. The most dramatic change resulted from the 1971 divorce law. The law
stated that there needed to be only one reason for a divorce petition - the
"irretrievable breakdown of marriage". This was a much wider category than the
previous ones of cruelty, insanity, desertion or adultery.

3 The change in the law had an immediate effect. In 1972 there were over
119,000 divorces in England and Wales and the rate has continued to rise. The
total number in 1990 was over 153,000, around 2% higher than in 1989.
Proposed laws may make divorce even easier.
Couples can now afford the legal side of getting and surviving a divorce more
easily than at any time in the past. However, for many families it is still an
.economic disaster as well as being emotionally difficult.
Another possible reason behind the rise in the divorce rate is the changing
attitude to marriage itself. The traditional Christian approach to marriage has
been against divorce. As the Church becomes less influential in the UK, the
view of marriage as a union for life has weakened. The result is that the break-
up of a marriage is seen as less of a normal crisis and more as a matter of
personal happiness.
Perhaps the people most affected by a divorce are the children. According to
current forecasts, about 20 % of children in Britain will experience family
breakdown by the age of 16. There has been growing concern for such children,
who are usually between the ages of five and ten. Recent laws indicated that first
consideration should be given to the welfare of the children when making
financial arrangements after a divorce.
If marriage is going through a troubled time, the partners may ask for help from
the voluntary counsellors of an organization which is called "Relate" (formerly
the Marriage Guidance Council).

4 These are chiefly as follows:


1) the parties should co-habit unless separated by agreement or by a decree of
judicial separation from a court;
2) the husband must normally support the wife financially in a style fitted to
his income. She loses this right if she deserts her husband or if the marriage
is dissolved or annulled. Her adultery is no longer an automatic bar:
Domestic Proceedings and Magistrates' Courts Act 1978. Although it
remains a factor to be taken into account. At common law a wife was under
no obligation to support her husband, but now the wife may in certain
circumstances be bound to assist the husband financially: Matrimonial
Causes Act 1973.
3) Disputes as to property between spouses may be settled by the High Court
or County court: Married Women's Property Act 1882, s. 17 (under the
Matrimonial Homes Act 1983, the court may give a spouse a right of
occupation of the matrimonial home, even if it belongs legally to the other
spouse).
4) One spouse can now be prosecuted for stealing from the other: Theft Act
1968.
5) Spouses can now sue each other in contract and tort, though the court may
stay any such tort action where it appears desirable: Law Reform (Husband
and Wife) Act 1962.

5 A marriage is null and void ( = i.e. regarded by the courts as never having
taken place) where:
a one of the parties is already married;
b the parties are not respectively male and female;
c see'capacity to marry'. These provisions are contained in the Matrimonial
Causes Act 1973, s. 11, according to which a degree of nullity in the case
6f a voidable marriage must not be granted if:
a the court is satisfied that the petitioner knowing he (or she) could have
avoided the marriage, conducted himself/herself in a way suggesting that
he or she would not do so, and
b to grant a decree would be unjust.
The Matrimonial Causes Act 1973, s.12, provides the followinggrounds for
avoiding a marriage:
a non-consummation (whether due to refusal or incapacity);
b lack of consent;
c unfitness for marriage because of mental disorder: Mental Health Act 1983;
d where one party suffers from a communicable veneral disease, or
e where the respondent was pregnant by some person other than the
petitioner.

6 This act reenacted the provisions in the Divorce Reform Act 1969, thus
affirming that "irretrievable breakdown of marriage' is the sole ground for
divorce. What constitutes breakdown will clearly depend on the circumstances
of each case, and for the prevention of rash divorces the Act makes provision for
a reconciliation procedure which must be followed before any divorce can be
granted. To establish irretrievable breakdown' one party must establish one or
more of the following five 'facts':
1) That the respondent has committed adultery and the petitioner finds it
intolerable to live with the respondent. Both elements must be established
(adultery and intolerability);
2) that the respondent has behaved in such a way that the petitioner cannot
reasonably be expected to live with the respondent;
3) that the respondent has deserted the petitioner for continuous period of at
least 2 years immediately preceding presentation of the petition;
4) that the parties have lived apart for a continuous period of at least 2 years
immediately preceding presentation of the petition, if the parties agree to
divorce;
5) that the parties have lived apart for a continuous period of at least 2 years
immediately preceding presentation of the petition, and whether the parties
agree to divorce or not.

Note: (1) There was a time when generally no petition could be brought for
divorce during the first 3 years of marriage. This period has been reduced to one
year: Matrimonial and Family Proceedings Act 1984;
(2) There is a waiting period of (usually) 6 weeks between a decree nisi and a
decree absolute. During this time the marriage subsists. The divorce is granted
unless (nisi) any cause can be established for not making it absolute.

5 Discuss the following questions:


1) Should the law be used to enforce any particular moral code, do you think?
Discuss whether the law should make sexual relations between consenting
homosexuals or lesbians a crime.
2) Should the wife support her husband financially or is it entirely the duty of a
man?
3) Adultery is not the sufficient ground for a divorce nowadays. Do you also
think so?
4) What factors should constitute the irretrievable breakdown of marriage?
5) Should the spouses stay together for the sake of their children? Before, a bad
marriage was considered to be better than no marriage at all. And now? Has
the attitude toward marriage changed? For the better or for the worse?
6 Choose a topic for a short composition (write 180 – 200 words):
1. Legal consequences of a marriage. Would you introduce any changes?
2. The sufficient grounds for nullifying a marriage.
3. The sufficient grounds for obtaining a divorce.
4. Voidable marriages.
5. Capacity to marry.
6. Legal consequences of marriage.
7. Marriage by different means.

Reading III
7 Before you read the text look up the meaning of the following:
- miscegenation - terminated by
- drug addicts - issuance
- common-law marriages - solemnized by
- desertion - abandonment
- intemperance - incompatibility
8 Read through the entire text and decide which of the following
titles (a - g) would be most appropriate for each part (1 - 7 ):
a The "Foreign" Divorce Decree

b Reasons for divorce

c The "Quasi-Marriage"

d To sum it up

e Rights and responsibilities of husband and wife

f Separation

g Forms of marriages in the US


FAMILY LAW IN THE UNITED STATES
1 The validity of the marriage is determined by the state where it takes
place. Though the US Constitution requires all states to give full faith and credit
to all enactments of the other states, however, each state has the right to control
the activities of its own citizens if a resident of one state goes to another state to
get married because he wants to avoid certain restrictive provisions limiting his
right to marry within the state, his home state may refuse to recognize that
marriage.
In most states the age of consent for males is 18 and 16 for females. But
they may require the consent of their parents or guardian until the male is 21 and
the female - 18. Several of the states have laws that prohibit intermarriage
between the races, so called miscegenation laws, making such marriages void
and the issue illegitimate. Although states have the right to determine
requirements for a valid marriage or a valid divorce, there can be no violation of
an individual's constitutional rights /the 14th Amendment/.
Many of the states specifically prohibit the marriage of epileptics,
lunatics, idiots, imbeciles and people of weak and unsound mind. Some have
included alcoholics, drug addicts, habitual criminals. Marriages between blood
relatives closer than cousins /uncle-niece, aunt-nephew, brother-sister/ are void
because they are incestuous (incest is sexual intercourse between people who are
closely related).
A marriage may be dissolved by annulment or divorce. It may also be
terminated by a proceeding when one spouse has been absent for more than 5
years or where the spouse has been sentenced to serve a term of life
imprisonment.
If the bride and groom are underage, they must present the consent of
their parents, but parental consent for underage applicants may be dispensed
with if the marriage ceremony is performed by a judge.
At least three quarters of the states require a medical examination and
certificate prior to the issuance of the license to assure the absence in both of
any communicable disease.
About one third of the states recognize common-law marriages. A
common-law marriage is an agreement made by a man or a woman to live
together as man and wife without any official ceremony, license, certificate, or
legal formality. It is entirely dependent upon their solemn intention to cohabit
and live together in decent and orderly manner, holding each other out to their
neighbours and to the community as husband and wife. A common-law marriage
which is valid in the state where it was consummated is valid and recognized in
all states. However, if a resident of a state which does not recognize the
common-law marriage left the state to enter into such a marriage, the state has
the right to refuse to recognize it.
Marriage by contract is another form of marriage without official
ceremony and without a license. This form is only recognized in a few states.
Both parties enter into a written contract of marriage.
Each state requires that the marriage be solemnized by a religious leader,
a public official or a judge. After such a ceremony some record must be
kept/made of the marriage by the filing of the marriage certificate with a
designated office for the keeping of such public records.
2 The husband is the head of the house. He chooses the domicile, the
permanent location for the household. The wife and family must reside at the
place chosen by him unless it is unreasonable and is detrimental to their health
and welfare. It is his duty to support and maintain his family out of his property
or the result of his labour. He must maintain them in accordance with his
financial ability. A husband who is prosperous may not keep his family in
poverty. He may not limit them to the bare necessities of existence.
Some states provide that if the husband is unable to support his family it is
the duty of the wife to help him in this responsibility. The husband when he
acquires property during the marriage is the owner unless it is taken in the name
of both the husband and the wife or it is purchased by the earnings of both. The
property which the wife owned before her marriage or which she individually
acquired since, continues to belong to her. Desertion of the husband and failure
to support his family may subject him to criminal prosecution. A person who
deserted his family and is apprehended in another state may be compelled to
contribute to their support by proceedings instituted in the state where he is
located through the Family Court.
3 The various grounds for divorce are: adultery, cruelty, abandonment,
desertion, neglect, habitual intemperance, addiction to drugs, habitual
drunkenness.
In New York until recently, the only basis for divorce was -'adultery. New
legislation has introduced cruel and inhuman treatment, imprisonment for more
than three years and separation, either by decree or agreement, after one year, as
additional grounds for divorce.
Incompatibility and a breakdown of tile marriage - such grounds are not
accepted by all states.
An action for divorce is brought by the person who claims to be affected
by the conduct of his spouse. He sets forth the grounds on which he bases his
claim and asks for a decree of the court to dissolve the marriage and give him
custody of the children. If the plaintiff is a woman she will also demand
permanent alimony if she wins the divorce. If the wife is the defendant she will,
when she answers the complaint, make a request for alimony and counsel fees to
defend the action.
4 The decree of divorce obtained in one state is recognised as a "foreign
divorce" and enforcible in all other states. The problem of enforcing a "foreign
divorce" arises when a person who is resident of one state, seeking a divorce
which is difficult to obtain goes to another-state and obtains a divorce there. He
then returns to his home state and attempts to enforce the terms of that out-of-
state divorce.
5 The currently widespread practice of couples living together without the
benefit of a legal marriage ceremony has brought to the fore the question of their
legal obligations. If this quasi-marriage consists only in living together, there is
no legal commitment. However, if this relationship is based on some agreement
or mutual promise between the two persons, we have the elements of a contract
and its consequent mutual obligations.
The matter then becomes merely a question of proof. If a contract is
established and the commitments under it are proved, then the court will enforce
it. Of course, if a common-law marriage is established and such a marriage is
legal in the state where litigation is instituted, then the regular marital
responsibilities are in effect.
6 A legal separation from 'bed and board' is accomplished by agreement or
court and continues all existing marital obligations while giving the parties the
right to live separate and apart. The provisions of the separation agreement
usually drawn with the aid of counsel contain all the terms agreed upon by the
parties (custody of the children, financial support of the wife and the children
and rights of visitation with the children). In the event of a subsequent divorce
and the wife's remarriage the husband may have to continue to pay alimony
unless the contract states the contrary. When a husband and wife resume their
marital relationship they automatically terminate their separation agreement.
The legal effect of a separation is to give each the right to establish his own
household and to live separately and apart from the other. Both are relieved of
their marital duty to cohabit. They are, however, not free to remarry since they
are still married to each other.
7 Marriage is the foundation of the family. The family is the basis of our
social structure. The obligations and responsibilities in marriage and in the
family form the core of communal existence. Some of the basic concepts to keep
in mind are:
a marriage is more than just a contract, it is a
b relationship vital to the public interest. It cannot be created or dissolved
without permission or authority of the state.
c The husband and the wife are responsible to each other and to the
community. The children, although a primary obligation of their parents,
are also considered the wards of the state, receiving the protection of the
courts.
d Each state by its laws authorizes the dissolution of a marriage. The grounds
for such dissolution are specific and must be complied. Annulment,
separation and divorce are available depending upon the right to such
relief.
e The United States Constitution directs that a judgment of one state is
entitled to full faith and credit in the courts of a sister state.
f The "foreign" divorce is subject to the same scrutiny in the courts of the
sister states.
g Divorces obtained in a foreign country are recognized on the basis of
comity between the countries. However, here again the state court is
entitled to delve into the question of jurisdiction. If these decrees and
judgments are based upon the required jurisdiction then they are
enforceable in all courts in the United States.
9 Discuss the following topics:

1. Common-law marriage. Consider all the pros and cons.


2. Separation or divorce? Which is the lesser of the two evils?
3. Compare the procedure of obtaining a divorce in the US and Russia.
4. A marriage is more than just a contract. Why?
5. The divorce procedure. Should it be more complicated?
6. The contractual nature of marriage.
7. Incompatibility or break-down of the marriage.

10 Write your own opinion on the following:

1. The most essential grounds for divorce. Arrange them in the order of their
importance.
2. Types of marriages.
3. Prohibited degrees of marriage.
4. Miscegenation and incestuous laws.
5. The "foreign" divorce.
6. Duties and responsibilities of spouses.
7. The irretrievable breakdown of marriage.

11 Vocabulary: Find a match


1 irretrievable a degree
2 to grant breakdown
3 life obligations
4 mutual imprisonment
5 legal for divorce
6 to support commitments
7 grounds a family
8 to get of proof
9 a question prosecution
10 criminal married
Test your professional English
Family Law
Below are the main areas that Family Law covers. The text gives excerpts
from those areas. Write one area above each text
Adoption Estate Planning

Child Custody Estates and Trusts

Children's Rights Insurance

Divorce Marriage
1 Adoption
The process by which a legal parent-child relationship is created between
individuals not biologically parent and child.

2 _______________

The parents of a child born within a marriage are joint guardians of that child
and the rights of both parents are equal.

3 _______________

Children are generally afforded the basic rights embodied by the constitution.

4 _______________

As a result of this both parties' status becomes single again.

5 ______________

The process by which an individual or family arranges the transfer of assets


in anticipation of death.

6 ______________

Generally, a trust is a right in property (real or personal) which is held in a


fiduciary relationship by one party for the benefit of another. The trustee is
the one who holds title to the trust property, and the beneficiary is the person
who receives the benefits of the trust.
7 _______________

While types vary widely, their primary goal is to allocate the risk;of a loss from
the individual to a great number of people.

8 _______________

A contract based upon a voluntary private agreement by a man and a woman to


become husband and wife.

Family law is the body of law which regulates family relationships,


including marriage and divorce, the treatment of children, and
money issues.
Newspapers write Newspapers write Newspapers write
I. Before you read discuss these questions.
1. How should the assets of the couple be divided in case of divorce?
2. Should the judges consider mutual reproaches of the spouses as the truth
about a broken marriage?
3. Does divorce always cause frustration or can it sometimes be beneficial and
fortunate?
Understanding main points.
After reading the article answer the questions
1. Should the court penalise a wife/husband if she/he suddenly leaves her/his
rich husband/wife?
2. What did the House of Lords rule in 2000 concerning the division of the
assets?
3. What was their first case?
4. In what case should the judges take the parties’ conduct into account?
5. What assets should be taken into account in America and most European
countries? What about England and Wales?
6. What were the details of Kenneth and Julia McFarlane’s case and how did it
end?

Vocabulary
Find a word or phrase in the article that has a similar meaning

1. to leave your spouse or boyfriend suddenly ______________________


2. something you compare other things or people with judging how good they
are _________________
3. something that is unfair or unjust ___________________
4. accusations made by two people about each other’s behavior on a particular
occasion____________
5. relating to a wedding ________________
6. the splitting of the nucleus of an atom to provide a large amount of
energy_______________________
(inequitable, nuclear fission, walk out on, recriminations, pre-nuptial,
yardstick)
The Economist Britain
Divorce laws

Nuclear fission
The law lords lay down guidelines for big-money divorce settlements

If a wife walks out on her American wife, Melissa, who, on


wealthy husband after a short marrying, gave up her £85,ooo-a-
marriage, should the courts penalise year job. The union ended less than
her when dividing the spoils? If a three years later when he went off
rich husband leaves his long- with another woman. At the outset of
suffering wife for a young bimbo, the marriage, Mr Miller's wealth was
should the wife be awarded a bigger estimated at nearly £17m. By its end,
share of their joint wealth on he had also acquired shares worth
divorce? No, said the House of between £13m and £18m.
Lords, Britain's highest court, this In awarding Mrs Miller a £5m
week in a firm rejection of the notion lump sum last year, a lower court
of blame being re-introduced into said that it had taken into account the
divorce proceedings. Straying husband's responsibility for the
spouses around the country breathed breakdown of the marriage along
a sigh of relief. with the wife's "legitimate
In 2000, the House of Lords expectation" of a higher standard of
ruled that assets should be divided living. To widespread astonishment,
according to a "yardstick of this was later upheld by the Court of
equality", and not simply on the Appeal. Under the 1973 Matrimonial
basis of the claimant's-usually the Causes Act, judges are supposed to
wife's—financial need. Since then, take the parties' conduct into account
judges have struggled to decide only if it was so egregious that it
when they might depart from that would "be inequitable to disregard
broad principle of equal shares. The it". Adultery and desertion had never
law lords have now tried to lay down been thought to fall into that
some guidelines. category. Did this mean the end of
Their first case concerned Alan no-fault divorces?
Miller, a fund manager with an No, Lord Nicholls ruled this
income of over £1m a year, and his week. Judges could not, and should
not, seek to discern the truth about a McFarlane—he a senior tax partner
marriage from the recriminations at Deloitte Touche Toh-matsu, she a
that followed a breakup. But in view well-paid solicitor before she gave
of Mrs Miller's expectations and the up her job to look after their three
huge increase in Mr Miller's wealth children. The marriage lasted 16
during the marriage, he nonetheless years. At their divorce, the couple
felt the size of the award was fair. agreed to share their capital assets,
In America and most other which were valued at £3m. But on
European countries, divorce the basis of her husband's anticipated
settlements take into account only future earnings, Mrs McFar-lane
those assets acquired during a demanded an extra £250,000 a year
marriage. But in England and Wales for life. The law lords decided in her
(though not Scotland) all assets are favour. While agreeing that the sum
traditionally up for grabs. Lord far exceeded her needs, they argued
Nicholls has now ruled that the that she was entitled to
"yardstick of equality" should not compensation for having given up
necessarily be applied to "non- her own career.
matrimonial" assets acquired before The rulings should help make
the wedding. The ruling should divorce more predictable for those at
cheer the likes of Sir Paul the top of the earning scale—
McCartney, the former Beatle, who something that may also be achieved
amassed most of his estimated by the growing use of pre-nuptial
£8oom fortune before his four-year agreements. But they will change
marriage to Heather Mills, which little for ordinary folk, who will
publicly broke down last week. continue to scrabble for what they
The second case before the can get, with both sides invariably
Lords concerned Kenneth and Julia ending up worse off.

On your own

1. Write what you think of the problem of dividing the assets of


spouses.
2. Read another article from the Economist. It is about autistic
children.
“Autistic” means a mental disease that makes children unable to respond to
other people.
Before you read discuss these questions:
1 .Should there be special schools for autistic children?
2. What problems can autistic children face in ordinary schools do you think?

Vocabulary
Give a suitable translation of the following words
1. arousal – the state of being alert or excited
2. stigmatise – if something is stigmatised a lot of people regard it as shameful
in some way
3. be under strain – a state of worry and tension
4. laudable – worthy of praise or admiration
5. benign – gentle and pleasant

Understanding main points.


After reading the article answer these questions:

1. What kind of place is Sybil Elgar?


2. In what ways is the school unusual?
3. How are autistic children treated by their schoolmates in ordinary schools?
4. What did the British government pledge in 2002?
5. Why are teachers in mainstream schools under strain?
6. What do civil servants want to provide?

On your own
1. Whose responsibility should it be to protect disabled children from suffering?
Think about the economic, social and financial problems for the state when
taking care of disabled children and how they may overcome them. What
measures would you suggest in order to improve the situation in our country?
Write your opinion in a form of a composition.
A cry for help
Why some children with autism suffer in mainstream schools
SYBIL ELGAR, a secondary school non-disabled peers. Some parents said
for autistic children in Southall, west their children were so unhappy that they
London, is a quiet place, and for good had harmed themselves and talked of
reason. Children with autism are easily suicide. One in five children had been
overwhelmed by information and can suspended or expelled, often more than
react badly—even violently—to the once.
wrong kind of stimulus. Sybil Elgar is In 2002 Tony Blair's government
designed as a "low arousal" building, pledged that most children with
without the usual eye-catching displays disabilities would be educated in
in the entrance hall mainstream schools. That was mostly to
The school is unusual in other avoid stigmatising them, but cost may
ways. With just over 100 pupils, it is also have played a part in the decision.
barely a tenth the size of the average According to the NAS, it costs £30,000 to
secondary school. There are two educate an autistic child in a special
members of staff to every five children. secondary school, but as little as £2,600 in
Some pupils have screens around their a mainstream school
desks to reduce external stimuli. The Poorly-trained teachers in
children travel between classrooms, as mainstream schools are under huge strain.
they would in an ordinary secondary Last week, the National Union of
school—but do so in small groups, led Teachers complained that schools were
by an adult. struggling to cope with children with a
About 90,000 pupils suffer from vast range of disabilities. Not
autism, but there are just 7,500 places in surprisingly, pupils with severe
specialist schools. Gillian Zettle, the behavioural and medical problems were
deputy principal of Sybil Elgar, says not the toughest.
all autistic pupils can cope in normal The government, it seems, is now
state schools. "Some can't even be with rowing back on its earlier policy. In
more than one person. The average recent evidence to the parliamentary
secondary school would be a living committee on education, civil servants
nightmare for many of our children." said they wanted to provide "a flexible
Many parents agree. The National continuum of provision" rather than
Autistic Society (NAS) recently asked insisting on inclusion. In June, the
more than 1,000 parents about their committee is expected to publish a
autistic children's educational critical report on a policy that once
experiences. Two-fifths had been bullied seemed laudable and benign.
at school, about double the rate of their
REFERENCES

1. Adam J.H. Longman Dictionary of Business English. Longman:


York Press, 1997
2. Brieger N. Test Your Professional English. Law., Penguin Books
Ltd., 2002
3. International Legal English Certificate. Handbook for teachers, :
www.LegalEnglishTest.org EMC|3336|7Y02 UCLES 2007
4. Smith T. Market Leader. Business Law. BE, Pearson Education
Ltd., 2000
5. Trappe T., Tullis G. Intelligent Business. Coursebook
Intermediate, Pearson Education Ltd. 2005
6. Градская Т.В. Семья. Семейное Право. УММ - Н.Новгород:
НГЛУ им. Н.А. Добролюбова, 2004
7. Петрова О.В. УММ по теме «Юриспруденция», Н. Новогород,
НГЛУ им. Н.А. Добролюбова, 2002
8. Фастовец Р.В. Английский для бизнес-права., Минск «Тетра
Системс», 2006
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