30317777

Ю.А.
Илиади
АНГЛИЙСКИЙ ЯЗЫК
ДЛЯ ЮРИСТОВ
Учебник
Москва
2010
УДК811.111(075.8)
Б Б К 81.2Англ-923
И43
Илиади Ю.А.
И43 Английский язык для юристов: учеб. — М. : Проспект,
2010. - 400 с.
ISBN 978-5-392-01084-4
Учебник содержит аутентичные тексты из английских источников:
словарей, энциклопедий, учебников по праву, а также произведений
юристов, оригинальные лексико-грамматические упражнения для раз-
вития навыков чтения и понимания литературы по специальности, за-
дания монологического и диалогического характера, способствующие
достижению коммуникативной компетенции. Учебник может быть ис-
пользован как на аудиторных занятиях под руководством преподавате-
ля, так и при самостоятельном изучении английского языка.
Для студентов высших учебных заведений и всех, кто интересуется
данной тематикой.
УДК 811.111(075.8)
ББК 81.2Англ-923
Учебное издание
Илиади Юлия Александровна
АНГЛИЙСКИЙ ЯЗЫК ДЛЯ ЮРИСТОВ

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© Ю. А. Илиади, 2010
© ООО «Проспект», 2010
P a r t I. LEGAL CAREER
Unit 1
Legal Terminology Basics. Areas of Law
A brief review of major legal terms
LAW
The state establishes the system of rules - law

The state must also establish law and order.
Law and order - правопорядок - situation in which people respect
law, and crime is controlled by the police.
The word law has Old English origin. It appeared in ancient times when the
Saxons invaded Britain.
Then the Normans (French) came to the island. They established their rules of
the state and wanted everybody to follow strictly those rules. Many words
assimilated, the French word ordre - that means порядок - among them.
Now both words used together strengthen the meaning.
e.g.
The soldiers restored law and order in the region.
law - laws - lawyer

(право - законы - специалист в области права)
You study law and then practise law.
You study at a Law Faculty and then work at a Law Firm.
You are lawyers.
You are supposed to know all the laws.
3
P a r t I. Legal Career
area of law - область права (практика)

according to the law - согласно закону
body of laws - совокупность правовых норм
Verb combinations with the word LA W
study
read practise
apply enforce
observe LAW execute
break create
modify amend
enact
Law students read or study law at Law Schools where law teachers
teach law.
Then they graduate and practise law.
People must observe law.
But sometimes they break law.
Then police enforce law.
In court judges apply laws.
Parliament or some other administrative bodies create law.

Or modify law if necessary.
They also sometimes amend law. And after that they enact law.
Governments execute law.
Why are you studying/did you study law?

Where do lawyers practise law?
How do the lawyers know what law to apply in a certain case?
Why must people observe law?
What are those who break law called?
How does the police enforce law?
Do you know what it means to execute laws?
Lawful v. Legal
lawful - законный, правомерный (соответствует закону)
legal — правовой; юридический; законный; узаконенный; легальный; осно-
ванный на законе; основанный на общем нраве (санкционирован-
ный законом)
4
U n i t 1. Legal Terminology Basics. Areas of Law
Choose the proper Russian definition for the following:
lawful act профессия в области права

lawful age правовой вопрос/проблема
lawful business решение суда
lawful arrest норма права
lawful owner юридическая консультация (служба)
legal activities законная сделка
legal system правовая поддержка
legal rule законный арест
legal service совершеннолетие
legal advice правомерный поступок
legal decision законная деятельность
legal backing законный владелец
legal profession совет юриста
legal question / matter / issue правовая система
Remember:
LEGAL ENTITY BUT: NATURAL PERSON / INDIVIDUAL

юридическое лицо физическое лицо
Explain each word phrase in plain English.

e.g. A lawful act is an act that doesn't break any law.
Negation:
unlawful - illegal
Finish the sentences:
It's unlawful...
It's illegal...
As you already know, the word law (and the root law-) has Old English
origin.
The word legal appeared in Middle English from Old French, where it came
from Latin leglis.
The Normans ( French) brought the process of making laws - legislation.
5
legislation [,led3is'leijh] - законодательная деятельность, законодательство

legislate ['led3isleit] — осуществлять законодательную власть, издавать
законы
legislative ['led3istativ] - законодательный
The three branches of power are: legislative, executive and judicial.

Parliament's major activity is legislation.
Parliament legislates, the government executes the laws, and courts
are involved injudicial activity.
Legislative body - Parliament (GB), Senate (USA), State Duma (Russia) -

законодательный орган.
Synonyms:
L A W - ACT
act - -is a product of legislative body - закон, принятый законодательным орга-
ном (документально зафиксированный)
e.g. Acts of Parliament
act (n) - smth done by a person in accordance with his or her free will - no-
(legal context) ступок, действие
e.g. wrongful act - противоправное деяние; lawful act (action) - правомерное
действие.
Law as subjects to study:

What law subjects do you study? Did you study?
What courses are you taking at the moment?
What subjects are you going to specialize in? Why?
Criminal Law History of State and Law Sales Law

Civil Law Theory of State and Law
Business Law
Law Enforcement Bodies - Legal History
Intellectual Property
Police / Militia Russian / Foreign Legal Law
History
Constitutional Law Customs Law
Civil Procedure
Administrative Law Employment Law
Criminal Procedure
Municipal Law Tax Law Family Law
Financial Law Contract Law Land Law
6
What related rules and regulations, statutes and orders, procedures and
court decisions do you also study? (Have studied?)
rule - норма права
regulation - правило
statute - статут
order - указание, предписание
procedure - процессуальная норма
decision - судебное решение
Law as a System
Common Law
common law - англосаксонское право
Common law is the law based on precedent.

Common law countries are the United Kingdom, the USA, Canada, Australia
and New Zealand.
Law is unwritten in common law countries.

In Russia there are codes with rules and regulations.
In the UK there is no constitution but there are Acts of Parliament.
In the USA there is the Constitution of the USA.
But precedent, or case is the main source of law.
Common law is a case law or judge-made law. It means that certain
judicial decisions may become laws according to which judges must
decide later cases.
Synonyms:
CASE - SUIT - судебное дело

PRECEDENT - AUTHORITY - прецедент, судебное решение
case - a civil or criminal suit
precedent - a judicial decision that should be followed by a judge when deciding a
later similar case
authority - an official decision of a court used as a precedent
eg-
Lawyers study a lot of cases in order to look for a precedent or authority that can
be applied in the case they are reading.
7
Authority also means: a) an important source of law; b) power or a

state body that has power (орган власти).
Have you studied any civil or criminal cases?
What is the role of precedent in Russian law?
In what countries do the courts base the decision on the authority?
Why is it said that judges in common law countries also legislate? '
SUIT - 1) иск; 2) судебная тяжба; 3) судебное дело; процесс

(to sue smb for smth - подать на кого-то в суд за что-либо)
LAWSUIT - 1) судебное дело; 2) судебное разбирательство; 3) судебный спор
The decision in the lawsuit Liebek v. McDonald's has become a precedent.
Do you know any famous lawsuits?
What was the case? What was the decision?
Civil Law
civil law - 1) гражданское право; 2) Римское право
CIVIL LAW - 1) the body of laws established by a state or nation for its own
regulation (ant: international law); 2) the legal code of ancient Rome; codified
under Justinian; the' basis for many modern systems of civil law (syn: Roman
law, Justinian code, jus civile).
Civil law is opposed to common law as a legal system.
Civil law is opposed to criminal law as the body of law.
1. Opposed as a legal system

Civil Law
Civil law is the law inspired by old Roman law, the
primary feature of which was that laws were written
into a collection; codified, and not determined, as is
common law, by judges. The principle of civil law is to
provide all citizens with an accessible and written
collection of the laws which apply to them and which
judges must follow.
Common Law
Common, law is judge-made law. Law that exists
and applies to a group on the basis of historical legal
precedents developed over hundreds of years. Because seek out
it is not written by elected politicians but, rather, by выискивать, отыс-
кивать
judges, it is also referred to as "unwritten" law. Judges
try a case
seek these principles out when trying a case and apply рассматривать дело
8
the precedents to the facts to come up with a judgment.

Common law is often contrasted with civil law systems
which require all laws to be written in a code or written
collection.
2. Opposed as the body of law

Civil Law
Civil Law regulates relationships amongst persons
and organizations setting rules and principles that
apply to private relations. Violation of these rules is a
private wrong, or tort. Thus, Civil Law is referred to as
Tort Law that consists of legal rules, regulations and
procedures.
Civil Procedure sets rules of compensation for compensation
damages. for damages
компенсация
зa (причиненный)
Criminal Law
ущерб
Criminal Law is the body of laws setting limits of
social conduct and forbidding unlawful actions.
Violation of these laws is a public wrong, or wrong
against society. Criminal Law sets the rules of
punishment for crimes. Criminal Law consists of legal
rules defining the criminal conduct and criminal
procedure.
Tort Law
Tort Law and Criminal Law (common law classification of crimes and
torts)
Tort Law or Law of Torts - деликтное право; касается нарушений против

личности и имущества личности, за которые тре-
буется материальное взыскание по иску потер-
певшего.
Tort is a civil wrong against a person or person's property, meaning both

individuals and legal entities, [e.g. negligence (халатность), assault (оскорб-
ление), breach of contract, unfair competition.] A person who does such
wrong must pay compensation.
Crime is a criminal wrong against society, because a wrong is committed
against all members of the community, [e.g. murder, bribery (взяточничест-
во), robbery, fraud (мошенничество).]
A person who commits a crime is punished and sent to prison.
9
Areas of Law Practice

Laws protect, provide control, and define the rights and obligations and set
principles of lawful behavior.
Laws include certain rales and regulations, statutes, procedures and orders
so that any activity is governed by an appropriate legislation. The areas of law
practice in which lawyers specialize are numerous; some are included into
large bodies of laws, such as Civil Law, Tort Law or Criminal Law. Some refer
to definite spheres of economy, business, human relations etc.
You are supposed to know what each area deals with, relates to or
focuses on.
The following list of law areas runs from the titles familiar to you to those
that you may not at once recognize. Study the definitions, if necessary
look up some words in your dictionary.
Areas of Law Practice

Administrative Law deals with rules and regulations and orders and
decisions created by administrative agencies of
government
Banking & Finance Law focuses on rules and regulations of banking
activity and financial transactions
Bankruptcy Law includes rules of business termination and
company liquidation
Computer & Technology Law focuses on the regulation of scientific
technology involving the production or use of
electronic devices and computers
Constitutional Law relates to the protection of rights provided by
constitution
Commercial Law deals with the regulation of sales, trade and
commercial transactions
Contract Law relates to rules and regulations of contractual
relations setting the rights and obligations of
the parties
includes classifications of crimes, responsibility
Criminal Law for criminal offence, trial process and court
procedures of setting punishment for criminal
act
deals with the rules that guard certain family
Family Law relations and regulation of adoption, support
and divorce
Intellectual Property Law focuses on protection of exclusive rights of
inventors, creators and authors
10
International Law is a group of laws, rules, or principles that are

based on custom, treaties, or legislation and that
control or affect the duties and rights of
sovereign nations in relation to each other
Internet Law concerns rules and statutes providing control
over Internet communication
Antitrust Law ensures and regulates fair competition, ensures
(антимонопольное право) protection from monopolization
Corporate Law deals with the legal methods of company
(корпоративное право) formation, company running and financial
affairs
Environmental Law involves statutes and rules of nature protection
(законодательство по защите
окружающей среды)
Insurance Law concerns rules and regulations of insurance
(страховое право) activity
Employment Law sets control of working conditions, deals with
(трудовое право) rules and regulations of labor and employment
relations
Tax Law and Taxation concerns tax matters and tax responsibilities
(налоговое право)
Real Property Law sets and ensures rules of property transactions
(законодательство (e.g. selling and buying of land and buildings)
о недвижимости)
Product Liability Laws includes legal issues concerning responsibility
(законодательство for the quality of products and protection from
об ответственности defective goods
производителя продукции)
Processes
Arbitration - третейский суд, арбитраж;
the process of resolving a dispute outside of the court system by presenting it to an
arbitrator.
Mediation вмешательство с целью примирения;
an attempt to bring about a peaceful settlement or compromise between parties
through the objective intervention of a neutral party.
Litigation - судебный спор;
a legal proceeding in a court; a judicial contest to determine and enforce legal
rights.
11
Р а г t I. Legal Career
Civil Procedure - гражданский процесс;

the steps taken and methods used in bringing and conducting a civil action.
Criminal Procedure - уголовный процесс;

the steps taken and methods used in bringing and conducting a criminal action.
You may practice defining the areas of laws asking questions like "What
area of law deals with ... / relates to ... etc.?"
The better way is to move to the following text and task.
Business Law
Read the text and define what areas of law Business Law comprises.
Refer to the Areas of Law Practice table given above.
A great number of law practice areas form the megafield of Business Law
that provides effective regulation of key business activities. Business Law
regards legal issues concerning company formation, company running and
financial affairs including complex tax matters. Working conditions and
regulation of labor and employment relations are also governed by Business
Law.
The central area of Business Law is related to contractual relations, which
clearly define the rights and obligations of the involved parties. Adjoining
here is the area of regulation of sales, trade and commercial transactions.
Constant control of fair competition and protection from monopolization are
executed within Business Law. The following legal matters are advised on and
regulated under Business Law:
- protection of exclusive rights of inventors, creators and authors;
- legal issues concerning responsibility for the quality of products and
protection from defective goods;
- control over Internet communication property transactions;
- business termination and company liquidation.
Lawyers who practice in the area of Business Law are experts in legal
procedure in court because their clients, legal entities and individuals, may
suffer from violation of civil or criminal law, or even break such laws. Thus, the
lawyers must be aware of all the steps taken and methods used in bringing and
conducting a civil action and, moreover, the steps taken and methods used in
bringing and conducting a criminal action.
So, specialization of a business lawyer means knowledge and skills in a
wide range of law areas.
12
Business File 1
The language of business is becoming international.

You know these words, only the pronunciation of most of them is
different in Russian.
Check pronunciation, give the meaning:
business director manager fax printer export import bank client

secretary computer industry contract agent company assistant
marketing project e-mail operation product economy function office
capital system boss strategy service group transport calculator
department standard sector finance inspector control test organisation
material analysis dividend model partner component president location
consultant sponsor design basis presentation interview plan mobile
phone laser guarantee marketing PR figure structure local
cooperate/cooperation coordinate/coordination budget
The main "business" verbs
Make - Do
The verbs have similar meaning - делать.
We use do when the activity is an end itself, e.g. do business, do a job.
We use make when there is an end product, result, e.g. make a profit, make an
offer.
There are phrases to learn:
Do Make
business; a job; work; a service; the ac- money; a decision; a profit; a loss;
counts /budget /forecast progress; a report; a complaint; an offer;
a mistake; an appointment;
arrangements; also a budget/forecast
(with results)
Perform - operate - function - carry out - execute - accomplish - fulfil

The general translation for the verbs in Russian - выполнять, исполнять,
though there are certain shades of meaning illustrated by the following text:
Companies that operate on the market are able to perform successfully when all the
company departments function effectively, the staff can carry out the day-to-day
work and accomplish the most difficult tasks. It doesn't matter whether an
employee acts as a manager or as one of the junior staff, everyone must do the job
and fulfil the duties. In this case the company makes good progress and executes the
plans.
13
Produce - manufacture
Both mean - производить, выпускать продукцию.
Produce - to make smth to be sold; to make smth using skills or imagination
Manufacture - to make or produce large quantities of goods to be sold, using
machinery
Provide - supply
Both mean to make sure that
someone gets what they need - снабжать, обеспечивать
Provide also means - предоставлять, устраивать
Supply - поставлять
Supplier - поставщик
Supply the demand - удовлетворять спрос
Supplies - поставки сырья и материалов
Sell - buy - purchase

Sell - to give smth to smb in exchange for money; to offer smth for people to
buy - продавать
Buy - to get smth by paying money - покупать
Purchase - to buy smth big or expensive, or in large quantities - приобретать (по-
купать), закупать
Organize - arrange
Organize - to make the necessary preparations so that some activities can happen
Arrange - to make preparations or plan
Employ - hire
Employ - to take into service - предоставлять работу, держать на службе, на-
нимать
Hire - to engage the services of (a person) for a fee; em ploy - нанимать на
оплачиваемую работу
People in business - lawyer's clients
Businessman/ businessmen
businessperson
Executive
one that exercises administrative
or managerial control - должностное лицо
14
Direct to be in charge, to guide, organize and control - возглавлять

бизнес, контролировать и организовывать
Manage - to exercise executive, administrative direction - управлять,
осуществлять руководство
Run - to direct a business or activity - руководить, вести дела
Director one that is in Manager one that exercises executive

charge, guides, organizes and administrative direction - управ-
and controls - директор ляющий, руководитель
Employer - one that employs, provides job - работодатель

Employee - one that is employed, does the job - работник
Producer / manufacturer ~ производитель

Supplier - поставщик
Distributor - дистрибьютор, агент по продаже, тот
кто распределяет товар фирмы по тор-
говым точкам
Dealer - агент по продаже товаров фирмы, дилер
Seller - продавец, торговец
Buyer - покупатель
Purchaser - закупщик, оптовый покупатель
Trader - коммерсант, оптовый торговец
Agent - one who is authorized to act for or in the place of another -

агент, представитель, посредник
Customer - one that purchases goods - заказчик, клиент

Consumer - one that consumes goods - потребитель
Clerk - one employed to keep records or accounts or to perform

general office work - клерк, чиновник
Officer - one who works for an organization - служащий, сотрудник
учреждения
Unit 2
Legal Education
When did you decide to enter the educational institution you are studying /
studied?
Why did you choose the institution you study at now / you have been
studying/ you studied?
What exams did you take to get admitted?
What about the graduate degree? Have you obtained or are going to obtain
any?
How do you assess your present professional educational level?
Core Vocabulary 1
law school юридический факультет университета
apply for подавать заявление (например, в учебное
заведение)
applicant поступающий, абитуриент, претендент
admission / admit / to be прием; принимать; быть принятым (зд. в
admitted учебное заведение)
acquire [a'kwais] / приобретать опыт
gain experience
enter a university поступить в университет
take an examination сдавать экзамен
pass an examination сдать экзамен
take a course проходить курс (по предмету)
get a qualification / qualify for получить квалификацию / стать квалифи-
a lawyer цированным юристом
obtain a degree получить ученую степень
academic/vocational training теоретическая / профессиональная подго-
товка
undergraduate/ graduate неполное высшее / высшее образование
postgraduate studies аспирантура
curriculum [ka'rikjslsm] учебная программа
foundational subjects базовые предметы
a major (n) (зд.) профилирующая дисциплина
16
U n i t 2. Legal Education
optional / elective courses - предметы по выбору (факультатив)

credit - зачет
master a course/ skills - освоить курс (предмет) / навыки
provide / develop / deepen - давать / развивать, совершенствовать / уг-
the knowledge лублять знания
dissertation / thesis / paper / - диссертация / тематическая работа / кур-
project совая работа / проект, разработка
clinic / clinical - практические занятия, учебная практика;
место проведения практики
training program - программа профессиональной подготовки
Bar examination - экзамен при поступлении в коллегию адво-
катов
grade / mark / score - оценка, балл, отметка, сумма баллон
educational background - образование
reasoning - logical / legal / - обоснование, аргументация - логическое;
analytical правовое; аналитическое
core subjects - основные предметы
faculty - факультет; преподавательский состав
attorney (USA) - адвокат
solicitor (UK) - адвокат, консультирующий клиента и под-
готавливающий дела для барристера; адво-
кат, выступающий в судах низшей инстан-
ции
barrister (UK) - адвокат, выступающий в суде высшей ин-
станции
LLB - Bachelor of Law - бакалавр права
LLM — Master of Law Letters - магистр права
JD - Juris ['d3uris] Doctor - - доктор права
Doctor of Law (USA)
Concept
Prospective law students always want to be well informed before
they apply to a university law school or law college.
This is what they usually ask:
How can I apply for a law school?
What are the admission requirements?
What exams do I have to take and pass to be admitted?
How long does it take to qualify for a lawyer?
What degree do I obtain?
What courses do I take at undergraduate / graduate level?
What are the core / foundational courses?
17
What are the optional / elective courses?

What major skills are mastered through the courses?
Is there a clinical semester / special training program in the curriculum?
What university or law school provides the best educational background?
Can you answer these questions? Can you provide this information
for an American or British potential lawyer?
Legal Education in the USA

Brief Reference
How to become a lawyer in the USA
1. Obtain a Bachelor's degree with high grades.
2. Pass the Law School Admission Test (LSAT) with a high score.
3. Attend an American Bar Association (ABA) law school.
4. Qualify for Juris Doctor JD - degree.
5. Pass the ABA bar examination.
Information Processing
Legal education mode in the USA is rather complex consisting of
some important stages. The table below shows these stages but doesn't
provide information. Copy the table in your notebooks in order to fill it
out with the facts you're going to find in the text of the interview with
an American attorney.
Undergraduate LSAT: Graduate course:
Duration of Degree Admission Degree Bar exam:
course: skills sections 1 s t year courses
education obtained requirements obtained purpose
to develop and skills 2 n d year courses
Interview with an American Attorney

(correspondent - C; Mr. Edwards - E)
C.: We are speaking today about legal education in the USA, and our
guest is Mr. Steve Edwards. Firstly, how long does it take to become a
lawyer?
E.: 7 years. That means 4 years of undergraduate study for a bachelor's
degree followed by the graduate Juris Doctor (JD) law degree.
C.: So, law is not offered at the undergraduate level, is it?
E.: No, students read law only at law schools.
C.: Would you fill us in on some details of the undergraduate course?
I mean, what college to choose, what subjects to study ...
E.: Gladly. Law students need to develop the three basic skills:
communication skills both written and spoken; research skills; and
18
especially analytical thinking skills. These

abilities can be developed by any major: social
sciences, history, economics, humanities, and
engineering. So a bachelor's degree at any top
college or university that provide highly
efficient background will give you a better
chance for admission.
C.: Here we come to admission. Is it really that
difficult to enter a law school?
E.: I wouldn't say it is difficult if you, first, have
high undergraduate grades, and, second, also
score high on the LSAT.
C.: Ah, yes, the famous Law School Admission
Test? As I know, it's a rather thorny kind of
examination.
E.: If you read up for LSAT properly it's not that
hard.
C.: Could you tell us more about it?
E.: Sure but just in brief. The test measures
reading and verbal reasoning skills that are
essential to succeed in law school. It consists of
five 35-minute sections of multiple-choice
questions. Only four of the five sections will
contribute to your score. These sections
include one reading comprehension section,
one analytical reasoning section, and two
logical reasoning sections, an experimental
section which can be any of the above and
finally, and an essay writing section
C.: OK, a successful applicant becomes a happy
student. What courses make up the first year
curriculum? memorandum
(pi. memoranda,
E.: During the first year of law school the students memorandums)
usually take major courses such as служебная записка,
Constitutional Law, Contracts, Property Law, справка, письменная
Torts, Civil Procedure and Legal Writing. справка, докладная
C.: A few words about the program of Legal записка
Research and Writing, please. draft a document
E.: The students are taught to work with составлять документ
documents just the way' a lawyer usually does. brief
They attend the library, write legal memoranda, краткое письменное
draft documents, and prepare briefs. изложение дела, за-
писка по делу, предъ-
C.: What other practical experience do they являемая солисито-
acquire? ром барристеру
19
They participate in the school's moot moot

competitions in which the skills of учебный судебный
argumentation are developed, in mock trials процесс
under the supervision of experienced lawyers mock trial
and judges, and in legal clinic activities. инсценированный
судебный процесс
C.: Will you say a bit more about the clinical
education?
E.: Sure. A special clinical semester is aimed at
gaining practical experience by young lawyers.
It is a hands-on learning model when students hands-on learning
develop their lawyering skills working with обучение
real clients. Of course the clinical semester is на практике
offered for the second or third year students.
C.: What courses are included into the second and
third year program?
E. For upper-level students the courses are
mainly optional. There usually is a broad range
of offerings from which a student can plan his
or her own curriculum. It depends on the
perspective practice area you are aiming at.
But at the same time it's essential to deepen
and broaden the basic legal literacy and
understanding the law as a whole.
C.: Which major courses did you specialize in?
E.: I chose the career of a business lawyer from the
start, so the courses I was mastering were
Corporate Law, Business Organization,
Antitrust Law, Commercial Law, Intellectual
Property and such.
C.: What comes after the graduation?
E.: You graduate from the school, gain the JD and
look for a job. You may find the position but
you can't practice law. You must be licensed,
or admitted to the Bar. All States require that
applicants for admission to the Bar pass a
written Bar Examination; most jurisdictions jurisdiction
also require applicants to pass a separate зд. судебный округ
written Ethics Examination
C.: Thank you, Mr. Edwards. I hope we meet next
time to discuss career possibilities for young
lawyers.
1. Go back to the Concept section questions. Answer the questions

looking at the table you've completed.
2. Write a short essay about legal education in the USA.
20
Legal Knowledge
First-Year Curriculum
Stanford Law School
The first year introduces students to legal institutions, legal
reasoning, and case analysis, emphasizing the close analysis of judicial
decisions.
The autumn term consists of five required courses, one of which is
taught in a small section of about 30 people. In the spring term students
take threè required courses plus two to four electives designed to
broaden their view of the law and to lay the foundations for the
advanced curriculum.
First-year requirements are as follows:
Autumn: Spring:
Civil Procedure Constitutional Law I

Contracts Property
Criminal Law Legal Research and Writing
Torts Electives (2 to 4 courses)
Legal Research and Writing
In Legal Research and Writing, a year-long course, students work

under the close supervision of a legal research and writing instructor and
a law librarian, learning the essential skills of legal library research,
writing legal memoranda, drafting documents, preparing a persuasive
brief, and arguing orally in a moot court in the context of trying to solve
a client's legal problem.
Second- and Third-Year Courses Offered

The Law School offers more courses in the advanced curriculum than
any student could take during law school. Below is a list of some of the
elective courses that have been offered at the Stanford Law School
during the last several years.
Business and Commercial Law Accounting

Antitrust
Bankruptcy
Business Reorganizations
Corporations
Partnership Taxation
Private Firms
Civil Procedure and Litigation
21
Constitutional Law and Theory

Criminal L a w a n d P r o c e d u r e International Criminal Law
White-collar Crime
D i s p u t e R e s o l u t i o n , M e d i a t i o n , a n d Problem Solving, Decision Making, and
Negotiation Professional Judgment
Environmental Law and Natural
Resources
Family L a w
I n t e r n a t i o n a l and C o m p a r a t i v e L a w European Community Law
International Taxation
International Trade Law
Labor and Employment Law
Professional Responsibility and
Ethics
Administrative Law Legislation
P r o b l e m Solving, D e c i s i o n M a k i n g ,
and Professional Judgment
Intellectual Property Intellectual Property and Antitrust Law
Intellectual Property: Copyright
Intellectual Property: Patents
Intellectual Property: Trademarks
Taxation Law Corporate Income Taxation
Income Taxation
International Taxation
Partnership Taxation
Note. The students have to complete a certain number of courses over three
years.
So, they opt for those courses that match the specialization they've chosen.
A number of law schools have clinical programs in which students

gain legal experience through practice trials and projects under the
supervision of practicing lawyers and law school faculty. Law school
clinical programs may include work in legal-aid clinics, for example, or
on the staff of legislative committees.
Law school graduates receive the degree of juris doctor (J D ) as the
first professional degree. Advanced law degrees may be desirable for
those planning to specialize, research, or teach. Some law students
pursue joint degree programs, which usually require an additional
semester or year of study. Joint degree programs are offered in a number
22
of areas, including law and business administration or public

administration.
Activate the information about the curriculum of graduate course.
First year:
1.
What courses are mastered by the students during the two semesters?
What do these core subjects of legal study deal with?
What knowledge do they develop?
Why is it important to master ... (a course)... ?
2.
Compose a letter of a 1st year American student who tells the parents
about the courses they study at a law school.
Second year:
1.
A student is going to specialize in Business Law. What offerings will
he/she opt for?
What knowledge does each of these courses provide?
What would be your choice if you happened to study at an American law
school?
Why is a clinical semester included into the optional curriculum?
Compare the curriculum with the one that your educational institution
offers / offered.
2.
Make up a dialogue between an American law student and a prospective
applicant to a law school (admission requirements, legal subjects,
specialization, student's life (you may devise things here).
Legal Education in the UK

Core Vocabulary 2
pupillage - ученичество
chamber - приемная мирового судьи
essay - очерк
A-level - advanced level
A-level examination - General Certificate of Education examination at
advanced level
vocation/vocational - профессиональный, относящийся к профессии
vocational studies - профессиональное образование, обучение спе-
циальности
23
assess / assessment - оценивать / оценка, аттестация

enroll on a course - записаться на курс
provisional Qualification Certif- - предварительный квалификационный сер-
icate тификат
- сертификат о полном квалификационном
Full Qualification Certificate соответствии
- закончить курс
complete a course
Abbreviations
LLB - Bachelor Degree - степень бакалавра
LPC - Postgraduate Legal - курс юридической практики по заверше-
Practice Course нии высшего образования
BVC - Bar Vocational Course - курс профессиональной подготовки при
коллегии адвокатов
LLM - Master of Law - магистр юриспруденции
LNat - examination for admission to a law school
GCSE - General Certificate of - сертификат (аттестат) о среднем образова-
Secondary Education нии.
Brief Reference
How to become a solicitor or a banister in the UK
1. Cover a three-year undergraduate degree program to obtain an
LLB.
2. To qualify for a solicitor it's required to take one-year
Postgraduate Legal Practice Course - LPC.
3. Perform a two-year training contract with a firm of solicitors to
gain practical experience.
4. To qualify for a barrister it's required to take one-year Bar
Vocational Course (BVC).
5. Complete a 12-month pupillage at a barristers' chamber.
6. To specialize in a certain law area take a one-year LLM course
(option for solicitors and barristers).
Legal Research
Find out more information on above given items 1 - 6 .

Prepare two separate abstracts - one about a solicitor's qualification
another about a barrister's qualification.
Studying law in the United Kingdom means a three-year undergraduate

degree program which results in an LLB. This is an academic qualification but
24
is not a license to practise as a lawyer. Lawyers are divided into solicitors and
barristers. So their further education modules are different.
Admission
Applicants to a law school (department of a university) must have the
GCSE - General Certificate of Secondary Education) and A-level that show
the achievements of the candidate. There is no special admission test to law
schools, though some universities have their own tests.
Top law schools are launching a national admissions test for
undergraduate law degrees.
The. eight leading law schools which have designed the new National
Admissions Test for Law (LNat) say it will help to distinguish between the top
candidates as they receive more and more applications from students with
straight A grades. It should also help to widen participation in law courses. The
two-hour long LNat exams consist of multiple choice and a short essay questions.
Undergraduate Course
The program gives students knowledge of the fundamentals of law.
The first year provides a systematic introduction to the foundational
subjects and offers a choice of optional subjects both from within the
department and from other departments in the university. First and foremost
they have to master the basics of the sources of common law.
Students also develop their knowledge of major legal concepts and
principles of law application. They are introduced to the core skills associated
with the study and practice of law.
A sample of the curriculum is as follows:
Year 1 Year 2 Year 3
Public Law Property Law 1 Property Law II

Criminal Law Jurisprudence Research Project
Law of Tort Law and Policy of the European Union I Options
Law of Contract Advanced Contract and Tort
Options
Postgraduate Vocational Legal Studies

Legal Practice Course - LPC
The LPC is a one-year program by full-time study for those intending to
qualify as solicitors. The aim of the course is to prepare students for legal
practice, enabling them to develop the necessary knowledge and skills
required to practise as a solicitor. The teaching of legal skills is fully integrated
in the relevant areas of law.
About forty institutions offer the LPC in the UK, and many deliver the
teaching through a variety of forums.- Assessments are also varied, ranging
from practical exercises (tested both orally and in written form) to
examinations.
25
Bar Vocational Course - BVC

Those who intend to practice as barristers in the UK or abroad, will need
to enroll on the Bar Vocational Course, run at ten institutions in the UK. This
is also a one-year full-time course, and like the LPC is taught and assessed in a
variety of ways. Unlike the old Bar Finals Examinations course, the BVC
focuses much more on practical skills, alongside with studying law. After
passing either the LPC or BVC, students then go on to complete a period of
practical training in order to qualify as solicitors, or be able to practise at the
Bar.
Pupillage
Pupillage is the final stage of the route to qualification at the Bar, in which
the pupil gains practical training under the supervision of an experienced
barrister. Pupillage is divided into two parts: the non-practising six months
during which pupils follow their pupil master's instructions and the second
practising six months when pupils, with their pupil masters permission, can
undertake to supply legal services and exercise rights of audience.
At the end of the first six months, if the pupillage has been completed
satisfactorily, the pupil master must submit a certificate of satisfactory
completion of the non-practising six months to the Education and Training
Department. The pupil then obtains a Provisional Qualification Certificate
At the end of the second six months, if the pupillage has been completed
satisfactorily, the pupil master must submit a certificate of satisfactory
completion of the practising six months to the Education and Training
Department. The pupil graduates with a Full Qualification.
LLM (Master of Law)
LLM (Master of Law) degree is the next step for those who intend to
continue the study in the field of academic law. The specialized one year
programs are as follows: LLM Business Law, LLM Commercial Law, LLM
Critical Legal Studies, LLM Employment Law, LLM Family Law, LLM
Feminist Legal Studies, LLM Human Rights, LLM Intellectual Property,
LLM International Law, LLM International Environment Law, LLM Public
Law. At the end the students are expected to complete a dissertation.
1. After you have written two abstracts about the qualification mode for
solicitors and barristers, practise speaking about these modes.
Take turns to speak in the name of one of the three following Britons (A,
B and C):
- A is going to be a solicitor and will tell about the forthcoming admission,
the undergraduate and further practice courses.
- B has just got a Full Qualification Certificate to become a barrister and will
give a brief review what courses he/she has mastered and knowledge and
skills he/she has developed.
- C is a practising lawyer, obtained a LLM, Intellectual Property, last year.
He/she will deliver a brief story of the obtained educational background.
26
2. Study the dialogue about legal education in the US once again. Make
up a dialogue (as with American lawyer) about legal education in the UK.
Option: in the dialogue interviewer and interviewee may compare two
systems - the UK and the USA.
Refer to the Reading Supplement section and read the article

"Learning business law by doing it" to find interesting facts about
clinical education for business lawyers in the USA.
Define:
- the objectives of this program;
- the particulars - what and where the students are training; how
the training is arranged;
- the benefits of this program.
Discuss the issue of the necessity to include clinical or practical
training into legal academic curriculum.
Legal Education in Russia

You are supposed to be aware of legal education system in your home
country. Answering the questions below use the vocabulary of the Unit
and apply your knowledge of the material. If you don't know the exact
answer, do kind of research - look up the guides, appropriate Russian
websites or ask the mates or colleagues.
How do you apply for a law department?
What are the admission requirements?
What exams do you have to take and pass to be admitted?
How long does it take to qualify for a lawyer?
What degree do you obtain?
What courses do you take at undergraduate (1-2 years) / graduate level
(3-5 years)?
What are the core / foundational courses?
What are the optional / elective courses?
What major skills are mastered through the courses?
How are the knowledge development and gained skills assessed during the
academic year?
When do the students start special courses (specialization program)?
Is there a clinical semester / special training program in the curriculum?
What university or law school provides the best educational background?
How do you get qualified with the Collegium of Advocates?
27
Unit 3
Legal Professions
What is the major objective of lawyer's work?

How do lawyers apply the knowledge of Law in their practice?
Which of the following verbs refer to lawyer's activity: advise, defend, produce,
represent, draft, sell, resolve, speak, study, buy, inform, help, research, preside,
teach?
Where do lawyers work? What legal jobs do you know?
Is it important to specialize in any particular area? Why?
Core Vocabulary 1
profession - профессия;
a job that needs special education and training (used formally)
job - работа, должность;
a regular activity performed for payment; a role, duty, function (informal, more
frequent usage)
job title - название должности
occupation - род занятий, профессия
position - занимаемая должность, положение
Legal job titles

(work with a dictionary to find out the meanings)
judge clerk advocate prosecutor notary

jurist detective attorney sheriff barrister
solicitor juror (jury) in-house counsel / corporate lawyer
in-house counsel - штатный юрист
corporate lawyer / attorney - юрист корпорации
Activities
advise/ counsel on - консультировать по (вопросу)
defend - защищать
plead a case - защищать в суде
act for / present a client - представлять клиента
28
Unit 3. Legal Professions
prepare / brief a case - готовить дело / составить сводку по делу

draft - составлять документ
mediate - содействовать соглашению между сторонами
bring an action - возбуждать судебное дело, предъявлять иск
file a lawsuit - возбуждать судебное дело, предъявлять иск
provide expertise - давать заключение, экспертную оценку
expertise - профессиональная компетенция, знание дела,
компетенция
initiate a criminal case - начинать уголовное дело
conduct criminal proceedings - проводить уголовное преследование, вести
уголовное дело
prosecute - выступать в качестве обвинителя, преследо-
вать в судебном порядке
present the evidence - представлять доказательства
preside - председательствовать (preside in a court - в
суде; at trials - на судебных процессах)
administer justice - отправлять правосудие
decide a case - принимать решение по делу
resolve a case / a dispute - принимать решение по делу / по спору
give judgment - выносить решение по делу
rule / hold - постановить, огласить/вынести решение
direct / instruct the jury - давать наставление/инструкцию присяжным
award relief - удовлетворить требование (по иску)
determine guilt - признать виновным
see into the evidence - вникать в суть доказательств
determine the facts - устанавливать факты (фактическую сторону
дела)
apply the law - применять закон
reach / give a verdict - давать вердикт
Match appropriate activities to the legal job titles.
Every legal profession has responsibilities clearly defined in

occupational descriptions published by the administrative bodies.
Below are simplified descriptions that lack job titles. If you complete the
sentences with appropriate job titles you'll learn about the job
responsibilities of these legal professionals.
29
Mind there are four legal professionals under one item number that
have similar job responsibilities. The first item is done for you.
1. Jurist is a person who has legal background and does research in a legal
area or history of law, he writes articles or books on legal issues.
2. ... presides in courtroom and administers justice, resolves disputes
between the parties, decides the case during the trial, directs the jury and
gives the judgment. He/she either awards relief, in civil cases, or
determines the guilt, in criminal cases.
3. ... investigates a criminal case, aims to discover the criminal, collecting
evidence and tracing him.
4. ..., ..., or ... advises the clients on legal matters, prepares a case or
documents, briefs a case, presents the case in a lawcourt, acts and speaks
for the client, mediates a case, defends or pleads the client's case, brings
an action when somebody breaks law, drafts legal documents.
5. ... usually initiates a criminal case and conducts criminal proceedings,
presents the evidence of the committed crime.
6. ... are elected community members who during the court proceedings
carefully see into the evidence, determine the facts of the case, then
accept the law given by the judge and apply that law when reaching a
verdict.
7. ... supports and counsels the business he works for, provides expertise in
corporate, commercial, tax, insurance and other legal issues, drafts
documents and contracts, acts for the company in negotiations, deals and
lawsuits, and files lawsuits or brings a legal action against those who
break law.
8 ... keeps law and order in a community or a region protecting the citizens
from law-breakers; he is ready to find and arrest the criminal.
9. ... is a court officer who files papers and keeps records of court
proceedings.
10 is a public officer who certifies the document's or its copy's authentity
and witnesses official acts: wills, commercial papers, etc.
See p. 45.
Vocabulary Note:
certify the authentity of a - удостоверять подлинность документа

document
witness a document / an official - подписывать в качестве свидетеля, заве-
act рить подписанный документ
The following words correspond to Russian job title адвокат:
advocate attorney solicitor barrister.
30
Advocate is a person legally appointed by another to act as his or her agent

in the transaction of business, specifically one qualified and licensed to act for
plaintiffs and defendants in legal proceedings.
1. Which profession have you chosen as your career? Why? Which

profession doesn't appeal to you as a career perspective? Why not?
2. Apply your experience and knowledge of the legal jobs. Add more
information (or facts) to each job description
3. Personify the professionals above - give names to them and some
other personal information. Make up a legend.
e.g.
Jerry Stone is a court clerk. He lives and works in Manchester. Jerry likes his
job. Every day he comes to the court and works hard. He files papers, and
there are a lot of papers in the court. Jerry also keeps records of court
proceedings, and this is what he likes most: he can be present at the trial and
listen to the judge, prosecutor and barrister...
Lawyers' Work
Lawyers work to assure the principle of equal justice under law to the
people of the state.
A lawyer is both an advisor and an advocate. As an advisor, a lawyer
informs clients about legal matters or represents persons, businesses, and
the government in such matters as contracts and commercial
transactions.
As an advocate, a lawyer acts for the client in court. A lawyer also
advocates on behalf of clients in resolving disputes out of court.
Lawyers' work can include defending or prosecuting those accused of
committing a crime.
Lawyers research legal issues, draft contracts, wills and other
documents, counsel, mediate, and negotiate settlements.
Some lawyers specialize in advising corporations working as in-house
counsel. They also act for the company in court if a dispute arises.
Most lawyers practice in law firms that can be small or big, but
usually have different areas to counsel clients on.
Usually, lawyers concentrate on a certain practice area: taxation or
intellectual property, some practice public interest law, for example
working to protect the en vironment.
Some lawyers may be appointed or elected to serve as judges. Judges
preside in the courtroom They resolve disputes and give the judgments.
In a jury trial they rule on points of law and tell the jury about the law
that governs the case.
31
Lawyers also work for various government agencies and

organizations.
Legal careers also include teaching law and research.
There are law-related jobs for which law degree qualification is not
required. These are clerks, court reporters and secretaries.
Careers in Law Enforcement, in the USA for example, such as
Private and Criminal detectives, FBI agents, Police officers, Customs
officers are possible after obtaining a Criminal Justice degree.
Find out if the following statements are true. If not give the correct
version.
1. Attorneys and solicitors can both work as advocates and advisers.
2. A prosecutor either defends the accused or conducts criminal
proceedings.
3. Lawyers can work for businesses and governments.
4. Lawyers don't do any paperwork at all.
5. An in-house counsel, or a corporate lawyer acts both as an adviser and an
advocate.
6. It's important for a lawyer to choose an area of specialization.
7. Judges are appointed or elected.
8. Judges resolve disputes and administer justice in a criminal trial.
9. All law-related jobs require a law degree qualification.
See p. 45.
Read the dialogue to find out the difference between the professions
of a solicitor, a barrister and an attorney.
A.: I have some problems and need to consult a lawyer. Can you tell me
where to find a good attorney?
B.: Attorney? You see, here, in London, we have solicitors or barristers.
A.: Solicitors and barristers... Which one is better to approach?
B.: A solicitor will help you from the start. But solicitors can't represent
you in court. This lawyer deals with clients, advises them and
prepares legal documents. Barristers speak for clients in court.
Solicitors do most of paper work for them.
A.: I see. In America counseling and advocacy in lawcourt is performed
by attorneys.
B.: What is your problem? Anything serious?
A.: Yes, rather. I think of bringing the action to court. So, I'd like to find a
good barrister.
32
B.: We'd better visit my solicitor first. He will have an interview with
you, look into the matter and then introduce you to a barrister, if
necessary.
A.: Of course it will be necessary!
B.: Is it a criminal case?
A.: No, why?
B.: Because barristers speak in higher courts. Solicitors can speak for
their clients in lower courts. Minor civil cases are decided in lower
courts.
A.: I see. Then we'd better make arrangements with your solicitor as soon
as possible.
1. Write down the responsibilities of a solicitor, a barrister and an attorney.
Go back to Unit 2 to see also the difference in legal educational modules
for these qualifications.
Solicitor
solicit - ходатайствовать, хлопотать.
So, solicitor is a lawyer who solicits for the client.
Barrister
bar - 1) барьер, за которым находится суд;
2) суд в полном составе;
3) коллегия адвокатов.
So, banister is a lawyer who is a member of the bar and who can speak before the
bar.
Attorney
attorn - передавать кому-либо права, поручать.
So, attorney is a lawyer whom a client attorns the case, or transfers the right to deal
with the case,
Core Vocabulary 2
Synonyms
(One Russian word - series of English synonyms)
Дело
case - a question or problem that will be dealt with by a law court
matter - a subject or situation that you have to think about or deal with. It's
a serious matter; a matter of importance
legal matter - правовой вoпpoc
subject matter - the subject that is discussed or shown in a book, film or article
subject matter of a contract - предмет договора
33
act - 1) a particular kind of action (criminal act)

2) a law that has been officially accepted by Parliament or Congress
business - 1) work done by companies; 2) company; 3) smth that concerns

you; 4) work to be done.
We discussed the week's business
deal - an agreement or arrangement in business or politics. We are

negotiating a new deal
Get a deal - buy smth at a good price; It's a deal - По рукам! (при заключении
сделки)
affair - an event; affairs - public or political events or activities; thing
(complicated affair)
Вопрос
question - a subject or problem that needs to be settled - вопрос

issue - a problem or subject that people discuss - спорный вопрос, постав-
ленный или подлежащий обсуждению,
item - a distinct point in enumeration, as e.g. in the agenda - вопрос на пове-
стке дня
point - a fact, idea or opinion that is part of an argument or discussion - про-
блема, дело, вопрос, суть, пункт, основной пункт
subject - smth that is talked about or discussed - тема, предмет разговора, во-
прос
problem - smth that causes difficulty - задача, вопрос, проблема
Иск
action / legal action - the process of taking a case against smb to a court of law
bring an action against / start a legal action
suit / lawsuit - an argument brought to a court of law by a private person or
company, not by police or government
file a lawsuit - подать иск (в суд)
claim - a right to request for money (compensation for damage); an
official paper to file the request - иск, требование
draft a claim — составить иск
litigation - the process of taking claims to a court of law in noncriminal
cases - тяжба, гражданский судебный спор.
34
Fill out the following texts with the words from each set of synonyms.
1.
This (1) ... definitely concerns a criminal (2)... If you see into the (3) ... you'll
find out that the company doing transportation (4) ... has made some unlawful
(5)... The case may even turn into a political (6)...
2.
The (7) ... we are discussing is very important. There are three (8)... on
the agenda and each includes a (9)... Our corporate lawyers have prepared
the commentary on legal (10) ..., but there are also financial ( I t ) ... to
settle. The (12).... is that if we fail to work out a proper strategy we'll go
bankrupt.
3.
This lawyer is an expert in (13)... He has already defended a great number of
clients in (14) ... So, if you need to start an (15)... against this agency, ask him
for advice. After the consultations he will help you to draft a (16)...
See p. 45.
Legal Career Development

Target the Career
It's common knowledge that lawyers practise law but no one "just
practises law." You can build the practice in the area of your interest.
Law deals with everything: money, goods, people, computers... If you
take interest in business, work toward Corporate Law. You love nature
and care about it. So, go ahead with Environment Law. A computer
fanatic and web searcher will do fine in Computer or Internet Law. Do
you regularly follow the stock market news and advise on speculation
matters? You can opt for Banking and Finance Law.
W h a t do you really like? W h a t do you know and love? You'll already
know how things work in that area and you'll be in tune with
everything. You'll like your clients because you share the same interests.
So, make your real legal career.
What area of law have you chosen to practise in?

What attracts you?
What exactly are you going to/ do you do as a professional?
What are the major skills and knowledge needed in your practice area?
What are the perspectives of the career in that law area?
35
Business Lawyer
Tips for a Businessman

Business lawyer is a legal professional whose scope of competence covers a
vast area of business activities.
1. A business lawyer can help you even from the

planning stage of your business and advise on what
type of organization to choose: a corporation, a
partnership or sole business. Incorporation or
registration of the business is also the lawyer's
competence. The lawyer will be the one to draft the bylaws
bylaws of your company. внутренний устав
организации
2. Your business lawyer can also make sure you stay
in compliance with any laws that are applicable to your compliance with law
business. Without a lawyer, you may not even be aware соответствие закону
that a particular law affects your business, until comply with smth
someone complains that you are violating the law. As a соответствовать
business owner, you will need to comply with laws on чему-л.
everything from finance management to employment
practices.
3. A business lawyer can provide expertise in

financial planning advising the best investment
schemes. He'll help you to deal with banks and trusts
on credit matters. You'11 find him effective in solving
questions of salaries, dividends or profit and loss profit and loss
distribution. Your lawyer will also counsel on tax прибыль и убытки
planning.
4. You expand into the market and want to acquire

a company or even two, or merge with a company. Your merge
business lawyer is on guard for you not to violate объединяться, сли-
ваться (о компа-
antitrust law. With him on your side you'll never be ниях)
accused of being a monopolist.
5. A business lawyer who has profound knowledge

of intellectual property laws is your right hand when it
comes to protect your patent, trademark rights or your
copyright.
6. You can't do without a lawyer entering into enter into a contract

contract with clients, partners, suppliers, customers заключать договор
36
and other parties. Being a professional in contract

negotiating and drafting your lawyer will perform this
sophisticated work for you.
7. A lawyer is extremely useful in dealing with the

consumers who find your product faulty. People may faulty
дефектный, брако-
complain and bring an action against you. In case of a ванный
dispute, with a customer, having your lawyer involved
early on may help you settle the matter quickly.
Besides, the lawyer's responsibility is to keep you
informed on the legal requirements and rules
concerning the quality of your production.
With the many legal issues that arise in business,

it is important to establish a relationship with a
business lawyer. He or she can help you address your
concerns and keep legal problems from getting out of
control.
Pairwork
Two entrepreneurs, e.g. Don/a and Ron/a, are talking about the role of a
business lawyer in successful company performance. Don/a, who is
starting a business, asks Ron/a questions stated below. Ron/a's answers
are the above given Tips. Make up a dialogue, add any colloquial
expressions you want.
Don/a's questions:
1. How can a lawyer help me to start a business?
2. If I can run a business myself and know some basic legislation, why do I
need counsel?
3. Can a lawyer help me in financial affairs?
4. What kind of legal assistance can I expect in my expansion plans?
5. Will the lawyer also provide support of my trademark?
6. I'll need a lawyer at hand in contract drafting, won't I?
7. How will a business lawyer help me in possible litigation cases?
Legal Research
Read the following text to find out where business lawyers work and
then answer the questions
- W h y are there several departments in a law firm?
- W h a t is the title of a lawyer employed by a corporation?
- W h a t are the responsibilities of a corporate lawyer?
37
Most business lawyers practise their craft in private law firms, which can
range in size from two lawyers to over 1,000 lawyers.
Any business lawyer practicing in a medium-to-large-size law firm is a
specialist in a particular field of law so, the firms usually have several
departments, or groups focusing on a particular practice area. The clients of
business law firms are corporations, companies and entrepreneurs.
But many business organizations have set up in-house legal departments of
business lawyers who are also employees of the organization. The law
department is a law firm within the corporation, consisting of dozens if not
hundreds of litigators and business lawyers.
While titles vary, usually the young business lawyer in a corporate legal
department starts out as a "counsel", performing very routine tasks, then
works his/her wav up to "associate general counsel", then "assistant general
counsel"-, and finally ending his/her career at the top of the departmental
ladder as "general counsel" to the corporation.
The corporate law department is expected to perform most of the routine,
day-to-day legal tasks. But when a complex legal issue arises they still refer to
an outside law firm with more deversified expertise.
(The abstract is abridged from the Business Lawyer's Handbook)
Not much is said about the corporate counsel's responsibilities. Return

to the text Business Lawyer and scan the tips to find the necessary
information. Make a brief abstract.
e.g.
A corporate counsel (or a corporate attorney) helps the business from the very
start. He prepares the documents for incorporation and drafts bylaws.
Legal Knowledge
Law Firm
Law firms usually offer a Wide range of services covering many areas
of law. They provide consultancy and legal support in these important
aspects. A big law firm advises business organisations, governments,
public sector bodies and financial institutions.
Read the following law firm advertisments to find:

- where they are located;
- what kind of legal services they provide;
- what areas of law they practice in.
38
Pay attention to the goal or philosophy the firms declare.

1.
BAYS LAW FIRM

ABOUT OUR LAW FIRM
We are a full service law firm serving clients with employment and business
matters, to Family and Criminal Disputes. Our law firm is located in Sierra
Vista, Cochise County, Arizona. We utilize a large legal library and have
immediate access to electronic legal reference services that fulfils research ana
signmcantiy reuuces overall costs.
We practice in the areas of business, Tax, Employment, Family, Real
Estate, Military, Civil and Criminal Law. We represent clients in Civil and
Criminal Litigation in State, Federal, Military and Tax Courts. We represent
companies and individuals who seek justice.
OUR GOAL
Our goal is. to make your attorney-client relationship as pleasant and
confidential as possible. We strive to listen to and understand your legal needs
and concerns. We do our best to work with you and come to a satisfactory
resolution or understanding of your legal issue.
2.
GOODMAN LAW FIRM

We serve clients with legal matters in Central and Northern Arizona, USA.
Our office is located in the city of Prescott, Arizona. We nrovide service in the
areas of business, family and property law. We assist companies and
individuals with their business transactions. The firm provides a full
complement of civil legal services including advice, document drafting,
negotiation and litigation. We defend employers, companies and individuals in
civil matters.
OUR PHILOSOPHY
We believe that hiring a lawyer is like making any capital expenditure: the
return is expected to be greater than the investment. Our goal is to make your
investment a good one. We also believe that "justice delayed is justice denied."
Thus, we strive to act with goodwill.
Note. Goodwill - добрая воля, готовность сделать что-либо, престиж фирмы.
As law firms гender a wide range of services that cover many areas of
law there are departments or practice groups that specialize in a certain
area.
39
For example, a fictitious law firm SM&G, LLP (limited liability

partnership) will have the following departments:
Corporate Group - deals with business formation and incorporation,

shareholders agreements, mergers and acquisitions
Corporate Finance Group - investment projects, issuing share and securities,
financial planning, AGM, annual report,
international finance, insolvency matters
(bankruptcy)
Property Group - renders property advice and helps to arrange
property transactions -
Commercial Group - specializes in Sales Law and Consumer Law
application, includes experts in Intellectual
Property, Product Liability, Advertising and
Marketing, Information Technology and
Telecommunications
Banking Group - deals with banking institutions providing advisory in
financial transactions and operations
Tax Group - offers corporate tax planning
Civil (Commercial)
Litigation Group - prepares a case and documents, conducts disputes,
act for clients in a lawcourt, arranges out-of-court
settlement
The following are extracts from business correspondence to SM&G,
LLP.
Read carefully and decide which group to direct each letter to.
1.... So, you see we're starting quite a new business. We'll appreciate to
receive a full-scale consultancy not only on the appropriate type of a
company but also the paper matters concerning incorporation...
2.... This is going to be a profitable project, but we need reliable commercial
expertise in marketing and advertising. Please, find the marketing plan
enclosed ...
3.... as your clients, we rely on your assistance in such a troublesome
perspective as tax audit...
4.... and they are illegally using our trademark. They claim to be the original
brand owners but refuse to show the evidence ...
5.... looking forward to purchasing these two big buildings as at present we
need to move some of our workshops to this convenient location ...
6.... the investment portfolio you've been preparing for us doesn't involve the
Italian project. If we don't act quickly enough ...
7.... we are negotiating this.important order on Tuesday and the contract
should be drafted by Monday...
8.... would like to open a franchise restaurant. It's something I've never done
before and I'm not aware of all the ins and outs of that business. As your
prospective client ...
40
9.... not sure we are able to deal with the bank on that loan agreement ...
10. ... and the medicine we're producing has been tested and licensed. Thus,
the claims are absolutely groundless.
11. ... as the insolvency of our company has become more than evident and
we're going bankrupt, we authorise you to ...
12. ... It became quite necessary to merge with our suppliers.
See p. 45.
Scan the text that is interesting both for those who need legal advice
and for those who are looking for a legal job.
Find out which law office benefits would attract:
- a small business owner;
- a married couple;
- a law school graduate;
- the head of corporation;
- an experienced business lawyer.
Law Office
Every lawyer has his or her own unique way of
doing business. However, most law offices have a law office
юридическая фирма
number of similar characteristics in terms of how they как учреждение, ор-
do business. Law offices range in size from sole ганизация,
practitioners (one practicing lawyer), small firms, (law firm - юр. фир-
mid-sized firms, and large firms. ма по роду деятель-
ности)
1. Sole Practitioners
Sole practitioners can be excellent lawyers. The
potential benefits of a sole practitioner include:
- taking on smaller cases. A sole practitioner may
be more inclined to take on smaller cases than a
big firm;
- direct one-on-one relationship. Your case is not
going to be handed off to another attorney;
- lower fees and costs.
2. Small Law Firms

Small law firms are typically characterized as law
offices with two to ten lawyers. The benefits of working
41
with a small law office include many of the benefits mentioned for a sole
practitioner plus:
- more experience and expertise in a particular practice area. In a small
firm, lawyers are typically able to develop areas of expertise, In many
cases, small law offices are called "boutique" firms because they tend to
specialize in a given area;
- a small law firm can handle a broader range of legal matters. Some cases
are simply too complex for a sole practitioner to handle;
- better coverage. It's difficult for one lawyer to be available all the time,
so a benefit of a small law firm is having other lawyers help out on a
matter;
- joining of knowledge. It's helpful on complicated legal matters to talk to
other lawyers and pick their brains on legal strategies.
3. Mid-Sized Law Offices

Mid-sized law offices are typically characterized as firms with ten to fifty
lawyers. The benefits of hiring a mid-size firm include:
- a mid-sized firm may have many of characteristics of a small law office,
yet at the same time, have the legal resources to do battle with the big
firms;
- a mid-sized firm may be able to provide broader legal representation in
every major practice area;
- the larger law firms have usually been together for a number of years,
and typically carry a good reputation.
4. Large Law Offices

Large law firms are typically characterized as firms with fifty or more
lawyers. The benefits of hiring a large firm include:
- the firm usually has the resources to handle legal matters for public
companies, governments, and other large organizations;
- lawyers have high levels of expertise and have been educated at the
most prestigious law schools;
- you are a strong opponent if you have a large law firm on your side;
- almost all large law firms have offices in metropolitan areas. Many of
these firms have offices worldwide.
1. Discuss the benefits of each type of law office in view of the

pre-reading task. Below is additional text about law office employees.
Read it and use the information in the discussion.
2. Which type is preferable for you? / What kind of firm are you working
for?
3. Read the text about lawyers' titles and answer: What are the positions
in the law firm you work for or in the law firm you know about?
42
Types of Lawyer Titles

A law office typically has many employees in
addition to the lawyers. The following descriptions will
help you be more informed about your legal
representation:
Partners: People typically refer to the owners of a

law firm as partners. It is very prestigious for a lawyer
to become a partner of his or her law firm. Partners are
usually the most experienced lawyers in the firm and
they charge the highest fees.
Associates: Lawyers who are employed by a firm associate
but who are not owners are typically called associates. зд. помощник парт-
нера
Associates can be very good lawyers but they typically
have less experience than the partners of the firm.
Although it varies from firm to firm, associates
typically have to work for four to ten years before they
are considered for partnership. Given their experience,
associates typically bill at lower rates than partners.
Contract Lawyers: A firm will sometimes hire
outside lawyers as independent contractors to do
part-time work. The firm will usually pay a contract
lawyer on an hourly basis and then bill out his or her
time at a higher rate in order to cover overhead costs
and hopefully make a profit off of the lawyer's work.
Law Clerks: Law clerks are typically law students
who work for the firm while they are going to law
school. They do legal research and assist lawyers in
preparing cases.
Paralegals: A paralegal is someone who has legal paralegal
training but who is not a lawyer. Paralegals serve an относящийся к юри-
дическим работни-
important role in a law firm by providing support to
кам без диплома
lawyers when they are working on cases. They can work юриста
under the supervision of a lawyer but do not justify the
high billing rates of a lawyer. Paralegals typically bill at
rates that are half of what a lawyer charges.
Legal Assistants: This is general term that is some-
times used by law firms to describe paralegals, legal
secretaries, and other support staff.
Investigators: Depending on the type of law
practiced, some law firms will hire investigators who
are charged with going out and investigating
background facts on a case.
43
You're welcome to the Reading Supplement section to read some

extracts from the preface of Clifford Ennico's Business Lawyer's
Handbook.
It's really fascinating reading material, and extremely useful one for
you'll learn a lot more about the career of a business lawyer.
The author points out the following issues:
- what distinguishes a business lawyer from a litigator (advisor v.
advocate);
- distinctive features of solicitors, barristers and attorneys;
- positions of a private practicing lawyer (law firm), corporate,
lawyer and staff attorney for an adminisrative agency;
- three basic functions of a business lawyer;
- relations between business persons and business lawyers.
Give a summary of and a commentary on each issue.
Arrange a discussion of the issues.
Note. While reading pay special attention to how the author "handles" the
usage of personal pronouns in the 3rd person singular - he and she.
To avoid gender conflicts the author makes reference to:
businessperson - he, lawyer - she, then conversly: businessperson - she,
lawyer - he.
Refer t o t h e G r a m m a r S u p p l e m e n t , G e n d e r - N e u t r a l L e g a l W r i t i n g section.
I. Make a research. Find out and report the information about legal
professions in Russia, the organizations they work, law firms in your
community.
II. Project.
The assignment: introduce a law firm that is either fictitious or the
firm you're working for.
The project you're supposed to create includes:
1. An advertisment of a law firm (brief information).
2. A discription of the law firm - type of office, practice groups and
services you render.
3. The staff - nalnes, job titles and responsibilities.
4. The clients - well-known companies. You may add their
references about your performance.
44
The sources - Unit 3 material and any other information you get -
brochures, websites etc.
Note. Avoid direct translation of your ideas from Russian.
P. 30:
2) judge; 3) detective; 4) advocate, attorney, solicitor or barrister;
5) prosecutor; 6) jury; 7) in-house counsel; 8) sheriff; 9) clerk; 10) notary
P. 32:
1 ) T; 2) F; 3) T; 4) F; 5) T; 6) T; 7) T; 8) T; 9) F
P. 35:
1) case; 2) act; 3) matter; 4) business; 5) deals; 6) affair; 7) subject;
8) items; 9) problem; 10) issues; 11) questions; 12) point; 13) litigation;
14) lawsuits; 15) action; 16) claim.
P. 41
1) Corporate; 2) Commercial; 3) Tax; 4) Commercial; 5) Property;
6) Corporate Finance; 7) Commercial; 8) Corporate; 9) Banking; 10) Civil
Litigation; 11) Corporate Finance; 12) Corporate
Unit 4
Applying for a Job
Do you know:
- how and where to look for vacancies?
- how to write a CV and cover letter?
- how to prepare for the interview?
- some general ethical rules concerning the interview?
Core Vocabulary
classified (advertisments) - классифицированные объявления
vacancy - вакантная должность, вакансия
CV - curriculum vitae (EU) - анкетные данные, резюме
resume (USA) - резюме
cover letter/ covering letter - сопроводительное письмо
enclose - вкладывать в конверт, прилагать
enclosure - вложение (документа в конверт), прило-
жение (к письму)
apply for a job - подавать заявление о приеме на работу
work experience - опыт работы
track record - послужной список
benefits - льготы
fringe benefits - дополнительные льготы
Anyone who wants to find a job, as a rule, undertakes the definite,

well-known steps. First, it's a search of a vacancy either in the classified
advertisments or in Internet. When a suitable vacancy is found, you
write a CV and a cover letter, and mail or e-mail the letter with enclosed
CV to the advertising employer. Then you wait for an answer. The
positive answer is usually an arrangement for an interview. At the
interview the employer should decide whether you are suitable for the
position. Later they deliver a decision to you or call to inform that you
are admitted. If you failed, start the process from the beginning again.
46
U n i t 4. Applying for a Job
Read the following short advertisments for young American lawyers

and decide which one attracts you or which position you would apply
for and why or why not.
1.
lob Title: Attorney - Corporate and Business
lob Type: Attorney
Location: California - Los Angeles
Description: Century City, CA law firm seeks an associate with
general corporate expertise to assist a growing office.
Candidate must have 2-3 years of law firm or in-house
experience with a background in financial transactions,
mergers & acquisitions. Candidate must also be able to
work well with clients. Excellent academic credentials
from nationally recognized law school required
Practice Area(s): Corporate and Business
Required Qualifications: 2 years experience required
Note: credential - диплом о высшем образовании
2.
Job Title: Attorney - Intellectual Property Law

Job Type: Attorney
Location: New York - New York City
Description: NYC firm is looking for a junior IP associate. 1-2
years experience is expected. Transactional
background with copyrights, trademarks, patents, and
technology is highly valued. Solid academics a must
Practice Area(s): Intellectual Property Law
Required Qualifications: 1 year experience required
3.
Job Title: Attorney - Taxation Law
Job Type: Attorney
Location: Illinois - Chicago
Description: Chicago firm is looking for a tax associate. Must have 1+
years experience with an emphasis on tax exemption.
LL.M in tax is highly valued; solid academics required.
Practice Area(s): Taxation Law
Required Qualifications: 1 year experience required
Note: tax exemption - налоговая льгота
47
4.
Job Information
Job Title: Litigation Paralegal
Employer: Bowles & Verna
Job Description
Description: Walnut Creek law firm seeks litigation paralegal with
2 + years experience. Position requires excellent
organizational and communication skills. Proficient in
Word, Excel and Lexis. Please submit cover letter,
resume and salary requirements
5.
LITIGATION ASSOCIATE ATTORNEY SEARCH:

NEW YORK - Litigation associate with 3-6 years experience wanted for TOP
NY FIRM. Sophisticated complex litigation practice offering regulated hours
position for the right candidate. Position is partnership track. Experience in
Federal and State court, drafting pleadings, motion practice and discovery.
NEW YORK Litigation Partners with portable business wanted for cutting
edge, profitable, big firm spin-off that is growing by leaps and bounds. Ground
floor opportunity. Words used to describe this firm are collegial and informal.
The lawyers do not stand behind closed doors or formalities. They work hard,
suit coats are rarely seen, and coffee talk is the norm. Lawyers enjoy each other's
company both at and after work. A popular job board states that it's not
Disneyland but it's darned close. Even without the dazzling compensation
schemes, it's a wonderful place to practice law. Partners in other practice areas
and groups are encouraged to apply.
ALL APPLICATIONS WILL BE TREATED IN STRICT CONFIDENCE.
Please e-mail your resume in MS Word Format to
Vocabulary Note: discovery - представление сведений (в доследовании)
The language of job ads is either formal (1-3) or too florid (4).
1. Render the information of the 1 - 3 ads so as you will tell your friend
about the positions. You needn't follow the ads style.
e.g.
I've seen an ad in the Classified. It may be just for you. A .... law fiim
advertises a vacancy of a ... The candidate must have .../the requirements for
the candidate are ... If you want to apply send your CV to ...
2. Read attentively advertisment 4 and answer the questions:
- What kind of position is this?
- Where is the firm situated?
48
- What kind of firm is it? (law firm? partnership? big? expanding?)

- How long does the working day last?
- Is the job experience necessary?
- Is it a team work? Is the atmosphere friendly?
- Do they offer any benefits?
Creating a CV
The purpose of your CV is not to get you the job. Its purpose is to get
you an interview, and after your meeting to remind the person you met
about you.
General Principles
Target your CV
Different firms will be looking for different information. But don't
write an all-purpose CV for everyone - it may not work. Study the
requirements and find information about the firm you're applying.
Think carefully about the difference between a CV and a covering
letter. Your CV is about facts, which should speak for themselves and
should not include much text.
Dos and Don'ts

To decide what to include in your CV and where, follow these dos
and don'ts:
What you do
1. Keep your CV to 2 - 3 pages in length.
2. Make your CV easy to read. Remember that the legal profession
demands clarity from its practitioners. Your prospective employer
should know exactly where to look for what.
3. Use positive language and adopt a confident tone.
4. Ensure that the first page contains enough personal details for a
potential employer to contact you easily.
5. Make the chronology of education and experiences clear by
keeping dates (months and years) down the left or right side of the
page. Highlight more recent experiences and education by
arranging lists in reverse order (most recent first).
6. Headline key skills relevant to the job. Ensure that bullet points
and headings provide reasonable detail and do not read simply as a
checklist.
7. Leave out information that is irrelevant or negative
49
8. Put more relevant information that demonstrates your suitability

for the role near the beginning of the CV.
9. When drafting your career history try to give an impression of
your role, status and achievements. If possible give examples of
interesting and relevant matters which demonstrate your skills.
10. Ask someone else to read your CV and find out his or her impres-
sions. This is essential in revealing embarrassing typing errors.
What you don't do
1. Don't attach a photograph to your CV. You're applying for a job as
a solicitor, not joining a dating agency.
2. Don't lie. This can lead to instant dismissal if discovered.
Employers sometimes carry out an auditing exercise where this
can be unearthed. Also be aware that past employers may reveal a
different picture if contacted.
3. Don't joke. Not everyone will share your sense of humour.
4. Don't write your whole life story. Positions of responsibility at
junior school are rarely of interest and give the impression of doing
little since.
5. Don't leave unexplained gaps in your career history as it gives the
employer the feeling you are trying to hide something. State
whether travelling, taking a career break etc.
6. Don't write banal profile/objective sections. Statements such as
'highly motivated team player' can be better demonstrated
through examples in the body of your CV.
7. Don't list your interests unless they are current. Think carefully
about the impression they will give the reader. Very special interests
may raise questions about your ability to integrate and not everyone
will share religious/moral/social concerns. Only state those interests
that you can talk fluently about and demonstrate positive skills that
the company may be looking for. If you know that the firm
represents travel agents, or pop stars, or IT companies, then it's
worth stressing those interests if you genuinely have them.
1. Practise to give advice (refer to the Grammar Supplement, Modal

Verbs section).
Should / should not:
e.g.
You should keep your CV no more than 2-3 pages long.
You shouldn't attach your photo.
2. You may discuss the tips to see if you clearly understand why you
should or shouldn't do something.
50
Guidelines for a Typical CV

A 2 - 3 page CV typically has the following sections (and
traditionally follow this order):
1. Name / surname and contact details.
2. Summary or profile.
3. Education and qualification.
4. Work experience.
5. Other experiences: IT skills / Language skills / Interests (optional).
1. Name Surname / Contact Details
At the top of the first page should be your Contact Details. For visual
impact, the text should be centred. It's not necessary to give the document
a heading, i.e. 'Curriculum Vitae'. Instead, your name should be the
heading. Type it using a larger type size, e.g. 22pt, and in bold type.
To save space, write your address on the line below your name, not as
if you were addressing an envelope - but as a string of text with commas
separating your house name/number, street name, town and post code
with commas.
Type in your contact telephone numbers. An e-mail address (if you
have one) should also be recorded in this section.
Sample 1
NAME SURNAME
12 Any Street
Anytown
Anywhere ANI 1NA
Telephone: XXO XX XX
e-mail: any@smth.xx
2. Summary / Profile
After the name heading qualified professionals may write a short
profile summary in order to highlight the scope of areas they're
specializing in and the major skills and abilities they possess.
Sample 2
Corporate lawyer with 6 years experience as corporation house counsel and 2 years
in law firm practice. Areas of expertise include financing, re-financing, tax
counseling, contract drafting and negotiations, investment projects, issuing share
and securities, financial planning, AGM (annual general meetings), annual reports.
In certain cases the profile is represented by one-line title and

degrees: e.g. Antitrust Attorney JD.
51
3. Education and Qualifications

This section should include all professional memberships as well as
your general academic skills. If you're currently studying for an addi-
tional qualification, this should also be included (at the top of the list)
with an anticipated result. Lay it out in reverse chronological order,
most recent first. Ensure that you include: the name of the establishment
and the dates you attended the institution.
Sample 3 ( USA legal education standard)
EDUCATION
1995-1998 Juris Doctor
University City, Law School, City
1993-1994 Colledge Name,
Finance course
1990-1993 Bachelor's degree
University Name
Note. American and British lawyers also include the item Bar Association
showing when they were admitted to the Bar. They may also be members of
other organizations or associations.
4. Work Experience / Career History
Starting with your current or most recent job first, compile the
following information:
Dates: The dates should be placed vertically in either the left-hand
or right-hand margin.
Organisation and location (city or town name only): Underneath
the organisation's name, give a brief narrative about the core business
this allows the reader to quickly make comparisons about the size and
complexity of the organisation, complexity of challenges, etc.
Job title: Underneath the job title, construct a 'function' statement,
i.e. what you were employed to do. Be selective in what you write here:
mention the principal tasks and responsibilities of your role, to include
those things you enjoy and are good at doing. It might be best to omit
other things you do but don't enjoy so much, unless they are crucial
parts of the job you're targeting. The function statement should be no
longer than 4 - 5 lines in length.
Achievements: Each achievement statement should include:
whether you worked independently or as part of a team, what you did,
and the result of your actions (this can be quantitative a n d / o r
qualitative). Achievements should be written in the form of short,
52
Unit 4. Applying for a Job
punchy, bullet-point statements of fact. They are designed to arouse the

reader's interest and generate questions like how? what? why? etc. so
that the decision-maker will shortlist you to obtain the answers. There's
no need to provide salary details or reasons for leaving on your CV.
Sample 4
W O R K EXPERIENCE
2004 X X X & XX , L L P , p a r t n e r
P R A C T I C E A R E A g r o u p leader; r e s p o n s i b i l i t i e s i n c l u d e
Achievements: has managed has been performing
Provide participate in
1998-2004 A N Y N A M E Inc,
H o u s e c o u n s e l l a w y e r in a g r o u p of X l a w y e r s , . . . .
5. IT Skills
Try to give an impression of your familiarity with computers. List
any software packages that you are familiar with using that would be
relevant to the job, e.g. word-processing or spreadsheet software and
your level of proficiency (beginner, intermediate or expert). Law firms
nowadays want to see that their potential trainees have some experience
in tools used for legal research, e.g. CD-ROM's and primarily the
Internet. Mention that you've used WestLaw or Butterworths or
Lawtel legal research web centres if you have.
Sample 5
IT SKILLS
M S O f f i c e P r o g r a m m e s - a d v a n c e d level
W o r d - i n t e r m e d i a t e level
I n t e r n e t - a d v a n c e d level
W e s t L a w and B u t t e r w o r t h s consistent user
6. Interests and Activities

Law firms are also looking for evidence of your team working and social
skills in an extra-curricula capacity. Therefore mentioning your
involvement in sporting teams and other organisations can highlight
positions of responsibility you have held and your outgoing nature.
However, you should be careful not to give irrelevant activities/interests
that don't demonstrate any skills to the firm, e.g. reading, or listening to
music. As in all of these sections be laconic and relevant.
53
Sample 6
INTERESTS
Sports: Roller-skating, volleyball.
Keen on plastic arts
Instead of above two columns there may be a column Other

experiences where you inform about your knowledge of foreign
languages, IT or other skills and interests.
Sample 7
Languages: Conversational French

Computers: Word; WordPerfect; FrontPage 2000
Interests: Humorous poetry, politics, travel, chess, reading, sports
Referees
Before you submit your CV to any employer you need to contact
potential referees to obtain their agreement to act as referees. It is not
conventional to reveal the identities of your referees on the CV. Some
employers will request such information prior to an interview, in which
case you provide the names and contact details in your covering letter.
Other employers will wait until they have met you and decided on
whether they want to take matters further.
You are responsible for referee management. That means, when a
potential employer or recruiter asks you for your referees, this is the cue
for you to also contact them. Explain to each referee the nature of the
role you are applying for. Detail the skills the employer is interested in.
This will enable the referee to have a relevant, constructive conversation
with the employer/recruiter.
No example seems possible here.
1. Practise writing a CV for a fictitious person joining and completing

Samples 1 - 7 . Complete any data and specify information (Sample 2 and
4). You may do changes in Samples 5, 6 or 7.
(You're not supposed to try to create your own CV at this stage because
the Sample basically fits the USA mode of education and track record. The
Russian mode will be given later in this Unit.)
2. Refer; to the Reading Supplement section and read the text
"Seeking a position of an attorney".
This is a kind of web resume that hosts place on their personal web sites.
Write a resume for Edward Coldwell according to the sample you've
studied.
54
Graduate CV
Recent graduates usually don't have relevant job experience (but
may have track record of some temporary jobs). In the CV/Resume a
graduate should highlight the following:
- skills mastered, achievements in project work, grades gained,
specialization in certain areas; clinic semester;
- travel experiences and sports participation;
- extensive training courses taken, like foreign languages or IT;
- summer jobs, or any volunteer participation;
- interests and hobbies (but see above mentioned advice).
Graduate CV Sample
Cathleen Oyres
64 Westlands Crescent, Crayford,. DAI 9 0 0
Tel: 0208 423 200001
Fax: 0208 423 200002
Email: clevergirl@cvsonline4u.com
PROFILE
An enthusiastic and hardworking law graduate who works well as part of a team
or by myself using my own initiative. I possess good communication skills and
work well under pressure. Look for an opportunity to start a training programme
at a firm of solicitors.
EDUCATION
2001-2004 Bladewell University LLB Degree Law, Honours.
2004-2005 Bristol University LPC course, specialized Finance and
Banking Law, Commercial Paper and Property Law.
Participated in colloquiums, performed challenging
reseach projects, published a number of articles in the
university journal.
1999-2001 Hillsfar Grammar School
A Levels History (A), Maths (B), English (B)
O Levels English Language (A),
English Literature (A),
History (A),
Maths (B),
Physics, Chemistry, Biology (B,B), French (A),
German (C),
IT (A),
Graphic Products (B)
55
LANGUAGE SKILLS Fluent French and German

Taking German course
CAREER HISTORY
2003-2004 Tompson's Real Estate . agency, second shift
receptionist
2003 Summer job at Chapman Nursery Home
2000-2003 The Silver Spoon - Evening and weekend waitress
Boots the Chemist
1997-1999 Saturday sales assistant
1995 Morning newspaper deliveries
COMPUTER Proficient in the use of Office 97 and 2000.
EXPERIENCE IBM Compatible PCs running Microsoft Windows,
MS-DOS, WordPerfect, Word for Windows,
INTERESTS Listening to music, reading, tennis, swimming,
socialising with family and friends.
You are reporting a new applicant to the open position in the law office.
Render the formal data from the CV to make a short story about Cathleen
Oyres.
Cover Letter
Before Putting Pen to Paper
Read the firm's literature or information. If they do not produce any,
find out as much as you can about them. You will then be in a better
position to compose a letter about why you are suited to the firm.
Consider the firm's requirements and decide what they are looking
for. Consider then whether you have the skills, abilities and qualities,
and, if so, how these can be best conveyed.
Look again at your CV - does it cover all the necessary points? If
not, you may need to revise.it. If it does, what points are there on the CV
that you would wish the employer to note?
General Points
Writing a letter is not always as straightforward as might be
supposed. It is worth taking time to create the best possible
impression. Size, quality of paper, layout and neatness all contribute to
this effect. By the time the letter has been read, the employer will have
56
been influenced by the way it has been written, as well as by its

content.
Every CV sent by post needs to have a covering letter to introduce it.
The letter ought to:

- encourage the employer to take your CV seriously;
- set the reader's expectations of what will be in the CV;
- persuade the employer that you are a suitable candidate for the
job;
- indicate evidence for the claims you make about yourself.
The letter should include:

- the purpose of the letter, i.e. the application for a training
contract/pupillage;
- the reasons why you are applying to that firm;
- the highlight of the best two-three things you can offer the firm;
- a sign off ('Please accept my enclosed CV as application for a
training contract/pupillage. I hope you will look on my
application favourably.').
Review the guidelines and complete instructions for a cover letter. Use
modals (refer t o t h e G r a m m a r S u p p l e m e n t , M o d a l V e r b s section).
Applying for a job you have to ... cover letter.

Before writing a letter you should ...
Every CV sent by post...
The letter ought to ...
The letter should...
Structure & Content

Beginnings & Endings of Letters
Address by name if you can, such as: If you have no name, address as
Dear Ms Bloggs Dear Sir
and conclude with and conclude with
Yours sincerely Yours faithfully
57
Sample
Your Address
Date
Name of Recruitment Partner
Firm's Address
Dear Name, (use title & surname only)
First Paragraph: Use as introduction. Identify who you are, what job you are
applying for and how you heard about it.
If you are a recent graduate, for example, mention of your degree specialization
subjects.
Say that you enclose your CV
Useful phrases:
in response to your advertisement... following our telephone conversation ... would
like to be considered for ... here is my CV for your consideration ... writing to
enquire whether...
e.g.
In response to your advertisment I'm applying for the position of attorney .
Second Paragraph: Give reasons why you are applying to that firm. What sort
of work does the firm do, what kind of clients does it deal with, what are the
main specialisms etc. Do not make vague generalisations about the firm's
'excellent reputation' or its 'first class training program.' Try to show that you
have researched the firm and you know what they do.
Third Paragraph (or continuation of the second paragraph): Give reasons why
the firm should consider you. What have you got to offer the firm? Talk about
any relevant experience or knowledge and discuss why you think you can make a
contribution. Refer to the points on your CV that you want the employer to
note.
Possible selling points: relevant work experience; related interests and skills,
especially if these are not fully covered elsewhere; aspects of your course that are
particularly relevant.
Useful phrases:
as you can see from my CV ... glad to work for you because ... I can offer ...
especially interested in ... my main skills are ... most important qualifications and
experience are...
Final Paragraph: Sign off, saying when you will be available for interview and
that you look forward to hearing from them.
Useful phrases:
happy to supply further information ... available for interview at any time ... look
forward to hearing from you... I hope you will look on my application favourably.
58
Yours sincerely/faithfully
Signature
Name
1. Complete the letter using the information from the CV you've made up
for a fictitious person.
Your candidate is applying for one of the jobs in the advertisments from
the Concept section.
2. Write a covering letter in the name of a law graduate.

Cathleen is applying for a trainee position at Barnes & Swindle Solicitors.
She has seen their ad in a newspaper, in the Classified. She will probably
start the letter as "Dear Sirs," because as you see there are at least two
partners in the firm.
Job advertisment giving substantial information (the particulars) on

the open position.
Before you read review (Unit 3 Legal Jobs) the responsibilities of
a corporate attorney who usually works in a legal department of a
company.
Vocabulary Note:
real estate / real property - land including the natural resources and buildings on
it - недвижимое имущество/недвижимость
Suppose you are just looking for a vacancy of a corporate attorney.
1.
Scan the first part of the ad. Initially you pay attention to the
heading and brief job information (bold-typed for you).
Would you read the abstract about the firm or go to further
information on the position?
You still have to find out what kind of firm is advertising the position
of a corporate attorney and what they do.
59
¡ P a r t I. Legal Career
Corporate Attorney
Large Chicago business consulting firm seeks corporate associate with 5-6 years
of experience. Excellent academics required.
This is one of Chicago's premier firms with national acclaimed expertise in
management, strategies, corporate and securities transactions, acquisitions- and
real estate, human resources and employee benefits, marketing and intellectual
property. Our clients include profit and non-profit organizations and agencies.
Associates here are very comfortable and enjoy working with their colleagues.
The people are intelligent, friendly and like to be around one another. The firm
pays slightly below market, but bonuses are generous and are based on billable
hours and billing rates. And you'll love the offices - they even have their own
home grown art collection.
J o b Information
J o b Title: Attorney
Employer: Stetson Companies
Location: Chicago, IL 60610
D a t e P o s t e d : 10-08-2004
Job Description
General Counsel
2.
The particulars on the position is the major part of job information
that will help you to decide whether you fit the position and whether it's
worth applying for.
Find the practice law areas.
POSITION P e r f o r m c o m p l e x legal w o r k for senior m a n a g e m e n t

SUMMARY t e a m of S t e t s o n C o m p a n i e s , will advise l e a d e r s h i p on
legal issues of significant i m p o r t a n c e to t h e C o m p a n y ' s
o p e r a t i o n s . P r o v i d e legal counsel a n d g u i d a n c e t o
officers a n d senior m a n a g e m e n t on legal m a t t e r s ,
m a n a g e all legal affairs, c r i t i q u e legal service of o u t s i d e
a t t o r n e y s a n d paralegals, r e v i e w of k e y real e s t a t e
c o n t r a c t s a n d d o c u m e n t s . R e p r e s e n t senior e x e c u t i v e s
a n d m a n a g e r s in a d m i n i s t r a t i v e hearings.
KEYJOB R e v i e w of key real e s t a t e c o n t r a c t s and d o c u m e n t s . All
ELEMENTS: real e s t a t e t r a n s a c t i o n closings for each p r o j e c t a r e t o b e
reviewed.
W i l l p r o v i d e a d v i c e for a n d p a r t i c i p a t e i n n e g o t i a t i o n s
w i t h federal, state, a n d local g o v e r n m e n t officials
regarding Stetson Companies relationships with those
entities.
60
MAJOR Draft or review and negotiate purchase and sale

RESPONSIBILITIES: agreements, legal documents, management contracts,
leases and amendments, letters of intent, construction
and design contracts.
Serve as primary legal advisor in all transaction
closings.
Participate in and lead the Real Estate Investment
Process for Stetson Companies.
Manage activities and billing of outside counsel.
POSITION Candidate shall possess minimum 5 years experience
REQUIREMENTS: with real estate law.
Candidate must have strong analytical skills, ability to
interpret, conceptualize, and analyze information, and
working knowledge of city and state funding for real
estate development projects .
Candidate must be licensed in the state of Illinois and
must be familiar with California State Laws. Must
possess strategic planning skills, leadership skills, and
goal setting skills.
Candidate must be able to make sound complex
decisions which will be essential in the ability to
successfully perform in this role.
Some travel may be required.
Vocabulary Note:
transaction closing - завершение сделки
leasing - долгосрочная аренда недвижимости
billing - выставление счета
development - новое строительство, застройка
1. Highlight the verbs of activity in the text: perform, advise, represent,

provide, manage, review, participate, draft.
2. Find out:
- what kind of work to perform,
- what legal issues to advise on,
- whom to represent and in what procedures,
- what kind of negotiations to participate in,
- what documents to review, draft and prepare,
- what projects (process) to participate in and lead.
61
Usage of modals and semi-modals (refer to the Grammar Supplement,

Modal V e r b s section).
Reference: must, have to - necessity.
a) Write down what experience, skills, knowledge, abilities are required for
the position.
Candidate must have...
Candidate must be...
Note. Candidate shall possess minimum 5-year experience - means that this
an obligatory requirement but the employers can't impose such personal
obligation.
b) Prepare information about the stated position responsibilities using must

or have to (instruction, duty).
e.g.
Corporate Attorney has to perform legal work for senior management, team
Attorney must represent senior executives and managers in administrative
hearings.
Note. ... the transaction closings are to be reviewed.

to be to + Inf. - так положено, предписано кем-то.
Read the following CV and decide whether the applying lawyer is a

competitive suitable candidate.
Mary Jane Adams

Corporate and real estate attorney (over 5 years experience) with profound
knowledge of city and state funding, familiar with Illinois State Law, Michigan
State Law, California State Law. Areas of expertise include financial planning,
property transactions, contract negotiating and drafting, real estate
development projects.
Address 255754 North birch ave, Chicago, 111 60044
Telephone (47) 555 87 90
E-mail adamsmj@core.com
EDUCATION
2000 JD, Chicago University
1996 California University, B. A. S.S. (Bachelor of Arts in Social
Sciences)
62
BAR ADMISSION
2001 American Bar Association admitted
WORK EXPERIENCE
2000 - present attorney, Mathews & Lowen LLP,Corporate group, member of
8-lawyer team (comprising corporate and real property
lawyers).
Provide legal counsel to corporate clients on such legal
matters as: financial management, corporate transactions,
acquisitions and real estate management.
Advise clients on property acquisition and disposal,
participate in negotiations.
Draft and review sales and purchase agreements, legal
documents, leases, letters of intent, construction and design
contracts.
Participation in a number of complex real estate projects that
have been successfully completed display my strategic
planning skills and ability to make complex decision.
1. Give commentary whether the applicant will be invited for an interview.

Give reasons based on the text of the ad with Mary's CV.
Start the statements I'm sure or I'm not/not quite sure:
e.g.
I'm sure Mary is going to have this job because she is an experienced corporate
and real estate attorney
Refer to the Functions Supplement, Connectors section and see the
connectors of cause and effect.
Mary is a perspective employee since ...
She is quite/ really suitable for the position as ...
The company will offer her the position because ...
Mary can be very efficient acting as General Counsel because ...
She will provide highly professional counseling since ...
Mary is able to lead real estate projects as ...
The Legal Job Interview
Preparation
The key to a successful job interview is preparation. The more prepared

you are, the more relaxed and confident you will be during the interview. The
63
suggestions below will help you in your preparation and get you on your way
to a successful interview.
Research the employer. Know the practice areas of the firm and the
background of its members. In particular, know something abut the
interviewer(s) - where they attended school, specialties, or if they have
written an article or recently argued a case on which you can comment.
Carefully analyze your skills and abilities and formulate your career goals.
Once you have a clear picture of what you can offer an organization, you will
be better able to express that at an interview.
Practice the interview aloud in the mirror. If possible, review some of the
typical questions employers ask and practice answering them in ways which
highlight the appropriate skills/abilities.
Always back up statements about yourself with proof (i.e. don't just say
you are organized, demonstrate it with examples such as how you developed a
more efficient client database at your last position, etc.)
With regard to areas of inquiry which may be uncomfortable or flaws,
develop an answer with which you feel comfortable, so as to avoid being
caught off guard or stumbling over the answer. Re-direct to some of your
positive qualities (i.e. grades - did you do better in practical vs. theoretical
courses; did you show improvement; do you have corresponding legal
experience.)
Make sure you know well where the firm is located and how to get there.
Include in your briefcase or portfolio, copies of your resume and
documents, reference page and any other materials you may be discussing.
At the Interview
Be on time.
Appearance - clean, neat, and professional - look and act like a lawyer, not
a law student.
Deal with secretaries and associates with the same respect and
professionalism you would with a senior partner. Your relationship with all
members of the firm impacts the hiring decision. Remember the interview
begins the minute you walk in the door.
Address the interviewer by name (i.e. Mr./Ms./Mrs. Jones); do not use
first names unless invited to do so and even then be conservative.
Convey a positive attitude - many a job has been lost over lack of
enthusiasm.
Demonstrate a real interest in the employer.
Try never to answer with a simple yes or no; if a direct yes or no is required,
answer and then elaborate, but be brief and to the point.
Control excessive, fidgety, nervous behavior.
64
It is OK to exhibit a sense of humor; not by throwing out one liners, but by

displaying humor appropriate to the situation.
No matter how lax or informal an interviewer, always remain professional.
Be honest when answering all questions.
Be prepared for multiple interviewers and day long interviews, especially
with larger firms and corporations. Knowing something about each
interviewer can arm you with new information for each interview.
Ask the interviewers about themselves, why they chose their job, what
prepared them in school and what they would change if they could.
Note. Be aware of your verbal and non-verbal skills — следите за тем, как
вы говорите и как используете жестикуляцию.
Interview at a Law Firm
Sample Questions You May Ask
Vocabulary Note:
pro bono work - работа (адвоката) без оплаты / безвозмездная (pro bono -
лат. во благо общества)
turnover - зд. текучесть кадров
In addition to asking questions about the firm, remember to ask

about the interviewer.
1. How would you describe the general trends of the firm's activity?
2. How are associates (law clerks) supervised, trained, evaluated?
3. How much pro bono work do attorneys do? Is it encouraged?
4. How and when do associates become specialists?
5. How much turnover has there been in the firm? What are the prospects
of the firm?
6. To what extent are associates given immediate responsibility and direct
contacts with clients?
7. Are there any internal regulations?
8. Does the firm have a wide client base or is it, for some economic reason,
tied to a small number of clients?
9. What is the policy concerning partnership?
10. Does the firm/employer have any attorney training programs?
11. What type of work would I be assigned to do?
12. Will I have an opportunity to attend court hearings of the cases I work
on?
65
P a r t i. Legal Career
13. Am I expected to bring in new clients and will I receive additional

compensation for doing so?
14. Tell me about your work in the firm.
Questions regarding salary and/or benefits should be reserved until
the second interview or until an offer is made.
Sample Questions Employers May Ask

1. What are the most important considerations for you in choosing a job?
2. How do you balance a busy schedule with quality of life?
3. What are your ideas on salary? How much money do you want to be
earning 10 years from now?
4. Describe a situation where you had to work with someone who was
difficult. How was the person difficult, and how did you handle it?
5. How would your friends describe you? Your professors? Your collegues?
(see Vocabulary Support at the end of the Unit)
6. Tell me a little about yourself.
7. What are your expectations of your future employer?
8. What was the most useful criticism you ever received, and who was it
from?
9. Describe the project or situation that best demonstrated your analytical
skills.
10. What idea have you developed and implemented that we particularly
creative or innovative?
11. How have your educational and work experience prepared you for this
job?
12. What types of situations put you under pressure, and how do you deal
with them?
13. Are you willing to relocate or travel as part of your career?
14. What persuaded you to become a lawyer? Why did you go to law school?
15. What do you see yourself doing five years from now?
16. How would you describe your ideal job/work situation?
17. What qualities do you possess that will make you a good lawyer? (see
Vocabulary Support at the end of the Unit)
18. What is the most significant item on your resume?
19. What would you like to know about our organization?
20. Tell me about your education/employment achievements.
21. What event in your life has had the most significant impact on you?
22. Why should I hire you?
23. What are your greatest strengths? Weaknesses?
24. How do you determine success?
66
25. If you could change legal education, what changes would you make?
26. What law school subjects have you liked most? Least? Why?
27. Do you think your grades are a good indication of your academic
achievement?
28. In what ways do you think you can make a contribution to our
agency/office?
29. What have you learned from participation in a clinical program? What
have you learned from the previous job activities?
30. Why did you decide to seek a position with the firm/agency/ company?
31. What do you know about this firm/agency/company?
32. What two or three things are most important to you in a job?
33. Do you have any other outstanding job offers? If so, where?
34. What are your salary expectations?
35. What areas of our practice would be of special interest to you?
36. Do you think you have the qualities that would enable you to become a
partner in our firm? What are those qualities?
(Abridged from Roger Williams University web site law.rwu.edu)
The best way to practise is to answer all the questions.
The HR manager of Stetson Business Consulting is interviewing

Mary Jane Adams.
Student A. You are the HR Manager. Study Ms Adams's CV and find what
you would like to clear out. Make up your own list of questions choosing from
the list (Essential 2, Sample Questions Employers May Ask) and adding some
more special questions. Get ready to answer the questions Mary will ask you
(Essential 2, Sample Questions You May Ask). Get ready to speak about your
company Business Consulting)
Student B. You are Mary Jane Adams. You are applying for the position of
Corporate Attorney at Stetson Business Consulting. To prepare for the
interview study Essential 2 material, read the advertisment and your CV so that
you will be able to answer all the questions.
Refer to the Reading Supplement section to read an abstract from

John Grisham's novel The Firm.
In the abstract the main hero Mitch McDeere, a Harvard law school
graduate is interviewed for a position of attorney at a law firm
specializing in taxation.
67
While reading take special notice of the questions that interviewers

ask Mitch and the way Mitch handles these questions.
Tips
The process of applying for a job in Russia mainly follows the
international standard.
The requirements for CV and cover letter are practically the same as
stated in the Unit unless you're applying by e-mail and fill out the form
provided.
- Your CV must be no longer than 2 pages.
- It should be easy to scan and find necessary information quickly.
There are still certain specifics.
- While in Britain and the USA it's not obligatory, and is even
considered discriminatory, to include one's age and marital status,
in Russia it's still conventional, and employers require this
information for some reasons.
- Before writing a CV you should make sure how to render in
English the names of educational institutions, organizations and
administrative bodies that you've studied in or worked for. Such
information may be available on the related web sites.
Legal job titles:
Lawyer but not jurist.
Advocate is just the proper word to use for адвокат, not attorney, or
solicitor, or barrister.
Legal assistant, or partner's assistant but not paralegal.
Write your CV and cover letter.

The following sample CV can help you.
CV Sample for a Russian Graduate
CURRICULUM VITAE
Name Petrova Ekaterina
date of birth 10.04.1981
address 12, Moskovsky per. apt. 45, Moscow
phone number 767-12-55
mobile number 8-916-555-44-33
e-mail petrovakatya@yahoo.com
68
EDUCATION
1999-2004 Law University of Russian Federation.
Graduated summa cum laude, qualified as "Jurist"
(Diploma № ABC 00189760, reg. № 7554, 30.06.2004).
Major subjects: Tax Law and Tax systems of foreign
countries, Financial Law, Civil Law, Criminal Law,
Administrative Law, Civil and Criminal Procedure,
Economics, Accounting and Audit.
Research works and semester thesis papers: "Legal control
of bank credit activities under Civil Law", "Regulation of
commercial transactions".
Graduation work "Legal control of franchising".
WORK EXPERIENCE
2003- "ZAO "Business Legal Consulting"
Senior partner assistant.
My responsibilities are: project legal support, contract and
legal documents drafting in Russian and in English,
correspondence with Russian and foreign clients, negotiation
service, translation service, office administration.
summer 2003 Training course at a Regional Prosecutor's Office.
I filed the documents, drafted orders, performed attachments,
assisted the investigators, attended court trials.
summer 2002 Training course at WondeWorld a manufacturing firm
specializing in
production of computer games.
As an assistant of the Deputy Director General I drafted
agreements and agreement appendixes according to
INCOTERMS, operated "Garant" and "Consultant Plus"
search systems.
SKILLS
Technical skills MS Office, Windows 2000, Word, Excel, Project, Access,
and competences Power Point, Internet, Consultant +, Garant
Language Fluent English - reading, translation, communication skills.
I covered the course of Business English mastering
negotiations, presentations and business correspondence
skills;
mastered Legal English course (oral practice and
translation) including the following topics: Business Law,
Civil Procedure, Contracts and Taxes.
Interests 1 love sports: play tennis and go swimming. I travel quite a
lot, take up photography.
Fond of studying foreign languages.
Note. Graduate summa cum laude - graduate with a red diploma (красный ди-
плом).
69
Vocabulary Support
Vocabulary support on personal qualities is given below. Look up the

dictionary to find the definitions:
Personal qualities
accurate friendly organized
adaptable get on well with other people positive
can work under pressure good communicator practical
careful good sense of humour receptive
committed good time-keeper relaxed
competent hardworking reliable
co-operative imaginative self-confident
courteous independent worker self-motivated
decisive lively sensitive
dedicated logical thorough
energetic loyal thoughtful
extrovert methodical vigilant
flexible meticulous work well with others
Part II. C O M P A N Y F O R M A T I O N
Business File 2
Company Management
Shareholders own stock (called shares, or The board of directors sets policy for the
ownership interests) in the corporation. corporation and makes major financial decisions.
Shareholders have the exclusive right to make Function of the Board is to do following:
the following decisions: - set corporate philosophy and policy
- elect and remove directors - select and appoint officers and managers
- amend the articles of incorporation and to run the company
bylaws - make major company decisions
- approve the sale of all or substantially all - pay dividends
of the corporate assets
Among other things, the directors:
- approve reorganizations, and
- dissolve the corporation. - authorize the issuance of stock
- elect the corporate officers
Shareholders are paid dividends out of the
- set officer and key employee salary amounts
company's profits.
- decide whether to mortgage, sell, or lease
real estate, and
approve loans to or from the corporation.
elect - выбирать Officers are responsible for the routine operation

approve - одобрять and management of the corporation.
dissolve - распускать Function of officers and managers:
- execute corporate philosophy;
- be in charge of departments, divisions or
authorize - предоставить groups;
полномочия;
- work out strategies;
уполномочить
- select employees;
appoint - назначать
The particulars of an officer or manager's activity
set - устанавливать,
depend on the area of responsibility: finance,
определять
production, marketing, sales, human resources,
research and development.
Managing Director appointed by the Board of
be responsible for - отвечать за (участок работы
Directors is responsible for the day-to-day
вид деятельности) - have
operations of the whole company.
buty, to be in charge of...
be liable for - нести ответственность - to be
legally responsible.
Manager's Role
To manage is to set objectives, to organize, to motivate, to -coordinate and

to control.
71
P a r t II. Company Formation
Corporation job titles

Managing Director / - управляющий предприятием, генеральный ди-
Chief Executive Officer ректор
Finance Director / - директор по финансовым вопросам
Chief Financial Officer
Production Director - руководитель производственного отдела
Marketing Director - директор отдела маркетинга
Sales Director / Manager - управляющий отделом сбыта
Human Resources Director - директор отдела кадров
Research and Development - управляющий отделом научно-исследователь-
Manager ских и опытно-конструкторских работ
Company's Money
Capital - the money which the shareholders of the company have put
into the business in order to start and carry on business.
Share - a separate part or portion into which the capital of a company is
divided:
- a company may have a capital of $1 million divided into two
million shares of 50 cents each
акция, доля акционера в капитале предприятия
Stocks - shares grouped into units, e.g. units of 100, that can be bought
and sold
Stake - money raised in a business venture
- a percentage of capital in a company
доля капитала в предприятии
Dividend - part of a company's profit paid to shareholders, usually once or
twice a year
дивиденд
Interest - money charged (by a bank for borrowing money, usually
expressed in percentage)
процент (напр., банковские процентные ставки)
- a share (part) of a company, business
долевое участие в компании
Securities - shares, stocks, debentures and bonds
ценные бумаги
Securities of all kinds are traded at the Stock Exchange (биржа)
Debenture - document aknowledging and securing a debt
облигация акционерного общества, облигация компании
A company starts up when people have raised money for its creation - the
capital. Everyone has a share in the capital, and becomes a shareholder. The
initial capital is called share capital.
72
share capital - уставной капитал
What are shares?

Companies sell shares in order to raise capital with which to invest and grow.
Shares are bought by shareholders, who then become legal part-owners of the
company. Shareholders are generally entitled to a 'share' in the profits of the
company (dividends) and the right to vote on certain company matters.
Other words used to describe shares are stocks, holdings, securities and
equities.
Shares are bought and sold on the stock exchange. The most commonly traded
shares tend to be from large companies. In the UK these large companies can be
found in the FTSE 100 and 250.
profit - прибыль
income - доходы
Why do companies issue shares?

Issuing shares is one way that a company can make money in order to start up or
expand.
When a new company starts up, it needs funds in order to buy capital (such as
computers, furniture, machinery etc.). This money may come from investors.
Investors put money into the company and receive shares in that company. But
a successful company will expand and increasing amounts of money will be
needed to develop the company. The company has two choices; it can either
borrow money from banks or it can issue more shares. The financial term for
stocks is equity capital and for borrowed money is debt capital.
equity - акция; активы предприятия за вычетом задолженности

equity capital - капитал в форме акций
debt capital — заемный капитал
Unit 1
Business Organizations
Business organization - предпринимательская структура; (pl) организацион-

ные формы предпринимательства
What business organizations do you know? What do they do? In what market
areas do they operate?
What do the following abbreviations stand for: Ltd.; plc/PLC; Inc; Corp, LLC,
LLP?
How many people can own a business?
Does the phrase "to have an interest in a business" mean that a) you are
interested in a business;or b) business is interesting for you; or c) you have a
share in business?
Who are shareholders?
What is share capital?
How are the business organizations formed?
Why should a lawyer know the types of business organizations and the
principles of their formation?
Core Vocabulary 1
sole trader - единоличный владелец
partnership - товарищество
limited liability company - компания с ограниченной ответственностью
Ltd. [limitidj - the abbreviation is pronounced as a word, not by
letters
public limited company - открытая компания с ограниченной ответствен-
ностью
private limited company - закрытая акционерная компания
legal entity - юридическое лицо
natural person / individual - физическое лицо
profit - прибыль
loss - losses - убытки
interest - доля в деле, долевое участие (банк. - процент)
debenture - облигация акционерного общества
share - доля акционера в капитале предприятия; акция
74
U n i t 1. Business Organizations
transfer shares - передавать акции

subscribe for the shares - подписываться на акции
equity - основной капитал; активы предприятия за вычетом
задолженности
capital - капитал, состояние
stock — основной капитал; наличность
stocks - акции, пакет акций
stake - доля капитала в предприятии; пай
Word pairs
liability v. responsibility
liability - legal responsibility for smth, especially to pay money that is owed
responsibility - duty that one has, especially when in charge of smth
Business activity is organized in statutory forms. Each form, or type

of business organization, provides the responsibilities, rights and
liabilities of business owners. The major types of business organizations
are: sole ownership (sole proprietorship - US), partnership and limited
liability company (corporation - US).
Businesses and companies are created by people coming together for
mutual benefit. There are different ways in which an organization can be
created. The form selected will depend on the type of organization and
the country it is in. It is important to ensure that the right type of
organization is created for the intended activity: production of goods or
rendering services.
Money raised for business creation is the capital or stock. Naturally,
a sole owner has the whole capital and partners have certain parts, or
stakes. Company members, who have invested their money into this
business, have shares of the capital.
Every business is supposed to grow and bring profits. Profits are
divided between the partners in partnership, or between shareholders in
a company, and only a sole owner gets all the profits. The liability for
losses or debts is proportionable to capital interest.
Can you name the major types of business organizations?
What's the aim of companies creation?
Who does the capital belong to?
What's a share and what's stake? (see also Business File 2)
How are the profits of a business organization divided?
75
Business Organizations
in the United Kingdom
Sole Trader
In the United Kingdom the oldest form of business is sole trader.
It means that there is only one owner who, having invested his own
money, is in charge of the business, gets all the profits and bears the
burden of the losses. In case of bancruptcy he alone is liable for his debts.
Sole owner / trader may be a shopkeeper, a landlord, a window
cleaners, a painter, a decorator etc.
Partnerships
Two or more people may become partners, investing their money into
business so that each has his interest. They form a partnership by
the agreement. They agree to distribute the profits and losses, so they
are also liable for their debts. A partnership agreement is not a legal
requirement in Britain but is usually considered to be essential as means
of distribution of profits and costs.
Partnerships are usually formed by groups of accountants, solicitors,
architects, auditors, consultants, and other professionals.
Legally sole traders and partners are natural persons. In any legal
wrongdoing they can be charged and sued.
Limited Liability Company (Ltd.)

A limited liability organization is a company created with the money
invested by shareholders, who own shares and receive a share certificate,
which confirms ownership of the shares.The shareholders do not own
the company but they own the shares and control the business by
appointing the directors. This separation of ownership limits the
liability of shareholders so that in the event of bankruptcy the
shareholders cannot be sued for the debts of the business. Shareholders
may lose the money they have invested in the business but their personal
income is not at risk.
Thus, a limited liability company is a legal entity, and its liability is
limited by the nominal value of the shares. The liability may be limited
by guarantee, that is, the liability of each member is limited to the
amount he/she has personally guaranteed (promised) to pay in the
event of the company liquidation for debts.
In Britain there are two types of limited liability company:
Private limited companies (Ltd.)
Public limited companies (pic)
76
Most companies are private and recognised by the Ltd. in their title.
Public limited companies are recognised by the pic in their title.
A private limited company restricts the right to transfer its shares,
limits its members to fifty (but minimum of two), and must not invite
the public to subscribe for its shares and debentures.
A public limited company can offer its shares and debentures to the
public; there is no restriction to transfer the shares to other persons.
There is no limit to the total number of its members except that there
must be at least seven.
Manufacturing and most services are private limited companies:
banks, insurance companies, hotels etc. Airlines and private utilities are
also in this category. W h e n state-owned utilities (gas, electricity, water
and telecoms) are privatized they are usually created as public limited
companies.
a) Scan the text to find:
- how many members there are in each type of business organization;
- what business activity is typical for each type;
- who gets the profits;
- who (and in limited liability companies - how) is liable for the losses or
debts.
b) Decide whether the liability of a sole trader and a partnership is
unlimited.
Finish the sentences:

1. A limited liability organization is a company created ...
2. A private limited company restricts the right...
3. A sole trader bears the burden of losses, so in case of bankruptcy ...
4. Shareholders may lose the money they have invested but...
5. A public limited company can offer ...
6. In a partnership the partners distribute their profits, and they are
also...
7. A limited liability company is a legal entity, so ...
8. Legally partners are natural persons, so, they can be ...
What type of organization will be appropriate for:

- a photographer who intends to open a photoshop;
- a family who dream to join in a restaurant business;
- three solicitors who specialize in business law;
- two businessmen who are going to start manufacturing gifts;
77
- two truckdrivers and a barge captain intending to start a shipping business;

- some businessmen and their investors with the idea to produce leather
goods;
- some architects and two owners of small construction firms who have
decided to join in a perspective development business.
Legal Knowledge
To learn about other British business organizations read the

following dialogue and then summarize the information.
Familiar situation - an exam at a law school, and a professor is
checking what legal knowledge a student has obtained.
Prof.: Well, what are you going to speak about?

St.: Types of business organizations. Shall I start?
Prof.: I guess you'll start with sole traders.
St.: Of course. Sole traders, partnerships and limited liability companies
are the major types of business organizations.
Prof.: I can see the notes you've made and I'm sure you have plenty to tell
me about them. But I'd like you to speak about other types of
companies.
St.: Let me think...
Prof.: Holding company, for example.
St.: Holding? All right. This is a company formed for the special purpose
of holding the share capital of other companies.
Prof.: The whole capital?
St.: The whole or more than a half. And the companies whose share
capital is in the holding are called subsidiaries. The holding company
serves both as a financial and professional business partner for its
subsidiaries.
Prof.: Will you explain its role?
St.: Its role is to control the capital and improve each related company's
investment portfolio.
Prof.: Good. Trading company? What do you know about trading
companies?
St.: A trading company is a company that is actively trading. That means
it is buying and selling for profits.
Prof.: Well...
St.: There are also investment companies, or investment trusts, that use
the capital to buy securities as investments. They profit from the
dividends. Then, of course, come joint stock companies. A joint-stock
company is a special kind of partnership. Such a company has a
common capital called stock. The partners in the company are called
78
shareholders, since they receive shares for their contributions to the

stock.
Prof.: What's the advantage of owning the shares?
St.: Shares express ownership interest and decision making power in the
company, and shareholders are free to transfer their shares to
someone else without necessary consent of the other shareholders.
Prof.: And to be more exact, how does a joint stock differ from a
partnership?
St.: While a usual partnership also has ownership interest, the difference
is that in a partnership, interest can only be transferred to someone
else if all the partners agree to it.
Prof.: I see you've been reading for the exam. The last question is:
subsidiary and affiliate. What are these?
St.: A subsidiary, as I have already mentioned, keeps its share capital or
more than a half of it, in a holding company, or parent company.
Subsidiaries of the same holding are also called affiliates, sister or
daughter companies. A subsidiary can be an associated company -
from 20 to 50 percent of its equity is held by another company.
Prof.: ...!
1. Suppose you were the Professor, how would you assess the student's
answer?
2. Now suppose you are to take the same exam. Make up notes (or a
crib note) in order to prepare for the answer: summarize and classify the
information about the types of companies mentioned in the dialogue -
holding, trading and joint stock companies, investment trusts, and
subsidiaries.
3. Role-play the dialogue with your partner. You may expand the
situation, and make the "student" speak about a sole trader, a
partnership and limited liability companies.
4. The crucial "exam" question:
Why does a business lawyer have to know the types of business
organizations and the principles of their formation?
Choose from the following:
- the lawyer's clients are businesspersons;
- the lawyer may want to start a business himself;
- this course is a must in the law school syllabus;
- the lawyer must be able to help the client to choose an appropriate type of
organization;
- the lawyer should be well aware of the world of business;
- the lawyer needs the knowledge of how to sue natural persons and legal
entities.
Refer to the Reading Supplement section and find more arguments in
the text Business Lawyers' Handbook.
79
Business Organizations in the USA

Core Vocabulary 2
sole proprietorship - фирма в индивидуальной собственности
general partnership - товарищество с неограниченной ответственностью
limited partnership - товарищество с ограниченной ответственностью од-
ного из партнеров при неограниченной ответствен-
ности другого
transfer the interest - передача доли в капитале, деле
corporation - корпорация
non-profit corporation - некоммерческая корпорация
enterprise - предприятие
statutory requirement - требование закона
statutory authorization - предоставление правомочий на основании статута
In the USA business may be conducted through a variety of

organizational structures. A specific business structure is generally
chosen for liability and/or tax reasons. The three most common types of
business organizations are sole proprietorships, partnerships and
corporations
Sole Proprietorship
This is the simplest form of business. The owner has unlimited
liability for debts of the business.
Partnership
Two or more individuals are the owners who have agreed to establish
and run a business for profit and form a partnership. There are two types
of partnership:
general partnership - a partnership in which each partner has
managerial power and unlimited liability for partnership debts;
limited partnership - a partnership that must conform to state
statutory requirements and have one or more general partners and one
or more limited partners who have limited liability and do not share the
management.
Corporation
A distinct legal entity that exists separately from its shareholders and
is created under state law. Four traits of the corporation are: limited
liability, centralized management, continuity of life and free
transferability of interests.
80
There are many subtypes: close corporations, professional

corporations, nonprofit corporations, etc. Besides such organizations as
sindycates, trusts, associations, joint ventures and cooperatives rely on
partnership and corporate law for most of their governing principles.
1 .What legal entity or individual has:

- unlimited liability;
- limited liability.
2. Name four traits of a corporation and explain or comment on each
one.
Legal Knowledge
Your USA based firm is developing an on-line, counseling service on
the website. You are assigned to check how the system works. The page
Types of Business Organizations has the following links-questions that a
client may ask. Join the questions with answers (as if you click and get
the proper answer).
What is a sole proprietorship?
What is a corporation?
What is a general partnership?
What is a limited partnership?
What is a limited liability company?
What is a LLP?
A
Like a general partnership, a limited partnership is established by an
agreement between two or more individuals. In a limited partnership,
however, there are two types of partners. A general partner, unlike a limited
partner, has all rights in management and greater control in some aspects of
the partnership; for instance, only a general partner can decide to dissolve the
partnership. Profits are shared according to the agreement, so limited partners
only receive a share of profits based on the amount on their investment.
General partner's liability is unlimited, as for limited partners their liability is
limited in proportion to their investment.
B
A corporation consists of shareholders, who elect the board of directors to
manage the business, and the board employs people to work for the company.
So, the corporation is a complex form of business organization that consists of
three groups: shareholders, directors and employees. The corporation can own
assets, borrow money, and perform business functions without directly
involving the owner(s) of the corporation. The liability of the owners is
81
limited to their investments: in case of liquidation for

debts the shareholders receive the share they invested
in the enterprise. The corporation, therefore, is subject
to more government regulations than proprietorships
or partnerships. It is created by statutory
authorization. Corporations are subject to "double
taxation" - the corporation as a legal entity pays
income tax on net profits, and shareholders pay income income tax
tax on their dividend earnings. налог на прибыль
с
This is a very common business in the US. Usually
these are small enterprises, like a home workshop or
office, but they may be quite big, especially in
restaurant or hotel business. These are quite easy to
start, but rather risky to run. The proprietor is
responsible for his/her business so he/she gets all the
profits but is liable for his/her debts.
Profits are taxed as income to the owner personally.
The owner has complete control of the business but faces
unlimited liability for its debts. Since this is a fairly
simple type of legal structure, there is very little
government regulation and reporting. A sole proprietorship
applies for a business permit at the local office.
D
An LLC combines selected corporate and partnership
characteristics while still maintaining status as a legal
entity apart from its owners. As a separate entity, it can
acquire assets, incur liabilities and conduct business. As incur liabilities
the name implies, however, it provides limited liability принимать долговые
обязательства, взять
for the owners. LLC owners risk only their investment.
на себя обязательст-
Personal assets are not at risk. ва в отношении
Е
A partnership exists when two or more persons
join together in the operation and management
of a business venture. Partnerships, like sole
proprietorships, are subject to relatively little
regulation and are fairly easy to establish. A formal
partnership agreement is recommended in order to
foresee potential conflicts before they arise; for
example, who will be responsible for performing each
task, what, if any, consultation is needed between
partners before major decisions are made, etc. Under a
82
general partnership, each partner is liable for all debts of the business. All
profits are taxed as income to the partners based on their percentage of
ownership. A general partnership, like sole proprietorship, registers a business
name with the county/city clerk's office in which the business is located.
F
A limited liability partnership (LLP) is similar to an LLC with the
exception that it is aimed at professional organizations (e.g. lawyers, doctors,
dentists, accountants, etc.).
1. Scan the texts and compare them to the Introduction text. What
additional details have you learned?
2. Read all the texts again and find out the advantages and
disadvantages of the types of business organizations.
e.g.
It's an advantage that the owner of sole proprietorship receives all the profits
and makes the decisions. The owner pays only personal taxes on profits.
The disadvantage is the burden of losses and unlimited liability.
3. Complete the following dialogue between two law students.

S.: Well, I've read about the types of businesses enough. What a knotty
problem! The more I read the more confused I become.
St.: Come on! You needn't worry! I'm ready to help you/ Go ahead
with your questions.
S.: O'K. The sole proprietorship ... It may be a big restaurant or even a
construction firm. That means many people work there, right? But
why the owner receives all the profits?
St.:
S.: I see. Now let's discuss partnerships. How many partners can there
be in each type of this business?
St.:
S.: Do they share the profits equally?
St.:
S.: How do the partners pay the taxes?
St.:
S.: I like the idea of a partnership. Besides, that's just the only way to
run a law firm.
St.:
S.: I know. Many law firms have this LLP after their name. And what
is better - to be a general or a limited partner?
St.:
S.: Now corporations ... Let me see ... Aha! Double taxation. Will you
fill me in?
St.:
S.: Thanks a million. Now I really understand everything.
83
Study the chart where the major business forms are compared.
Core Vocabulary 3
to file - подавать документ в надлежащее учреждение; реги-
стрировать и хранить документы в определенном по-
рядке
to complete a form - заполнить форму документа
to file a statutory form - подать официальное заявление
charter - документ, содержащий согласие государственного
органа на создание корпорации
receive a state charter - зарегистрироваться
pro rata - лат. пропорционально (distribute pro rata as dividends)
retain profits - оставить прибыль для реинвестирования
retained profits - доля годовой прибыли компании, не распределяемая
между акционерами, а оставленная для повторного
инвестирования
inheritance - наследование
by inheritance - по наследству
incapacity - недееспособность
insolvency - неплатежеспособность, несостоятельность
withdrawal - выход из состава
termination - прекращение действия
The Forms of Business Organizations C o m p a r e d
Item Sole Proprietorship Partnership Corporation
1 Creation Few if any By agreement of By statutory

requirements partners (generally authorization (must
(easy to organize). should be written; meet state
Registers the limited liabilities requirements to
name. partnerships must receive a state
complete and file a charter; must file
statutory form). Articles of
Registers the name Association)
2 Governmental Almost none Little, except for The most
regulations of the limited or other
business structure special partnerships
3 Governmental Yes Yes Yes
regulations based
on the type of
business (products,
markets etc.)
4 Owners The proprietor The partners The shareholders
84
Item Sole Proprietorship Partnership Corporation
5 Liability Of Unlimited Unlimited, except Limited; shareholders

individual owners that in a limited generally can lose
for business debts partnership the only their actual
or actions limited partners investments
usually lose only
their investments
6 Transfer of By sale of Buyer can receive In most cases the
owner's interest business, some but not all stock is freely
inheritance or any rights of a partner transferrable
other means unless other partners
chosen by agree; limited
proprietor partner's interest is
freely transferrable
7 Profit and losses Solely the Shared equally by the Calculated after
proprietors partners unless paying salary to
partnership employees, including
agreement states officers; profits are
otherwise retained by corporation
and/or distributed pro
rata to shareholders as
dividends
8 Management The proprietor General partners - Management distinct
equal votes unless from owners; officers
stated otherwise are appointed by
in the agreement; directors, who are
limited partnership - elected by
limited partners have stockholders
no management rights
9 Income taxes Profits part of Each partner's share "Double taxation" -
personal income; of profits (whether corporation pays
no separate tax for distributed or not) is income tax on net
the proprietorship part of his/her profits (no deductions
personal income; no for dividends); each
separate taxes for the shareholder's
partnership dividends are part of
his/her personal profit
and thus are taxed
10 Termination By sale or other By terms of partnership Can have perpetual
volantary agreement; by existance, as provided
termination of agreement of partners; by statute and articles
business; or by by death, incapacity or of incorporation; can
death or incapacity withdrawal of one or continue despite
. of the owner more owners; or by death, incapacity or
sale or other volantary withdrawal of officers,
termination of directors and/Or
business shareholders
11 Size of business Can be Can be substantial, Varies from small to
substantial, but but tends to be small the largest business
tends to be small entities in existence;
most significant
businesses are or
become corporations
(Abridged and modified from Business Law, Robert W. Emerson, John W. Hardwicke)
85
In the chart and in Core Vocabulary 3 find words and phrases that
correspond to the following definitions:
the act of ending performance of certain activity

to keep profits for future investments
physical or mental inability of a person to perform a job
certificate of corporation
to register a document
inability to pay the money you owe
the act of no longer taking part in an activity
to submit documents to a certain organization
Complete the sentences using the following phrases:

by agreement by statutory authorisation file the statutory form
have few requirements for organization file Articles of Association
Sole proprietorships...
General partnerships are formed ...
Limited partnerships must...
Corporations are created ...
Corporations must...
Write your own sentences with the following word combinations:

be liable for incur liability have limited / unlimited liability
Read the definition and answer the questions:

Interest - rights of ownership in a business or a large share (stock) in business.
How does a sole proprietor transfer his/her interest?

How do partners transfer the interest?
Is the interest transferable in corporations?
Which of these verbs can make a collocation with the word PROFIT?
Get, change, receive, retain, transfer, calculate, distribute, pay, share.
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Match the words used in the chart boxes with the definitions:
insolvency continuation all the time without stopping

termination not taking part in an activity
withdrawal inability to pay the debts
incapacity end of doing something
perpetual existance disability to do something
Activating the Chart The Forms of Business Organizations Compared

Down:
a) Column Item - ask a question to each numbered item (e. g. How are
businesses created?)
b) Columns Sole Proprietorship / Partnership / Corporation - collect
information on each business. Write down the sentences.
e.g. Sole Proprietorships are easily created and there are few requirements to
form the organization. The proprietor must register the name of his/her business.
There are almost none governmental regulations of the business structure but the
Government regulates the type of business - products or services, markets to sell
etc....
Across:
Compare the businesses going horizontally using the connectors however,
while, whereas to contrast certain ideas (refer to the Grammar Supplement,
Connectors section):
e.g. Sole Proprietorships are created easily as there are few requirements, but
they must register the name. However, partnerships are created by a written
agreement, and limited partnerships must complete and file a statutory form.
Partnerships must register the name of organization. Corporations are created by
statutory authorization....
Legal Counseling
You are a business lawyer.
This is the list of your clients who need your legal advice and are
scheduled for a meeting. W h a t will you advise?
1. Erik and Jane Owner, a married couple, are eager to start a business.
They have some money and can get a loan from the bank. Erik thinks they can
manage a small restaurant. What type of organization should they choose?
(Jane thinks they'd better be partners)
87
2. Linda Venture sees herself as perspective businesswoman. She has an

idea to launch a beauty parlour. She has perfect business skills, but she has
little money. Her friend Alice Scholar has got a lot of money and is ready to
invest a certain sum into Linda's enterprise. Alice is not interested in business
and wants to go on with her scientific research. What business form would you
recommend?
3. John Boss represents a group of shareholders who intend to invest into

manufacturing business. John wants to know more about corporations and,
just in case, about LLC, as some shareholders find it a better form of
conducting business.
In preparing your advice use the following information about

corporations.
What you should remember about corporation:
1. For most legal purposes a corporation is a person.
2. A corporation is created by statutes and is granted a charter, usually by
the state.
3. A corporation is liable for its debts.
4. A corporation is usually granted perpetual existence.
5. There are the following types of corporations:
public corporation (formed to meet a governmental or public purpose),
private corporation (created for private purposes), federal or state
corporations (system of national banks, federal savings and loan
institutions).
Corporations may be profit (most) and non-profit (charitable)
corporations.
A corporation is said to be domestic in the state of its incorporation. In
respect to other states it is a foreign corporation. Corporations formed in
other countries are called alien corporations.
Limited liability company is a kind of a partnership-corporation hybrid.
Professional corporations are created by lawyers, doctors, accountants,
architects, and other professionals in order to gain corporate tax
advantages.
The situations in L e g a l Counseling can become the background for a

role-play. One of you is a lawyer, the other two (or just one person) play
the role of above stated characters ( 1 - 3 ) who need legal advice.
You may choose one situation, or use all three to practice more.
88
Refer to the Reading Supplement section where you can learn more
about corporations in the text Corporations.
The following questions will help you to collect and report the
information.
- W h a t are the four identifying characteristics of a corporation?
- W h y is the liability protection the main advantage of a corporation?
- How is a corporation formed?
- How is the opertion of corporation arranged?
- What are the advantages and disadvantages of running a
corporation?
Vocabulary Note:
veil of corporate liability or corporate veil - завеса корпоративности
pierce the corporate veil - проникнуть за завесу корпоративности
Preparing a report about corporations review the information in

Business File 2, where the functions of shareholders, directors and
officers are presented in the diagram.
Working for a Russian law firm you may be assigned to prepare the
information about business organizations and write a letter that is an answer
to an inquiry from a your client's contact or partner from a foregn country.
In the letter you are to give a brief overview of the forms of Russian
business organizations and forms of foreign companies.
Refer to the Functions Supplement, Correspondence section where
you'll find useful information about the style and the standard of business
correspondence for lawyers (Part I) and tips on legal writing (Part II).
Study the information in Part I that will help you to write the above
said letter.
Read and process the information that will make up the subject of
your letter.
Note. While collecting information and drafting materials in English avoid
direct translation from Russian. Review the texts and exercises of the Unit.
Search the Web to find similar native English topics, read and absorb.
Mind: Russian official sources written in English give the following
interpretations of the business notions:
share or statutory capital - charter capital
articles of incorporation - charter
89
1.
Russian law offers the following forms of businesses:

- Limited liability company (OOO);
- Privately held, closed joint-stock company (ZAO (3AO);
- Publicly held, open joint-stock company (OAO);
- Partnerships - general and limited;
- Individual private entrepreneur (ПБЮЛ);
- Representative or branch office of a foreign company.
2.
A limited liability company is a company with a charter capital
divided into members' participatory shares.
Member's shares may be of equal of different par value (portion of
charter capital).
Both individuals and legal entities, including foreign citizens and
foreign companies, may become company members. State bodies may
become members only in cases specifically provided by the law. The
total number of the company's members may not exceed 50 (Art. 7 of the
Law on Limited Liability Companies).
Minimal charter capital of 100 minimal statutory monthly wages
(MSW) is required for a limited liability company (Arts. 14 and 16 of
the Law on Limited Liability Companies). For companies engaged in
certain types of business higher amounts of charter capital are required.
There are two types of corporations in Russian law: open and closed
jointrstock companies. The basic distinction is that open joint-stock
companies may carry out public and private placement (subscription) of
shares, their shareholders may freely trade shares. Closed joint-stock
companies (analogous to closely held corporations) may only carry out
private placements of shares. Shareholders of closed joint-stock
companies have the first refusal right in case of sale of shares by a
shareholder to outsiders.
A minimal capital investment equal to 1000 minimal statutory
monthly wages ( M S W ) is required to incorporate a joint-stock
company and 100 MSW to incorporate the closed joint-stock company.
For companies engaged in certain types of business higher amounts of
charter capital are required.
A charter of a joint-stock company is the only constituent document.
It defines the name and address of the corporation, categories and a
number of shares of each category, amount of charter capital, structure
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and competence of management bodies, shareholders rights, procedure

of preparing and carrying out the shareholder's general meeting, infor-
mation on branch and representative offices of the company.
3.
Branch offices and accredited representative offices are both legally
distinct from Russian corporations, which may be established by foreign
firms either as joint-stock companies with partial Russian ownership, or
as wholly-owned subsidiaries of the foreign firm. Foreign ownership can
be as high as 100 percent, except in certain sectors. For example, foreign
stakes are restricted to 25 percent at defense-related enterprises.
Branch Offices
In Russian terminology, branches are not considered independent
legal entities, though they can negotiate, market or provide other
business support on behalf of firms based outside Russia. However, they
can not technically generate a profit on their operations in Russia.
Setting up a branch may be worthwhile if a foreign company has started
to pursue business in Russia and is exploring opportunities. Many large
US firms originally began their Russian operations as locally established
branches. The US firms should not use the term branch with registration
authorities if the purpose is to register as a company. Branches could be
accredited from a one to five-year term.
Accredited Representative Offices

Like branches, accredited representative offices are not independent
legal entities and can not earn profit in Russia. Advantages of an
accredited office include annual (rather than monthly) reporting
requirement for some activities (including some tax payments), and
greater leeway in issuing invitations for the US partners to visit Russia
on business visas. Up to five foreign employees may work with an
accredited office of a foreign company. Offices are usually accredited for
one to three years term.
Unit 2
Incorporation and Registration
Taking into account the information concerning creation and government

regulation of businesses:
- Do all business organizations have to be registered?
- What are the requirements for such registration?
Do you know:
- why it is necessary to register a business?
- if an entrepreneur needs legal assistance in the process?
Core Vocabulary 1
incorporate (v) - оформлять в качестве юридического лица;
регистрировать как корпорацию
register/ registration - регистрировать / регистрация
license - лицензия
permit - разрешение (письменное)
obtain license / permit - получить лицензию, разрешение
file (v) - подавать документы; регистрировать доку-
менты
file (n) - досье; подшитые документы
be on file - имеющийся в деле; приобщенный к делу
filing fee - регистрационная пошлина
Articles of Incorporation - устав корпорации (USA)
Articles of Association - устав юридического лица
Memorandum of association - заявка на регистрацию акционерного об-
щества (UK)
charter - документ, содержащий согласие государ-
ственного органа на создание корпорации
issue (a charter) - выдать документ
issue stock - пустить в обращение ценные бумаги (ак-
ции компании)
capital stock - основной капитал
satutory agent / registered - поверенный, предусмотренный законом
agent
92
U n i t 2. Incorporation and Registration
Employer Identification — (налоговый термин) регистрационный но-

Number (EIN) мер фирмы, выплачивающей налог в фонд
социального страхования
bylaws - устав корпорации (внутренний)
Articles of Incorporation include:
Name / Address / Nature of business/ Capital stock / Special provisions /
Term of existence - название / адрес / род деятельности / основной капи-
тал / особо оговоренные условия / срок существования.
All businesses are required by law to register with the state

authorised bodies. Every country has certain rules and regulations
concerning the procedure of business registration and incorporation.
Why it is necessary to register a business.
1. Government must be able to identify any business organization by
name, product or nature of business, and also has to tax an
enterprise either as natural person or as legal entity.
2. The business owners who have the name on file can prevent
another business from using its registered name.
3. The information about companies must be available for public
reference so that public or other businesses could know with
whom they are doing business, or verify the information about
companies they are cooperating or dealing with.
How to register a business or to incorporate.
In common law countries (as UK and US) individual businesses and
partnerships have to register a business name, get an Employer
Identification Number with the tax bodies and obtain licenses and
permits appropriate for the nature of .their business activity.
Incorporation is the form of registration for companies with share
capital. A company has first to apply for registration and then to file the
documents for statutory authorization, such as Articles of Association
( U K ) / o f Incorporation (USA). The Articles contain information on the
name, address, nature of business, capital stock, term of existence of the
company and some special provisions.
The state body, after having checked the information, will issue a
state charter, and the corporation starts operation.
1. Check if the following statements convey the ideas expressed in the
text.
- Registration of the companies is obligatory.
- Government setting control over businesses must be informed of all
companies.
93
- Registration helps to protect the name of the organization.

- The public should know the producer of goods or provider of services.
- Information about companies must be available for entrpreneurs.
2. What are the requirements for registration of individual business or
partnership?
3. What are the stages of incorporation process? What main documents
are to be filed?
4. What is necessary for the corporation to start operation?
Business Formation Rules

The statutory requirements for business formation in the U S A
State bodies:
Secretary of State - государственный секретарь
SBA (Small Business - Управление по делам малых предприятий
Administration)
Trademark Office - Бюро регистрации торговых марок
IRS (Internal Revenue Service) - Управление внутренних доходов, налоговое
управление США
County clerk - начальник канцелярии округа
Sole Proprietorship
Setting up a sole proprietorship takes minimal effort. It's also the simplest
type of business to structure and operate. It's necessary to:
- obtain local, state and federal licenses and permits. (Small Business
Administration (SBA) or an attorney can provide the information);
- choose a name for the business and verify it has not already been taken
through the Trademark Office;
- register the name of the business in the county clerk's office where the
business is done;
- apply for an Employer Identification Number (EIN) with the IRS;
- get business insurance to protect the personal assets.
Explain the statutory requirements for a sole proprietorship.
- What do I have to do? - asks the client a sole proprietor.
- You have to ...
- Where do I have to (obtain ..., verify ..., register ..., apply ...)?
- You have to ...
Partnership
A partnership allows you to share the profits and losses of a business
venture with one or more partners. It's necessary to:
- obtain local, state and federal licenses and permits;
94
- register the name in the county clerk's office where the partnership does
business and obtain a certificate;
- get an EIN from the IRS;
- draft a written agreement between the partners determining a financial
plan, management responsibilities, and the rights and obligations of
individual partners. A written agreement is not required but can help to
avoid a lot of problems should a dispute arise. It's advisable to engage
the services of an attorney in drafting this document.
General partners assume unlimited legal liability with no protection for
personal assets if the business goes bankrupt.
Responsibility for the business actions of each individual partner is shared
by all partners.
Explain the statutory requirements for a partnership.

- What do I have to do? - asks the client starting a partnership.
- You have to...
- What are the partners' liabilities and responsibilities?
You answer: ...
Limited Partnership
Limited partners invest in a company but are not
involved in the management of the business. They
assume only limited liability. assume
принимать на себя
It : s necessary to: (ответственность)
- obtain all required local, state and federal
licenses and permits;
- get an Assumed Named Certificate by registering Assumed Named
a business name in the county clerk's office Certificate
where the company does business. The words сертификат на при-
своение имени
"Limited Partnership" must be contained in the
name of the partnership;
- get an Employer Identification Number from the
IRS;
- obtain a State ID Number from the state State ID Number
Department of Revenue; регистрационный
- write a partnership agreement that defines profit номер штата
Department of
sharing, asset distribution, participation rights
Revenue
etc. It's advisable to engage the services of an отделение налогово-
attorney in drafting up such a document; го управления
- file a Certificate of Limited Partnership with the
Secretary of State.
General partners are personally liable for all debts,
while limited partners are only responsible up to the
value of their investment in the partnership.
95
Part II. Company Formation
All partners report profits and losses on their individual income tax
returns.
If a limited partner gets involved in managing the company, he or she may
become personally liable for all debts.
Explain the statutory requirements for a limited partnership.

- What do I have to do? - asks the client.
- You have to ...
- Can 1 become liable for all debts? - asks the client, a limited partner.
You answer: ...
- Would you help us to draft the partnership agreement? - asks the client.
You answer: ...
Corporation
Corporation formation includes the process of incorporation of business, or
statutory authorization.
It's necessary to:
- file an application for registration of the name under which to
incorporate. Obtain the forms from the Secretary of State's office;
- prepare Articles of Incorporation for the business, following
instructions from the Secretary of State's office. The office will send a
certificate of incorporation, which will include the name of the
company, the purpose for which it is being formed, the location of the
company and other basic information. The certificate must be signed;
- receive the corporate charter from the state;
- at the shareholder's meeting adopt corporate bylaws and elect the board
of directors at the meeting;
- obtain business license (tax registration certificate).
Contact an attorney for help in conducting the shareholders' meeting or
drawing up the certificate of incorporation and bylaws.
Explain the statutory requirements for a corporation.
- What do I have to do? - asks the client starting a corporation.
- And what does the certificate of incorporation include?
- Should I receive the corporate charter?

- Can you help me to conduct a meeting and draw up the bylaws? - asks
the client.
96
U n i t 2. Incorporation and Registration 1
Legal Counseling
A lawyer can draft the following written advice for the client who
intends to incorporate the business. Read the text and compare it with the
previous guidelines about the registration of corporation.
- Are all the items of the guidelines covered?
- What extra information is provided by the text below?
Forming a Corporation
To form a corporation, you must file "articles of incorporation" with the
corporations division (usually part of the Secretary of State's office) of your state
government. Filing fees are typically $100 or so. For most small corporations,
articles of incorporation are relatively short and easy to prepare. Most states
provide a simple form for you to fill out, which usually asks for little more than the
name of your corporation, its address and the contact information for one person
involved with the corporation (often called a registered agent or statutory agent).
Some states also require you to list the names of the directors of your corporation.
In addition to filing articles of incorporation, you must create "corporate
bylaws." While bylaws do not have to be filed with the state, they are important
because they set out the basic rules that govern the ongoing formalities and
decisions of corporate life, such as how and when to hold regular and special
meetings of directors and shareholders and the number of votes that are necessary
to approve corporate decisions.
You must issue stock certificates to the initial owners (shareholders) of the
corporation and record who owns the ownership interests (shares, or stock) in the
business.
Every company needs a federal employer identification number (EIN). So, you
must apply for and get one from the IRS.
Is this information sufficient for the client?
A lawyer usually prefers to have a conference with the client where

they can discuss all legal issues.
Counseling a client who decided to set up a corporation needs
thorough preparation of documents and appropriate references. The client
may want to know more about:
- the registration of the name;
- the nature of business;
- the issuance of stocks (capital stock);
- the registered / statutory agent;
- the structure of the business (directors, officers, etc).
Study the following abridged form of the articles of Incorporation in
order to get ready for the conference with a client where the Articles of
Incorporation will be completed.
97
ARTICLES OF INCORPORATION OF
The undersigned subscriber to these Articles of Incorporation, a natural person
competent to contract, hereby forms a corporation under the laws of the State
of
ARTICLE 1
Name
The name of the corporation shall be
ARTICLE II
Nature.of business
This corporation may engage in
ARTICLE III
Capital Stock
The maximum of shares of stock that this corporation is authorized to have
outstanding at any time is shares of common stock having
a par value of $1.00 per share
ARTICLE IV
Address
The street address of the initial registered office of the corporation shall
be
And the name of the initial Registered Agent for the corporation at that address
is
ARTICLE IX
Board of Directors
The corporation shall have a minimum of one director. The initial Board of
Directors shall consist of:
[NAME]
[NAME1
ARTICLE X
Incorporator
The name and address of the incorporator is;
In WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
[ notary public]
98
Reference Material
Study the following reference material and prepare to give
explanations in plain English.
1. N a m e
The name of the corporation must comply with the
rules of the respective state's corporation division.
The general rules are as follows:
- The name cannot be the same as the name of
another corporation on file with the corporations
office.
- The name must end with a corporate designator,
such as "Corporation," "Incorporated,"
"Limited," or an abbreviation of one of these
words (Corp., Inc., or Ltd.).
- The name cannot contain certain words
prohibited by the state, such as Bank,
Cooperative, Federal, National, United States or
Reserve.
2. N a t u r e of Business
The state regulates the business activity in the area
to ensure good balance of production and services. So,
in order to comply'with the needs and demands of the
state the companies shall license the business, or obtain
special permits (for example, tobacco industry
dealing).
Texas requires that you obtain a license and pay a
fee if operating certain types of businesses in the state.
Please check with the state to make sure your business
is complying with the license requirements for your
particular profession.
3. Capital Stock authorized stock
The authorized number of shares of stock must be разрешенные к вы-
пуску акции
shown in the Articles of Incorporation.
As soon as the corporation receives the corporate
charter it may issue stock certificates to the initial
owners (shareholders) of the corporation.
4. R e g i s t e r e d / S t a t u t o r y A g e n t
In all states, an individual or service company must
be responsible for receiving important legal and tax
documents. This service is provided by an "agent" of
the corporation who is "registered" with the state of
99
incorporation. Thus, the term "Registered Agent." The registered agent must
have a valid street address within the state of incorporation, and be available
during normal business hours to receive documents.
5. Initial B o a r d of D i r e c t o r s
The incorporators (i.e. the individuals who signed the articles of
incorporation) may elect the initial board of directors who serve until the first
annual meeting of shareholders (at which time a new board is selected by the
shareholders).
The initial Board of Directors may have only one director.
The Board of Directors adopts the bylaws that set out the basic operating
rules of the company.
(You may also use the information from Business File 2 and from the text
C o r p o r a t i o n s i n t h e R e a d i n g S u p p l e m e n t section.)
A lawyer has prepared all the documents and references on the

incorporation issue and is having a meeting with his client who is setting
up a corporation. Location: Atlanta, Georgia.
Student A. You are an American lawyer, Mr / Ms Evans. You are a

partner of a large law firm performing expertise in Business Law. You in
particular specialize in Corporate Law. Mr / Ms Blake has contacted you
several times asking for advice. It's been you who persuaded him / her to
incorporate (first he / she wanted the business to be a partnership).
Your plan of counseling is: 1) to explain the steps of incorporation; 2) to
complete the Articles of Incorporation and the commentary of each article of
the document.
(Source of information: the previous material on corporations and Business File 2)
Student B. You are Mr / Ms Blake. You are having a meeting with your
lawyer and want a full scale counselling. Your business idea is to manufacture
carpets and rugs (you are free to describe your products). You own a factory,
sell the carpets locally and make profit. You and your business partner,
Mr / Ms O'Raily have chosen the name for the corporation - (your idea).
You and Mr / Ms O'Raily will be the directors, and you give your
particulars as Registered Agent.
The authorized stock is 50,000 shares having a par value of $1.50 per share.
Your address is 145 Labrador street.
There are 25 shareholders in your corporation, and later you are going to
hold a meeting to elect more directors and to appoint officers.
You've jotted down some questions that you are going to ask:
- What are the major steps to incorporation?
- Where can I register the name and what are the requirements?
100
- How long does it take to incorporate?

- Do I need to license my business?
- Who can be the Registered Agent? What are the responsibilities?
- When can I issue the stock?
- When should I hold the shareholders meeting?
- Who adopts bylaws?
- What should be included into the bylaws?
- What are the responsibilities of the Board of Directors?
(While preparing review Business File 2)
The statutory requirements for business formation in the UK
State Bodies authorised to register companies:
The State Registrar - бюро регистрации компаний
IRS - Inland Revenue service - налоговое управление (Великобритания)
Board of Customs and Excise - Управление таможенных пошлин и акцизных
сборов
Read the following tips for businessmen on registration of sole

tradeer business and partnership in the UK. The requirements are not
stated directly but are easily guessed from the questions. Make up the
lists of requirements similar to the above stated.
When you set up and register as a self-employed sole trader

Check that you are properly set up as a self-employed sole trader by
answering these questions. Have you:
- registered as self-employed with the Inland Revenue?
- obtained any permits and planning permission that you may need from
your local authority?
- found out from your local authority whether you need to pay Business
Rates?
- contacted Customs and Excise to register for VAT if you expect to have
turnover of more than £58,000 a year?
- set up a financial record-keeping system?
- made sure that your name is on all your business stationery, including
letters, invoices, receipts and cheques?
If you can answer "yes" to all these questions, congratulations - you're in
business as a self-employed sole trader.
Note. Business Rates - kind of a local tax on companies in Britain.
101
When you set up and register as a partnership

Check that you are properly set up as a partnership by answering
these questions.
Does your partnership:

- clearly display the partners' names at all its business premises, together
with the address to which official documents should be sent?
- clearly display its partners' names on its business stationery, including
letters, invoices, receipts and cheques, together with its official address?
(If the partnership has more than 20 partners it need only to display its
official address.)
H a s each individual partner:
- registered as self-employed with the Inland Revenue?
Has the partnership:
- contacted the Inland Revenue?
- contacted Customs and Excise to register for VAT if it expects to have
turnover of more than £58,000 a year?
If you can answer "yes" to all these questions, congratulations - you're in
business as a partnership.
Read the following brief information about the formation of limited

liability companies in the UK. Try to compare this process with
incorporation in the USA. W h a t is similar and what is different? You
are supposed to pay attention to the language as well.
To set up as a limited company in the UK, you will need to send several
documents and completed forms to Companies House, or the Registrar of
Companies. In Britain there are some types of limited companies - private
limited company by shares, private limited company by guarantee and public
limited company (PLC). The incorporation requirements are basically the
same for any type, though there are some special rules as well.
Companies House charges a standard registration fee of £20. It also offers
a premium same-day registration service for a fee of £80. Memorandum and
Articles of Association have to be obtained from law stationers or company
formation agents.
The documents that must be filed include:

- A Memorandum of Association, giving details of the company's name,
location and what it will do.
- Articles of Association, describing how the company will be run, the
rights of the shareholders and the powers of the company's directors.
102
- Form 10 (Statement of the First Directors, Secretary and Registered

Office) giving details of the company's registered office and the names
and addresses of its directors and company secretary.
- Form 12 (Declaration of Compliance with the Requirements of the
Companies Act), stating that the company meets all the legal
requirements of incorporation.
The name that you choose:
- must be original in the sense that it has not been registered by another
person;
- must end in the word limited (abbreviated as Ltd.);
- must not be deemed offensive to any third party;
- must in no way associate itself with Her Majesty Government or the
local authority.
The Memorandum of Association is one of two legal documents that

are required to form a limited company, the document defines the following
points:
- the company's name;
- the address of the registered office (England, Wales or Scotland);
- a statement of limited liability on the shareholders;
- a statement of the companies authorised share capital;
- the signature of one or more subscribers.
The Articles of Association sets out the rules for the running of the
company's internal affairs. Clauses refer to share capital, issue of shares,
transfer of shares and powers of Directors. All companies must register
Articles with Companies House. The company's Articles of Association
must be signed by each subscriber or member in front of an independent
witness.
After you have completed and signed the Memorandum and Articles of
Association, Companies House Forms 10 and 12 you file the documents to the
Registrar of Companies. Within 7 days you should receive a Certificate of
Incorporation, and you are now ready to commence business.
Pairwork
A British solicitor specializing in corporate counseling helps clients to
understand and remember the requirements for registration of different
types of businesses.
Work in pairs.
The Client prepares questions (refer to Essential, USA - questions
training tasks).
The Solicitor reviews Unit 1 Business Organizations (United Kingdom)
and again goes through the texts given and studied above.
103
Registration of Business Organizations in Russia

Working with foreign clients or with foreign partners of your clients
you may need to provide information on registration procedures for
foreign companies in Russia.
There are two options:
- write a letter to a foreign potential client with information;
- do a project.
For letter writing refer again to the Functions Supplement,
Correspondence section.
Project
It will be wise to create special web page on the site of your law firm, or to
have such file in your computer at hand.
Web Master
The data below needs processing. Make up the proper text layout for the
web page. Do the heading, side links, arrange information so that it could be
easily read.
1. Law
Business registration in Russia is regulated by the following basic laws and
Government resolutions:
— The 1999 Federal Law "On Foreign Investment in the Russian
Federation";
— The 1999 Civil Code;
— The August 8, 2001 Federal Law "On State Registration of Legal
Entities" (entrepreneurs);
- T h e Russian Government Resolution No. 319 "On Authorized
Federal Entity of the Executive Power, Providing State Registration of Legal
Entities" of May 17, 2002, and
a number of legal acts.
2. Where to register
Russian enterprises - in local Tax Inspectorate.
Foreign - in the City Tax Inspectorate.
Foreign companies - branch offices; accredited representative offices.
3. Registration of Branches and Accredited Representative Offices

Accredited Representative Offices and Branches should register with the
State Registration Chamber (with the Ministry of Justice of the Russian
104
U n it 2. Incorporation and Registration
Federation), and Accredited Representative Offices may also register with the
Russian Chamber of Commerce and Industry. Several Russian government
agencies and ministries supervising the industry in which a company operates
may also require accreditation. Such agencies include the Central Bank, the
Ministry of Economic Development and Trade, the Ministry of Finance, the
Ministry of Transportation, and the Ministry of Industry, Science and
Technologies of the Russian Federation.
According to the law, accreditation of a representative office or of a branch
should take 21 days. Accreditation fees vary from $1,000-1,500 for one year
to $3,000-3,500 for three, and $3,500 for 5 years (for branches only). Above
those amounts, an additional $500 should be paid for an expedited
accreditation within seven days.
4.
The Moscow Department of the Ministry of Taxes and Levies of the
Russian Federation, the authorized legal entity for company registration
(15 Tulskaya Street, Moscow) provides counseling to business people on the
new registration procedure and registration documents.
Beginning July 1, 2002, all legal entities that were established (registered)
in Russian before August 8, 2001, were requested to reregister with local State
Tax Inspectorates. If they fail to submit the necessary documentation for
re-registration by January 1, 2003, they will be liquidated. Branches and
Representative Offices do not fall under this requirement, because they are
not considered to be legal entities under the Russian law.
Unit 3
Franchising
What do you know about the following franchising companies:

Benneton Marks & Spencer Ikea Holiday Inn
Body Shop Donkin Doughnats Hilton
You can find shops, hotels or some other businesses in different countries. Why
is the range of products and services, the quality, the interior design style and
the uniform the same in every country?
Who are the owners of the business?
How is it possible to sell or purchase the rights to operate a certain business?
Why do some entrepreneurs choose a franchise business?
Are there any franchises in Russia?
Core Vocabulary
franchise право на производство и продажу продукции дру-
гой компанией; договор франшизы
franchise agreement договор франшизы
franchisor
franchisee фирма, предоставляющая привилегию
предприятие, получившее право продажи марочно-
го товара фирмы
grant a right предоставить право
trademark / service mark торговая марка / торговая марка сервисной фирмы
fee плата; денежный сбор
royalty гонорар; плата за право пользования (зд. франши-
зой)
Franchising is one of the methods of doing business. It is an

alternative, for many executives, to expand their companies without
having to spend money on building and development of new business
locations. The method has proven to be a very effective way to build a
106
U n i t 3 . Franchising
"chain" or "distribution network" comprised of many small business

owners all operating under a common title or name.
For instance, the McDonalds Corporation relies on independent
business owners to make sure their hamburgers and other products
reach consumers in a consistent manner
In its simplest form franchising consists of two business groups: the
franchisor (the company doing the franchising), and the franchisee (the
independent business owner who buys a franchise).
Thus, a franchise organization is such a system of marketing goods, or
services, or technology when one company (franchisor) grants its
certain rights to another company or companies (franchisee).
A franchisee obtains the right to use the trademark or service mark, the
know-how, business and technical methods of a franchisor. The
franchisor and the franchisee enter into franchising agreement that sets
the rights and obligations of the parties, defines the fees and royalties,
stipulates the rules of termination of the agreement.
Franchise agreement - a legal agreement that allows one organization

with a product, idea, name or trademark to grant certain rights and
information about operating a business to an independent business
owner. In return, the business owner (franchisee) pays a fee and
royalties to the owner.
Franchisor - a company that owns a product, service, trademark or

business format and provides this to a business owner in return for a fee
and possibly other considerations. A franchisor often establishes the
conditions under which a business owner operates but does not control
the business or have financial ownership. McDonald's is an example of a
franchisor.
Franchisee - a business owner who purchases a franchise from a

franchisor and operates a business using the name, product, business
format and other items provided by a franchisor. For example,
McDonald's sells a franchise to a franchisee. This allows the franchisee
to open and operate a McDonald's fast-food restaurant.
Franchise fee - a one-time fee paid by the franchisee to the

franchisor. The fee pays for the business concept, rights to use
trademarks, management assistance and other services from the
franchisor. This fee gives the franchisee the right to open and operate a
business using the franchisor's business ideas and products.
107
Royalty fee - a continuous fee paid by the franchisee to the

franchisor. The royalty fee is usually a percent of the gross revenue
earned by the franchisee.
Is franchise a) a method? b) a company? c) a system?
What kind of "chain" is built by means of franchising?
Who grants and who obtains the right to use a trademark, know-how or
technology?
What confirms the relations between a franchisor and a franchisee?
Is a franchisor a financial owner of a franchisee's business? Does he
control it?
How does a franchisee start to operate?
What is a franchisee fee? What does it pay for?
What else does a franchisee pay to a franchisor?
Franchising Basics
The term 'franchising' has been used to describe many different forms
of business relationships, but basically this is a relationship between a
company, expanding its operations, and an independent businessperson,
in which the businessperson obtains certain rights, characteristics and
elements of the company business. Namely, the company who owns or
has developed a business or product (the franchisor) grants to others
(the franchisees) the ability to offer, sell, or distribute the products or
services, which are closely associated with the franchisor's business
system, trademark, service mark, or any other commercial symbol.
There are several types of franchises:
- Manufacturing franchise - a franchisee gets the right to
manufacture and sell the product using the franchisor's trademark.
These are food and drinks franchises.
- Distribution chain franchise - a franchisee has the license to sell
the franchisor's product on the specified territory. Such type
concerns, for example, automobile dealership.
- Business format franchising - is the most popular form of
franchising. In this approach, a company provides a business
owner with a proven method for operating a business using the
name and trademark of the company. The company will usually
provide a significant amount of assistance to the business owner in
starting and managing the company. The business owner pays a fee
in return. Typically, a company also requires the owner to
purchase supplies from the company.
108
In the USA according to the United States Federal Trade Commission

Rule on Franchising (1979), a franchise relationship exists when the
following three (3) elements co-exist in the business relationship:
The company doing the franchising:

1. Grants a limited right to use their tradename, service mark, logo or other
advertising symbol.
2. Controls and significantly assists the franchisee providing the methods of
operation.
3. Receives a payment in return for granting these rights.
Prove that the following statements are true (or nearly true).
1. Franchise business, to put it shortly, is granting and obtaining rights for
commercial operations.
2. A franchisee of any type of franchise uses the name, trademark and
methods of a franchisor.
3. A business owner who entered into franchise agreement must pay
franchise fee.
4. There are usually government rules on franchising.
Franchise Benefits
W h y do companies want to franchise their business?
W h y do people want to own a franchise instead of starting business
from the outset?
In order to. answer these questions read and study the notes below.
First define whom the listed benefits concern — a franchisor or a
franchisee.
Capital
Start-up assistance
Rapid expansion
Lower risks
Established product or service
Name recognition (узнаваемость названия)
Management assistance
Strong market position
Efficiency in operation
Motivation
Assistance in financing
Proven system of operation
Marketing assistance
109
You can check if you are right going through the text below: the
advantages of franchising for both parties with brief explanations
provided.
Franchisor's Advantages
Capital. In growing a business you need more and more capital. In
franchising the capital needed to expand the business is provided by the
Franchisee. Later the capital growth comes quicker and easier.
Motivated management is the core of franchising. It is difficult to find and

keep good experienced managers, who are so necessary to grow a business.
With franchisees, you have people who are well trained. In the franchise
systems people are very motivated because their capital is at risk.
Rapid expansion. Today's marketplace changes very quickly, often if you

don't move quickly on expanding an idea, someone else will. You allow to use
your idea, open many new outlets in different locations, and that is expansion.
Strong market position. Because franchises tend to grow rapidly, they tend
to locate many units in a given market and strengthen the competition.
A franchise can do extensive advertising in a given market because the cost is
distributed among many units. So, your position becomes even stronger.
BUT: There is always the image of the company at risk.
1.Complete the sentences:

A. In franchising the capital needed to expand the business is ...
B. In the franchise system people are very motivated because ...
C...., and that is expansion.
D. A franchise can do extensive advertising in a given market because ...
2. Make the summary of franchisor's benefits in running the business.
Franchisee's Advantages
Lower risks. Most business experts agree that a franchise operation has a
lower risk of failure than an independent business. Whatever statistics are
used, they consistently suggest that a franchise is more likely to succeed than
are independent businesses.
Established product or service. A franchisor offers a product or service that

has sold successfully, has been developed. The brand speaks for itself.
Experience of franchisor. The experience of the franchisor's management

team increases the potential for success. This experience is often conveyed
through formal instruction and on-the-job training.
110
Unit 3. Franchising
Name recognition. Established franchisors can offer

national or regional name recognition. This may not be
true with a new franchisor. However, a benefit of
starting with a new franchisor is the potential to grow
as its business and name recognition grow.
Efficiency in operation. Franchisors work out and
set standards in management and business operation.
That provides uniformity among franc hisees and helps uniformity
them to become more efficient. единообразие-
Management assistance. A franchisor provides

management assistance to a franchisee. This includes
accounting procedures, personnel management, facility facility management
management, etc. An individual even having руководство объек-
том
experience in these areas of management, may at the
same time, not know how to apply them in a new
business. The franchisor helps the franchisee to
overcome this lack of experience.
Start-up assistance. The most difficult aspect of a
new business is its start-up. Few experienced managers
know how to set up a new business because they have
only done it a few times. A franchisor supplies all the
necessary equipment, manuals and guidelines.
Marketing assistance. A franchisor typically offers
several marketing advantages. The franchisor can
prepare and pay for the development of professional
advertising campaigns.
Assistance in financing. It is possible to receive
assistance in financing a new franchise through the
franchisor. A franchisor will often make arrangements
with a lending institution to lend money to a lending institution
franchisee. кредитное учрежде-
ние.
Proven system of operation. An attractive feature of
most franchises is that they have a proven system of
operation. This system has been developed and refined
by the franchisor. A franchisor with many franchisees
will typically have a highly refined system based on the
entire experience of all these operations.
A franchisee seems to have more advantages than a
franchisor.
BUT: There is one major disadvantage: lack of
independence and creativity.
111
Prove that the following statements are true.

A.: Franchisee has no risk of business failure.
B.: Franchisee gets a developed brand and can operate under a recoignized
name.
C.: Franchisees are provided a large scale assistance from the very start.
D.: But franchisees have to develop their own system of operation and then
prove its efficiency.
Complete the sentences with the following words and phrases (try not to
look in the text above):
a lower risk of failure accounting procedures equipment manuals and guidelines

instruction and on-the-job training a loan national or regional name recognition
a highly refined system of operation professional advertising campaigns.
Most business experts agree that a franchise operation has ... than an
independent business.
This experience is often conveyed through formal...
Established franchisors can offer...
Management assistance includes ..., personnel management, facility
management.
A franchisor supplies all the necessary ...
The franchisor can prepare and pay for the development of...
A franchisor will often make arrangements with a bank so that a franchisee
could get...
A franchisor with many franchisees will typically have ... based on the entire
experience of all these operations.
Legal Counseling
W h o needs the lawyer's assistance and advice most - a franchisor or
a franchisee?
Actually, both, but a franchisee, especially the one who intends to
start franchise business, is always a potential client.
Pairwork
Student A. You are a newcomer into franchise business. You haven't
decided what kind of business to run. Besides you are not sure that a franchise
is a good idea at all.
112
You '11 ask:

What kind of franchise is it better to buy?
Is the whole thing worth doing, or is it better to run your own business?
What are real advantages for a franchisee?
What's the use for a franchisor to grant.his/her rights to other people?
Student B. You a franchise lawyer. You are counseling a client who is
looking for an opportunity of buying a franchise. The client needs your
professional advice. Look through the previous texts and exercises to get well
prepared.
For your consultation you may need information about the

industries where franchising has proven to be effective. Some of the
industries are listed below:
Retail Health Aids and Services Food: Restaurants and Quick
Service
Rental Services Laundry and Dry Cleaning Food: Specialty Shops and
Supermarkets
Real Estate Services Accounting and Tax Services Automobile Rental and Leasing
Advertising Services Pet Products and Services Cleaning Products and Services
Travel Party Celebration Services Motels, Hotels and Campgrounds
Education Sports and Recreation Lawn, Garden Care and Florists
Photo and Art Building Products and Services Business Products and Services
Entertainment Printing and Copying Services Hairstyling, Haircare and Cosmetics
Franchise lawyer
Read about a franchise lawyer and define: a) the practice areas;

b) knowledge aspects; c) clients range; d) key to success in franchise
lawyering.
Note. Lawyering - legal assistance and counseling.
Susan Wellington, attorney at law, is a franchise lawyer.
Susan's franchise practice includes franchise transactions, preparing and
reviewing documents, franchise agreement drafting and representation of both
franchisors and franchisees in dispute resolution matters.
Susan says, "A franchise lawyer must have a working knowledge of a
variety of laws in addition to franchise law, e.g., anti-trust law, trademark law
and certain aspects of tax law. It is also essential to remember that, despite
periodic disputes, franchisers and franchisees have to continue to live together
most of the time."
Susan has represented clients ranging from international hotel companies
to fast food franchises and sports-related enterprises. Clients include a range
of domestic and international businesses and markets from clothing retail
operations to florist design.
113
How can she manage to provide expertise in all these multivarious business
areas?
"Franchise lawyers need to understand their clients' franchised business,"
Susan answers. "Otherwise they may fail to perform professional counsel on
such fundamental issue as franchisor's and franchisee's obligations. Each
business is special, but still you have to know the basics - the statutory
requirements and the statutory form of the agreement."
Legal expert
Abstract from a radio interview with Susan Wellington, a franchise

lawyer, who speaks about the obligations of franchisors and franchisees.
While you are reading the interview, complete the table below. You may
first highlight the phrases and then write them down in your notebook.
(Reporter - R; Susan Wellington - S)
R.: We have some calls from our listeners. People, and these are
prospective franchisees, would like to know more about the Franchise
Agreement.
S.: Firstly, I recommend the prospect to seek legal assistance in such
matters as entering into agreement, and even earlier. If you want to
own a franchise you have to be aware of mutual rights and obligations,
the terms, fees and royalties, and the future costs.
R.: Well, suppose I'm a franchise prospect. I know enough about
franchise advantages and I'm ready to start looking for an
opportunity. You are a lawyer. Will you tell me please, what my
franchisor must do for me.
S.: And is your franchisor ready to allow you to operate the business and
use the trademark?
R.: He, let it be "he", will grant me this right, I think.
S.: But it's his major obligation. Besides, without granting you the right,
no franchise exists.
R.: I see. I obtain the right and promise to carry on the business, to
maintain the image and reputation of franchise network.
S.: You must do it under the agreement provisions.
, R.: What if I don't know all ins and outs of the business, restaurant
business, for example?
S.: It's obligatory that your franchisor provides you with copies of
operation manuals. Then there are always seminars and training
arranged.
R.: Good. So, 1 really have a reliable support.
S.: The franchisor must provide you with advice and know-how of the
method. And you must not disclose to anybody the know-how even
after the termination of the agreement.
114
R.: Let's move on. What about equipment, uniforms and such?
S.: You will be supplied with the necessary equipment and gear. But your
responsibility is to maintain the equipment and repair it. Besides, you
must keep the premises in due order.
R.: What about financial obligations?
S.: Of course you as a franchisee must follow the accounting system laid
down by the franchisor and supply him with operating data. You must
permit the franchisor or someone of the staff to inspect your business
performance.
R.: OK, I see. But as a businessman I would like to promote the product
or service. I'm supposed to advertise it on the market.
S.: You don't advertise without the franchisor's approval. He will supply
you with necessary advertising material.
R.: Fine. Competition always worries business people. I'm wondering,
what if I'm not the only franchise of the company I've chosen?
Suppose, there are some more, say, restaurants, in the area?
S.: Don't worry. Franchisor's obligation is to guarantee equal services to
all franchisors and to avoid competition of franchisees on the
territory.
R.: Thank you, Ms Wellington for effective consultation. Our listeners
greatly appreciate your assistance.
S.: I'm glad that I've been helpful.
Franchisor's obligations Franchisee's obligations
See p. 125.
Problem Solving
1.
Read the following situation and decide if the franchisee has failed to
fulfill the obligations.
Jenkins decides to start a franchise sweetshop. The franchisor is a reliable
producer of cakes and pastries. A franchise agreement is made, and under
the agreement, Jenkins is to sell the cakes at specific location, to buy the
cakes only from the franchisor and to order and pack the cakes in the boxes
supplied by the franchisor. He mustn't sell the cakes and pastries purchased
from other suppliers, offer drinks other than franchisor requests. The
franchisor's inspector finds out that Jenkins sells other cakes and drinks
alongside with the franchisor's and the sweetshop is far from being clean.
115
2.
Read the following franchisee's complaint and decide whether you as a
lawyer would raise a claim for default from obligations.
"I've got so many problems but my franchisor refuses to advise me on the
matter. He says to study the manual, but the manual is out of date. There's
no such equipment any more. I visited another franchise in the
neighbourhood, and they are just doing fine. They told me about the
training programme I had not been informed about. Really, I think of going
out of the business, but I'm afraid he'll sue me for the contract breach."
Vocabulary Note: default from obligations - невыполнение обязательств
In the following advertisment the company Great Party invites

prospective franchisees to join its network.
G r e a t Franchise Opportunity
You a r e w e l c o m e to join our t e a m !
GREAT PARTY is the largest manufacturer, distributor and

entertainment service provider with offices in the USA, the UK,
Canada and Australia.
GREAT PARTY is a one-stop-party-shop where customers can get
all they need for the party.
And even more
We make the party planning, arrange the party, service the party,
make video and photoes of the party, entertain and cater. We can
implement the customer's most sophisticated ideas.
GREAT PARTY has set up a stable franchise network and we invite
new members to our family.
Interested? Make a call and come.
Tel. 555 88 99
Vocabulary Note: one-stop shop - магазин комплексного обслуживания
Student A. You are a company manager. You meet a prospective franchisee

and tell him/her about the benefits of your franchise. Give more details about
the range of services. You also explain how the company is going to support
the business, what the obligations of both parties are. Additional material is
given below.
Student B. You are interested in buying a franchise. You've been looking
for a suitable business for some time, and have consulted with your lawyer.
You are well-prepared for the meeting with the prospective franchisor. Look
through the previous texts of the Unit as if that's what your lawyer has
116
printed for you. Prepare your questions - benefits, obligations, agreement,

fees, assistance, etc. to ask at the meeting. Learn more about the profile of the
franchisor.
For Student A.
Profile: corporate, birthday, wedding parties, small family parties, picnics.
Entertainment services can include DJs, Party Motivators, Magicians,
Characters, Clowns, Bands, Comedians, Impersonators and many talents.
Services can include the whole range of products from simple photo shots to
full blown video and photographic productions! VHS, Digital, CDs, DVDs,
Animation. Great Party has photo frames and albums that makes photos even
more memorable.
Decorations in all styles. Florists services. Enourmous range of gifts.
Costumes for fancy dress parties.
Franchise P r o g r a m
What does the Great Party Franchise offer?
The Great Party complete business gives you a
geographical territory, with a minimum population of
250,000 people. It provides a 10-year exclusive license
to use, market and promote all of our systems and
services, one week training at our Headquarters and
one week with a Great Party Representative to give
you support and assistance in your market.
Our regular franchise fee is $19,500. We are
offering a special discount off the regular franchise fee.
A discount of $9,500, for people that have existing
businesses.
That leaves a $10,000 Franchise Fee balance, plus
interest free
we will finance up to $5,000 for 12 months - interest беспроцентный
free! That's a great deal! Remember, you still need
$25,000 to $50,000 to run this business properly.
The Great Party Franchise is a full business
package. Having a background in business will help
you succeed. If you don't, we suggest hiring someone
full-time
on a full-time basis to assist you. This will maximize (employment)
your success. работа на полный
A business set-up and re-launch program resulting рабочий день
in a lower risk of failure and a business quicker to
profit.
Trading on the established brand name of Great
Party to generate business
117
Our design for your shop attracting not just more customers but increasing
customer spend.
On purchasing through the franchise we will recommend a range of
products that are proven best sellers. You will acquire products at the best
prices enabling a higher mark up.
Although you will be your own boss, the franchise regulars members'
meetings will give the feeling of belonging to a team and benefit of drawing
upon shared knowledge and other members' experiences.
Refer to the Legal Forms Supplement, Legal Forms 2 section to see

the Sample Franchise Agreement which franchisors host on their
websites just to attract businesspersons.
Usually a franchise agreement is a multipage document.
Legal Knowledge
The History of Franchising

The concept of franchising was born centuries ago. During the
Middle Ages, local rulers granted to their subjects rights pertaining to
specific activities, such as holding fairs or hunting on the ruler's land.
Later, monarchs granted similar rights on a larger scale, such as building
roads or brewing ale. The Church granted the same kind of commercial
interest when it allowed its tax collectors to retain a portion of what
they collected.
In the middle of the 19th century, the Singer Sewing Machine
Company began granting franchises for distribution of its sewing
machines. By the beginning of the 20th century, the emerging
automobile industry and the increased demand for local dealerships was
contributing to the growth of franchising.
The modern age of franchising began in earnest around the middle of

the 20th century, when Ray Kroc bought the rights to franchise a
California drive-in restaurant owned by the McDonald brothers. The
success of McDonald's franchises led to explosive growth in Business
Format Franchising. The increased standardization of operations now
found in most major franchise businesses has played an important role in
making franchising an attractive business model for both franchisor and
franchisee.
Make a "research" and find information about some famous franchises in

the media or Internet.
Render the informations in terms of the Unit.
118
Refer to the Reading Supplement section. Read the article Fran-

chise and 10 Rules of Success in Business.
W h a t are these rules?
W h a t kind of franchise is described in the article?
Would you like to be a franchisee? If yes. W h a t kind of business this
would be?
Franchise Law
Core Vocabulary 2
regulate — контролировать, управлять
comply with (the law / laws) — соответствовать
to be binding — имеющий обязательную силу
fair competition — честная конкуренция
applicable law — применяемый закон
provision (of a law) — положение закона
seek to do smth — зд. стараться что-л. сделать
Legal Knowledge
Franchising has become internationally accepted method of business
operation that is governed by appropriate laws.
Franchise organization as any other, though rather special, type of
business organization is regulated by laws mainly expressed in statutes.
The laws protect franchisees from dishonest franchisors, protect
franchisors' rights, and furthermore, ensure and maintain fair
competition. The authorised administrative bodies exercise this control
and provide legislation binding for each franchise.
The laws that regulate the franchising and the administrative bodies
authorised to provide control are:
- In the USA franchising is regulated by the US Federal Trade
Commission ( F T C ) and by various state agencies.
The FTC Franchise Rule applies everywhere in the United States.
- In the European Union the control is executed by the European
Franchise Federation (EFF). Its members are national franchise
associations or federations established in Europe.
The European Code of Ethics for Franchising is binding in all
member states.
119
- In the UK the British Franchise Association regulates franchise

business and the applicable law is the British Franchise
Association Code of Ethical Conduct: Extension and
Interpretation.
- In Russia the Russian Association of Franchise (RAF) is a
non-profit organization providing assistance in franchising
promotion. Franchise law or law on commercial concession is the
legislative basis of franchise business.
First and foremost, franchise legislation gives the definition of

franchise and outline the elements the existance of which constitutes
this form of doing business. Other provisions concern the requirement
to submit necessary documentation, the obligation imposed on a
franchisor to disclose the information of all possible risks, guiding
principles of franchisor — franchisee relations, and rules of franchise
termination.
Franchise legislation is illustrated here by the USA applicable law,

the FTC Franchise Rule.
The FTC Franchise Rule defines three elements of franchise:

1. Trademark. The franchisee is given the right to distribute goods
and services that bear the franchisor's trademark, service mark, trade
name, logo, or other commercial symbol.
2. Significant Control or Assistance. The franchisor has significant
control of, or provides significance to the franchisee's method of
operation. Examples of significant control or assistance include:
- approval of the site;
- requirements for site design or appearance;
- designated hours of operation;
- specified production techniques;
- required accounting practices;
- required participation in promotional campaigns;
- training programs;
- providing an operations manual.
3. Required Payment. The franchisee is required to pay the franchisor
(or an affiliate of the franchisor) at least US $500 either before (or
within 6 months after) opening for business. Required payments include
any payments the franchisee makes to the franchisor for the right to be a
franchisee. These include franchise fees, royalties, training fees,
120
payments for services, and payments from the sale of products (unless
reasonable amounts are sold at bona fide wholesale prices).
1. Refer to the definition at the beginning of the Essential 1 section.
Decide if the above said means that the company doing the franchising:
- grants a limited right to use their tradename, service mark, logo or other
advertising symbol,
- controls and significantly assists the franchisee providing the methods of
operation;
- receives a payment in return for granting these rights.
2. Refer to the table of Franchisor's obligations.
Do the obligations comply with the Rule No. 2 provision Significant
Control and Assistance?
The legislation defines the obligatory documentation in franchise

dealing.
- The franchise agreement is a very important document. It is a legal
obligation which is binding on both the franchisor and franchisee.
( franchise agreement is a binding document in all countries where
franchise is hosted and granted).
- In the USA the Uniform Franchise Offering Circular ( U F O C ) is
another obligatory document. It includes information about the
franchisor, the franchised business, and the franchise agreement. The
UFOC helps the franchisee to better understand the rights and
obligations clauses, the provisions on fees and royaltess and other
important information that the franchisor must disclose to a franchisee.
- Next, the legislation sets disclosure as one of obligatory
requirements of franchise formation. Disclosure means that a
franchisor must disclose the possible risks of operating a franchise.
Failure to understand the risks involved in opening a franchise can be a
costly mistake. A key to understanding franchise regulations is recognizing
that the law does not try to eliminate risk for investors. The law does not
seek to prevent businesspersons from making poor business decisions; but
it seeks to ensure that businesspersons are able to make informed decisions
regarding franchise opportunities. If, after learning all the facts about a
franchise opportunity, an investor still wants to undertake the risks
possible in opening a franchise, he or she is free to do so.
Decide if the above said means that:

- the franchise agreement is a complicated document containing important
information which not all prospective franchisees are able to understand;
121
- the UFOC helps the franchisee to better understand the rights and
obligations clauses, the provisions on fees and royaltess and other
important information that the franchisor must disclose to a franchisee;
- disclosure of all the possible risks prevents a prospective franchisee from a
costly mistake in the desire to open a franchise or
- disclosure of possible risks helps the informed franchisee to make a right
decision - either he undertakes the risk and goes on, or gives up.
Franchise agreement provides standards of operation the business,

sales or services arrangements, rules of keeping records, payment periods
etc. (see franchisee's obligations). The agreement obligatory specifies
the rules of termination.
In most of the states, it is illegal for a franchisor to terminate a
franchise agreement without good cause. "Good cause" usually includes
things like:
- the franchisee fails to substantially comply with its material
obligations under the franchise agreement;
- the franchisee becomes insolvent or bankrupt;
- the franchisee voluntarily abandons its operations;
- the franchisee is convicted of a crime relating to the franchise
operations.
These laws typically require the franchisor to give the franchisee
written notice of the proposed termination a certain number of days
before the termination. This advance notice period ranges from 30 to
120 days. Thus, a franchisee is given reasonable time to improve the
situation concerning material obligations (bankruptcy, abandonment,
and crime excluded).
The franchisee may also initiate a breach of contract if the franchisor
violates franchise law or doesn't comply with the agreement or U F O C
provisions.
To practice comprehension of the above given information move to

the next item.
Comment and analyse if Holiday Inns acted within the law.
The summary of the case Huang versus Holiday Inns, Inc.

Holiday Inns, a famous hotel chain franchisor, entered into a franchise
agreement with the Huangs. Under the agreement the Huangs were to
maintain the quality standards of hotel running. The Standards Manual
122
U n i t 3. Franchising
provided to the franchisee included all the necessary and obligatory

guidelines. Two years later the inspection held by a Holiday Inns district
director revealed a lot of failures to comply with the requirements. The hotel
was in an awful state: damaged walls, broken pices of furniture and windows.
It was clear that the Iluangs were not maintaining quality standards. In two
months period another inspection showed no improvement, and Holiday Inns
sent a report to the franchisee demanding to put everything in due order
within two months otherwise they would terminate the agreement. The due
inspection again showed no improvement of the premises and facilities.
Holiday Inns notified the franchisee that they had two months more to do the
repair.The Huangs started renovation only next month, and then declared
that they needed ninety-day extension to the stated deadline. Holiday Inns
refused to grant the request and terminated the agreement. The Huangs
brought the suit against the termination of the franchise. They claimed that
Holiday Inns hadn't stated exactly the nature of defects and the required
repairs, and hadn't given enough time to do the proper improvement.
(Huang v. Holiday Inns, Inc., 594 F.Supp 352 (C.D.Cal. 1984))
International Franchise Organizations

Carefully study the following text to get the idea of international
significance of the franchise regulation. You'll need to use the
information in the next section Hands-On Experience.
Franchised businesses continue to grow in all corners of the world. On

average 14 percent of a country's franchisors establish franchises across
borders. For instance, from 1985-1995, 48 percent of the units established by
US franchisors were international units. In 1995, more than 400 US franchise
systems operated internationally. In 2000, approximately 100 additional US
franchise systems set up globally. International franchising has been successful
because consumers around the world recognize famous brands as symbols of
quality, consistency, service, and value.
Of course, international franchising presents different challenges than
domestic franchising. For example, if goods come from overseas, you may need
to be aware of various duties, tariffs, and transportation requirements. You
also need to consider language and cultural differences. For instance, if you are
a franchisee in a different country from the franchisor's home office, the
franchisor's system may need to be modified for use in your country.
The International Franchise Association (IFA) was established in 1960 to

build and maintain a favorable economic and regulatory climate for
franchising. It is the only association serving as the voice for franchising in the
123
United States and is a major participant in the international franchise arena.

IFA's mission is to enhance and to safeguard the business environment for
franchising worldwide. Today, more than 75 industries operate within the
franchising format, and IFA's membership and network encompass more than
800 franchisors, 300 suppliers, 30 organizational franchisee members, and over
30,000 franchisee members.
The European Franchise Federation (EFF) is a non-profit making

international organisation that represents, promotes and defends the interests
and development of franchising in Europe.
The EFF currently represents 18 different national franchise associations
from Europe.
Each of the member franchise associations is the official representative
organization for franchising in its country.
Members of national associations include franchisors, franchisees, experts
from different professional backgrounds with interests in franchising
including_ lawyers, legal advisers, development and marketing experts,
accountants as well as representatives of major banks and insurance
companies.
The EFF is a member of the World Franchise Council.
The World Franchise Council ( WFC)

Purpose of the WFC:
The World Franchise Council was founded in 1995 to act as a forum where
both national and supranational franchise associations/federations meet on an
equal footing to'share views and experiences, and decide on matters of interest
to franchising internationally.
The EFF and each of its 17 national members make up 18 of the current 46
WFC national.
Brief Reference
Franchise business is developing in Russia as the business climate for
this kind of international investments is rather favourable. Furthermore,
national franchises are also growing, for instance trading chains as
Sedmoy Continent, Pyaterochka, some restaurant chains. Franchising is
governed by the Law on Commercial Concession.
The Russian Franchise Association (RFA) maintains the extension
of this kind of business throughout the country and promotes the
involvement of small businesses in the system.
124
Still the community of entrepreneurs is not quite aware of the

franchise benefits.
An international seminar Franchise Perspectives is to be held. You are
assigned to write an article to be published in the seminar's newsletter.
The plan of your article is as follows:
1. Short definition of franchise.
2. Obligations of the parties.
3. Kinds of franchises - industries.
4. Franchise benefits for both businesses.
5. International recognition and Russian franchise market.
Refer to the materials of the Unit for the items 1 - 4 . As for item 5, you
can use information given at the end of the Unit and, possibly expand it,
but for brief overview of Russian market you can make a research and
share your own opinion on the issue.
Refer to the Grammar Supplement, Connectors section where you'll
find helpful hints how to structure your article and how to channel your
ideas.
P. 114:
Franchisor's obligations Franchisee's obligations
allow to operate t h e business and to carry on business franchised

use t h e trademark - grant t h e right
provide t h e franchisee with a copy of maintain t h e image and reputation of
operation manuals t h e franchisor
arrange seminars and training not to disclose t h e know-how
provided by t h e franchisor
•provide with advice and know-how maintain and repair t h e equipment,
keep premises in due order
supply with t h e necessary equipment follow t h e accounting system laid
and gear down by t h e franchisor
supply with t h e necessary advertising permit t h e franchisor or its staff to
material inspect t h e franchise performance
guarantee equal services to all not to advertise w i t h o u t franchisor's
franchisees in t h e network approval
avoid competition of franchisees in to use and display t h e advertising
one territory material supplied by t h e franchisor
Unit 4
Mergers and Acquisitions.
Antitrust Laws
Why do companies join their efforts in one business activity? Why do they
merge? (see Core Voc.)
What have you heard about recent mergers? (DaimlerChrysler; Sony and
MGM; Ford -Volvo;)
How do mergers and acquisitions effect the economy of the country? The
World economy? .
What is a monopoly?
Why is monopolization of the market unlawful?
What must be the provisions of any antitrust law?
What government bodies are authorized to control the competition?
Core Vocabulary 1
alliance - союз; strategic alliance
merger - слияние(компаний)
joint venture - совместное предприятие
acquisition - приобретение; покупка
takeover - поглощение (компании), перекупка
takeover bid - предложение о покупке контрольного пакета акций
другой компании
hostile takeover - сделка по поглощению компании, нежелательная с
точки зрения ее руководства; (hostile - недоброже-
лательный; враждебный)
gain control - получить контроль
get controlling interest - получить контрольный пакет акций
Mergers and acquisitions are among the most powerful tools in the
ongoing campaign to build a new generation of companies with the
power and resources to compete successfully on a global basis.
In the business world the competition is severe, and companies and
businesses organizations strain to keep their market positions and
126
Unit 4. Mergers and Acquisitions. Antitrust Laws
remain profitable. There are many ways to successful operations, one of

them is creating a strategic alliance.
These are the following types of alliances:
Joint venture. Company A and company B (also C, D) start co-operating
in one special business activity or over one project. This enterprise is usually
temporary, but may become permanent.
Merger. Company A and company B, both can be equal in size, agree to
operate together as a quite new company. For example, both Daimler-Benz
and Chrysler ceased to exist when the two firms merged, and a new company,
DaimlerChrysler, was created. In another case, one company, usually the
larger, obtains ownership of the other. In both cases it's done in the interests of
the parties.
Acquisition. A company can buy another company with cash, with stock,
or a combination of the two. Another possibility, which is common in smaller
deals, is for one company to acquire all the assets of another company.
Company A buys all of Company B's assets for cash, which means that
Company B will have only cash (and debt, if they had debt before) and goes
into liquidation.
So, whether a purchase is considered a merger or an acquisition really
depends on whether the purchase is friendly or hostile and how it is
announced. In other words, the real difference lies in how the purchase is
communicated to and received by the target company's board of directors,
employees and shareholders.
Takeover. The acquisition of controlling interest in a firm - buy enough of
its stock to acquire it and take over its management. Although the term is
often used to refer to acquisition by a party hostile to the target's
management, many takeovers are friendly
The act or process of gaining control of a company by making its
shareholders a general offer, takeover bid, usually with a time-limit for
acceptance, to buy at a stated price that is higher than the market price, all the
shares, or at least enough of them to get a controlling interest in the company.
Read the following statements.
What kind of business formation given above are these people talking
about?
A. They intend to obtain the ownership of our company. They are larger, and
. we are loosing the market position. But our management say, the deal will
be beneficial for both companies.
B. We have been operating together on this project for three years. We are all
growing stronger, and I think our enterprise will be in such alliance for long.
127
C. They were becoming weaker, so we bought their assets and debts, and
their staff joined us.
D. We won't give up so easily. That company are fighting fiercely too - they
are trying to acquire the controlling interest in our firm. They've made a
takeover bid - gave us time to accept and stated an attractive price. But
we won't give up.
Mergers and Acquisitions

If you want to know more about different types of alliances the main
questions are:
W h a t kind of alliance is a / a n ...?
W h o (what companies) are involved?
W h y do they ally?
How is it performed?
Read the following text and find the answers to the questions.
Compare the information with the one given in the Concept to define if
the texts are mutually complementary.
In theory a merger is an alliance of two companies that agree to go forward

as a single company, rather than being separate entities. But in other words, a
merger is a polite way of saying that one company has bought another, and the
top executives declare that this transaction is a merger of equals.
But a merger is not necessarily between equals. If one company is much
larger or smaller than the other, that can still be a merger. The idea of a merger
is that the CEOs agree that continuing in business alone isn't the best thing
for both companies. By merging with each other, the companies will only
benefit.
Competition climate effects the tendency to merge. When times are very
bad, strong or weak companies will look for "partners" in order to create a
more competitive and efficient company than either one currently is. The
strong companies combine to gain a greater market share or to achieve greater
efficiency. The same is true for weaker companies who know they can't survive
as independents. They will often contact each other to see if a merger can be
beneficial both for business and for the employees.
An acquisition of one company by another is a little different from a merger
but not much. An acquiring, usually bigger and stronger company doesn't
necessarily discuss the matter with the weaker target company, but just buy it.
The difference between a merger purchase and an acquisition depends on
whether the purchase is friendly and announced as a merger or announced as
an acquisition or the purchase is unfriendly. When it's unfriendly, it's always
an acquisition, or takeover.
128
U n i t 4. Mergers and Acquisitions. Antitrust Laws
The reasons for combining two companies are the same - strengthening
the position on the market and thus to meet the competition.
Any time there is a merger or acquisition, the acquiring company has to
pay the target company with money or stock, or both, for the business. Usually
a stock transaction is more favourable - the shares of acquiring company are
traded for the shares of the target company. This is a tax-free exchange of
stock. Then the new company issues the shares.
A joint venture is a type of alliance when two (or more) companies agree to
contribute to one project for the following possible reason: one of the
companies has the cash to fund a project and the other has the expertise.
The joint venture differs from a merger or acquisition in that both
companies remain independent. There is no other affiliation between the
parties (except when there is an equity investment of one in the other but that
investment is usually a small percentage of the company). If the joint venture
doesn't work out, both companies go their separate ways. If it's successful,
there is always a business plan as how the two companies proceed.
Go back to the pre-text questions and prepare the answers.
Legal Research
Core Vocabulary 2
market concentration - рыночная концентрация
market share — доля рынка
expand / extend - расширяться, расти
set prices - устанавливать цены
price fixing - фиксация цены
cut prices - снижать цены
raise prices - повышать цены'
monopoly / oligopoly - монополия /олигополия
competition — конкуренция
fair/unfair competition - честная/нечестная конкуренция
restrain trade / restraint - ограничивать, сдерживать торговлю
increase - reduce - повысить - снизить
W h e n companies decide to merge they have to foresee all the possible

effects of such activity. There are certainly great benefits for the merged
company, but there may be rather negative consequences for the state,
community and economy.
129
Look through the following list of possible effects, mark them (+) if
you think they are positive or ( - ) if they are negative. You may even use
(+/-).
(Pay attention to the activity verbs and underline them.)
increase revenues and productivity change the company structure
increase the market share reduce the staff
gain market power take on new staff
set favourable prices push out other similar products
widen the range of products create market concentration
expand geographically restrain small businesses
quicken the competition initiate price fixing
initiate culture clashes
a) Make up sentences about benefits and negative effects of mergers. Use

modal verbs can and may (can - possibility; may - probability). See also
Grammar Supplement.
e.g.
A merger is beneficial because the companies can increase revenues and
productivity.
A merger can have a negative effect because the companies may reduce the
staff.
b) Summarize (use mustn't - strong prohibition).

Merging companies mustn't...
Now write sentences in which you should try to make analysis based on
contrast.
U s e b u t ; t h o u g h ; a l t h o u g h o r w h i l e a s linking w o r d s ( r e f e r t o t h e G r a m m a r
S u p p l e m e n t , C o n n e c t o r s section),
"e.g.
The merger can increase the market share, but it may create market
concentration.
Although merger can increase the (its) market share, it may create market
concentration.
While the merger can increase its market share, it may create market
concentration.
The merger can increase the market share, but it mustn't create market
concentration.
130
Unit 4. Mergers and Acquisitions. Antitrust Laws MilNHiMI
Headline news about mergers in different areas.

1. Italian and Danish companies producing lamps and lighting equipment
merged last month.
2. Two footwear producing companies - Shoe&Shoe and Step - have
merged."
3. Company Snowfield (winter sports goods) and Breeze (summer sports
goods) have announced their merger.
4. Dairy products company Milkpool is merging with its milk supplier
Milkman.
Write short news stories about these companies using the phrases and ideas
from Exercises 1-3.
Summary
Complete the sentence with appropriate phrases of negative effects from
Execise 2 , and see what activities may result in the monopolization of the
market.
A merger, which ... attempts to monopolize the market.
Monopoly (definition)
In economics a monopoly (from the Greek monos, one + polein, to sell) is
defined as a market situation where there is only one provider of a product or
service. Monopolies are characterized by a lack of economic competition for the
good or service that they provide as well as high barriers to entry for potential
competitors on the market.
Monopolize means to obtain control over market and dominate on the
market.
(Oligopoly is a. market form when the market is dominated by a small number of
sellers)
Antitrust Laws
Core Vocabulary 3
(also review Part I Unit I)
pass a law - officially accept a law, especially by voting
enact a law - to make into law; to establish by legal and authoritative act
apply a law - to use a law in particular situation or process
enforce law - to ensure observance of laws, make smb observe the law
provisions (of law) - a clause in a document; contract
section of law - a division (part) of a statute or code
131
enable - to give legal power, capacity, or sanction

authorize - to give authority to act to; to make legal; to give legal
sanction to; to legalize
entitle - to give the official right to have or do smth
law in effect - current law
under the legislation - according to a law
Nowadays media speak about merger-mania: global transnational

mergers, mega mergers burst out throughout the world. Sound market
competition seems to loose balance but for the strict legal measures.
Uncontrolled mergers, acquisitions and other intercompany
relationships (e.g. joint ventures) often present antitrust issues. These
issues can be raised by government regulatory agencies or in private
antitrust actions. It's obvious that only effective antitrust legislation can
and must curb any rising monopoly.
The antitrust laws are those laws and regulations that are meant to
ensure that the market place remains competitive. The laws were first
established when large monopolies, which were legally called trusts, had
control over certain industries (such as railroads and oil production)
and used this control to drive their competitors out from the
marketplace. These laws have become the basis of fair trade.
When enacted, the law authorises specific government bodies to
provide control over business activity on the market. They may apply
the law in the situations defined or stated in the law provisions in order
to prevent the anticompetitive behavior of certain undertakings. The
antitrust authorities are entitled to enforce law that enables them to
prosecute the breaching pary. Under the antitrust legislation either
criminal or civil lawsuits can be started.
Answer the following questions:
What kind of laws must be enacted and applied to support fair competition?
What provisions should be included into such laws?
What state organizations control and regulate companies' mergers?
Which activities may be considered to be the violation of these laws?
How severe may penalties against the lawbreaking companies be?
How can lawyers help their corporate clients to avoid problems when
planning a merger or an acqusition?
Legal Knowledge
A n t i t r u s t Law in t h e U S A
Government organizations:
The Federal Trade Commission (FTC)
The Department of Justice (DOJ)
132
Basic Antitrust laws: Sherman Act, Clayton Act, Robinson Patman Act,
FTC Act.
Four Basic Antitrust Laws

Sherman Act - the Sherman Act was passed in 1890
and is the most important of the antitrust laws. Section
1 of the Act prohibits every c o n t r a c t , c o m b i n a t i o n or
conspiracy between two or more companies which conspiracy
leads to an unreasonable restraint on trade or заговор
commerce. Section 2 prohibits the monopolization,
any attempted monopolization, or any agreement or
conspiracy to monopolize any market for a particular
product or service.
Over the years, these broad principles have been
applied by the courts thereby making the above said
commercial conduct unlawful.
Clayton Act - passed in 1914 prohibits a supplier of
products to utilize certain restraints which keep
customers from buying from the supplier's competitors.
The provisions also concern acquisitions and mergers
that may substantially lessen competition.
Robinson - Patman Act - enacted in 1936, the

Robinson - Patman Act principally deals with
d i s c r i m i n a t i o n in prices. It prohibits a supplier to
charge different prices from competing customers
because such practices substantially lessen the
competition. Its purpose is to protect smaller
businesses by limiting the large company's ability to
command discriminatory discounts. command
требовать
Antitrust laws are enforced by both federal and
state governmental authorities. Further, the Clayton
Act enables anyone - a private person, business or
charitable organization - to bring a civil lawsuit
against any company or other entity that allegedly is
violating the federal antitrust laws and thus damaging
the suing party
Federal Trade Commission Act, 1914 (amended in
1996) - this law in effect authorizes the Federal
Trade Commission to enforce the other three
a n t i t r u s t laws. Section 5 of this Act prohibits "unfair
methods of competition" and "deceptive practices." deceptive practice
Conduct which does not violate the other federal нечестная практика
133
antitrust laws may nevertheless be unlawful under the

FTC Act. The reason - the law is designed to stop
anticompetitive practices in their primary stage.
Two federal entities have concurrent responsibility concurrent
for civil enforcement of the antitrust laws - the действующий сов-
местно
Department of Justice and the Federal Trade
Commission. Criminal violations are prosecuted by the
Department of Justice. The Federal Trade Commission
also enforces consumer protection laws. These laws
address fraudulent, deceptive or unfair advertising or address
performance by sellers which mislead or injure относиться к...
consumers. Consumer protection laws jointly with mislead
antitrust laws ensure that a free enterprise system вводить в заблужде-
ние
functions to improve consumer welfare.
Finally, each state has enacted antitrust laws which
complement the federal statutes, and which must be
observed when applicable to business activities.
1. Look through the Acts and find out how each complements the other.
Essential points are underlined and key verbs are given below:
prohibit deal with protect enable
e.g.
Sherman Act prohibits any contract, combination of conspiracy between the
companies that leads to unresonable restraint on trade. Sherman Act prohibits
the monopolization
2. Define the functions of law enforcement bodies - the FTC and the DOJ.
Refer to the Statutes Supplement section to find some abstracts from

the Sherman and Clayton Acts. Reading of statutes may not be easy. Try to
render the texts in Russian. You'll have to work with a dictionary.
Law enforcement
Core Vocabulary 4
violation of law/agreement - штрафные санкции / наложить штраф
penalty/ impose penalty
felony - тяжкое уголовное преступление
indictment - обвинительный акт, вердикт по обвинению в
преступлении, вынесенный большим жюри
conviction - осуждение
134
imprisonment - тюремное заключение

fine / monetary fine - штраф / денежный штраф
injunction - судебный запрет
damages - возмещение ущерба
recover damages - взыскивать убытки
attorneys fees - судебные издержки
Penalties
Penalties for violation of the antitrust laws are
severe. Violation of the Sherman Act is a felony. A
criminal indictment may be instituted by the Justice institute criminal
Department, with corporate exposure to substantial indictment
monetary fines. Individual employees, officers or возбудить дело по
обвинению в уголов-
directors of the company who authorize or participate
ном преступлении
in the violation face felony conviction, imprisonment
and substantial monetary fines as well.
Also civil damages may be recovered by private
parties under section 4 of the Clayton Act. This
provision permits any person whose business has been
injured by an antitrust violation to recover triple
damages plus costs of suit including attorney's fees.
Additionally, the attorney general in each state may file a class-action
file a triple-damage class action on behalf of all подать групповой иск
consumers in the state for an antitrust law violation. cease-and-desist order
Enforcement may also be accomplished by a распоряжение о пре-
court-ordered injunction or by an FTC cease-and-desist кращении и невозоб-
order. Civil penalties may be assessed for violation of новлении действий
court injunctions or court-approved FTC orders. assess penalty
назначить штраф
1. Match the words with their definitions:

penalty sentence conviction fine indictment damage recover
damages injunction imprisonment.
1. damages a) a court order that orders a party to do or refrain from

doing a certain act (or acts) as opposed to a money
judgment
2. sentence b) payment of money demanded of a person convicted of a
crime that is imposed by a court as punishment
3. indictment c) a judgement of guilt against a criminal defendant.
A condemnation
4. imprisonment d) the punishment given to a person convicted of a crime
135
5. fine e) a charge of a felony, issued by a grand jury

6. conviction f) punishment for breaking a law
7. injunction g) the financial compensation awarded to someone who
suffered an injury or was harmed by someone else's wrongful
act
8. penalty h) a penalty imposed by a court under which the individual
is sent to prison
See p. 148.
M&A and Antitrust Lawyers

Scan the text about American antitrust lawyers to find information
on:
- the general aspects of legal advice;
- the cooperation with the authorities entitled to control the
competition;
- participation in enforcement actions;
- successful litigation activities;
- legal assistance and counseling of corporate clients;
- proactive advice and policies.
Antitrust lawyers provide solution-oriented advice on all aspects of trade

regulation and competition law, including mergers and acquisitions, joint
ventures and other strategic alliances, government civil and criminal
investigations, private antitrust litigation, and counseling
The lawyers regularly appear before all key competition authorities,
including the European Commission in Europe and the Federal Trade
Commission and the Antitrust Division of the Department of Justice in the
US Members of our antitrust group have 'Served with the US agencies,
including as a federal antitrust prosecutor, and as a senior attorney advisor to
a Federal Trade commissioner.
Antitrust and special matters attorneys represent clients in antitrust
investigations and enforcement actions conducted by government agencies,
including the US Department of Justice, the European Commission, and the
Canadian Competition Bureau.
Usually antitrust lawyers have successfully represented major corporations
in actions involving market manipulation and price fixing claims, and obtained
significant recoveries for them. They also monitor antitrust class actions on an
ongoing basis for those clients that could potentially be included in the class.
The lawyers assist in structuring a transaction that achieves a client's desired
goals while minimizing antitrust risks. Antitrust lawyers are skilled at planning
and implementing strategies to gain US and international approval of
136
Unit 4. Mergers and Acquisitions. Antitrust Laws
transactions, including complex, large-scale mergers in concentrated industries.

They also advise clients on collaborations with competitors and customers to
ensure that these joint ventures and strategic alliances are structured and
operated lawfully under the antitrust laws in the US and in Europe
As part of each client's business antitrust lawyers provide ongoing
antitrust counseling on a daily basis. This counseling takes the form of
proactive advice and policies to help our clients identify and avoid potential
danger. When a competitor attempts to achieve a leadership position by
utilizing unfair marketing or advertising practices, they work with our clients
to take the offensive.
Antitrust lawyers work in tandem with each client, helping them manage
the complex challenges and day-to-day issues that arise as they pursue their
business objectives.
The article Why Antitrust Lawyer (the Reading Supplement

section) will provide you with even better understanding of antitrust
specialization aspects. You are supposed to read it and either comment
on it or discuss it.
Find out where antitrust lawyers can work and what are the
responsibilities.
Legal Counseling
A lawyer, a legal assistant to a senior partner of an American law firm,
has been assigned to advise a client on issues concerning antitrust laws.
The client is a rapidly developing young company that would have
extended the activity in the local market but for the competitors' tactics:
price fixing and allocation of territories. He wants you to give the
general reference on the antitrust legislation. In addition, he would like
to know how to deal with the competitors.
The points of reference:
1. Antitrust laws brief overview.
2. Unlawful activities.
3. Penalties.
4. Dealing with competitors.
5. Possibility to file an action.
Following the brief notes below draft an answer to a query. Give legal
references and clear explanation. Try to use plain English
Note. Applicable grammar - Modal Verbs (see Grammar Supplement).
Decide which modals to use in your letter.
137
1. Antitrust law brief overview (see Sherman Act,

Clayton Act, Robinson - Patman Act and FTC in the
Legal Research).
2. Unlawful activities:
Price fixing
Agreements between competitors to fix, raise,
lower, stabilize or peg prices, or establish a range of
peg prices
prices, a minimum price, a maximum price, or a
искусственно под-
common pricing system are unlawful. держивать цены
Improper for competitors: to set production level,
to agree on materials to be used in their products, to fix
or set terms and conditions of sale.
Agreements as to discounts, service charges,
delivery charges and terms, product warranties, taxes
and the like are unlawful.
Allocation of territories - means to distribute
according to the plan.
Competitors may not agree to allocate specific
customers or classes of customers, or geographic
territories among themselves.
Remember! Term Group Boycott used in antitrust laws
means an agreed-upon refusal by competitors to deal with
another business unless it refrains from dealing with a
potential competitor trying to enter the market.
For example, competitors refuse to deal with their
suppliers because they sell to another company. It's unlawful.
A company may not agree to deal with a customer only
on the condition that such customer refrains from buying
from the company's competitors where there may be a
substantial adverse effect on competition.
For example, it was unlawful for a newspaper to refuse to
accept advertising from retailers who also advertised via a
competing radio station. Here the newspaper had attempted
to monopolize the local advertising market by forcing
advertisers to boycott the competing radio station.
3. Penalties (see Information Processing)
4. Don'ts (You shouldn't)
Dealings with competitors don't agree on and avoid
discussing the following topics with any competitor:
- Prices, pricing procedures, changes in or
stabilization of prices, terms or conditions of sale.
- Pricing practices of any industry member.
138
- Specific credit terms, discounts, rebates, freight rebate

allowances, profits, profit margins or costs, возврат переплаты
market shares or sales territories. freight allowance
надбавка за доставку
- Selection, rejection or termination of one of your
груза
suppliers or customers.
profit margin
- Production levels or schedules. чистая прибыль
- Don't exchange price information (or other
sensitive business information) with competitors
without guidance from company counsel. Be able
to show that you obtained information on a
competitor's prices from some source other than
the competitor.
- Don't agree with any competitor to refuse to sell
to certain customers, or to buy from certain
suppliers.
5. Possibility to start legal action
A law firm offers the assistance, counseling and
representation in any legal action against the offending
competitors (see M&A and Antitrust Lawyer)
After you've drafted the answer to the client you can practise the
same situation as pairwork.
The Client, the head of a young company, needs plain English explanation
of the strategies he/she should keep to. So, the Lawyer has to do his best to
clarify the most important issues.
Student A - The Client. The competitors of your. company have

approached you with "reasonable" offers to increase the prices, to limit the
range of product, to change suppliers, etc. You understand that such activity is
unlawful and want to have the lawyer's-expertise and to know what to do,
because you are afraid of hostile takeover.
Student B - The Lawyer. You are an expert in M&A and Antitrust Laws.
Counseling your worried client explain to him his line of behavior. Offer to act
for him in dealing with competitors. Tell the Client about the criminal
responsibility and advise to bring an action.
(Use your notes and texts about law enforcement.)
Penalties for the breach of antitrust laws include imprisonment. You

know that an individual can be sent to prison. Is it possible to imprison a
139
corporation? Before you read discuss the listed

arguments against the possibility to imprison a
corporation.
Arguments against
Corporation is a legal entity.
It's not a living person, and crimes are committed
by a living person.
In fact, the directors and officers are protected from
criminal liability.
It's difficult to imagine the whole staff behind the
bars in one, even big, prison.
Actual imprisonment is impossible.
The court can impose a fine or injunction instead.
United States v. Allegheny Bottling Co. (1988)
Once an American judge managed to sentence a
corporation to a three-year term of imprisonment.
The case United States v. Allegheny Pepsi-Cola
Bottling Company is illustrative in this respect.
The company was convicted of price fixing
agreements with Coca-Cola distributor in violation of
the Sherman Antitrust Act.
Judge Don mar who precided at the trial based his
main reasoning on the Webster dictionary definition of
the word "imprisonment" as "constraint of a person
either by force or by such other coercion (pressure) as
restrains him within limits against his will". The judge
stated that nothing is said about "iron bars and stone
walls". Thus, it was necessary to decide how to restrain
the corporation not actually putting it into jail.
The judge's decision was: $50.000 fine and three
years probation.
Condition of the probation: probation
Allegheny was prohibited to "dispose of any of its условное наказание
franchises, capital assets or plants or facilities in the dispose
Norfolk, Richmond, or Baltimore areas, without specific избавиться
permission of this Court through the probation officer".
(Note: areas, where price fixing had taken place.)
Allegheny was to contribute into community
service without any compensation - for one or two
years every week any four of the executives were to
perform such services in the stated above areas.
The case became a strating point to hold
corporations liable for corporate crimes.
140
Legal Expert
Competition policy in the UK
cartel - сговор
abuse - злоупотреблять
exercise control - осуществлять контроль
empower - уполномочивать
conduct inquiry - вести дознание
A British lawyer (an O F T officer) makes explanations on the UK
policy in the area of fair trade and fair competition. (A - interviewer;
B - O F T officer.)
A.: What laws provide fair trade and fair competition in the UK?
B.: These are the Competition Act 1998 and the Enterprise Act 2002.
A.: Could you just outline the main provisions of the both Acts?
B.: The Competition Act prohibits anti-competative agreements and
abuses of market power. And the Enterprise Act defines the
anti-competative behavior, for example price fixing and cartels, as
criminal offence punishable by either fines or imprisonment, or both.
A.: Has this legislative initiative resulted from the increase of mergers,
even global mergers?
B.: In a way, yes. But you know that the UK is a member state of the
Eropean Union and our legislation must be in compliance with the
EU law. Besides, the Enterprise Act introduces a new merger control
regime.
A.: Are the penalties for violation of the laws severe?
B.: Yes, of course. Companies breaching the laws are punished. It may be
a fine or even criminal indictment. Moreover, the Enterprise Act
makes provisions for the disqualification of directors whose
companies breach competition rules.
A.: And what government bodies are empowered to exercise control of
competition and to enforce the laws?
B.: Firstly, the Department of Trade and Industry (DTI). It is. a
government ministerial department responsible for the fair
competition increase, science development and productivity growth
in Great Britain. Then the OFT. The Office of Fair Trading is a
non-ministerial government department, that has strong powers to
investigate businesses suspected of breaching the Competition Act
and to impose tough penalties on those that do.
A.: Are there any public organizations that are authorised to monitor and
regulate the merger practices?
B.: This is the Competition Commission, an independent public body
established by the Competition Act 1998 that replaced the Monopolies
141
and Mergers Commission on 1 April, 1999. The Commission conducts

in-depth inquiries into mergers, markets and the regulation of the major
regulated industries. Every inquiry is performed at the request of
another authority: the Office of Fair Trading (OFT), for example. The
Commission doesn't conduct inquiries on its own initiative.
A.: Thank you for information.
Make up a brief reference to outline the legislation on fair competition

protection in the UK and the authorities exercising control.
Legal Research
Study the information on the competition policy in the EU. You are
supposed to give commentary and to compare the antitrust laws and
strategies in the USA with those in the EU.
be binding - имеющий обязательную силу
be bound to do - быть обязанным что-л. сделать
give effect to - привести в исполнение
treaty - (международный) договор
sign a treaty - подписать договор
distort - нарушать
exemption - льгота
The United Kingdom of Great Britain and Northern Ireland is a member

state of the European Union. One of the fundamental principles which lies at
the heart of the European legal order is that European law has priority over
any conflicting law of the member states. As a result national courts of the
member states are not only bound to apply European law, but may not give
effect to any national law which is inconsistent with applicable EU rules. EU
law is therefore an integral part of the law in the UK.
The European Commission proposes policies and legislation, is responsible
for administration, and ensures that the provisions of the Treaties and the
decisions of the institutions are properly implemented.
Competition Policy in t h e European Union
Effective competition cuts prices, raises quality and expands customer
choice. Competition allows technological innovation to develop. Thus, it's
essential for businesses and governments of member countries to set and
observe fair rules of the "game". The European Commission has wide powers
to make sure they comply with the European Union rules on fair trade in
goods and services. Two of the major areas of competition policy are: antitrust
and cartels, and merger control.
142
Antitrust and Cartels

It is illegal for businesses to conspire with each other in order to fix prices
or devide markets between them. If a single company has a dominant position
in a particular market, it may not abuse its market power to drive out
competitors. It's illegal for a big firm to impose conditions on its suppliers
which make it difficult for them to do business with other companies. The
Commission can fine companies for these practices.
Merger Control
The Commission can ban mergers between two large companies or takeovers
of one firm by another if the enlarged company would dominate the market and
therefore too easily be able to force out its competitors of the market.
The EC competition rules are set out in Article 81 (formerly Article 85)
and Article 82 (formerly Article 86) of the Treaty.
Article 81 prohibits anti-competitive agreements which may have a
substantial effect on trade between member states and which prevent, restrict
or distort competition in the Single Market. The Commission can grant
individual or group exemptions from this prohibition if there are some
prevailing benefits such as an improvement in efficiency or the promotion of
research and development. Article 82 prohibits the abuse of a dominant
position to such an extent that it may affect trade between member states.
There is no possibility of exemption.
Find in the text sentences that prove the following statements:
1. Member state law must comply with European law.
2. The European Commission provides legislation and ensures
implementation of the enacted laws.
3. A fair competition is an important basis of the economic development.
4. Conspiracy, restraint of trade and price fixing are illegal activities.
5. Merged companies that dominate on the market may be banned by the
Commission.
6. Article 81 prohibits agreements and activities that distort competition.
7. Article 82 prohibits such activity when a company trades on its dominant
position on the market.
Read the following case summary and give your commentary on

Antitrust Law violation by Microsoft Corporation.
Appeals Couit Modifies Microsoft Judgment
Description. Appeals court reversed part of the findings of the trial court in
the Microsoft case but remanded the case to another lower court for
143
reconsideration of the issue of monopolization of the PC operating system

market and of the tying of Windows and Internet Explorer.
CASE SUMMARY
Facts in a suit for violation of the Sherman Act brought by the Department
of Justice, the district court found Microsoft 1) to be a monopoly in the
market for PC operating systems, 2) to have attempted to gain a monopoly in
the market for internet browsers, and 3) to have illegally tied two supposedly
separate products, Windows and Internet Explorer, together in a per se
violation of ,the law. The court's major order was that Microsoft be split into
separate companies: one for operating systems and one for application
software. The company appealed.
Decision Affirmed in part; reversed in part. The order that the company be
split into two parts is vacated. The finding that Microsoft employed illegal
anti-competitive means to maintain a monopoly in the PC operating system
market is affirmed in part and reversed in part and is remanded for further
consideration. The finding that Microsoft illegally attempted to monopolize
the browser market is reversed. The finding that Microsoft illegally tied
Windows and Internet Explorer is'remanded for consideration under a rule of
reason analysis. The "actions of the trial judge seriously tainted the
proceedings ... and called into question the integrity of the judicial process."
Hence the case will be remanded to a different trial judge for further
proceedings.
(Citation: U.S. v. Microsoft Corporation, - F. 3d - (2001 WL 721343, D.C. Cir.
Ct. App.,2001)
This is only one case in the row of lawsuits against the famous company.
Microsoft has been sued more than once for monopolizing the PC
operating system market.
What do you know about these cases?
Collect the information and prepare for the discussion.
The following news story is also worth discussing. There is no breach

of antitrust law but you can give reasons for such merger, explain
advantages and forsee the circumstances.
Law Merger
Mid-sized law firms are afraid of losing out to big new merged firms, so
they too are combining. Now comes news that two of the most prestigious US
law firms, Boston's Hale and Dorr and Washington's Wilmer Cutler Pickering
will join forces. The new firm will be international in scope and have over
1,000 lawyers on staff. Both companies have staff in the UK and in Germany
that will be added to the firm. The two firms combine a wide variety of civil
specialties, with Hale and Dorr having a major presence in, of all things,
144
mergers and acquisitions. Hale and Dorr is strong in intellectual property law,
while Wilmer Cutler Pickering has major practice in regulatory law. The
merger will be one of the biggest between US law firms.
(According to a Boston Globe story "Hale and Dorr OKs merger deal", 4/20/2004)
(Refer to the Reading Supplement section)

Read the Microsoft Antitrust Case. From time to time Bill Gates
and the company Microsoft are alleged of breaking antitrust laws. The
case you're going to read about is not "new" but interesting for a lawyer.
Find out what Microsoft was charged with and how they built their line
of defense.
You may also read the article Why Antitrust Lawyer about their
work and their range of expertise. After you've read get ready to tell how
the lawyers handle various legal matters: how they work with their
clients, what they advise.
Your firm's client, the director of a Russian company, is entering a

negotiation process with a foreign investor who is considering the
possibility of a merger or acquisition with the aforesaid Russian
company. You are to write a letter providing the requested information
on acquisition of an interest in a Russian company.
You've found out the necessary article in the US Chamber of
Commerce website. The appropriate abstract is given below. You are
supposed to process information, then write the letter. Refer to the
Functions Supplement, Correspondence section to review how letters
are compiled. Also, look through material in the Functions Supplement,
Connectors section in order to apply good links between sentences and
ideas.
Note. Create the particulars of your client and the foreign investor (names,
titles, addresses, faxes, company names and companies' profiles).
US Chamber of Commerce
1. Acquisition of an Interest in a Russian Company
Acquisition of Shares/Participatoly Shares in a
Russian Company participatory shares
It is by now a common practice for a foreign investor доля, долевое уча-
to buy the shares/participatory shares of a Russian стие
145
company and to become a shareholder/participant in

that company. However, Russian law sets forth certain
legal formalities associated with the purchase of shares/
participatory shares and the transfer of the title thereto,
the non-compliance with which may seriously damage
the interests of the investors.
Basically, there are two commonly used forms of
Russian companies: joint-stock companies (JSC) and
limited liability companies (LLC). Joint-stock
companies issue shares of stock, which are securities
under Russian law. Therefore, the Russian securities
legislation introduces additional regulations (as
compared to those governing transactions with
participatory shares) governing transactions with
shares of stock as securities, e.g.:
- each emission of shares must be properly
registered with the RF Federal Commission for
the Securities Market - the absence of such a
registration results in the invalidity of any
transaction involving the purchase of such shares
under Article 168 of the RF Civil Code;
- if an investor is buying shares from a shareholder
of a Russian joint-stock company, the investor
should make sure that those shares are fully paid
in - otherwise, the transaction will be' deemed
invalid and may be challenged by any interested
party; and
- most Russian joint-stock companies issue shares
in non-documentary form, i.e., such shares exist
only as entries in a special registry of entries in a registry
shareholders, maintained by the joint-stock внесение в реестр
company itself or by an independent registrar;
therefore, the applicable Russian legislation
provides that title to such non-documentary title transfer
shares transfers only at the moment of the filing передача права соб-
of the relevant entry in the registry of ственности; переда-
ча правового титула
shareholders; consequently, it is very important
for an investor to make sure that it receives an
extract from the registry of shareholders of the an extract from t h e
Russian joint-stock company, confirming the registry
investor's title to the acquired shares. выписка из реестра
Limited liability companies do not issue shares of

stock, therefore, the participants of such companies
instead hold participatory shares. Transactions with
146
the participatory shares of a Russian limited liability

company do not require registration of the
participatory shares. However, just like in the case of
the shares of a joint-stock company, an existing
participatory share may be sold only if it is fully paid in.
In addition, an investor will obtain the rights of a
participant in the limited liability company only after
the company is notified of the sale of the participatory
share. Moreover, since all of the participants in a
Russian limited liability company must be named in its
charter and foundation agreement, it is very important
to make sure that a meeting of participants is convened
and that the relevant amendments of the company's
charter and foundation agreement are approved;
naming the investor as a new participant in the limited
liability company.
The following steps must be taken by a purchaser:
- perform a full due diligence of the target due diligence
company; обязательное обсле-
дование
- obtain the prior approval of the RF Federal
Service of Anti-Monopoly Policy in those cases
where such an approval is required under Article
18 of the RF Law "On Competition";
- ensure that the appropriate corporate procedures
are followed (such as the waiver of the preemption waiver of the
rights of other shareholders (participants), the preemption rights
отказ от преимуще-
approval of "major transactions" in the case of the ственного права по-
placement of shares of stock, etc.); купки
- sign a share purchase agreement and other
required documents (such as a share transfer
instruction in the case of JSCs or a notification
to the company in the case of LLCs); and
- ensure that the purchaser of shares of stock is
entered into the shareholders registry of the
joint-stock company, or that a new version of the
charter and foundation agreement, reflecting the
purchaser of a participatory share as a
participant in the limited liability company, is
properly approved and registered.
2. Reference on Antimonopoly Law in Russia

Russian antimonopoly legislation is presented by the Law of the Russian
Federation "On Competition and Limitation of Monopolistic Activities on the
Consumer Market" dated March 22, 1991.
147
P a rt II. Company Formation
Authorised government organization and law enforcement body is the

State Antimonopoly Service/ Committee ( former Ministry for Antimonopoly
Policy).
The Antimonopoly Law prohibits any business activities that restrain
competition or use unfair methods of competition. The Law sets control over
formation, reorganization and liquidation of businesses, mergers and
acquisitions of property and land.
Under the law penalties are imposed for antimonopoly practices and
competition distortion.
P. 136:
1g 2d 3e 4h 5b 6c 7a 8f
P a r t III. TAXATION O U T L I N E
Business File 3
Finance Matters
Capital
Capital Assets
money that a company owns everything that company owns:
fixed assets current assets intangible assets
Land Money in cash or in the Goodwill

bank (reputation)
Buildings Stocks of goods to be sold Brand (trademark)
Equipment Investments
assets - all things owned by a business or person and having money

value - активы
fixed assets - possessions of a long- lasting and unchanged nature - основ-
ные активы
current assets - assets that can be turned into cash rather soon in the course of
business operation - оборотные средства, текущие активы
intangible assets - assets which are valuables in helping business but have no
material form and can't be turned into cash - нематериаль-
ные активы
goodwill - репутация, доброе имя
A business is usually run for profit (except some non-profit

organizations). A production enterprise or trade, or service
company expect to have enough revenue to keep on
performing on the market. High income provides for a good
profit.
Income - revenue - profit

money of all kinds coming in regularly to a person, family, organization,
such as salary or wages from employment, rent from property, profits
from business, fees from professional services - доход; доходы
149
P a r t III. Taxation Outline
revenue — money received from sales. Private individual income can't be called '
revenue - доходы с продаж
profit - the gain one gets doing business, the positive difference between income
and expenses - прибыль
In the course of operation substantial amounts of money is

spent to produce and sell goods or to render services. These
are costs that a company incurs: production costs,
distribution costs, administrative costs, marketing and
selling costs, R&D costs and labour costs.
The expenses have to be covered, that means the money
spent must be returned to the accounts of the company.
If the deduction of expenses from income leaves little or nil
sum the company is suffering a loss.
Costs - expenses - expenditure

cost(s) - money that has to be paid - издержки, расходы
incur costs — понести издержки
expenses - the amounts of money spent - затраты, расходы
expenditure - (formal word) spending of large sums of money for a particular
purpose - расходы
Expenses
Buying supplies or materials Paying rent Repairs and construction
Advertising and market surveys Electric energy bills Wages and salaries
Telephone and Internet services bills Transportation Travel expenses
Entertainment and representation costs Production process Storage
Salary - wages
salary - money paid monthly to professional employees - зарплата
wages — money paid weekly to manual and unskilled workers - зарплата
The profit makes it possible to pay dividends to the shareholders and

to provide some fringe benefits for the employees. Part of the profit can
be invested into projects or businesses. Part of the profit goes into
expanding business facilities, new products development, buying more
supplies etc. Money must work.
Financial Documents
Accountants who keep all records of the company's money are to
report regularily on the financial condition of the company to show
profit or loss. The following documents are done: profit and loss account
and balance sheet.
150
A profit and loss account - an account compiled at the end of an

accounting period to show gross and net profit or loss; a statement of
financial condition at a given date
A balance sheet shows the company's assets and liabilities.
Liabilities are money that company owes to the suppliers, lenders and
tax authorities. Balance sheet is done at a specific period, mainly at the
end of each fiscal year in order to prepare a financial report.
Financial report is a set of documents issued by a company each year
to report the finacial position. It consists of a balance sheet, a profit and
loss account and a statement of cash flow.
profit and loss account - счет прибылей и убытков

balance s h e e t - баланс
assets and liabilities - актив и пассив баланса
fiscal year / financial year - финансовый год, в конце которого подводятся
итога, сдается финансовая отчетность (не совпа-
дает с календарным годом)
financial report - финансовый отчет
statement of cash flow - отчет о движении финансов
Unit 1
Tax Basics
Do you and your family pay taxes?

Who collects taxes?
Why do we have to pay taxes? Why are taxes collected by the government?
Why do some people or organizations avoid paying taxes?
Is it a crime not to pay taxes? How is it prosecuted?
W h o pays taxes?
People (individuals) and organizations pay taxes to the State
(Government).
They are tax payers.
W h o collects taxes?
Organizations or bodies authorized by the government collect taxes.
They are tax administration.
In the UK tax administration is presented by the IRS - Inland

Revenue Service.
In the USA tax administration is presented by the IRS - Internal
Revenue Service.
In the Russian Federation tax administration is presented by the
F T S - Federal Tax Service and tax inspection agencies.
Why is it important to collect (and to pay) taxes?

Taxes go to the State Budget.
The government must "earn" money for the budget.
From the budget the government provides money for:
- building and construction of important objects and roads;
- medical service;
152
U n i t 1. TaxBasics
- educational institutions (schools, colleges, universities, etc.)

- the army and military needs;
- police servicies;
- science and technology development;
- culture;
- sport development and sports facilities building;
- pensions and social funds;
- utilities and community services;
- transport facilities;
- maintenance of state bodies and organizations.
Core Vocabulary 1
tax / taxes - налог /налоги
to tax - облагать налогом
taxation - налогообложение
tax payer - налогоплательщик
tax administration - налоговая служба; налоговая администрация
tax authority - налоговое управление (the body responsible for
administering the tax laws of a particular country or
regional or local authority, and persons employed by
that body to carry out its responsibilities)
taxable (income, goods, - налогооблагаемый, подлежащий налогообложе-
property) нию
pay(платить) charge (облагать)

Taxes
raise (взимать налоги) collect (собирать)
impose (официально вводить налог) withhold (вычитать налог, удерживать налог)
calculate (считать) plan (планировать)
levy (облагать налогом)
153
Note:
Levy - charge
Charge tax means to make a person or entity liable for
paying a tax and demand payment - облагать, начислять
Levy tax means to impose and collect; it also means to
enforce tax collection by a taxagent - облагать и собирать
The legal term for enforced collection by the IRS. The IRS may levy your
wages (salary), commissions, the cash value of life insurance, licenses or
franchises, securities, contracts, rental income, dividends, retirement accounts,
etc.
Define the verb phrases from the diagram that refer to tax authorities and
the verb phrases that refer to taxpayers.
Taxpayers Tax authorities
Complete each sentence with a proper verb.

1. The Government... taxes.
2. Individuals and businesses ... taxes to the government.
3. Governments ... many kinds of taxes.
4. Every year the government has to ... taxes for the budget.
5. Taxagents or certain tax bodies ... taxes.
6. Taxpayers have to ... taxes.
7. Companies usually ... taxes due to pay.
8. Company accountants ... some taxes from your income.
9. The tax administration ... taxes on your property and gifts.
See p. 167.
154
U n i t 1. Tax Basics ЯИИИ
Core Vocabulary 2
Tax law - legislation that provides rules of tax charges and tax payments -
налоговое законодательство
Tax c o d e - collection of laws, rules and regulations relating to taxation -
налоговый кодекс .
Tax b u r d e n - responsibility to pay taxes - налоговое бремя
Tax r e t u r n - a statement which each taxpayer must make once a year
showing his/her income during the past year - налоговая
декларация
Tax e x e m p t i o n - freedom from payment of taxes allowed by law - налоговая
льгота
Tax p a y m e n t - money payed as taxes - уплата налогов, налоговый платеж
Tax r a t e - a charge or payment of taxes fixed according to a standard
scale - ставка налогообложения
Tax b a s e - amount of income, goods on which one must pay taxes; taxable
goods, property, etc. - база налогообложения
Tax r e v e n u e s - the income received by the government from taxation - госу-
дарственные доходы от сбора налогов
Tax y e a r - the period of a year which the government uses to calculate
how much tax a person or business must pay - финансовый
год, учетный год налогообложения
Tax holiday - a stated period in a year when a new business is allowed not to
pay taxes (in some countries) - временное освобождение от
налогов
t a x minimization - legal ways of paying less taxes - уменьшение суммы налога
без нарушения закона
tax avoidance / - illegal ways of paying less or no taxes - незаконное уклоне-
t a x evasion ние от уплаты налогов
Tax h a v e n - a country where the tax rates are so low that some companies
prefer to have part of the business located there, and thus pay
less taxes - налоговый оазис, страна с низкими налогами
Tax deduction - a reduction in the gross amount on which the tax is calculated -
снижение налогов при выполнении определенных усло-
вий (вычет определенных сумм из суммы налога)
Tax benefit - a deduction made to encourage certain types of commercial
activity - налоговая льгота
155
If you want to know more about taxation read the text below. And if
it seems too complicated substitute the highlighted definitions with the
appropriate word combinations from the table above.
(1) Tax authorities operate under the legislation

that provides rules and regulations presented in the
written collection of such rules and regulations
related to taxation.
(2) The rules define the charge or payment of
taxes fixed according to a standard rule and the
amount of income, goods on which one must pay
taxes for individuals and legal entities, and the certain
dates of the period of a year which the government
uses to calculate how much tax a person or business
must pay.
(3) In this period a taxpayer has to file a statement
which they make once a year showing his/her
income during the year.
(4) Some categories of population are given
freedom from payment of taxes allowed by law, some
may make a reduction in the gross amount on which
the tax is calculated
(5) Certain businesses enjoy the priviledge of a
reduction made to encourage some types of
commercial activity or are even given a period when a
new business is allowed not to pay taxes.
(6) It is possible to make schemes of legal ways of
paying less taxes in order to minimize the sum of
money payed as taxes for a period of time.
(7) For example, organizations find a country
where the tax rates are low, and place their money
there. This mitigates the responsibility to pay taxes mitigate
but doesn't increase the income received by the state уменьшать, смягчать
from taxation of the countries they are operating in.
(8) But it's illegal to resort to illegal ways of
paying less or no taxes, which is considered to be a
serious crime.
See p. 167.
156
U n i t 1. Tax Basics
Why is it necessary to have a stable tax law?

How do you pay taxes?
How do the taxpayers show the income to taxagents? How often do they
do it?
I have good income and some property. How is it defined in terms of
taxes?
Who collects taxes?
Is there a place in the world where the tax rates are not very high?
Are there legal ways to pay less taxes?
When does the government calculate how much tax a person must pay?
Does the law allow some freedom from payment taxes?
We start a new business. How much tax must we pay from the
beginning?
Is there a fixed standard to charge or pay taxes?
What does the state receive from taxation?
How do we call the process when somebody illegally pays less taxes?
assess - зд. определять сумму налога

assessment - зд. определение размера налога
evaluate - оценивать, устанавливать стоимость
tax audit - проверка правильности начисления налогов, налоговая
ревизия
taxable income - налогооблагаемый доход
tax deductible - вычитаемый из суммы налогооблагаемого дохода
tax reduction - уменьшение налоговой ставки, снижение налога
Tax Lawyer
A tax lawyer assists people or businesses in the computation and

payment of taxes of all kinds: income, property, estate, etc. A good
background in statistics, mathematics a n d / o r business as well as a
genuine enjoyment of working with numbers are basic necessities for the
tax lawyer.
A tax lawyer counsels corporate and individual clients on the tax
issues of all types of business organizations: sole proprietorships,
partnerships, corporations and limited liability companies. The range of
tax expertise includes strategic alliances, mergers and joint ventures
where professional advice in tax planning is essential. That makes a
profound knowledge of corporate law and related areas obligatory for a
tax lawyer.
157
LL.M. degrees can be received in tax law in a number of law school

around the country. This is one of the specific areas in which the LL.M.
degree is rather frequently pursued. If you meet the requirements of the
field, your work in private practice, for a law firm or as a tax lawyer with
a corporation.
What areas of knowledge and what skills is a tax lawyer required to
master? Why is it necessary to obtain the LL.M. degree?
Who are the tax lawyer's clients?
What is the range of expertise of a tax lawyer?
Decide if a tax lawyer has to know the accountancy basics? What must a
tax lawyer know? (Refer to Business File 3 to check.)
Tax lawyer's competence:

What taxes do we pay?
The main three levels (as in the USA and some other federated systems)
are: f e d e r a l t a x e s ( f o r federal g o v e r n m e n t ) , s t a t e , o r r e g i o n a l t a x e s ( f o r
territorial or administrative units) and local taxes (for cities).
The two groups of taxes are:
direct tax - a tax paid directly by the person or organization on
whom it is levied, and
indirect tax - a tax levied on goods or services rather than on persons
or organizations
The types of taxes are:
income tax - a tax levied on net personal or business income (подо-
ходный налог, налог на прибыль)
capital gains tax (UK) - a tax imposed on profits realized from the sale of a
capital asset, such as stock (налог на доход от прирос-
та капитала)
franchise tax (US) - a local tax imposed by upon corporations doing
business in this state (налог на концессии или налог
на торговую привилегию)
(It's not a special tax on franchising as business.)
sales tax - a tax levied by a state or city on the retail price of an
item, collected by the retailer (налог на доходы от
продаж)
Value Added Tax (VAT)- a consumption tax which is levied at each stage of
production based on the value added to the product at
that stage (налог на добавленную стоимость НДС)
property tax - local tax assessed on property owned, such as real estate
or automobiles. Usually federal income tax-deductible
(налог на недвижимое имущество)
158
social Secutity Tax - federal tax levied equally on employers and employees,
used to pay for Social Security programs (налог в фонд
социального обеспечения)
Some other taxes are:
estate tax - налог на наследство

gift tax - налог на дарение
Tax Law Firm

While reading the text of the advertisment decide if the personnel of
the Law Firm comprises tax lawyers who comply with all the necessary
professional requirements stated in the previous text Tax Lawyer.
Also decide why the firm employs accountants.
The TACS (Taxation, Accountancy, Corporare

Services) Law Firm was established as a tax law firm
to provide specialized legal and tax services. By
combining legal and tax specialists in one firm, we are
able to service individuals and businesses. The
combination of attorneys and accountants enables us
to offer the clients a full spectrum of planning options.
The firm offers advanced legal and tax strategies
for individuals, business owners and corporations.
Assisting in start-up of a business we not only advise
on the tax matters concerning each type of
organization but actually help with the the formalities.
Each client is unique; therefore, each plan is personally
customized to fit every need and situation. customize
We are able to render expertise of your financial выполнять по инди-
видуальному заказу
documentation, including profit and loss accounts,
balance sheet and financial report.
We provide personal and corporate tax planning
services. We help to prepare proper tax documents,
resolve related tax issues and settle tax problems at all
levels of the Internal Revenue Service or through
litigation in Tax Court.
The personnel of TACS Law Firm consists of
well-educated and experienced legal and tax
specialists and assistants. The background and be critical
training of each professional is critical to the overall зд. быть важным,
effectiveness of the practice. ценным
159
Services
Tax counseling, income tax assessment, tax base
evaluation, deduction strategies, possibility of tax
benefits, preparation of individual tax returns, corporate
tax returns, partnership and limited liability company
returns, estate tax returns, gift tax returns, accounting high net worth
individual
services, 1RS audits and Tax Court litigation. Tax
лицо с крупным
planning and strategies for corporations, mergers,
чистым капиталом
businesses and high net worth individuals, opinion opinion letter
letters. Consideration of federal, state, and multi-state письмо с заключе-
planning issues. Tax reduction and tax compliance нием или пояснени-
planning. International tax planning. ем по делу
The services rendered by the firm are generally outlined or only listed in
the text. Suppose a client approaches you, a tax lawyer of the firm, with
the following requests (or questions).
a) Check with the text in the advert if you are ready to counsel on the
matter:
1. I still don't know what type of organization is better for the

business I'm going to run. Could you explain that to me in tax
terms?
2. Do you assist in partnership registration matters? I mean some
formalities with the IRS...
3. I've just started my business in America, I come from Europe. I
know little about IRS tax returns.
4. I've got some problems with taxes, and the IRS has warned me
about an audit. I am nervous.
5. We're a multi-national company with subsidiaries abroad. Could you
perform our tax planning with regard to our international activity?
6. My boss would appreciate your assistance in working out proper
tax strategies in connection with the substantial capital growth.
7. I'm running a corporation and I need a good professional to
evaluate my tax base and taxable income.
8. Will you advise me on the way we have to make deductions before
calculating net taxable income?
b) Give more detailed commentary on points 1 and 2. Refer to Part II
Unit 1 Business Organizations (the chart The Forms of Business
Organizations Compared) to review how the businesses are taxed. Refer
to Part II Unit 2 Incorporation and Registration to review how
different organizations register with tax authorities.
c) This is the TACS lawyers' response from the website forum.

1. Sole proprietors pay taxes on business income on their personal tax
returns. As a sole proprietor you must report all business income or
160
losses on your personal income tax return; the business itself is not
taxed separately. A partnerships doesn't pay income tax as a legal
entity. Each partner has a share of profit and losses set out in the
written partnership agreement. Each partner estimates his share of
profits and pays income tax accordingly. Corporation is a legal entity
separate from its owners and pays income tax on net profits, then each
shareholder's dividends are taxed as part of their personal profit.
2. When you register a partnership you must apply for a EIN with the
IRS. Individual businesses and LLCs must do the same,
corporations obtain a tax registration certificate.
3. Tax returns are forms filed with the Internal Revenue Service or
with the state or local tax collection agency which contain
information used to calculate income tax or other taxes. The
standard US individual tax return is Form 1040. There are several
variations of this form, as well as many different supplemental
forms. Americans who earn more than a specified amount (which
changes occasionally, as of 2002 about $5000) are required by law
to file tax returns. In the UK tax returns are filed with the Inland
Revenue Service once a year (tax year). The form is a multi-page
document rather difficult to handle for individuals, that's why it's
advisable to approach a lawyer. Our firm is the best choice for you.
4. The staff of our firm consists of tax lawyers and accountants. Tax
audit means the examination of the financial records of a person,
business or organization typically conducted by the IRS, the main
purpose of which is to assess taxes owed.
5. Our tax lawyers are specialists in International Tax Law. We'll
gladly do the proper tax planning taking into account the
peculiarities of other countries' tax laws.
6. The high net worth individuals are always welcome in our firm. The
tax strategies include thorough tax assessment and reasonable
schemes of tax avoidance, or minimization, and search of tax havens
for you. Each client is unique; therefore, each plan is personally
customized to fit every need and situation.
7. The firm offers advanced legal and tax strategies for corporations. The
team of tax professionals assists businesses in the computation and
payment of taxes. To do so we conduct a careful study of the tax base
of our corporate client and assess the taxable income. We can explain
what it is now. Taxable income is the net amount of income that is left
of a taxpayer's gross income after the deduction of the expenses.
8. Look, you've got an income. In order to get the income you've spent
a lot of money on the production, sales, transportation, marketing,
advertising. This money should return to you. You deduct it from
the income, or cover the costs, and this money is not taxable. What
is left is the taxable income and you pay the tax on that amount.
161
P a r t III, Taxation Outline
Practise working in pairs with a partner to respond to the requests or

questions properly.
Legal Counseling
Read and finish the following dialogue.
An American lawyer is counseling a client who is starting a
corporation on tax matters.
While reading the dialogue make notes to define how corporations
are taxed.
L.: Well, Mr Turner, I see it's settled - you are going to run a
corporation.
C.: Precisely. But we are to discuss some more details. Taxes seem to be
the most complicated issue especially for a corporation. Will you
clarify that for me?
L.: Gladly. As you may know, corporation as a legal entity pays income
tax, and its owners - shareholders - pay income tax on dividends.
C.: What is the usual income tax rate?
L.: Generally, depending on individual income, it ranges from nothing to
35% of one's income, but the rates may change. The income tax is
called a progressive tax because it takes a larger percentage of the
income from high net worth individuals. It is assessed on most
corporations, as well, so that the dividends paid to stockholders are
subject to double taxation.
C: I find it rather unfair. But it seems to be the only disadvantage of
running a corporation. I've got another question. Is all income taxed?
L.: No, the company itself is taxed on all profits that cannot be deducted
as business expenses.
C.: I see. The expenses reduce my taxable income.
L.: But remember your expenses must be legitimate. The IRS may check
the business expenses. You know people can sometimes give quite
curious information like repair costs of the director's house or some
odd purchases.
C: Will you kindly make up a list of deductible business expenses?
L.: Of course. Now let's talk about the employees' salaries. A corporation
can deduct the bonuses it pays to the employees. This expenditure
item can help in tax minimization.
C: By the way, what about the shareholders?
L.: The corporation's owners, if they work for the corporation, pay
individual income taxes on their salaries and bonuses, like regular
employees of any company. Salaries and bonuses are deductable
business expenses, so the corporation deducts those costs and does
not pay taxes on them.
162
C.: Do we have to withhold any other taxes?

L.: I'm going to prepare a detailed memorandum for you to get an
overview of your tax base and all taxes to be levied. Besides we offer
our services in tax planning.
C.: That would be fine. Will you also deal with the IRS?
L.: ;
Finish the dialogue using the information below, and then prepare a
memo on taxes for the Client.
The memo should include the summary of what has been said in the
dialogue and extra information based on the brief reference below:
1. You'll find the list of business expenses in Business File 3 preceding the
Unit.
2. The corporation must file a corporate tax return, IRS Form 1120, and pay
taxes at a corporate income tax rate on any profits. If a corporation owes
taxes, it must estimate the amount of tax due for the year and make
payments to the IRS on a quarterly basis - in April, June, September and
January.
3.As an employer, you are responsible for:
Social Security and Medicare taxes;
State Disability Insurance (in some states).
A) Read the following text and role-play a dialogue between a lawyer and
a client who is going to run a sole proprietorship (USA).
How Sole Proprietors Are Taxed

Sole proprietors pay taxes on business income on their personal tax
returns.
As a sole proprietor you must report all business income or losses on your
personal income tax return; the business itself is not taxed separately.
You'll be taxed on all profits of the business - that's total sales minus
expenses - regardless of how much money you actually withdraw from the
business. In other words, even if you leave money in the company's bank
account at the end of the year - for instance, to cover future expenses or
expand the business - you must pay taxes on that money.
You can deduct your business expenses in the same manner as any other
type of business. You are allowed to write off any money you spend in pursuit
of profit, including start-up costs, operating expenses and product and
advertising costs, as well as business-related meals, travel and entertainment
expenses. But you'll need to keep accurate records for your business that are
clearly separate from your personal expenses. One good approach is to keep
separate checkbooks for your business and personal expenses - and pay for all
of your business expenses out of the business checking account.
Sole proprietors must make contributions to the Social Security and
Medicare systems; taken together, these contributions are called
"self-employment taxes." Self-employment taxes are equivalent to the payroll
163
tax for employees of a business. But while regular employees make

contributions to these two programs through deductions from their
paychecks, sole proprietors must make their contributions when paying their
other income taxes.
B) Write a short e-mail for the client (refer to the Functions Supplement,
Corespondence section).
H o w P a r t n e r s h i p s Are Taxed (brief information about partnership's

taxation).
Partnership itself doesn't pay income tax as a legal entity.
Each partner has its share of profit and losses set out in a written
partnership agreement.
Each partner estimates his share of profits and pays income tax
accordingly.
Partners can deduct their legitimate business expenses from their business
income, which will greatly lower the profits you have to report to the IRS.
Deductible expenses include start-up costs, operating expenses and product
and advertising outlays, as well as business-related meals, travel and
entertainment expenses.
The tax system of the USA includes more aspects than those
presented here. If you want to know more about American taxes refer to
the Reading Supplement section to find a piece of curious reading on
how people see a tax cut, and it's kind of fun.
Before you read the text Insight into US Income Tax System make
sure you are good at maths. Besides, check if you clearly understand
what the progressive tax is and why some entities are given a tax cut.
Note: tax cut - снижение налога, сокращение налогов
Legal Knowledge
UK Taxes
Core Vocabulary 2
fiscal year - налоговый год (tax year); финансовый год
relief - скидка с налога, освобождение от уплаты
obtain a relief - получить скидку с налога
intangible assets - нематериальные активы
goodwill - престиж фирмы, благорасположение клиентуры, цена
нематериальных активов
disposal of assets - реализация активов
self-assessment - самостоятельное исчисление (налогов)
164
While reading pay attention to what is said in the text about:

- the complexity of the taxation system;
- the obligation of individuals to pay taxes;
- the tax that is paid on the sale or transfer of assets;
- the obligation of self-assessment of taxes;
- the fiscal (tax) year - dates;
- the reliefs that are available for taxpayers.
United Kingdom tax legislation is one of the most complicated and

sophisticated in the world and is in constant change. There is no uniform tax
code but there is a number of acts which regulate the process of taxation.
The system of national taxation is administered by two agencies, the
Inland Revenue Service and Her Majesty Customs and Excise. In addition,
Local Authoroties collect local taxes.
Personal Taxation
Individuals are liable to pay income tax on most kinds of income, including
income from employment, self-employment and investment income. They may
also be liable to pay Capital Gains Tax if they make a profit on the sale of
assets. Certain types of individual may have to complete a self-assessment tax
return, and may have to make payments of tax directly to the Inland Revenue.
Individuals with low incomes and families with children may be able to
obtain additional relief in the form of new tax credits.
Income tax and capital gains tax are based on the fiscal year which
commences on 6 April each year and ends on the following 5 April.
Business Taxation
The taxes imposed on businesses include corporation tax and capital gains
tax. Companies are separate legal entities and are liable to pay corporation tax
on their "profits" for each accounting period, which include both income and
chargeable gains.
Corporation tax is often a complex area and encompasses many of the
rules for both income tax and capital gains tax applicable to individuals.
However, different rules do apply for transactions involving, for example,
interest paid and received, gains on the disposal of shareholdings in other
companies, research and development and gains on most intangible assets,
including goodwill.
Like individuals, companies are now responsible for completing and filing
their own tax returns, together with self-assessing their corporation tax
liabilities.
Capital Gains Tax (CGT) is paid on the sale or transfer of an asset.
The tax is on the increase in the value of the asset between the time it was
acquired and the time it is disposed of.
There are certain reliefs available so that the gains and therefore the tax
can be reduced or the payment postponed, or in some cases totally wiped out.
165
It is important, where you hold an asset of value, or if you are planning to

sell or transfer an asset that you speak to a tax advisor well in advance. This
can ensure that the above mentioned reliefs are protected and utilised as far as
possible so that your tax bill can be minimised
Transfers of assets must be reported to the Inland Revenue and failure to
do so can result in penalties. Complex calculations are required to calculate
the capital gains and the reliefs deductible.
1. What are the major taxes that individuals pay?
2. Who can obtain a relief?
3.What major taxes do the businesses pay?
4. Why is the corporation tax so complex?
5. Who files tax returns and performs self-asessment?
6. Your opinion: Isn't it better for individuals and businesses to have the tax
lawyer's assistance in such matter as tax calculation and payments?
UK tax legislation is changing. Here is the evidence:

Taxation: Tax law rewrite third draft Bill
The Tax Law Rewrite project, which will modernise UK direct tax law so
that it is clearer and easier to use, has published its third draft Bill on trading,
property, savings and investment and miscellaneous income. The Tax Law Rewrite
commands the support of all parts of the tax community and aims to rewrite the
UK's primary direct tax legislation with clearer, more logical structure; use of
plain language and other reader aids; no alteration of main tax policies; (possibly)
some minor policy changes, where these further improve the current legislation;
full consultation with interested parties throughout the life of the project; and
new streamlined Parliamentary procedures for enacting "rewrite Bills".
If you want to know how and when taxes started to be levied, refer to
the Reading Supplement section.
Read the text History of Taxes. Prepare a brief outline on the matter.
Your client, a foreign company, requested information on Russian tax

rules concerning non-residents. The following brief notes have been
made by you after a web search. Using the notes write an e-mail letter to
your client. (See the Functions Supplement, Correspondence section.)
Major federal taxes: corporate Profit Tax, Individual Income Tax, VAT,
Unified Social Tax, Property Tax and Sales Tax.
Profit Tax rate - 24%. Paid monthly in advance, file returns every quarter.
166
Foreign companies that have Russian source of income are taxed

depending on the type of income - withholding tax from 10 to 20%.
For example, 15% on dividends received by foreign companies from
Russian legal entities.
Individual income tax - flat tax 13% for residents; non-residents 30%.
For salaries the date of income receipt is the last day of the month for
which the salary is accrued (начислена).
Income and property of foreigners is taxed according to common
procedures - specify later.
Foreigners may have tax benefits under a double tax treaty - prove that
they pay taxes in the country of residence. (Russia and this country - double
tax treaty.)
Unified Social Tax - Employers, foreign or Russian, must pay UST for
their Russian employees and expatriates working in the representative offices
or branches.
Property Tax - is levied on property of enterprises and organizations.
Exemptions under double tax treaties. Non-profit are exempt from property
taxation.
Sales Tax - is paid by Russian and foreign legal entities and individual
entrepreneurs. The tax is levied on the value of goods sold in retail or
wholesale trade for cash. Exemptions - basic food products, goods for
children, medicines, educational services.
Note. Avoid too formal style (it's not a government report). Don't just make
up short sentences of the brief notes above.
P. 154:
1) impose; 2) pay; 3) charge; 4) raise; 5) collect;
6) calculate; 7) plan; 8) withhold; 9) levy
P. 156:
(1) Tax authorities operate under tax laws that are presented in a tax code.
(2) The rules define the tax rates and tax base for individuals and legal
entities and the certain dates of the tax year.
(3) In this period taxpayers have to file tax returns.
(4) Some categories of population are given tax exemptions, some may
do tax deductions.
(5) Certain businesses enjoy the privilege of tax benefit or even are given
a tax holiday.
(6) It is possible to make tax avoidance schemes in order to minimize tax
payment for a period of time.
(7) For example, organizations find tax havens and place their money
there. This mitigates the tax burden but doesn't increase tax revenue of
the country they are operating in.
(8) But it's illegal to resort to tax evasion which is considered to be a
serious crime.
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Unit 2
Tax Crimes
What do you know about tax crimes? What are they?

How are the crimes prosecuted?
Are there any special enforcement bodies or organizations dealing with tax
crime prevention?
Core vocabulary
cheating - обман
cheat - обманывать, плутовать
fraud - мошенничество
fraudulent - мошеннический
perjury - лжесвидетельство
bribery - взяточничество
aiding - пособничество
abetting - подстрекательствою
failure to do smth - неделание чего-л., отказ что-л. сделать, невыпол-
нение
wilful failure to file return - намеренно не подать декларацию (трудность со-
гласования в переводе - глагольная фраза в рус-
ском, но в английском - существительное)
money laundering - отмывание денег
underreport - занижать сведения о чем-л.
over-deduct - приписывать к вычетам
overstate - завышать
Try to give definitions to the words and phrases given above or interpret
the meaning.
Do you know any examples of such criminal behavior or acts?
How can these crimes be related to taxes?
Types of Tax Crimes

The most common tax crimes include tax evasion, willful failure to
file return or supply requested information, willful failure to collect or
pay taxes, preparing false tax returns or submitting false tax documents,
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U n i t 2. Tax Crimes
making false statements to governmental tax officials, making false

claims, perjury, bribery, aiding and abetting in the preparation of false
documents, and failure to file currency transaction reports. Tax crimes
may be charged against individuals, as well as corporate officers,
partners, and others involved in the tax reporting chain. Whether the
tax crime charges will be filed is dependent upon the amount of
admissible evidence against the taxpayer, not dependent upon the
amount involved. Therefore, tax crimes are relevant to all taxpayers, not
only the taxpayers that have made significant amounts of taxes. The
amount of the tax loss to the government is only relevant in determining
the sentence, not whether the crime occurred.
Cheating
Is cheating a crime?
Do many people cheat on their taxes?
W h y do some taxpayers do that?
You will find the answers in the following analysis of the situation in
the USA.
In a national poll, one out of five Americans admitted to cheating the
IRS on their tax returns. The IRS says that 17% of taxpayers don't fully
comply with the tax laws on a regular basis. If you throw in people who
cheat by not filing tax returns, the number is closer to one in four.
Undoubtedly the figure would be higher if wage earners did not have
taxes withheld by their employers and the self-employed did not have
their earnings reported to the IRS.
Arguably, cheating by self-employed people approaches 100%. It may
just be a question of degree - did you ever mail a personal letter with a
business-bought stamp?
A look at who cheats, and how - and a discussion of what happens if
an auditor suspects you of trying to dodge the IRS.
It shouldn't come as a shock to hear that it's a crime to cheat on your
taxes. In a recent year, however, only 2,472 Americans were convicted of
tax crimes - 0.022% of all taxpayers. This number is astonishingly small,
taking into account that the IRS estimates that 17% of all taxpayers are
not complying with the tax laws in some way or another. And the
number of convictions for tax crimes has decreased over the past decade.
Note: dodge - увиливать

According to the IRS, individual taxpayers do 75% of the cheating -
mostly middle-income earners. Corporations do most of the rest.
169
Cash-intensive businesses and service industry workers, from

handypeople to doctors, are the worst offenders. For example, the IRS
claims that waiters and waitresses underreport their cash tips by an
average of 84%.
How People Cheat on Their Taxes

Most people cheat by deliberately underreporting income. A
government study found the bulk of the underreporting of income was
done by self-employed restaurateurs, clothing store owners and - you'll
no doubt be shocked - car dealers. Telemarketers and salespeople came
in next, followed by doctors, lawyers (!), accountants (!!) and
hairdressers.
Self-employed taxpayers who over-deduct business-related
expenses - such as car expenses - came in a far distant second on the
cheaters hit parade. Surprisingly, the IRS has concluded that only 6,8%
of deductions are overstated or just plain phony.
If you are caught cheating by an auditor, she can either slap you with
civil fines and penalties or worse, refer your case to the IRS' criminal
investigation division.
The Auditor Suspects You of Fraud

Auditors are trained to look for tax fraud - a willful act done with the
intent to defraud the IRS - that dark area beyond honest mistakes.
Using a false Social Security number, keeping two sets of financial books
or claiming a blind spouse as a dependent when you are single are all
examples of tax fraud. While auditors are trained to look for fraud,
however, they do not routinely suspect it. They know the tax law is
complex and expect to find a few errors in every tax return. They will
give you the benefit of the doubt most of the time and not go after you
for tax fraud.
Fraud or Negligence?
A careless mistake on your tax return might tack on a 20% penalty to
your tax bill. While not good, this sure beats the cost of tax fraud - a
75% civil penalty. The line between negligence and fraud is not always
clear, however, even to the IRS and the courts.
While auditors aren't detectives, they are trained to spot common
types of wrongdoing, called badges of fraud. Examples include a business
with two sets of books or without any records at all, freshly made false
receipts and checks altered to increase deductions. Altered checks are
170
easy to spot by comparing written numbers with computer coding on
the check or bank statements.
Note: badges of fraud - основание для утверждения наличия обмана
While the statistical likelihood of your being convicted of a tax crime
is almost nil, it does happen to some folks. If you are in the unlucky
minority, hire the best tax a n d / o r criminal lawyer you can find.
(From the website nolo.com)
I. Analyse the texts to prove that the following statements are true:
I. Only individuals can be charged with tax crimes.
2.17% of people don't file a tax return.
3.The employers don't withhold taxes from their employees' wages and
salaries.
4.84% of American taxpayers have been convicted for tax crimes.
5. Service industry workers cheat most often.
6. Some people underreport their income, some people over-deduct their
business expenses.
7. Doctors and lawyers never underreport their income.
8.68% of deductions made by people themselves are false.
9. Tax auditors are trained to differentiate a mistake in tax return from a
fraud.
10. Penalties are imposed on those who commit tax fraud or appear to be neg-
ligent with the tax return.
II. As a lawyer you must know all the tricks people resort to in order to
"dodge" the tax authority. What examples are given in the text?
III. More about fraud.
According to the IRS Criminal Investigation there are the following types
of fraudulent activities (although not all inclusive, listed below are some
of the criminal activities in violations of the tax law):
- Deliberately underreporting or omitting income.
- Overstating the amount of deductions.
- Keeping two sets of books.
- Making false entries in books and records.
- Claiming personal expenses as business expenses.
- Claiming false deductions.
- Hiding or transferring assets or income.
What do you know about such fraudulent activities?
Can you comment on each in legal terms?
Refer to Statutes Supplement to read the US Code provisions on

taxes.
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Legal Research
Criminal Investigation
While reading the article, ignore the words that are not important for
overall understanding. After you get the concept, read again and try to
guess the meaning of the new words. Look up the words in the
dictionary only if you can't do without them.
Money Laundering
( United States Treasury website Tax Fraud Alerts)
What is Money Laundering?

The term "money laundering" refers to the activities and financial
transactions that are undertaken specifically to hide the true source of the
income. In most cases, the money involved is earned from an illegal enterprise
and the goal is to give that money the appearance of coming from a legitimate
source.
W h y is IRS Involved in Money Laundering Investigations?
One look at the daily news is proof that the crimes dealing with or motivated
by money make up the majority of criminal activity in the nation. Tax evasion,
public corruption, health care fraud, money laundering and drug trafficking are
all examples of the types of crimes that revolve around money. In these cases, a
financial investigation often becomes the key to a conviction. For this reason, the
IRS is one of the key agencies involved in money laundering investigations.
Money laundering is a very complex crime involving intricate details,
often involving numerous financial transactions and financial outlets
throughout the world. Criminal Investigation has the financial investigators
and expertise that is critical to "follow the money trail."
Criminal Investigation focuses on money laundering where the underlying
conduct is a violation of the income tax laws. According to the IRS, money
laundering is the means by which criminals evade paying taxes on illegal
income by concealing the source and the amount of profit. Money laundering
is in effect tax evasion in progress.
When no other crimes could be pinned to Al Capone, the Internal Revenue
Service obtained a conviction for tax evasion. As the astonished Capone left
the courthouse he said, "This is preposterous. You can't tax illegal income!"'
But the fact is income from whatever source derived (legal or illegal) is
taxable income.
Had the money laundering statutes been on the books in the 1930s,
Capone would also have been charged with money laundering. However, since
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U n i t 2. Tax Crimes
October 1986, with the passage of the Money Laundering Control Act,
organized crime members and many others have been charged and convicted
of both tax evasion and money laundering.
When a criminal has a large amount of illegal income, they have to do
something with it in order to hide it from the IRS. They attempt to launder it to
make it appear as if it was from a legitimate source, allowing them to spend it or
invest it in assets without having to worry about the IRS and tax consequences.
One of the ways to launder illegal proceeds is to move the money out of the
United States and then bring it back in a clean form, often disguised as loan
proceeds. Another method is to channel or co-mingle the money through
various business activities to give the appearance that the money was derived
from a legal source.
Why a Financial Investigation?

Financial investigations are by their nature very document intensive. They
involve records, such as bank account information or real estate files, which
point to the movement of money. Any record that pertains to or shows the
sequence of events involving money movement is important. The major goal in
a financial investigation is to identify and document the movement of money
during the course of a crime. The link between where the money comes from,
who gets it, when it is received and where it is stored or deposited, can provide
proof of criminal activity.
IRS investigations of illegal income cases involving money laundering are
critical components of the nations National Money Laundering Strategy. The
long hours of tracking and documenting financial leads allows an investigation
to go right to the door of the money launderers and eventually to the leader of
the illegal enterprise. A complete financial analysis and reconstruction of the
illegal activity (i.e. a drug organization or an abusive trust scheme) will
document the financial activities related to unreported income on tax returns
and money laundering which is usually key to securing a conviction.
Money laundering creates an underground, untaxed economy that harms
our country's overall economic strength. It is a global threat that erodes our
financial systems.
What is the History of Money Laundering Prosecution?

Criminal Investigation was established in 1919 and commenced its first
narcotics investigation of an opium trafficker in Hawaii in the early 1920's,
bringing the only charge we could; tax evasion. At that time, millions of dollars
were being laundered through financial institutions, going untaxed and being
used to purchase assets. There was no paper trail at the financial institution other
than bank account records, if the money was deposited. There was no
requirement for banks to report the large amounts of currency transactions.
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In 1970, the Congress passed the Bank Secrecy Act (BSA). With the
enactment of the BSA came the introduction of the Currency Transaction
Report (CTR, Form 4789), Report of Internationa] Transportation of
Currency or Monetary Instruments (CM1R, Form 4790) and Report of
Foreign Bank and Financial Accounts (FBAR, Form TD F 90-22.1).
The BSA created the paper trail needed by law enforcement to track
untaxed dollars and the millions of dollars being laundered through U.S.
banks. IRS has been able to follow this paper trail to disrupt and dismantle,
through investigation, prosecution and forfeiture of assets, the country's
major drug and money laundering organizations.
Each part has a question title. Can you answer these questions briefly?
More questions:
What money is laundered? How is it technically done?
How do tax authorities, financial investigators and criminal investigators
cooperate in law enforcement against tax evaders?
Why has money laundering become an international problem?
Arrange a round-table discussion of the tax crimes problem. There

may be guest-speakers from different countries.
Choose from the following topics or devise your own one.
- Tax crimes is an issue of international concern.
- The measures that can be taken to prevebnt criminal activities.
- Tax crimes and terrorism.
Apply information from the Unit, look for extra information in

different sources, mainly magazines, Internet.
P a r t IV. LEGAL FRAMEWORK
OF COMPANY OPERATION
Business File 4
Company Operation
The objective of any company is to set and develop the product or
service that will be competitive in the market. Thus, effective and
successful operation requires well-arranged and perfectly functioning
team-work of all company's units, or departments.
PRODUCTION
Responsibilities includes product design, development,
manufacturing and quality control.
There are usually several departments under Production.
R&D - RESEARCH AND DEVELOPMENT - научно-исследовательский

отдел
They work out and implement progressive ideas and apply high technologies to
create a product that will win the market. It may be an invention that becomes a
state-of-the-art device or appliance. It may be an innovation, a new and even
revolutionary development of the existing product.
invention - изобретение
innovation - новация, нововведение
state-of-the-art - последнее слово техники
high t e c h n o l o g i e s - высокие технологии
device - прибор, устройство
appliance - бытовой прибор
Stages of product development:
1 2 3 4 5 6
Draft Feasibility s t u d y Prototype Tests Product

drawings анализ техническом c r e a t i o n эксперименты l a u n c h
Idea чертеж осуществимости создание выпуск
Design модели продукции
проект
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P a r t IV. Legal Framework of Company Operation
The way from the initial design to the final launch may be rather
long. The test stage is the most important as the R&D must make sure
there are no defects of design. Depending on the company profile, R&D
often have to obtain certification of the product.
FACTORIES - производство (как подразделение)

The production facilities include machines and other types of equipment. The
product is done or assembled here. Assembly lines are automated, and electronic
machines assemble, say, car in short time.
facility - производственное помещение, сооружение, объект

facilities - комплекс сооружений, приспособлений, оборудования
assemble - собирать из частей целое
assembly line - сборочный конвейер
MAINTANANCE - техническое обслуживание и ремонт

They maintain the production equipment and bear great responsibility, because
a defect in a machine will result in the product's defect, and defective products
mean losses and problems with consumers.
maintain - поддерживать в рабочем состоянии, осуществлять тех-

ническое обслуживание
PACKAGING - упаковочный (отдел или цех)

Every product needs appropriate packaging, and perfect packaging increases
sales.
That is why package designers's work becomes so creative that it is nearly art.
But packaging must also meet quality standards to avoid the consumers' claims.
PURCHASING - отдел закупок (сырья, деталей и т. д.)

Purchasing deals with the selection of supplies and components for the
production. They deal with suppliers, look for proper materials and items,
negotiate prices. They prefer not to make a mistake in supplies purchasing.
Materials of bad quality can make a product defective.
QUALITY CONTROL - отдел контроля за качеством продукции

Quality control managers set quality standards of each product. They work out
specifications, which include norms of design, material, dimensions and process
of manufacturing.
Standards are maintained throughout the whole production cycle, no flaw must
occur. Complying with the quality standards imply warranty so that each unit of
the product becomes merchantable.
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imply - подразумевать
warranty - гарантия как гарантийное обязательство
merchantable - обладающий нормальным рыночным качеством, при-
годный для торговли
The finished and packed product must be supplied with the
information about its specifications. Some goods need to get enclosed
instructions so that the consumer, or user can be aware of and
understand how to use or apply the product.
Marketing and Sales

Marketing is the range of activities intended to create a profitable
demand for a product by such means as advertising, sales promotion,
pricing, carrying out market research and defining the sales location and
sellers.
Marketers' major objective is to work out and develop the company's
brand and the corporate image, which are the most valuable intangible
assets of any business.
MARKETING
The traditional marketing rules are described in terms of four P's:
1. PRODUCT, or product's attractive design, or efficient services arrangements.
2. PRICE, or reasonable and competitive sum of money for the offered product
or service.
3. PLACE, or distribution.
4. PROMOTION, or methods to make people aware of the product or service,
attract and make the consumer buy it.
Now some more P's have been added to the marketing formula:
People, or everyone involved from producer to customer.
Packaging, that adds value to the product.
Phasing, the effective step-by-step techniques in the process of marketing and
sales.
Market research
Even before a product is being manufactured the marketers perform the study of
the market to find out the demand, the target consumers, the competitors'
positions, the range of prices and the best locations of sales.
Marketing plan
Marketing plan includes, among other important matters, all methods and
strategies to be used in the product promotion and sales.
Promotion
Promotion strategies comprise advertising, sales promotion and publicity, or
PR. The strategies are aimed at creating the product image and a brand.
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BRAND
A brand is not just the product, it's a concept associated with a particular
product. There are many good products but not all of them are brands. A brand
means the presence of unique features that make the product recognisable by the
consumers, and distinguish it from the competitors' products. So, the maker's
name, trademark, logo, symbols, signs make up a brand, that becomes the
intellectual property of the company.
Famous brands: Nike, Sony, Coca Cola, Lego, Ikea etc.
ADVERTISING
Advertising is an essential part of product promotion. Some types of advertising
are:
- Media advertising: adverts in magazines and papers, TV and radio
commercials;
- World-web advertising through banners on websites;
- Out-of-door advertising: billboards, posters, advertising on public transport;
Direct mail is performed through mail shots - letters, brochures, catalogues;
- Sponsorship: advertising around sports arena or show stage;
Advertising campaign is a promotional event that includes various methods of
attracting potential buyers: shows, presentations, flyers distribution, sales, fairs etc.
advert / ad - реклама как рекламное объявление
commercial - рекламный ролик
banner - баннер - рекламное объявление на веб-сайте
billboard - рекламный щит
direct mail - рассылка рекламы прямой почтой
mail shot - раскладка рекламы в почтовые ящики
PR
Public Relations is aimed at creating the corporate image and setting
favourable communication with the general public through media and public
organizations. It's performed by various methods including press releases, press
conferences, exhibitions and special presentations, charity events and shows etc.
The public becomes aware of the company's profile and starts associating it with
reputable and reliable provider of goods or services. Therefore, the company's
goodwill is being developed.
general public - широкая общественность, широкая публика
charity events - благотворительные мероприятия
reputable - достойный уважения
goodwill - престиж фирмы, репутация фирмы и деловые связи, не
материальные элементы фирмы, включая название, то
варный знак и клиентуру; также юр:. стоимость деловых
связей и репутации фирмы
178
SALES PROMOTION
In sales promotion they apply various methods and techiques targeted at sales
increase.
These include: discounts, sales, website with interactive forums and e-commerce
pages, catalogues, mail orders, credit sale, premiums - free samples coupons,
BOGOF method - buy one get one free, etc.
REMEMBER
All promotional activities must be arranged in compliance with the
laws of fair competition.
Unit 1
What are the most important inventions of the past? Do you know the
inventors?
Is an invention the inventor's property? How is it possible to prove the ownership?
How is it possible to implement the invention or idea into practice?
What do these symbols mean - © ® and ™? Where do you see these symbols?
Can you give the definitions of a patent, copyright and trademark?
Are you a computer user and Internet searcher? Agree or disagree with the
following:
- computer software does not refer to intellectual property;
- anyone can copy anything from the Internet;
- you can register your personal website under any name.
Do you know why intellectual property should be protected by law?
Core Vocabulary 1
intellectual property - IP - интеллектуальная собственность
patent - патент
trade mark/service mark - торговая марка / торговая марка в сфере обслуживания
trade dress - торговая марка упаковки
copyright - авторское право
trade secret - коммерческая тайна
domain name - домен(web)
intangible property - нематериальная собственность
distinctive - распознаваемая (торговая марка)
distinguish - различать
disclose - раскрыть (секрет), разгласить
disclosure - разглашение
non-disclosure agreement - соглашение о неразглашении
Intellectual property refers to the creations of the mind: inventions,

literary and artistic works, and symbols, names, images, and designs used
in commerce.
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U n i t 1. Intellectual Property
Intellectual property laws are applicable both to natural persons and

legal entities.
Some of a company's most important assets are its intellectual
property rights, which include patents, copyrights, trademarks and
trade secrets that must be protected and secured.,
Intellectual property is a peculiar type of property. It is considered
"intangible," that is, you can't touch it. There are four general types of
intellectual property: (1) patents, (2) trademarks and trade dress,
(3) copyrights and (4) trade secrets. The ability to recognize and protect
intellectual property is important for all businesses. Under Internet
networks global expansion intellectual property laws have been updated
to provide protection of domain holders, Internet site owners and
computer software owners.
A patent is an exclusive right to make, use, and sell a new and useful
process, machine, or product, granted to the inventor for a certain period
of time.
A trademark is a distinctive word, phrase, logo, an Internet domain
name, a graphic symbol, a slogan or other device that is used to identify
the origin of a product and to distinguish a manufacturer's products
from others.
A copyright is the exclusive right to print, reproduce, sell, and
exhibit written material, a musical compositions, an art work,
photographs, movies, TV programmes or data systems.
A trade secret is a business process or information that can't be
patented, copyrighted or trademarked, and that must be protected from
disclosure.
A domain name is the strings of letters used to name organizations,
that is an address of a computer network connection identifying the
owner of the address
1. Finish the statements:

a) Intellectual property refers to ...
b) The four types of intellectual property are ...
c) Internet IP laws protect ...
2. What definition of intellectual property type do the following words

and phrases refer to?
exclusive right protect from disclosure logo string of letters
inventor distinctive word identify distinguish ... from
reproduce new and useful product
181
Intellectual Property in Business

Every business owns intellectual property rights - patents,
trademarks, copyright and trade secrets.
The following situation about a fictitious company will be rather
illustrative.
Corporation HighUp produces sports equipment for hikers and
mountaneers: rucksacks, tents, camp furniture, grills, special tools,
compasses and electronic navigation systems. The company also
publishes a popular magazine for hikers and mountaneers. They've
recently launched the exclusive series of super tents and some high-tech
tools. The company also runs a developing chain of hotels - HighUp
Inn.
The intellectual property rights of the corporation will be as follows:
Patent rights:
Exclusive design of the tents
New manufacturing methods used in the production of both the tents
and tools
Trademark and service mark:
Distinctive word HighUp recognised as the mark of the corporation
Company's logo
Slogans or phrases used in advertisement of goods or services
Internet domain name
Packaging as a trade dress
HighUp Inn chain as a distinctive service mark
Copyrights:
User and reference manuals
Promotional materials, ads, catalogs, press releases, TV commercials
Website contents
Magazine publications
Trade secrets:
Methods of doing business, such as office management and policies,
handbooks, and salary schedules
Manufacturing techniques, processes, or equipment, and information
on materials used
Lists of customers, suppliers, distributors and information about them
Developments of new products, current research, market objectives
and targets
Financial information such as pricing, profits, salaries, etc.
182
и n i t 1. Intellectual Property
1. Speak about intellectual property of the company HighUp. You may

also refer to Business File 4.
Start as follows:
Intellectual property is one of the most valuable assets. HighUp's IP is its
patents, the recognised trademark, its copyright and the trade secret.
The company's patent rights include ...
The company's trademark is ...
... are copyrighted.
... are referred to as the company's trade secret.
2. Make up a similar list of Intellectual Property items for the following
companies:
a) a company producing office furniture;
b) a company producing tools for left-handed people.
Intellectual Property Types

(according to the USA laws)
recognise - зд. признавать; узнавать
recognised - общепризнанный; узнаваемый
fair use - допустимое, добросовестное использование
novel - новейший
nonobvious - неочевидный (такой, который не может придумать
любой другой)
mislead - вводить в заблуждение
be confused - спутать, перепутать
likelihood of confusion - вероятность, возможность перепутать (торговые марки)
infringe - нарушать авторское право, право интеллектуальной
собственности
piracy - нарушение права интеллектуальной собственности,
авторского права
passing-off - коммерция под чужим именем
Patents
A patent is the exclusive right, or a document granting the inventor

this exclusive right to make, use, and sell an invention for the period of
20 years from the date. The application is made in the United States
Patent and Trademark Office.
To be patented, something must be novel (that is, very new,
something that has ever been patented), useful (applicable and
necessary), and nonobvious (means that the idea of the invention has
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not been too obvious for ordinary professionals of the same field of
knowledge).
A patent is granted if these three major requirements are met.
Any company doing business on the Internet should thoroughly
explore the possibility of applying for software patents a n d / o r for
methods of doing business patents including methods of doing
e-business.
1. Make up a statement that sums up the information (refer to the

Grammar Supplement, Conditionals section — type 0).
If your invention is ... a patent is granted.
2. Prove that the following statement is true:
The extended definition of a patent provides information on: a) the period the
right is given; b) the office that registers inventions; c) the three requirements
for obtaining a patent; d) patents for computer software and e-business.
3. Give examples of the latest inventions and comment whether they
were novel, necessary and nonobvious at the time of patenting.
Trademarks
A trademark must be registered. An application is filed to the US Patent
and Trademark Office to receive an approval. The Office may reject the
trademark if it doesn't meet certain requirements, for example there already
exists such trademark, or the word combination resembles a famous mark, or
the words are improper.
A trademark is a distinctive sign which identifies certain goods or services
as those produced or provided by a specific person or enterprise
In the trademark context, "distinctive" means unique enough to help
customers recognize a particular product in the marketplace. A mark may
either be distinctive as such (the mark is unusual, imaginative, for example
Apple for computers ) or may become distinctive over time because customers
come to associate the mark with the product or service (for example - IBM).
When registered the trademark is protected by IP law. A trademark
permits the consumers to be certain that the product they buy is reliable, that
it is from the same producer. Nobody is allowed to use the registered
trademark and mislead the consumers.
The same legal protection concerns service marks used by service
businesses such as fast food, photo shops, legal services.
A trade dress for packaging and special decor serves the same function as a
trademark or service mark - the identification of goods and services in the
marketplace - a trade dress can be protected under the federal trademark laws
and in some cases registered as a trademark or service mark with the Patent
and Trademark Office.
A trademark in Internet usually is a domain name and it is protected by law.
184
1. Make up statements that sum up the information (refer to the

Grammar Supplement, Conditionals section — type 0 and type I).
A trademark is registered if it is distinctive and meets the following
requirements:...
If you intend to protect your domain name,...
2. Define what the requirements for a trademark are.
3. Give some examples of a distinctive and recognized trademarks. Give
an example of a famous trade dress.
4. How and why are trademarks protected by IP law?
5. Do you know any cases of misleading trademarks? If you don't there
is a prompt: McSleep, Koke Company.
Copyright
Copyright Law protects works of art, literature, music, drama, movie
production. The US Code defines w hat may be copyrighted:
"(a)
Works of authorship include the following categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculpture works;
(6) motion pictures and other audiovisual works;
(7) sound recording; and
(8) architectural works.
(b) In no case does copyright protection for an original work of authorship
extend to any idea, procedure, process, system, method of operation, concept,
principle, or discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work."
(U.S.C. §102 (1992))
Copyright includes the right to reproduce and

distribute copies of the work, make derivative works derivative
(for example, movie version of a book), perform and производный от ос-
новного, созданный
display works. на основе (напр., эк-
Registration with the US Copyright Office is not ранизация)
obligatory. A copyright is secured once the work is
created. A copyright lasts for the life of the creator plus
50 years.
The rights of the author, or copyright owner, are not
absolute. Fair use provisions of the copyright law allow
185
for limited copying or distribution of works without

author's permission in special cases, such as: quotation of quotation
extracts, criticism, commentary, teaching materials. цитата
Digital technologies enable the creators of
copyrightable works to make their works widely
available. Materials can be transmitted, copied and
re-distributed. Special provisions of copyright law
protect from unauthorised usage of such materials.
Computer programs are also copyrightable.
1. Give examples of each copyrightable "work of authorship" (1)-(8)
listed in the citation from the US Code.
2. What cannot be copyrightable?
3. How long does a copyright last?
4. What is possible to do with copyrighted works under fair use
provisions?
5. Make up statements that sum up the information (refer to the
Grammar Supplement, Conditionals section — type 0 and type I).
If you have recorded a disc ...
If an article contains quotations and criticism ...
A web-master should copyright his work if...
Trade Secrets
A trade secret is defined by the law as information including a
formula, pattern, compilation, program, device, method, technique or
process used in a business. This information gives its owner an
opportunity to gain advantage over competitors, and thus must not be
disclosed.
Trade secret needn't be registered. A company usually requires that
the employees sign the non-disclosure agreement. So they are liable if
confidential information is made public or is transferred to competitors.
Make up statements that sum up the information (refer to the Grammar
Supplement, Conditionals section — type 0 and type I).
If a company wants to avoid disclosure of its trade secret...
A US law firm collected some frequently asked questions (FAQs) that the
clients seek answers for. Imagine you work for this firm, and you were assigned
to prepare the answers that will appear on the Internet site. The information
given above is brief and rather formal. The answers should be given in plain
English so that a lay person can easily understand them.
Note: lay person - неспециалист
186
U n i t t . Intellectual Property
Why do I need to patent my invention?

e.g. When you patent your invention you are granted the exclusive right to
make, use and sell the invention.
How long does a patent last?
Where do I register patents and trademarks?
Can my application for a patent be rejected? If yes, on what grounds?
How should I chose a trademark?
What priviledge does a registered trademark give?
We use very specific packaging for our products. Can it be protected?
What is copyrightable?
I've got a brilliant idea and I want to copyright it. How can I do it?
We want to copy some manuals for our training course classes. Should we
refer to the author or publishing house for permission?
What exactly referes to the trade secret category?
I am starting a business. How can I protect my business confidential
information?
Develop legal advice completing the following sentences. (If clause I -

modal can or have to in the main clause; refer to the Grammar Supplement,
Conditionals section.)
e.g.
IF your invention is novel, useful and non-obvious you can obtain a patent / it
can be patented.
IF you have created a work of art you ...
IF you want your product to be distinguished from the others ...
IF you don't want everybody to be aware of the secrets of your business ...
IF you are developing your own website ...
Legal Counseling
Presentation Basics
You work for a law firm K&Q.
The company HighUp is a new client of the firm. You were assigned
to make a presentation about the intellectual property rights at the
general meeting of the corporation shareholders.
The plan to get prepared is as follows:
- Go back to Intellectual Property in Business in this Unit to
review information about the company HighUp.
187
P a rt IV. Legal Framework of Company Operation
- Refer to the Presentation section in Functions Supplement and

study the information about presentation basic skills.
- Read carefully the presentation sample in the Presentation
section that turns to be very helpful as it concerns particulars of
HighUp operation.
- Refer to the Connectors section in Functions Supplement to find
out more about the text structure.
- Review the above given information on patents, trademark,
copyright and trade secret.
- Make up your presentation in which you'll speak about IP types of
the company backing up legal matters by processed information
from the marketing director's presentation.
Your presentation will consist of at least four parts.
Pattern for the introduction:

Good morning ladies and gentlemen,
I'm (name, surname) and I represent the law firm ... that is performing legal
assistance for HighUp. 1 work in Commercial Group of the firm, and I've
been specializing in Intellectual Property Law for about... years.
Today I'm going to be talking about intellectual property as it's one of the
vital assets for every business, and HighUp is the lucky owner of a number
of valuable patents, a renown trademark and even service mark, copyright
and trade secret of course. So I've devided my presentation into 4 parts. |
In the first part I'll be speaking about...
Then ...
Then...
Finally,...
So, let's get started.
Legal Knowledge
Trademark Registration
What are the steps
to get a trademark protected by law?
1. Create a distinctive trademark which means that
you choose a unique memorable name that will
distinguish your product from the similar ones in the
marketplace. It's better to choose a so called inherently inherently
distictive trademark. по существу
Typically, inherently distinctive marks consist of:
- unique logos or symbols, such as the M&S
(Marks and Spencer) and the IBM symbol;
188
- made-up words fanciful such as STARBUCKS

or YAHOO;
- words that are surprising or unexpected for the
product or service, such as APPLE for computer
company; PINGUIN for book publishing;
- words that cleverly connote qualities about the connote
product or service, such as 7-ELEVEN for a shop вызывать смысло-
that is open from 7 a.m to 11 p.m. or FLORIDA вые ассоциации
TAN.
It's possible to use descriptive trademarks that
describe the goods or service they market.
COMPUTERLAND for a computer store, VISION
CENTER for an optics store, GRAPHIC IMAGES
GIC for grahic design company.
2. Search database, before filing your application, to
determine whether anyone is already claiming
trademark rights in such a mark.
You may conduct a search online via electronic
search system database. If your mark includes a design
element, you will need to search it by using a design
code.
Mind that the trademark you've created must not
conflict with existing registered trademark.
3. Now that you have chosen your mark and
conducted a trademark search, you will need to draft a
description of goods and/or services. A trademark
application is incomplete without a statement
identifying the goods and/or services with which the
mark is used or will be used. The identification of goods
and/or services must be specific enough to identify the
nature of the goods and/or services.
4. Another consideration is the depiction of your
mark. Every application must include a clear
representation of the mark you want to register.
5. File your trademark application either straight to
the authorised agency, or through specialized online
service, or with the assistance of a lawyer.
1. Pairwork. Ask each other in turn:
- How to create a distinctive trademark?
- Why is it necessary to make a search of existing trademarks?
- What is a description of goods or services?
- Does the depiction mean a graphic image of a mark?
- How can I apply a form?
189
2. Devise what kind of company you "have" and create a trademark with
a depiction.
Discuss with others whether your trademarks are distinctive and
would they be registered.
Legal Expert
To learn more about the intellectual property read the following
intervew of a British correspondent with an American IP lawyer.
(C - correspondent; D - Mr Davies)
While reading the interview focus on:
- the reasons for intellectual property protection;
- the responsibilities of related administrative bodies and
organizations.
(Pay attention to the phrases used to express agreement.)
C.: Today we are going to talk about the intellectual property rights
protection. Our guest speaker is Mr Davies who is specializing in IP
Law. Mr Davies, why is it important to protect IP rights?
D.: There are several reasons. But first let me remind you that intellecual
property is the product of mind that comes into existence through a
creative process. That's why protecting IP rights we encourage and
reward creative work. Most societies consider IP laws to be effective
means of doing it. Inventors, authors, creators and designers must be
provided a favourable legal environment if we want our civilization to
progress.
C.: I totally agree with you. Development of new tecnologies is a primary
economic objective.
D.: That's another reason of IP rights protection - the promotion of
technological innovation.
Businesses should see all the benefits from investing in research and
development, and wise IP policy can make it possible.
C.: What about the exchange of ideas? Thomas Jefferson, a famous
American president, said that "ideas should be spread from one to
another over the globe, for the moral and mutual instruction of man,
and improvement of his condition, seems to have been peculiarly and
benevolently designed by nature."
D.: I can't but agree here. I'd like to point out that the process of
spreading, or exchanging of progressive ideas is possible and effective
only under strict IP laws provisions. The rights of intellectual
property owners must be protected from unauthorised use or even
piracy.
C.: Now, I guess, the next reason for IP protection is maintaining fair
competition.
190
D.: That's exactly the point. The protection of trademarks, copyrights,

patents and trade secrets ensures fair competition among businesses.
Moreover, IP protection ensures the protection of consumers as well.
A registered and distinctive trademark defines the origin of goods.
C.: So, to sum up, you've mentioned five main reasons of intellectual
property rights protection. Now let's move on to the next item of the
discussion. I mean government bodies, associations and international
organizations that are responsible for intellectual property policy.
D.: O'K. And I'd like to clarify that responsibility in terms of activity
means not just to protect. It is to promote understanding and
cooperation, to draft legislation, to advise, to analyze, to provide
expert assistance, to register and process applications, to adjust
complaints, and, of course to enforce law.
C.: You're absolutely right. These functions are fulfilled by the
government department agencies or offices. For instance, in the
United Kingdom, the UK Patent Office is the main governmental
body for IP, which both registers rights (patents, designs and trade
marks) and bears responsibility for nearly all IP policy, including
unregistered rights such as copyright. It is an executive agency of the
Department of Trade and Industry (DTI) which itself sponsors many
areas of industry and business, including e-commerce, where IP is
important.
D.: In the USA it is the United States Patent and Trademark Office
(USPTO), a federal agency in the Department of Commerce that
besides the registration and processing of applications promotes an
understanding of intellectual property protection. Then we have
the Copyright Office, a department of the Library of Congress, the
office of record and claims, which also provides expert assistance to
the Congress on intellectual property matters, analyzes and assists
in the drafting of copyright legislation and legislative reports.
Law enforcement is executed by the US Department of Justice
Criminal Division, Computer Crimes and Intellectual Property
Section.
C.: Due to the globalization and electronic media trends intellectual
property protection has become internationaly important, even
vital.
D.: Yes, that's quite true. But the necesity to set up an international
strategy on IP protection emerged even earlier. In 1967 the World
Intellectual Property Organisation (WIPO), the nation-state
membership organization that administers international treaties
dealing with different aspects of intellectual property protection, was
established. It's essential to highlight that not only W I P O but also a
great number of national and international organizations are working
out the joint policy on harmonization of IP laws.
191
C.: Of course our readers would like to know more about these
organizations, but we have to stop here now. Luckily, the interview
will be supported by extra brief information that you've kindly
supplied. Thank you, Mr Davies.
D.: Thank you. I've really appreciated our talk.
1. What arguments in the interview support the following five reasons of
IP rights protection:
- encourage and reward creative work;
- promote technological innovations;
- ensure fair competition;
- provide protection of IP owner's rights;
- provide protection of consumers.
2. Answer the following questions:
What is a favourable legal environment for creators, authors and designers?
Why does business benefit from investing in R&D?
What is fair competition in terms of intellectual property rights protection?
3. Make up the following assumptions (refer to the Grammar
Supplement, Conditionals section - type II):
- If creative work were not encouraged
- If technological innovations were not promoted
- If progressive ideas were not exchanged
- If fair competition were not ensured
- If IP owners' rights were not protected
4. Give commentary to the quotation of Thomas Jefferson's words.
5. Speak about the responsibilities of government bodies and
organizations in pursuing IP protection policy.
6. Speak about the reasons for elaborating international strategy of IP
protection.
Refer to the Reading Supplement section to read about the History

of Intellectual Property.
In the Reading Supplement section you are supposed to read more
about cyberspace intellectual property protection in the text Internet
Law.
Find out:
- if there is really such law as Internet Law;
- why it is essential to protect IP in cyberspace;
- what types of IP relate to cyberspace.
W h a t do you know about E-commerce?
The second part of the Internet Law text is devoted to this issue in
terms of IP protection.
192
intellectual Property Infringement

Core Vocabulary 2
Synonyms
infringe - to encroach, trespass - нарушать, посягать на чьи-л.
права
to infringe the copyright
infringement - нарушение; посягательство
infringer (n) - нарушитель
breach - to break or violate (an agreement, for example) - нарушать
закон, соглашение и т. д.
breach (n) - a violation, as of a law, regulation, or agreement - наруше-

ние
Litigation vocabulary
plaintiff - a party that brings a legal action - истец (в суде) (до суда -
claimant)
defendant - a party against which an action is brought - ответчик
allege - to state without proof - заявлять; утверждать (без осно-
ваний)
A claimant brings an action against alleged infringer of the copyright.
seek - to require, try hard, labour - юр. добиваться, требовать
seek relief — to require protection, compensation or punishment - доби-
ваться судебной защиты, возмещения ущерба, наказания
The claimant seeks relief.
claim - to demand, ask for - заявлять претензию, иск, утверждать
claim (n) - иск, исковое заявление, жалоба
claimant - заявитель иска
The copyright owner files a claim (= files a lawsuit).
The plaintiff claims damages for the infringement of his exclusive rights.
motion - an application made to a court or judge to obtain an order,
ruling, or direction - ходатайство
motion for — ходатайство об упрощенном судопроизводстве (see
summary judgment Vocabulary Notes below)
The defendant, an alleged infringer, files a motion for summary judgment.
grant - to permit as a right or privilege - удовлетворить (иск, хо-
датайство ...)
grant relief - удовлетворить иск о возмещении ущерба
193
award - to give in accordance with a judicial or administrative

determination or decision - присудить
award damages
impose - to establish or apply by authority - назначить
(меру наказания), возложить, установить
impose a fine; penalty; an
injunction
impose a restriction/restraint - установить ограничение, ограничительную норму
impose a judgment - вынести судебное решение
The judgment is imposed at the end of a trial.
The court either grants the plaintiff's relief or grants the defendants motion.
The court awards damages or imposes an injunction.
restraining order - запретительный судебный приказ
Intellectual property laws protect the owner of the rights from

intentional or unintentional infringement.
Infringement is an act or an instance of infringing; especially: the
unauthorized use of copyrighted or patented material or of a trademark,
trade name, or trade dress.
The parties for litigation before the court are Plaintiff and
Defendant.
Study the chart showing the steps they take and the options of couit
decisions.
Plaintiff Defendant Court
- file a lawsuit -. be sued - grant relief

- allege wrongful act - (allegedly) infringe - grant motion for
(infringement) - cause the liklihood of injunction
- seek relief confusion - grant motion for
- seek punishment - prove (fair use, no summary judgment
- claim damages infringement....) - award damages
- motion for injunction - motion for summary - award relief
- appeal judgment - deny motion/damages
- appeal - impose a judgement
The Court's Decisions

A penalty is a punishment imposed on a wrongdoer by statute or
judicial decision.
Summary judgment is a procedure that permits a judgment to be
granted to all or part of a case if there is no real dispute in the evidence
that would require a trial to determine the facts. The judgment is often
prompt and direct.
Injunctions may be as follows:
Preliminary injunction is an order by the court requiring the
defendant to do or refrain from doing some action till the end of the
lawsuit. Sometimes in intellectual property litigation, the property
owner, soon after filing the complaint, will make a motion for a
preliminary injunction requiring the defendant to stop doing those
things the plaintiff alleges are infringing the plaintiffs intellectual
property rights.
Permanent injunction is a court order to prevent an action after the
plaintiff shows that a serious injury will result unless the relief is
granted. The judgment is imposed in the end of trial. Despite its name, a
permanent injunction does not last forever.
The court may impose a restraint order on the infringer by which he
is forbidden to continue his business activities.
Using the chart above train preparing information about procedures in civil
litigation.
The first column (1) is done for you.
For No. 3 (Court) you may add information on decision options for the court.
1. Plaintiff may file a lawsuit alleging wrongful act. Plaintiff may seek relief
so he can claim damages. Plaintiff may seek punishment for infringing
party, and can file a motion for injunction. If court decision is not
satisfactory Plaintiff can appeal to higher court.
2. Defendant...
3. Court-Judge...
Legal Knowledge
Infringement of Trademark
Unauthorized use of a protected trademark or service mark, either entirely
or to a substantial degree, or use of something very similar to a protected mark
constitutes an infringement.
The trade mark needn't be obligatory registered in order to obtain
protection by law. The success of a lawsuit to stop the infringement turns on
whether the defendant's use causes a likelihood of confusion in the average
consumer. If a court determines that the average consumer would be confused,
the owner of the original mark can prevent the other's use of the infringing
mark and sometimes collect damages.
195
The plaintiff can also claim that his trademark is dilute

ослаблять
diluted by the infringer. Dilution is diminishing or
damaging the value of a famous trademark. For
example, using Lloyd's as the name of a shiping agency
would not be a legal trademark since it devalues the
existing insurance company.
Infringement of Copyright
Infringement is any unauthorized use of a
copyrighted work, but fair use, that is reproduction
that doesn't have to be exactly the same as the original
work. Moreover, the reproduction of a substantial part
of the work constitutes copyright infringement. The
copyright owner may file a lawsuit to seek injunction
for to stop the infringement and sue the infringer for
damages. If the copyright owner has failed to register
the rights, he will still enjoy legal support.
Copyright infringement in computer software can
include literal infringement, non-literal infringement, Literal / non-literal
copying of graphical user interfaces or visual displays, infringement
буквальный / небук-
or copying of a software interface. Copyrights on вальный
literary works as electronic content may also be
infringed on the Internet by linking deep into a web
site and avoiding its home page and by framing content
on second web site from a first web site.
Infringement of Patent
Violation of a patent, occurring when someone else
is making, using, or selling the invention described in
the patent, or a product that is functionally equivalent
to the invention described in the patent, without the
patent holder's permission.
Infringement of Trade Secret

If someone unlawfully gets hold of a trade secret
and uses it in his own interests, a trade secret
misappropriation Occurs. An employee who has signed
a non-disclosure agreementlaw in this case breaches
confidentiality or contract. Payment of damages and
attorney fees are usually awarded to the plaintiff by the
court. Trade secret misappropriation may be misappropriation
considered as theft or espionage, and these are crimes незаконное присвое-
punished with severe penalties.
196
An IP lawyer specializing in litigation should know and remember certain

provisions.
Match the two parts of the sentences below to make useful notes (refer to
t h e G r a m m a r S u p p l e m e n t , C o n d i t i o n a l s — t y p e 0 a n d t y p e I).
1. If a firm makes and sells another firm's its IP rights will be

patented product without the patent owner's nevertheless protected by law.
permission
2. If a substantial part of the original is the firm will be sued by the
reproduced rights owner.
3. If a firm operates under another firm's no relief is awarded by the
registered trademark using it entirely or court.
partially
4. If company's secret information is disclosed it's the case of copyright
by one of the employees infringement.
5. If the loss from IP infringement is severe the tort of patent infringement
exists.
6. If the alleged infringer proves fair use of the the plaintiff may ask the court
reproduced material for an injunction.
7. If the firm failed to register the trademark or the company will sue him for
copyright trade secret misappropriation.
See p. 203.
Refer to the Statutes Supplement section where you can read two
statutory quotations from:
- Statute United States Code on copyright fair use;
- Lanham Trademark Act.
Legal Counceling
Read the following situations and decide whether these are cases of
IP rights infringment. Comment on each situation.
1. Helen Fabulator starts a business - she prints, distributes and sells
postcards with photoes of landscapes and streetscapes which she finds in
Best View - a photo magazine for professionals. Can Best View file a suit
alleging copyright infringement? Comment.
2. Joe Trickster and Tom Dodger have come up with a commercial idea. In a
small workshop they produce ballpoint pens and sell them under the
trademark Bik. Is it possible for the company Bic, famous ballpoint
197
producer, to prove likelyhood of confusion and seek for injunction and

damages? Comment.
3. Nick Wise, an amateur inventor, who lives in a small town in the
mountains, has invented a device to clean snow from roofs and started
selling it locally. He doesn't follow technological news, so he is not aware
of the fact that a similar device has been invented and patented by the
company Cool Minds. Can he claim damages if he learns about Cool
Minds device? Can Cool Minds sue him for patent infringement?
4. Roy Host runs a restaurant. His chef Luidgi makes a range of special
dishes which are the restaurant's brand. The recipe is kept a secret. After
one of chefs assistant had quit, these dishes appeared on the menu of
Host's competitors. What relief can Roy Host seek in court?
Pairwork
Choose one or two (or maybe all four) situations to do pairwork with your
partner.
A client (1-4) comes for an interview seeking good legal advice.
For the reasoning use the information of Essential 2.
Types of IP Infringement
Under common law jurisdiction applicable laws in IP infringement
cases can be either Law of Torts or Criminal Law. If the infringer
commits a private (civil wrong) wrong against an individual or a
business, the damaged party brings the suit to court seeking relief. If the
infringement constitutes a severe wrong, committed willfully,
knowingly and intentionally, a criminal prosecution is started by the
government, and punishment is sought.
Types of Criminal Offence

Felony is a very serious type of criminal offence punished by
imprisonment.
Misdemeanor is a minor class of offence punished by a fine or a short
term of imprisonment.
Crimes Related to IP Rights Infringement

Give the definitions of such crimes as espionage, fraud, forgery, theft,
counterfeiting and piracy.
(You are supposed to know or guess the meaning, but can look up the
dictionary to find out and be ready to explain.)
198
There are also specific crimes such as:

- passing-off - коммерция под чужим именем;
- trafficking - торговля запрещенным товаром (контрабанда).
How would you interpret these terms? Give examples, if possible.
Frequently asked questions about IP infringement
Find the answers ( A - G ) to the following questions ( 1 - 6 ) .
1. W h a t wrongs constitute the IP infringement?
2. W h a t are civil IP wrongs and what are IP crimes?
3. Why is it necessary to enforce law in order to prosecute IP crimes?
4. How is it possible to prove IP rights criminal infringement, of a
trademark for examle?
5. W h a t penalties are imposed for IP crime?
6. W h a t are cyberspace crimes?
A
Each of the wrongs can be both a tort and crime. Passing-off may be a tort,
but organized passing off is a crime, it's already traficking. Counterfeiting,
fraud, forgery and theft are classified as crimes. Theft of a serious trade secret
and espionage are felonies prosecuted by Criminal Law.
В
Under the US Law, to establish a criminal offence four elements must be
shown:
The defendant trafficked in goods or services.
The defendant did it intentionally to make a profit.
The defendant used a counterfeited mark.
The defendant knew that the mark was counterfeited.
С
These wrongs are passing-off, piracy, counterfeiting, which are commonly
used words. A passing-off in other words is trading under other than own
name or mark. Piracy refers to copyright infringement. Counterfeiting is a
kind of fraud or forgery. Trade secret misappropriation is also an IP
infringement.
D
Under the US Law, for trademark trafficking first offense is 10 years'
imprisonment and $2,000,000 fine (individual) or $5,000,000 fine (corporation).
For copyright criminal infringement the court decides whether the crime
is a felony or misdemeanor. For felony the sentence is from 3 to 10 years, and
$250,0006 fine for misdemeanor, 1 year, $100,000.
E
A cybercrime in its broadest definition could be considered any crime
committed through the medium of a computer or other relevant information
technologies. The specifics of these crimes is that they exist outside the
199
material world and at the same time may effect anybody. The types of crimes
commited through Internet are "familiar" - fraud, trade secret
misappropriation, piracy etc. There are also specific cyber crimes: hacking,
cracking and spam. But the virus attacks have become the most violent crime
today. Because of this, cyberspace intellectual property protection is the
problem of international concern.
F
Infringements of intellectual property are ruinous for any country's
economy. Counterfeiting of trademarks and unauthorised usage of copyright
cause enourmous losses to the right holders. The right holders may bring an
action to court and be granted damages in a civil lawsuit, but a wide- range
wrongful activity can be restrained only by imposing criminal sanctions.
Sometimes right holders are not even aware that a violation of the IP right is
being committed, and the infringer can be identified only in the course of a
special investigation.
See p. 203.
Practise with your partner to ask and answer these questions.
The following is a case summary of

C O M P A Q C O M P U T E R V. E R G O N O M E et al.
First Ergonome started an action against Compaq alleging the
company of copyright infringement, Compaq filed a cross-claim.
Read the case to find out the arguments of the court based on the
United States Code definition of fair use (refer to the Reading
Supplement section, US Statutes on intellectual property to read the 17
U.S.C. §107 on copyright fair use).
COPYRIGHT; FAIR USE
Plaintiff Compaq Computer filed suit against Defendant Ergonome and
others seeking a declaration that Compaq did not infringe upon Ergonome's
copyrighted material. Ergonome subsequently filed an infringement action
against Compaq that was consolidated into the present suit.
The dispute arose over Compaq's use of four images and seven phrases from a
copyrighted book of Ergonome's, titled Preventing Computer Injury: The Hand
Book. At the trial level, the jury concluded that Compaq's use of Ergonome's
copyrighted material was de minimis and constituted "fair use" under 17 U.S.C.
§107. To analyze whether use of copyrighted material falls under the "fair use"
exception, four factors need to be considered in their totality. Specifically:
Purpose and Use - commercial. The court held that while commercial,
such fact is not dispositive of "un-fair use."
200
Nature of the copyrighted work. Here, the court held that originality in
work is required, but in factual work, "selection and arrangement" are enough
to clear this low hurdle.
Substantiality in proportion to overall work. The court determined that
Compaq utilized a very small proportion of Ergonome's overall work.
The effect on the potential market or value of the copyrighted work. The
court felt that this most important factor weighed heavily in favor of Compaq,
thus confirming the trial court's verdict in favor of Compaq - no copyright
infringement.
The court affirmed the trial court's decision to grant Compaq $2.8 million
in attorney's fees. The high fees is the result of expensive discovery arranged
by Defendant.
Prepare lawyer's commentary and analysis of the case.
Two more case summaries to be discussed.

Look through the headnote: first is the topic, then the identification
of the parties. Then comes the date and the court; the words Before:
Name (give the name of the judge). There are also block letters and
numbers that show the citation - abbreviation of the source of original
legal case text.
Plan of discussion:
1. Report the facts of the case in longer sentences than they are given
un the summary.
2. Define more detailed arguments for each party.
3. Refer to the material in the Unit to explain the applicable law
provisions (e.g. fair use of copyright or trademark infringement).
4. Explain the court's reasoning.
TRADEMARK
Caterpillar Inc. v. Walt Disney Co.
No: 03-1334 (October 20, 2003)
United States District Court, Central District of Illinois
Before McDade
For full opinion: 2003 U.S. Dist. LEXIS 18618; 2003 WL 22384756,
Plaintiff Caterpillar Inc. filed a temporary restraining order against
Defendant Disney to prevent the release of "George of the Jungle 2" on VHS
and DVD. The trademark infringement claim arises in the film when George's
enemies drive bulldozers (clearly bearing the Caterpillar trademark), in an
attempt to destroy Ape Mountain. The court found there would be no
likelihood of confusion among consumers (most of whom are children), that
Caterpillar somehow acted as a sponsor in the Disney film. Caterpillar
201
advanced the argument that its bulldozers, driven by evil henchmen seeking to
destroy George's jungle homeland had the effect of diluting Caterpillar's
trademark, and tarnishing the trademark's reputation. The court ruled that
without proof of lost sales, or consumer surveys showing tarnishment or
dilution, Caterpillar's claims fail. The court also reasoned that even young
viewers would recognize the fact that the human drivers in the film were evil,
and not the Caterpillar bulldozers themselves. The court denied the restraining
order, concluding that the resulting harm from not granting a restraining order
to Caterpillar is slight; while the harm would be high for Disney.
TRADE DRESS INFRINGEMENT

Philip Morris USA, Inc. v. Cowboy Cigarette, Inc.
No: 03 Civ. 2292 QSR) (December 2, 2003)
United States District Court for the Southern District of New York
For full opinion: 2003 U.S. Dist. LEXIS 21582
In a legal "shoot out" between the plaintiff, Phillip Morris USA (the owner
of the Marlboro cigarette company), and the defendant, Cowboy Cigarette,
the court found that Cowboy Cigarette's use of western cowboy imagery
(substantially similar to the Marlboro man), combined with red and white
packaging (substantially similar to Marlboro packaging), would create a
likelihood of confusion among consumers, and therefore, Cowboy Cigarette
had infringed upon Phillip Morris USA's trade dress. The court found no
inherent distinctiveness in the Marlboro design, because the image of the
Marlboro man had acquired secondary meaning in society.
Undoubtedly, you have heard about cyberspace crimes - hacking

and computer viruses. You can find out more about these and other
cyberspace crimes in the Reading Supplement section in the text
Cyberspace Crimes.
The information can initiate a discussion. Besides you may be aware
of some facts related to the issue.
As lawyers you will be interested in the latest legislation concerning
World Wide Web.
In the Reading Supplement section there is useful information:
Digital Millenium Copyright Act. If you haven't heard about this
document, read the text.
Intellectual Property is one of the multiple practice areas of the firm

you work for. Your range of expertise includes also International IP
issues.
202
Your client is going to form a joint stock-company with an American

business partner and they both are in the process of negotiations. The
issue your client is discussing with you concerns Intellectual Property
matter, namely the trademark of the enterprise that is about to enter the
international market.
As you advise to register the trademark in the USA, where the
American company has been incorporated and the major division of
potential business is going to operate, you are to write a letter (e-mail)
to the US partner and set forth the plan of action.
You should:
- point out the necessity of having strong trademark competative on
the market;
- explain what a distinctive and inherently distinctive mark is;
- outline the registration requirements and explain how to apply
with the USPTO;
- highlight that the US registration is recognized in the world;
- offer your services with further Russian company registration
formalities.
Write the letter according to the standard given in the Functions
Supplement, Coorespondence section.
Note. Remember to give names to the client and the American businessman.
P. 197:
1. If a firm makes and sells another firm's patented product without the
patent owner's permission, the tort of patent infringement exists.
2. If a substantial part of the original is reproduced, it's the case of
copyright infringement.
3. If a firm operates under another firm's registered trademark using it
entirely or partially, the firm will be sued by the rights owner.
4. If a company's secret information is disclosed by one of the
emloyees, the company will sue him for trade secret misappropriation.
5. If the loss from IP infringement is severe, the plaintiff may ask the
court for an injunction.
6. If the alleged infringer proves fair use of the reproduced material, no
v
relief is awarded by the court.
7. If the firm fails to register the trademark or copyright, its IP rights will
be nevertheless protected by law.
P. 200:
1C 2A 3F 4B 5D 6E
203
Unit 2
Products Liability
Products liability means responsibility imposed on a producer or service

provider for the quality of the product or service.
1. Are you aware of the way the product is manufactured? What is done to
ensure the quality and safety of the goods?
2. Comment the following statement: Businesses are liable for the product
they make and sell, or for the services they render.
3. How are consumers protected from the defective goods? Should a lawyer
support consumers in their claims for defective goods or should a lawyer
act for businesses in such suits?
4. Have you ever bought something that appeared to be faulty? If yes, what
steps did you take? Did you raise a claim against the seller or producer?
What were the results?
5. How often will you deal (or have you dealt) with cases that involve
personal injury caused by defective products?
6. Are you ready to back your corporate client whose production is alleged
to have injured a consumer or consumers?
Core Vocabulary 1
products liability - ответственность за качество производимой продукции или
оказываемых услуг
product - продукт, продукция
merchandise - товары (для торговли)
goods - товары, изделия
safe/unsafe - безопасный / небезопасный
safety - техническая безопасность, меры техники безопасности
defect - дефект, неисправность, брак
flaw - изъян
faulty goods - бракованные изделия
warning - предупреждение
take precautions - соблюдать меры предосторожности
foresee - предвидеть
foreseeability - предсказуемость, предусмотрительность
recall - отзывать продукцию (из-за выявленных дефектов)
204
U n i t 2. Products Liability
be in the stream of commerce - быть выпущенным в продажу

reasonable - разумный (зд. reasonable person - обычный,
здравомыслящий человек)
reasonably - резонно
duty of care - обязанность соблюдать необходимую осторож-
ность
Every year, thousands of consumers sustain serious injuries from

defective products. Many of such injuries could be avoided if the
manufacturers or distributors of these products took all precautions to
ensure consumer safety.
Quality control is number 1 priority. The product entering the
stream of commerce must not have any actual or potential defects or
flaws. The manufacturer must foresee any possible danger in handling
some kinds of goods. Thus, there must be a warning attached to such
product. Exercising the duty of care, a manufacturer, or distributor, or
seller, gains goodwill and spares himself from product liability lawsuits.
The reasoning runs as follows:

If we presume that
Whatever is produced, distributed or sold will be finally consumed or
used,
Then we can state that
The producers, distributors and sellers have to provide quality and safe
products in order not to do harm to or even damage, and on no account
injure, the consumer or user.
And as soon as we presume that
Safety and quality standards have been complied in a prototype, a
product, then in merchandise or goods,
We may mean that
There isn't any defect or flaw that can prevent the consumer from using
the purchase or do the consumer any harm.
Thus,
Unless the producer, distributor or seller reasonably foresees the flaws
and takes all precautions to avoid introducing faulty products in the
stream of commerce, including tests, certification, control and
warnings to the consumer, and in case they find out the defects and fail
to recall the product or goods, the products liability case will be
brought to court.
Analyze the information in the text to work out the obligations imposed
on manufacturers, distributors and sellers of goods.
205
Part IV. Legal Framework of Company Operation
Core Vocabulary 2
duty of care - обязанность соблюдать необходимую осторожность;
a duty to use care toward others that would be exercised by an ordinarily resonable
and prudent (cautious) person in order to protect them from unnecessary risk of
harm
reasonable care - разумная степень осторожности;
the care that a reasonable man would exercise under the circumstances; the standard
for determining legal duty (also due care)
breach of the duty of care - нарушение обязанности соблюдать осторожность;
failure to fulfil the duty of care
Every manufacturer of a product, especially of a potentially dangerous product, must
exercise the duty of care.
Every consumer of a potentially dangerous product must exercise reasonable care while
handling the product.
Breach of the duty of care resulting in a defect or flaw in any product, especially
potentially dangerous product, may cause great ham.
foreseeability - предусмотрительность;
ability to foresee the risk of harm
Foreseeability of risk must be exercised not only by a producer, or distributor, or seller,
but also by the consumer when handling a product.
negligence - халатность, неосторожность;
a tort; failure to exercise the degree of care considered reasonable under the
circumstances, resulting in an unintended injury to another party
contributory negligence - неосторожность, вина, потерпевшего;
negligence on the part of a plaintiff, not only on the part of a defendant
Negligence has been committed if the following elements are present:
a) the defendant owed a duty of care to the plaintiff;
b) the defendant breached that duty;
c) the plaintiff suffered an injury;
d) the defendant's breach of duty of care caused the plaintiff's injury.
If both parties have been negligent and their negligence combined to cause an injury, the
court constitutes contributory negligence.
strict liability - строгая ответственность; объективная ответствен-
ность;
liability that is imposed without a finding of fault
Strict liability is usually imposed on a producer of some potentially dangerous products
or products that need special precautions to be taken in handling them.
206
guarantee - гарантия;
a promise or an assurance, especially one given in writing, that attests to the quality
or durability of a product or service
warranty - гарантийное обязательство;
a guarantee given to the purchaser by a company stating that a product is reliable
and free from known defects and that the seller will, wit hout charge, repair or replace
defective parts within a given time limit and under certain conditions
In tems of products liability this is usually warranty, but not guarantee that is taken
into consideration.
breach of warranty - нарушение гарантийного обязательства;
a breach by a seller of the terms of a warranty (as by the failure of the goods to
conform to the seller's description or by a defect in title)
The breach of warranty or the failure to provide conforming goods makes the producer-
liable for the defective product.
compensatory damages - реальные/фактические убытки
punitive damages - штрафные убытки;
damages awarded in cases of serious or malicious wrongdoing to punish or deter the
wrongdoer or deter others from behaving similarly
In products liability lawsuits, as in most tort lawsuits, the plaintiff claims compensatory
damages, but the court may award punitive damages as well.
class action — групповой иск;
an action in which a representative plaintiff sues or a representative defendant is
sued on behalf of a class of plaintiffs or defendants who have the same interests in the
litigation as their representative and whose rights or liabilities can be more
efficiently determined as a group than in a series of individual suits
Class action in product liability cases successfully held by a lawyer specialising in
litigation can result in million dollar damages award.
defense - аргументация ответчика / подсудимого; возражение
ответчика / подсудимого; возражение по иску, обви-
нению;
(Law) The defendant's answer or plea; an opposing or denial of the truth or validity
of the plaintiffs or prosecutor's case; the method of proceeding adopted by the
defendant to protect himself against the plaintiff s action.
In product liability cases the defendant may reduce liability by proving one or more of
the product liability defences, such as proof of contributory negligence or misuse of a
product.
misuse - ненадлежащее использование;
failure to use the product in the way it should be used or handled
Misuse of a product by the plaintiff can be a manufacturer's defense in a products
liability case.
207
expert witness - свидетель-эксперт;

a witness (for example, a medical specialist) who by virtue of special knowledge,
skill, training, or experience is qualified to provide testimony to aid the fact-finder in
matters that exceed the common knowledge of ordinary people
The product liability trial is often called a battle of expert witnesses because only
qualified professionals can present evidence on the matters that concern
manufacturing defects.
malpractice - противозаконные действия или преступная небрежность
врача (мед. персонала) при лечении больного (также проти-
возаконные действия или небрежность юриста);
negligence, misconduct, lack of ordinary skill, or a breach of duty in the performance
of a professional service (as in medicine, healthcare - nurse, or lawyer) resulting in
injury or loss
Unfortunately, many of product liability claims concern malpractice of medical
staff.
After studying the vocabulary carefully read only the highlighted
information to get the outline of the matter.
Products liability is the area of tort law that deals with a

manufacturer's or seller's liability for injuries suffered by a purchaser or
user as a result of a defective product. Products may range from
low-tech, such as slippers, to high-tech, such as air conditioner, but in
any case the person who introduces a product into the stream of
commerce owes a duty of care, not only to the person who first
purchases the product, but also to anyone else who might foreseeably
come into contact with it. Thus, the duty of care and forseebility of any
possible damage are the basic principles of products liabilty.
The products liability lawsuit is the consumer's most effective
weapon against unreasonably dangerous products. A product can be
unreasonably dangerous for various reasons: there may be a
manufacturing defect, that is the result of the way the product was
made, or a design defect, resulting from initial design error or flaw. A
failure to warn the consumer of possible risks, or an inadequate warning,
also makes a product unreasonably dangerous.
There are three theories of liability in a product liability case:
- negligence;
- strict liability;
- breach of warranty.
An injured person, plaintiff, bringing the claim under any of these
theories will point out that the legal standards have been violated and
thus he, or she, has the right to recover damages - compensatory for
medical expenses, lost wages, disability, pain and suffering, o r / a n d
208
punitive in order to punish the defendant. However, defendants may try

to prove that it was the plaintiff s negligence who has failed to handle
the product carefully or just misused it.
If several individuals have similar claims to a producer of a defective
product, they can join together in class action, which will make the case
far more costly for the defendant.
The producer may admit liability and settle the claim. If the producer
denies the liability, he and his attorneys must prove it, and there are
certain defences to do so. It's common practice to bring expert witnesses,
who provide qualified estimation of the defect and its consequences.
Lawyers practicing in Products Liability Law are both advisors on a
wide range of issues and first-class litigators.
1. Compare the information given in the text with the highlighted
examples for the definitions in the Core Vocabulary.
How do the examples compliment the facts in the text?
2. Give answers to the following questions:
What is products liability and what are its basic principles?
Who must exercise the duty of care?
What is an unreasonably dangerous product? Potentially dangerous product?
What is negligence?
What are the theories in a products liability case?
When does an injured person have a right to recover damages?
What is a class action?
How can a manufacturer reduce the liability?
3. Determine who is responsible in the following situations.
Then reason the decisions and add arguments using If-clauses type III
(see Grammar Supplement, Conditionals).
e.g.
If the manufacturer of a bicycle had exercised the duty of care the man
wouldn't have been injured.
a) A man has bought a bicycle and in two days a wheel comes off while the
man is riding it. The man is badly injured.
b) A lady bought a facial cream that caused heavy allergic reaction. The
doctor showed her a warning on the box which the lady should have read
before applying the cream.
c) The residents of a small town have been consuming dairy products
supplied by a local company to the shops. Some of these products, a new
make of yoghurts, caused serious indigestion. It turned out that the sellers
hadn't used the yoghurts knowing they were not reliable enough.
d) One night a shop where they have been selling fireworks went on fire. The
fire caused unreparable material damages to the neighbourhood property.
Luckily, no person was injured. The owner of the shop denies liability
because he had left two days before the fire occurred.
209
Legal Expert
An experienced Products Liability lawyer from the USA is giving the
following presentation at a conference for business executives.
The presentation is interrupted by the participants who ask
questions. The questions will help you to clarify the issues:
- Negligence.
- Strict liability.
- Breach of warranty.
Good morning ladies and gentlemen.

I'm here to speak about some aspects of Products Liability Law, namely,
the doctrines or theories that can be the basis of products liability claims.
Moreover, I'd like to outline the main elements of a products liability case. So,
there will be three parts. I'll begin by a short overview of negligence in
products liability cases, then I'm going to consider the issue of strict liability,
and finally I'll explain the breach of warranty matter. If anyone has any
questions, please feel free to interrupt.
OK, let's start. I presume that you all know that negligence as tort is the
failure to use such care as a reasonable and careful person would use under
similar circumstances. The liability imposed upon the producer includes the
duty of care at all stages of production and promotion: design, assembling,
even packaging and instruction. If this duty has been neglected and caused an
injury to the user, the latter is likely to sue the producer for negligence.
Q.: Excuse my interrupting you, but shouldn't producers take all
precautions? I mean safety standards, quality control, warnings on
the labels...
I assure you they must, and they are strainig to avoid negligence
allegations. But whenever a flaw occurs, the manufacturers prefer to recall the
whole batch of defected products from the market.
Q.: Would you mind explaining what the plaintiff must prove under the
negligence theory?
I've been just about to do it. Firstly, the plaintiff must prove that the
defendant, say manufacturer, though it can be a distributor or seller, owed the
duty of care to the users - he or she, or even they, should have foreseen the
dangers and risks. Secondly, the plaintiff must show that the defendant
breached this duty - that is, the design or manufacturing defect, or lack of
appropriate warnings has been found - and introduced an unreasonably
dangerous product to the market. Thirdly, the plaintiff demonstrates the
result of this fatal breach - the injury, and finally, proves that this injury has
been caused by the defective product.
Q.: Are these four the elements of negligence that a plaintiff has to prove?
You're absolutely right.
210
Q.: May I comment on that one? As far as I know, negligence is hard to

prove. We, manufacturers, fight back. We know the rules and do our
best to play fair game to avoid court trials.
Sure you do. But still when at trial you present your evidence and bring
your experts, while the plaintiff brings the expert witnesses as well.
And here I want to move on to the next part. Strict liability, that is the
most frequent theory under which a plaintiff sues in a product liability case.
Basically, strict liability is the liability imposed without finding fault, but I am
going to make a detailed commentary, as certain jurisdictions do not apply
this theory. The essential principle here is that a producer or seller is initially
liable for the unreasonably dangerous and defective product as soon as they
introduce it to the consumer.
Q.: I'm afraid I've missed something. But do you mean that the plaintiff
needn't prove anything?
It's not the way you put it. Strict liability isn't absolute liability. The
injured person can't merely claim strict liability and seek compensation.
Provided the plaintiff proves that unreasonably dangerous condition of the
product actually caused the injuries, the compensation is awarded.
Q.: Will you please give an illustrative example of products liability case?
Gladly. The case that has become products liability classics. Ms. Lieback
versus McDonald's. The lady was injured by the hot coffee served to her in a
plastic cup in a drive-through. Ms Lieback sued the company and was awarded
$260,000 compensatory and over $1 million punitive damages. After that
McDonald's started seving coffee at lower temperature in cups with covers.
By the way, you can find more summaries of products liability cases in the
brochure that we have provided you with.
Q.: Sorry, I think you've made a mistake. The recovery was $160, 000 of
compensatory and $2.7 million of punitive damages.
Thank you, madam. I've mixed the figures up.
And my last point today is the breach of warranty. For better understanding
let me again give you an example. You are producing toys for babies. Babies play
with toys, and you guarantee that babies can play with your toys, that is you
imply a warranty on the product. But when a baby takes your toy into the
mouth, and that is what they usually do, the poor thing's tongue and lips and
hands become red or yellow. You must have foreseen the bad effect, but you
failed and breached the warranty. The parents will definitely claim products
liability case and seek recovery. And not only one child's parents, but lots of
angry parents. And this is sure to be a class action case. But this is the theme of
our seminar. Thank you for atttention and for your questions.
a) You've attended the above mentioned "conference". Before this event
and knowing the theme of the discussion, you prepared the list of issues
that you wanted to clarify. Check if you have been informed on all the items:
- what to do if a flaw occurs in the product and a lawsuit is unwanted;
- if it is easy to prove negligence in a product liability case;
- how to prove strict liability;
211
- any most famous products liability case;

- whether warranty proves that all negative effects have been forseen;
- how to deal with class action.
b) Look through the text again and the questions below. Can you answer them?
- Can negligence be the claim of an injured person in a products liability case?
- What is the duty of care imposed upon producer?
- What must a plaintiff prove under the negligence theory?
- What's the difference between strict liability and liability under negligence
theory?
- How can a breach of warranty occur?
In the brochure you've got at the "conference" there is a puzzle you're

supposed to solve and thus get more information on the subject matter of the
discussion.
Match the two halves of each sentence (refer to the Grammar Supplement,
Conditional Clauses section). Write the sentences down in your notebooks.
1. In case the automobile producer he, alongside with the producer and
discovers a flaw in the cars they seller, would be held liable for any
manufacture harmful effect on the user's health
2. If only a distributor of pharmaceuticals the court will impose on him
failed to carefully check up the compensatory damages for both
certification of the medicine he supplies negligence and breach of warranty
3. In the event of indigestion caused by you will recover not only
defective food purchased by the compensatory but punitive damages
customers in a supermarket
4. Provided you can prove that the drug he must recall them from the market
(medicine) you were taking caused bad in order to avoid accidents and
side effects and on condition you show lawsuits
the container lacking the proper warning
5. Unless the producer shows the detailed a class action suit can be started
and illustrated instruction for handling against the management
the dangerous device
See p. 226.
Read the following headline news and match them with the above
statements. Comment on the story that may be behind the headline or try to
forecast the case development.
- Chrysler Recalls Jeep Liberty SUVs.
- FDA:Warn Campbell Unit on Unsafe Soup Procedures.
- $20 Million Punitive Damages for AHP Drug Side Effect.
- CPSC, Light Distribution Inc. Announce Recall of Hair Dryers.
- Plym Pharm distributors neglect what they offer.
212
Refer to the Reading Supplement section to read the abstract The

McDonald's Scalding Coffee Case.
This is the famous case that has become products liability litigation
classics a lady got injured having spilt hot coffee at McDonald's drive
through.
Find out some interesting information on product liability cases
initiated by consumers against companies.
In the Statutes Supplement section you will find a clause from the
Uniform Commercial Code that defines warranty that is one of
doctrines in a products liability case.
Products Liability. Lawyers' practice area

Lawyers who specialize in Products Liability Law can either act for
injured persons, and they are Personal Injury lawyers, or represent
corporate clients against whom an action is brought, and they are
Personal Injury Defense attorneys.
Note. Personal injury - травма, дающая право на подачу иска.
Personal injury and product liability lawyers

The law firm of Piccin & Glynn
You're probably aware of the high profile lawsuits against manufacturers of
dangerous products such as tobacco, lead paint and breast implants. Those cases
involved nation-wide class action law suits. However, not all product liability
cases involve large class actions. A corporation is just as liable for producing a
sub-standard product if only one or a handful of people have been injured.
The law firm of Piccin & Glynn is a firm with the resources required to challenge
the largest corporations and hold them accountable for their wrongdoing.
We've handled numerous cases in which corporations have produced
sub-standard products that have severely injured or killed people. The
corporations and their insurance companies hire high caliber attorneys to
aggressively defend their interests. Their attorneys are hired because of their
expertise in handling products liability cases.
Shouldn't you be represented by experienced trial attorneys who have
prosecuted many products liability cases?
Comment on the firm's specialization.

Can you suppose what problems the firm's clients may have?
How can the lawyers help the corporate clients?
213
Part IV. Legal Framework of Company Operation
Legal Counseling
A corporate client, a producer having a retail network, needs a

consultation on the products liability issue.
Student A. You are Mr/Ms O'Raily, Managing Director of O'Raily

Delicatessen - manufacturer of ready-to-eat and ready-to-cook products. You
also have a chain of shops. You are very careful because you understand that
food may become a high-risk product if it is cooked or stored improperly. To
be on the safe side with your business and avoid any product liability conflicts,
you've arranged a meeting with a lawyer. The following is what you would like
to know:
- the responsibilities of the producer, seller, and delivery staff
(disributors);
- extra precautions concerning food - any warranty?
- if your consumer filed a claim what he/she would prove;
- what your defenses would be.
Student B. You are Mr/Ms Flemming, the lawyer, the best Product
Liability expert. You render advice and provide expertise on the matter and
successfully handle product liability litigation. You've won a number of cases
and have reliable expert witnesses. Your clients are both business persons and
consumers. However, you carefully prepare for meetings with every client.
Study the material given above (Essential and Law Expert). There are
some more useful notes below.
1. The main responsibility falls on producers - such as manufacturers and

importers.
They need to:
- ensure that the consumers have information to help them understand
the risks - such as what safety precautions they need to take;
- monitor the safety of the products - by investigating complaints or
testing products;
- take action if a safety problem is found.
Be particularly careful with high-risk products such as products that are
often misused and products like products for children. Specific regulations
apply to some products like fireworks, food and medicines.
2. Extra information for the retailers.

The sellers have safety responsibilities. They mustn't sell any product
which is known, or should be known, to be unsafe. They also need to:
- pass on safety information to their customers;
214
- help monitor product safety - for example, by investigating complaints

and by passing information back to the producer;
- co-operate with producers and others - for example if a product is
recalled because it is unsafe.
In any case, they need to take an active approach to preventing problems.
If they don't, they can face enforcement action, fines or even imprisonment.
They should be aware that court cases are usually expensive and complicated.
They should take professional legal advice before taking any action.
3. Elements of product liability case.

The court will find out if:
- it's a product - "a tangible property distributed commercially"
/Restatement (Third) of Torts/;
- the product was introduced into the stream of commerce;
- the product was sold by a commercial seller or distributor (not
occasional seller);
- the product reached the consumer without substantial change
(no modifications or repairs are possible after the product leaves the
plant);
- there is a manufacturing defect/ design defect/ marketing defect (lack
of warning, instruction, labelling); or
- the specifications are unadequate;
- the product was unreasonbly dangerous;
- the products defect caused the plaintiffs injury.
4. Defenses.
Contributory negligence - the plaintiff knew about the danger but
neglected this and carelessly used smth or wanted to try to avoid danger.
Industry standard - show that this is common practice, otherwise the
plaintiff has to show another item that is safer.
State of the art design (последнее слово техники, самый современный,
новейший).
Legal Research
An Internet site of an American law firm offers on-line advice for

consumers and claimants. The links are highlighted, the answer is your
choice from the information in boxes. W r i t e the proper questions over
the boxes.
claimant - сторона, заявляющая претензию
215
a) I am an unfortunate patient. Can I sue my doctor for malpractice?

H o w can you help me?
b ) H o w c o s t l y a r e p r o d u c t liability l a w s u i t s ?
c ) M y c a s e i s p r o d u c t l i a b i l i t y . I f I c o m e t o y o u , w h a t will y o u d o ?
d) W h a t is the range of damages awarded by jury?
e) I w a s i n j u r e d . T h e d e v i c e h a d a m a n u f a c t u r i n g d e f e c t . Shall I claim
negligence or strict liability?
f) A r e there special P r o d u c t s Liability laws?
g) We are a group of claimants. H o w do we sue?
1 ?
Products Liability Law is not a single statute or rule. It includes such areas of
legal study as torts, namely negligence, contracts, sales and international trade,
also related rules and statutes dealing with products, consumer statutes. In the
USA the American Law Institute, responsible for drafting Restatements of
Laws, in 1998 published Restatement (Third) of Torts where the provisions of
strict product liability were introduced and have become the body of product
liability law. Uniform Commercial Code carries the provisions concerning
implied warranty of merchantability imposing obligations on the sellers.
Countries of the world are also legislating in this direction to provide stronger
consumer protection
implied warranty - обязательная гарантия

merchantability - годность для продажи, товарное состояние
2 ?
It's more perspective to file a suit on the basis of strict liability in tort especially
if the product was really unreasonably dangerous because of the defect.
In negligence the claimant must prove that: 1) the manufacturer owed the duty
of care; 2) he/she breached this duty by introducing a defective product in
the stream of commerce; 3) the injury occurred; 4) the defect was the cause of
the injury. Strict liability holds a manufacturer liable as a matter of law. But
under negligence standard a person will not be liable for a defect if he or she
took all reasonable care to avoid or detect the defect, and. that is what the
defendant will seek to prove, while under strict liability, if there was an
unreasonably dangerous defect in the product, no amount of care will
constitute a defense.
216
3 ?
Although a person injured by an unreasonably dangerous product is justified in

seeking compensation for his or her injuries, you should be aware that a
products liability lawsuit is often a hard-fought battle. The manufacturer
generally has no concern for fairness. They try to settle out of court offering less
in compensation for injuries. Large verdicts of more than a million, though
made a scoop by media, are rare, and when they occur, they are usually reduced
by the trial court or on appeal. Punitive damages are awarded only in the most
outrageous cases.
scoop - сенсационная новость
4 ?
When you bring an action you seek to recover damages. In product liability
lawsuits claimants want substantial awards, sometimes millions of dollars. If
you are eager to win you will hire best lawyers. And that will cost you a lot. For
example, you obtain a verdict of $75,000. Expert witnesses require $500 per
hour. They spend no less than 100 hours on the case, so it makes up to $50,000
paid in advance. Attorneys fees would be one-third of the judgment - $25,000.
What is your award? And if you loose? That's why the claimed damages tend to
be higher.
5 ?
We will start with an initial interview to determine the facts as you know them
and we will in turn, make a preliminary judgment about whether the case is one
which falls within our expertise and interest. If it appears the case does fall
within our expertise and is a case that we wish to pursue, an investigation will
begin to collect all relevant records, including but not limited to, accident
reports, product information, company brochures, product history and medical
records. Once obtained, we will then review and analyze the records. If we
believe there is a strong possibility that a product was defective, the
information is then submitted to appropriate experts for review, asking for
their opinions on the issues on the defective nature of the product, damages
and causation. This review can be quite expensive and time consuming. If, after
consultation with experts, we believe we can satisfy our burden of proof, we
will recommend that the case proceeds, in other words start litigation
procedure.
causation — причинно-следственная связь

burden of proof - бремя доказывания
217
6 ?
If you are sure that the physician failed to exercise the duty of care to full extent, you
may start legal action. Medical malpractice involves delay or failure in diagnosing a
disease or failure to properly treat the patient. Misuse of prescription drugs or a
medical device or implant can also be medical malpractice. During the initial client
contact, the attorney will obtain a detailed medical history during which the
attorney should obtain the names of all physicians and hospitals who have rendered
medical treatment to the client. It is valuable for a client to prepare a written
summary (timeline) of all medical treatment including dates, doctors, symptoms,
conversations with medical providers, and treatment received. Thereafter, all
relevant medical records are obtained by the attorney. In many medical malpractice
cases, proof of negligence is found in these records. In order to determine if there is
"medical malpractice" it is necessary that a medical expert be retained to consult with
the plaintiffs attorney. Provided the expert concludes that it is appropriate to file
suit against the physician/hospital. Filing suit begins the legal advocacy process
which may cover a period of several years. During this period both parties exchange a
series of documents. In the first stage, the legal pleading stage, the parties set forth
their legal theories. In the second stage called the discovery stage, the facts to support
the various legal theories are developed. If the parties are not able to resolve their
differences, the case, now in its third stage, will go to trial before a judge and jury.
set forth - излагать

pleading stage - стадия предварительного производства no делу; ста
дия обмена состязательными бумагами
discovery stage - стадия представления сведений сторонами друг другу
7
A class action is a method for individuals who have similar claims to be joined
together to prosecute their claims in a more efficient manner. In order to initiate a
class action, someone must agree to serve as the class representative. The class
representative must be approved by the court. In order to be a class representative,
the claims of the representative must be typical of the claims of the other members
of the proposed class. The class representative is proceeding not only on his or her
own behalf, but also on behalf of all others who are similarly situated.
In order for a class action to be certified, the court must find that:
- the class action is a superior method of prosecuting the claim;
- the claims of the class representative are typical;
- the plaintiffs are so numerous to prevent joinder of all cases in one action, and
- the class counsel and class representative will adequately represent the interest of
all class members.
Courts will also consider whether there has already been litigation involving
members of the class and whether the forum selected is appropriate for litigation of
claims of the class. In addition, the court will analyze the complexity of the issues
and the expenses of litigation of separate claims. Finally, courts will consider
whether the amount to be recovered by individual class members will be large
enough in comparison to the cost of bringing and administering the class action. In
cases where equitable (injunctive) or declaratory relief is sought, the courts will
also consider whether the party opposing the class action has acted or refused to act
on grounds generally applicable to the class.
218
joinder - объединение; выступление в качестве соистца или

соответчика
equitable relief - средство судебной защиты по праву справедливости
d e c l a r a t i v e relief - судебная защита в ф о р м е определения прав и обя-
занностей сторон
See р. 226.
1. Search the texts to provide information on the following:

- the products liability legislation;
- the claimant's burden of proof and what must be proved;
- procedure stages from filing a lawsuit to trial;
- the expenses that are suffered by the plaintiff in a lawsuit;
- manufacturers' tactics to avoid a trial;
- the lawyer's assitance in preparing a case / a malpractice case;
- the requirements to get a class action certified.
2. Pairwork
Practise to answer the questions counseling consumers who seek legal
advice.
3. Prepare a presentation on the topic Products Liability Case. Take the
presentation in Law Expert as an example. Practice to ask questions
during the presentation (refer to the Functions Supplement section,
Interactive Presentation).
4. Problems to discuss:
You should be aware that there are both legal and ethical problems
concerning products liability. You are offered to prepare your opinion
and reasoning on the following:
- strict liability of gun producers and gun sellers;
- liability of tobacco and alcohol producers.
Prepare a discussion on that topic. Practice to apply the knowledge
you've acquired in this Unit.
In the Reading Supplement section find more information about

class action in the text Class Action.
It's interesting and useful information for lawyers because in Russia
class action is hardly ever practised.
Read the following Supreme Court case summaries from West Legal
Studies in Business to understand the legal matter. Prepare to give
commentary on the case and the court decisions applying what you've
mastered in the Unit.
219
These are Supreme Court rulings on appeals after District Court

decisions.
Vocabulary Note:
hold - вынести судебное решение
reverse a decision - отменить решение суда
affirm a decision - утвердить решение
testify - давать показания под присягой
contend - заявлять
malfunction - нарушение нормальной работы, сбой, несрабатывание
bar (v) - запрещать
minor child - маленький ребенок
guardian - представитель интересов в суде
Manufacturing D e f e c t Different from Design Defect in Products

Liability Action
Description. Appeals court held that a suit by a vehicle owner, who was
injured when his vehicle's engine caught fire, could proceed. While the owner
failed to show a design defect, which requires a showing of a safer design
alternative, the owner does have a suit for a manufacturing defect that might
be the cause of the injury.
CASE SUMMARY
Facts. Ridgway suffered severe burns when his 1995 Ford F-150 pickup
burst into flames while he was driving it in 1997. The fuel system had been
repaired three times. Ridgway sued for products liability, contending that the
vehicle was defective. An expert testified that there was an electrical
malfunction that caused the fire to start in the engine block. Ford contended
that there was no evidence of a product defect or a safer design alternative.
The trial court dismissed the suit. Ridgway appealed.
Decision Reversed. Summary judgment was not proper since there is a
genuine issue of material fact regarding whether the fire resulted from a
manufacturing defect or not. If there is no direct evidence of any specific
defect, the plaintiff may offer evidence of the malfunction as circumstantial
proof of the manufacturing defect. To claim design defect, the plaintiff would
have to offer a safer alternative design; that is a separate issue from a
manufacturing defect. A design defect occurs when the product's design itself
makes the product unsafe. Ridgway does not have to prove design defect to
win a suit for manufacturing defect.
(Citation Ridgway v. Ford Motor Co., - S.W.3d -
(2002 WL 121820, Ct. App., Tex., 2002))
220
Product Misuse by Child D o e s N o t Bar Design Defect Claim

Description. Jury can find design defect in strict liability claim against
lighter manufacturer who warned of dangers to children on product package
but did not incorporate safety feature into lighter design in case where
three-year-old started fire that injured another child.
CASE SUMMARY
Facts. A three-year-old child used a BIC lighter to start a fire that burned
his younger brother. The lighter, bought by their mother, had warnings on the
package about keeping it away from children. The guardian of the injured boy
sued BIC in strict liability for design defect because known and inexpensive
child restraint features had not been incorporated in the lighter. The federal
district court of New Hampshire certified a question to the Supreme Court of
the state if the child's guardian could maintain a cause of action in this
situation.
Decision Affirmative. "Barring a determination that the utility of the
product completely outweighs the risk associated with its use or that the risk
of harm is so remote as to be negligible, the legal representative of a minor
child injured as a result of the misuse of a product by another minor child can
maintain a defective design product liability claim against the product's
manufacturer, even though the product was intended to be used only by
adults, when the risk that children might misuse the product was open and
obvious to the product's manufacturer and its intended users."
(Citation Price v. BIC Corp., Slip Copy
(1997 WL 677136, Sup. Ct„ NH)
or 702 A.2d 330 (Sup. Ct„ N.H., 1997»
Legal Knowledge
Products Liability Law in the European Union and in the UK
While reading the following text pay attention to the doctrines
which can be the basis of a products liability case.
Traditionally, civil liability for unsafe or defective products in the United

Kingdom has been governed by the common law principles of contract and
negligence. However, over the past two decades, both the UK government and
EU institutions have been active in the field of products liability. This has
resulted in a stream of legislation. Much of this is designed to restrict, if not
reverse, the old concept whereby goods are bought at the buyer's risk.
The international aspect of products liability litigation has also become
more important in recent years. In Europe, this is partly a function of the
European Commission's increasing activity in consumer protection law. It is
221
also an expected result of the increasing globalization of world trade. A badly

designed product may find its way into markets in many jurisdictions across
the world.
As a result of the EU-inspired Consumer Protection Act 1987,
manufacturers and suppliers in the United Kingdom have had to accept the
risk that they may be held liable for damage caused by defective goods,
regardless of any lack of fault on their own part.
Civil liability
Civil liability for defective products can arise in contract, in negligence,
under Part I of the Consumer Protection Act 1987 and as a result of a breach
of statutory duty. These liabilities are not mutually exclusive and claimants
will often bring an action on more than one ground. The ability of a
manufacturer or a supplier to limit its liability is subject to a number of
statutory constraints. However, the use of appropriate warnings and
instructions can be an effective way of minimizing exposure to legal liabilities. ,
Contract
A buyer can recover compensation from a seller if the product he has
bought does not comply with the terms of their contract and, as a direct result,
he suffers loss, damage or injury. The buyer does not need to prove that the
seller has been negligent. To this extent, there is 'strict' or 'no fault' liability in
contract
The seller will be liable for any failure of the goods to comply with the
terms of the contract, even if the seller is not at fault and could not have
prevented that failure (although the seller may have rights against its own
supplier).
Negligence
A supplier of products (e.g. manufacturers, wholesalers/distributors
and retailers) will be liable to pay damages for negligence if this person fails to
act with the amount of care which the law expects of it in relation to its
products. This means that the supplier must take reasonable care to avoid acts
or omissions which can reasonably be foreseen as being likely to injure others.
In deciding whether a particular supplier has discharged the duty imposed
on him/her, the courts will give regard to all the relevant circumstances. For
example, the resources and expertise available to a supplier will be a
consideration - a department store would be expected to exercise more checks
than, for example, a corner shop.
If the claimant can prove that a duty of care was owed and that the duty
was breached, liability in negligence can nonetheless be avoided or reduced by
the supplier if the claimant knew the risks associated with the product but
222
chose to accept them ('voluntary assumption of risk'). Liability may also be

reduced if the claimant's own negligence contributed to his loss ('contributory
negligence'), although this can only result in a reduction in the amount of
compensation that is to be awarded.
Strict liability under Part I of the Consumer Protection Act 1987

Part I of the Consumer Protection Act 1987 (CPA) implemented the
provisions of the 1985 EC Product Liability Directive in the United
Kingdom. Proposals are being considered within the framework of the
European Union's legislative process for amendments to be made to the
directive. If enacted, these amendments would extend the scope of the
directive and increase the risks faced by producers.
Part I of the Consumer Protection Act imposes liability to pay
compensation for damage caused by a defect in a product, even if there is no
proof of fault on the part of the party responsible. It is in this sense that
liability is said to be 'strict'. Under the act, liability extends to:
- the producer;
- the first importer into the European Union (the intention being to
ensure that there will always be a producer within the European Union
who can be held liable for a defective product);
- an own brander (i.e., someone who holds himself out as a manufacturer
by including his own name or trademark on the product); and
- a 'downstream' supplier (whether the retailer, wholesaler or
distributor), but only if it is asked by the claimant to identify the
manufacturer, the own brander or the first importer, and fails to do so.
The consumer Protection Act gives broader definition of: a) product;
b) defects; c) damages.
While the Consumer Protection Act avoids the need for a claimant to
prove 'fault' by the producer (and to that extent liability is 'strict'), a claimant
under the Consumer Protection Act is still obliged to prove that the product
was defective and that it was because of the defect in the product that the
damage complained of was caused. Often these will represent considerable
obstacles for a claimant and the burden of proof (which rests on the claimant)
will not be easy to discharge.
Criminal liability
Manufacturers and suppliers of products should appreciate that they may
face criminal, as well as civil, liabilities if their products are defective. There
is extensive regulation of the safety of products in the United Kingdom and
much of this legislation is EU driven. Special and detailed regulations
relating to a number of products (e.g. medicines and food) contain criminal
sanctions.
223
If a person has supplied goods which offend against the general safety
requirement, he will be guilty of an offence, unless he can show that (i) he
neither knew nor had reasonable grounds for believing that the goods failed to
comply with the general safety requirement, or (ii) he took all reasonable steps
and exercised all due diligence to avoid committing the offence.
Refer to Legal Expert and Legal Research materials to review the

Products Liability laws in the USA. Compare the EU statutory principles
with those of the USA. Follow the points:
- Negligence doctrine.
- Strict liability (see Additional Reading Task below).
- Contract (EU / UK) - breach of warranty (USA).
- Class action.
- Criminal liability.
- Statutes governing product liability.
The text How Strict Products Liability Became a Law in the

Reading Supplement section can hep you to do the previous task stated
above.
You'll have to use a dictionary in order to understand certain ideas.
Your client is a foreign citizen who works in Russia. He got badly

injured while using an electric appliance that was imported from
another country. He is ready to file a lawsuit and needs your
professional advice.
You will recommend the client to claim products liability in his
native jurisdiction.
Write a memorandum where you set the overview of products
liability cases highlighting the main doctrines. Your writing style should
be clear and the language plain.
Refer to Functions Supplement, Correspondence II where you'll
find tips for writing opinion letters.
But first you are to decide on the name and citizenship of the client,
and on the product he has bought and the particulars of the damage.
Complete the form Product Defect Notice for your client (the form is
given below).
Review the material of the Unit.
224
PRODUCT DEFECT NOTICE
Date:
To:
Dear :
Notice is hereby provided that we have purchased a product manufactured,

distributed, or sold by you and described as:
You are advised of a product defect or warranty claim. In support of same
we provide the following information:
1. Date of Purchase:
2. Nature of Defect:
3. Injuries or Damage:
4. Item Purchased From:
This is provided to give you earliest notice of said claim. I request that you
or your representative contact me as soon as possible.
Sincerely,
Name
Address
City, State, Zip
Telephone Number
CERTIFIED MAIL, Return Receipt Requested
225
P. 212:
1 In case the automobile producer discovers a flaw in the cars they
manufacture he must recall them from the market in order to avoid
accidents and lawsuits.
2 If only a distributor of pharmaceuticals failed to carefully check up the
certification of the medicine he supplies he, alongside with the
producer and seller, would be held liable for any harmful effect on the
user's health.
3 In the event of indigestion caused by defective food purchased by the
customers in a supermarket a class action suit can be started against
the management.
4 Provided you can prove that the drug you were taking caused bad
side effects and on condition you show the container lacking the
proper warning you will recover not only compensatory but punitive
damages.
5 Unless the producer shows the detailed and illustrated instruction for
handling the dangerous device the court will impose on him
compensatory damages for both negligence and breach of warranty.
P. 219:
1F 2E 3D 4B 5C 6A 7G
Unit 3
Contract Drafting Outline
Contract Law is a vast area of legal knowledge. It would be nearly

impossible to cover all legal aspects of Contracts in one Unit. Besides,
the contract doctrines and methods under common law may differ from
those accepted in this country.
Consequently, here you are introduced only to contract general idea
and basic terminology as conventional under common law (USA). The
focus is made on developing some contract drafting skills, but mainly
contract reading skills. Afterwards you are supposed to use the specific
words, phrases and language structures in drafting veritable contracts.
The contract forms presented in the Unit and in the Legal Forms
Supplement are samples provided only for information and study
purposes.
Additionally, the Unit contains some information on international
contract standards and useful tips of international contract drafting.
These are, certainly, import sales contracts as business clients operating
worldwide mainly deal with cross-border sales.
Have you ever drafted, negotiated or signed a contract?

When you have to enter into a contract (employment agreement, services
agreement (with travel agency, club, Internet provider etc), contract of tenancy
(rent a flat) or any other) do you:
- read attentively every clause, make remarks and clarify each point?
- scan it to find the stipulations that you care about most?
- estimate it as a professional to find some inconformity with legal rules?
- try to detect hidden pitfalls?
- just look through and sign?
- start hot discussion on the clauses because you love to argue and reason?
Give your reasons.
Do you think contracts should be written in plain language so that everybody
can get the point or should be comprehended only by legal professionals?
227
Core Vocabulary 1
Contract - agreement
The difference between the words contract and agreement:
every contract is an agreement, but not all agreements are
contracts. "Agreement" is mostly used when we speak about types of
contracts: Employment Agreement, Franchise Agreement, Loan
Agreement, etc.
party/parties - стороны (договора, соглашения)

draft a contract - составить договор
negotiate a contract/agreement - вести переговоры по условиям контракта,
договариваться об условиях
amend - вносить поправки
- заключать договор (Not! - conclude а
enter into a contract contract)
- подписать договор
sign a contract
- исполнить договор
perform a contract/agreement
- исполнить договор; also: заключить до-
execute a contract говор
breach a contract - нарушить условия договора
offer ['эГэ] - оферта

acceptance - акцепт
competent parties - компетентные стороны
offeror ['ofsral - лицо, вносящее предложение (оферент)
offeree ['ofs.ri ] - лицо, принимающее предложение (акцеп-
тор)
legal subject matter — предмет договора

consideration — встречное удовлетворение условий (цена)
mutual agreement — взаимное согласие
mutual obligations — взаимные обязательства; обязательства
сторон
counteroffer — встречное предложение
clause — статья договора
remedy — средство судебной защиты
specific performance — реальное исполнение договора
228
U n i t 3. Contract Drafting Outline
229
The text activating the diagram

Contract is a legally enforceable agreement between two (or more)
people, called parties to contract. Contractual relations usually start
when one party makes an offer to another party.
The contract is binding if only there are four elements:
Competent parties are those who are of age and mentally able to
understand the matter.
Legal subject matter is the subject that the parties want to agree on
and that must not involve any illegal act.
Consideration is a legal bargain that something is promised for
something in exchange.
Mutual agreement is called "meeting of minds" - both parties must
clearly and definitely agree on the details, terms and rights outlined in
the contract
Mutual obligations mean that both parties must incur legal duties.
Provided all four elements exist the parties draft a contract, then
negotiate the clauses, make necessary amendments in order to confirm
the agreement on the terms.
If one of the parties at any stage makes another offer, that is, makes a
counteroffer, a new contract is to be created.
W h e n every clause is agreed upon the parties enter into a contract
and sign it to make the contract binding.
As soon as the contract is signed, the written copies of the contract
are delivered to both of the parties to acknowledge.
The contract must be performed unless one of the parties breaches
the contract - fails to fulfil the promise.
In case of contract breach the injured party will start the legal action
to seek remedies.
The remedies can be either damages, as compensation for losses or
expected benefit, or specific performance, that is contract performance
enforced by the court decision.
Note. The information here concerns only written contracts.
The following are the questions business clients would ask the lawyer.
Give answers using the previous informatiom and then check your
answers with the KEY.
1.I was sent a copy of the contract to review it before signing. But in the
contract I don't see the clear price for my work. Shall I sign it? If not what
should I undertake?
2. We've come to mutual agreement, but the other party claims the
obligations are ambiguous. Can we pursue on drafting the contract?
3.I am fifteen. Can I enter into any contract?
4. We've signed the contract. What next?
230
5.1 want to make alterations to the previuos offer. Is it possible?
6. What makes a contract binding?
7. The construction company that according to the agreement had to perform a
repair in our office failed to fulfil some kinds of work. What are the remedies?
Note: ambiguous - двусмысленный, неясный, неоднозначный.

See p. 258.
Law firm folders usually contain lots of contracts. There are many of
sample forms in the computer software as well.
1. Look through the following list of agreement titles. Select those
that refer to business activities of corporate clients. The titles that
you may have a difficulty to render are given below.
Employment Agreement Partnership A g r e e m e n t Franchise A g r e e m e n t
Confidentiality A g r e e m e n t Services A g r e e m e n t Prenuptial C o n t r a c t
Custody A g r e e m e n t Joint Venture Agreement Distribution Agreement
Merger Agreement Retainer A g r e e m e n t Trust A g r e e m e n t
Shareholders A g r e e m e n t Construction Agreement Lease A g r e e m e n t
Agency A g r e e m e n t A s s i g n m e n t of C o p y r i g h t Sale C o n t r a c t
Purchasing A g r e e m e n t C o p y r i g h t License A g r e e m e n t Loan A g r e e m e n t
Sales Representative Agreement A g r e e m e n t to Sell Business Subcontractor Agreement
Subcontractor Agreement - договор подряда

Retainer Agreement - договор на оказание адвокатских услуг
Assignment of Copyright - издательский договор
Copyright License Agreement - лицензионный договор на использование автор-
ских прав
The following agreements refer to general practice:
Custody Agreement - договор об опекунстве
Trust Agreement - договор доверительного управления имуществом
Prenuptial Contract - брачный контракт
2. Define the parties to the agreements concerning business area of

practice according to the following list of titles.
The titles of parties to a contract introduced after the phrase
...hereafter referred to as...: (именуемая/именуемый в дальнейшем ...)
- Company name - Company name
(e.g. in Purchase Agreement, Joint Venture Agreement. The name of the
company may be rather long, so in the contract a shortened variant may
be given)
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- Person's name - Person's name

(in case that the agreement is entered into by two natural persons, or
the persons are authorised to enter into a contract)
- Employer - Employee
- Provider (of services) - Client
- Client - Consultant (consultancy services)
- Client - Attorney or
Client - The Firm (eg. AC Legal Consultancy or Brown, Green & Black LLP)
- Buyer - Seller
- Company - Supplier
- Lessor - Lesee (lease/tenancy agreement)
- Principal - Agent
- Franchisor - Franchisee
- Licensor - Licensee (copyright or IP agreement when it concerns
a certain license)
- Copyright Owner - Organization
- Owner (a person or a company) - Contractor (e.g. construction agreement)
- Bank - Borrower / Client
- Contractor - Subcontractor (e.g. construction agreement)
- Company - Shareholder(s)
- Company - Distributor
- Company - Sales Representative
3.
a) Define the subject matter of the contracts concerning business
relations and specify a possible situation. Use plain English.
e. g.
- Employment agreement. An employer hires an emloyee. A company is taking
on new staff. After a successful interview a new employee enters into and signs the
Employment Agreement.
- Services agreement. A provider provides cettain services to a client. Internet
provider service fum provides access to Internet for their clients.
b ) T r y to define what obligations of the parties can be under the
provisions of some agreements. You are free to choose any
agreement to give a comment.
Do you know what clauses are included in the agreement? Is there
any difference in the document structure due to the nature of contract?
Core Vocabulary 2
clause - статья договора
covenant - (n) обязательство, статья договора, условие договора; (v) заклю-
чить соглашение, договор, сделку; взять на себя обязательства по
договору, соглашению
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unit 3. Contract Drafting Outline
enter into effective — вступить в силу

effective date - дата вступления в силу
set forth — излагать
term — срок
initial term - изначально (установленный) срок
terms and conditions - сроки и условия
construe - толковать, истолковать
to give a written notice - подать письменное уведомление
to notify in writing - уведомить письменно
successors and assigns - правопреемники (те, кому переходит право и титул,
и те, кто назначается правопреемниками)
duress [dju'res] - принуждение
under duress - под принуждением
In witness whereof — в подтверждение чего
Contract drafting is one of the principal activities in law practice.
However, it may become a real burden unless a lawyer masters not only
the contract doctrines but also the basic methods and techniques.
Since contract is a document, it has a definite structure. Being a legal
document it requires the use of distinct, comprehensible language and
specific style.
Sample Agreement
1. Scan the generic sample agreement below.
Find:
- the heading;
- the part that identifies the parties to the agreement;
- the statement of agreement between the parties;
- the open clause lines for terms and conditions;
- the clause where the dates and termination conditions are agreed upon;
- the clause where the parties agree on the laws applied to;
- the clause where the parties agree on the document integrity;
- the clause that shows the parties binding to the agreement;
- the clause that shows the mutual agreement between the parties and
where the parties confirm that they are in no way forced to enter into the
agreement;
- the clause where important notes and additions are made;
- the closing part.
2. Scan it again to find the clauses concerning payments, obligations
(coditions), terms of performance, applicable laws, possibility to make
amendments, the effective date?
233
AGREEMENT
T H I S A G R E E M E N T ( t h e "Agreement") is entered into effective as of
20 by and between , a
( " P a r t y # l " ) and , a
("Party#2").
In consideration of t h e mutual covenants set forth herein and other good and valuable
consideration, the parties agree as follows:
1. (Statement of Business Relationship; Rights, Obligations). Subject to t h e terms and
conditions of this Agreement,
2. (Fees, Payments, etc.). P a r t y # l agrees to pay P a r t y # 2 .
3. ( O t h e r terms/conditions). .
4. (Other terms/conditions). .
5. Term and Termination. The initial term of this Agreement will be for (months,
days, years) from t h e effective d a t e of this Agreement. This Agreement will
automatically renew for successive (month, day, year) terms thereafter until
terminated by either party. Either party may terminate this Agreement at any time
before its initial term (or any renewal term) is completed, for any reason or for no reason
at all, provided t h a t at least days' advance written notice of termination is given to
t h e non-terminating party by t h e terminating party.
6. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of , without regard to any conflict of laws
rule or principle that might refer t h e governance or construction of this Agreement to
t h e laws of another jurisdiction. This Agreement will at all times and in all events be
construed as a whole, according to its fair meaning, and not strictly for or against any
party.
7. Entire Agreement; Amendment. This Agreement constitutes the entire
understanding between t h e parties and supersedes all proposals, commitments,
writings, negotiations, and understandings, oral and written, and all other
communications between the parties relating to the subject matter hereof. This
Agreement may not be amended or otherwise modified except in writing duly executed
by all of t h e parties.
8. Parties Bound. This Agreement will be binding upon, and inure to the benefit of, each
of t h e parties hereto to t h e extent applicable to them and their respective successors and
assigns.
9. Mutual Understanding. Each party has read this entire Agreement, fully understands
the contents hereof, has had t h e opportunity to obtain independent advice as to its legal
effect, and is under no duress or obligation of any kind to execute it. This Agreement
reflects the mutual understanding of the parties with respect to all subject matter
addressed herein and will be construed accordingly.
10. Notice. Except as expressly provided to t h e contrary herein, any notice required or
permitted under this Agreement will be deemed sufficiently given if in writing and
personally delivered, transmitted by facsimile, or sent by certified mail (postage
prepaid) to the party at the address set forth beneath its signature below or at such
other address as t h e party may subsequently designate.
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In witness whereof, the parties have executed this Agreement effective as of the
date first above written.
Party# 1 : Party#2:
[name] [name]
By By
Its Its
[Address line 1] [Address line 11
[Address line 2] [Address line 21
Facsimile: ( ) - Facsimile: ( )
The sentences below is an attempt to construe the provisions of the

Agreement. Check if the interpretation is True (T), or Quite True (QT), or
False (F). Justify your opinion.
1. The parties mutually agree on everything that is covenant in the agreement
2. The initial term of the Agreement is unstated.
3. The parties may terminate the agreement at any time but give a written
notice of termination.
4. The Agreement is governed and construed in accordance with the laws of a
definite State and the laws of other jurisdictions are not applied to avoid
the conflict of laws.
5. The meaning of the Agreement is always construed as a whole whatever
happens.
6. The parties understand all the provisions of the Agreement and thus, stop
giving proposals, negotiating, orally or in writing, or other communications
concerning the subject matter of the agreement.
7. The Agreement may be amended or ortherwise modified only in writing
executed by all of the parties in due time.
8. The Agreement is binding upon the parties but not upon those who may
later succeed / replace them or be assigned to perform their functions.
9. The parties have read the Agreement, understand it, discussed it with
competent advisors who forced their opinion upon them, that's why the
parties are ready to execute the Agreement.
10. The parties confirm that the Agreement is due to enter into effective as
stated above and sign the Agreement.
See p. 259.
Legal Knowledge
While reading the following information return to the Sample
Agreement for better understanding of the agreement's provisions.
235
Consideration
If you look at a legal agreement or contract, you will generally see a phrase
in the opening paragraph indicating that the parties agree on an amount of
money or "other good and valuable consideration." The concept of
consideration has a long history in the law, but simply means something of
value. An exchange of consideration between the parties to an agreement is
necessary for the agreement to be legally enforceable.
Each party to an agreement must both give and receive something of value
in order for a contract to be legally enforceable. The "something of value" may
be either something that the person actually hands over (that they would not
otherwise be obligated to hand over) or some right that they give up (that
they would otherwise have been entitled to exercise). For example, if you
agree to buy a car for cash, you agree to deliver cash to the seller, and the seller
agrees to deliver the car to you. In that situation, there is legal consideration,
or sufficient value, for the agreement to be enforceable.
Another example is a mutual release of claims. Suppose you accidentally
hit a parked car, and you agree to pay the owner of the car $500 in cash to
settle. In that case, you agree to deliver cash to the owner of the car, and the
owner agrees that he or she will not file a lawsuit against you. (In such a
situation, always get a written release of liability, or "release," from the owner
of the car to prove that you have settled up.) The consideration on your part is
the cash, and the consideration on the owner's part is that he or she gave up
the right to sue you for the damages. Although the owner didn't give up
anything physical, there is consideration to support the agreement because the
owner gave up a legal right.
Term and Termination
Important concepts to consider when drafting a contract or legal
agreement are the term of the agreement and the termination provisions. An
agreement usually runs for a term, or period of days, months, or years, and that
period should be specified in the agreement. The term may be stated, in its
most basic form, in language similar to the following: "The initial term of this
Agreement will be for one year from the effective date of this Agreement."
What happens after the initial agreement term is concluded? While you
might think that the agreement is finished (and in most cases it is), in some
situations (and in some states) an agreement may be deemed to automatically
"renew" for an additional period of time equal to the initial term. This may be
true if parties continue to act, after the term has expired, as if the a g r e e m e n t
was still in place (which is not unusual in many business relationships). For
example, if you continue to sell products or services to a customer as outlined
in the agreement, and the customer continues to pay according to the terms
outlined in the agreement, an argument can be made that the agreement has
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been extended or renewed by the actions or conduct of the parties. For this
reason, it may be important to clarify if you intend for the agreement to be
renewed. An example of "automatic renewal" language is as follows: "This
Agreement will automatically renew, for successive one year periods, after its
expiration unless notice of termination is given by either party."
If you want to be able to terminate the agreement at will (or upon relatively
short notice), you need to either a) make the initial term very short, such as
10-30 days, or b) include termination provisions. An example of a termination
provision is as follows: "This Agreement may be terminated before its initial term
(or any renewal term) is completed by any party at any time, for any reason,
provided that at least 10 days' advance written notice of termination is given to
the non-terminating party by the terminating party." In essence, this language
limits the agreement to a 10-day term from the date that notice of termination is
given. Keep in mind that actions taken by either party during the 10-day
termination notice period are within the specified duration of the agreement, and
will likely be considered to be binding and enforceable.
Document Structure
Compare the information with the Sample
Agreement.
A contract (agreement) consists of the following
parts:
1. The heading, that is the title of the document.
2. The identification of the parties.
3. The words of agreement.
4. The body of the contract.
5. The closing part.
The contract above is only a generic sample. Some
kinds of agreements may contain:
a) Recitals - the information about the parties; recitals
декларативная часть
b) Definitions - where the parties explain the документа
terminology of some items or points that
repeatedly appear in the body of the contract.
Sales and purchase contracts include even more
special clauses, that will be presented later.
The body of the contract contains any of the

following clauses:
Obligations Confidentiality Arbitration indemnity
Terms Warranty Governing/Applicable Laws возмещение убытков
Liabilities Indemnity Entire Agreement
waiver ['weival
Termination Force Majeure Notices
отказ от прав, отказ
Payment Waiver от претензий
237
The clauses vary according to the nature of agreement - Employment or

Merger, Purchase or Sales of goods, Franchise or Retainer, and there may be
other special provisions.
The clauses do not obligatory have titles and are simply enumerated. As a
rule, such multi-page documents as Purchase, or Franchise, or Sale Agreement
contain not only clauses but description provisions and exhibits that provide
additional information.
Legal Writing Tips

Read and mind the following useful tips for the proper contract
drafting. Master the vocabulary options and explanations.
I. Grammar
Grammar applied in document drafting includes mainly mastering Modal
Verbs general and special usage and Conditionals. Refer to the Grammar
Supplement section to study related grammar rules.
II. Language
1. The heading must be appropriate to the nature of the agreement (not
just Agreement or Contract).
e.g. Franchise Agreement; or Partnership Agreement, or Contract for the Sale
of Goods.
2. You may avoid writing long and heavy-handed sentences.
e.g.
In consideration of the mutual covenants set forth herein and other good and
valuable consideration, the parties agree as follows:
NOW, THEREFORE, in consideration of the promises, conditions, covenants
and warranties herein contained, the parties agree as follows:
The simpler form is:
The parties agree as follows:
It is therefore agreed:
But often lawyers use either such phrase as is given in the Sample, or rather
archaic phrases like
NOW, THEREFORE or WITNESSETH.
Note. The closing phrase IN WITNESSETH WHEREOF is also rather
old-fashioned. The parties can just sign the agreement.
3. R e m e m b e r :
The language of the contract, especially of an international contract, must
be understandable for both the parties and the court, if a dispute arises.
Don't use traditional phrases or words that are not a tradition in your
country. And inversely, don't try to directly translate phrases customary in your
native language.
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4. The words, word combinations and phrases that frequently occur in

the agreements and may be quite helpful:
this Agreement - данный договор

in accordance with - в соответствии
according to - в соответствии; согласно
as provided by - как указано, дано, представлено

related (to this Agreement) - относящиеся к
related (rights, laws .... etc) - соответствующие
any subsequent - любой последующий
including - включая
including but not limited to - в том числе, без ограничения
from and including (date) - с ... и но ... включительно
prompt payment - своевременная уплата

prompt performance - немедленное, своевременное исполнение
due - должный, надлежащий, соответствующий

in due time - в должное время, своевременно
duly - должным образом, в должное время, во-
время, в надлежащем порядке
upon request - по первому требованию
upon receipt of the notice - по получении
unless the context otherwise required - если не требуется иного

unless otherwise provided for by law - если законом не предусмотрено иное
unless otherwise agreed by - если иное не определено договором
unless otherwise specified — если не указано иное
5. S p e c i a l a t t e n t i o n to t h e u s a g e of fail a n d failure.
The knowledge of the usage will help in rendering Russian ideas into proper
English.
fail to do smth - не сделать что-л.
If Company fails to deliver the (instead — Если Компания не доставит...
of: If Company doesn't deliver...)...
failure to (perform, renew, pay...) - невыполнение, невознобновление,
неоплата
failure to perform the work in due - невыполнение работы в установлен-
time ный срок
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Failure to pay the fee within 60 - Невыплата гонорара в течение 60 дней рас-
days shall be breach ценивается как нарушение договора
6. The use of hereinafter, herein, hereby, thereafter, etc.
These pronouns are typical for legal documents but it's not that easy to
master them. Today, when the language of contracts is tended to be plain and
comprehensible, they advise not to use lots of them.
here + в этом д о к у м е н т е there + в т о м документе, потом
hereafter - далее (в документе) thereafter - впоследствии

hereby - этим, настоящим, сим thereby - в силу того
herein - в этом документе therein - в том (месте), в нем
hereof - в отношении этого thereof - вследствие того
hereto - к этому (в документе) thereto - кроме того
Note. While reading contract samples in the "Legal Forms Supplement" and
materials in Unit 3 pay special attention how the pronouns are used.
Legalese style is usually a figure forfun. Here is one joke to make you smile
The professor of a contract law class asked one of his better students, "If you
were to give someone an orange, how would you go about it?"
The student replied, "Here's an orange."
The professor was outraged, "No! No! Think like a lawyer!"
The student then replied, "Okay. I'd tell him 'I hereby give and convey to you all
and singular, my estate and interests, rights, claim, title, claim and advantages of
and in, said orange, together with all its rind, juice, pulp, and seeds, and all rights
and advantages with full power to bite, cut, freeze and otherwise eat, the same,
or give the same away with and without the pulp, juice, rind and seeds, anything
herein before or hereinafter or in any deed, or deeds, instruments of whatever
nature or kind whatsoever to the contrary in anywise notwithstanding..."
Legal Research
The contracts selected here for familiarization and reading practice
are not related to commerce because sales contract is the subject of
special study. Later in the Unit some general information on
international sales contracts is provided.
To start with is the agreement that is important for successful

lawyering - Legal Services Agreement, or Retainer Agreement.
240
и n i t 3. Contract Drafting Outline
While reading the Legal Services Agreement find and make notes on
the major provisions that comprise it:
- services provided by the attorney (you can add information here);
- fees arrangements:
hourly rate - почасовая ставка
billing - выставление счетов
reimbursement - возмещение расходов
retainer - предварительный гонорар адвокату;
- term of the agreement and termination;
- integrity of the agreement and applicable laws;
- dispute resolution or arbitration.
SAMPLE LEGAL SERVICES AGREEMENT 1

This Legal Services Agreement ("Agreement") is between ,
("Client"), and (name) ("Attorney").
Client retains Attorney to perform legal services for Client, as set forth
herein, and Attorney agrees to provide such services.
In consideration of the mutual covenants contained herein the parties
hereto agree as follows:
1. Services
Client hereby engages Attorney to perform the following legal services:
[ Describe services here]
2. Fees and Reimbursements / Invoices

2.1 Client agrees to pay Attorney for services rendered hereunder at the
rate of $ per hour.
2.2 In addition, upon submission of proper documentation, Client will
reimburse Attorney for all reasonable and customary expenses incurred while
providing services for Client. Travel time shall be billed at one-half the normal
hourly rate. Out of pocket expenses shall be reimbursed without mark-up or
service charge.
2.3 Attorney shall submit an invoice to Client at the completion of the
work, or at the 'beginning of each month during the progress of the work
setting forth a description of the work performed and related fees and
expenses for the prior month. These statements shall be submitted to Client at
the address set forth in Section 8 below. Client shall promptly review and pay
each such invoice. Invoices which remain unpaid after 15 days are subject to
service charges at one percent of the unpaid balance per month, or the highest
rate legally allowed under (state)_ law. Attorney reserves the right to
suspend further work for Client if invoices are not promptly paid.
241
3. Term
The term of this Agreement shall commence as of the date signed by both
Attorney and Client below, and shall continue in effect until the earlier of (a)
the completion of the work for which Attorney is engaged by Client, or (b)
termination by either Attorney or Client, as provided in section 6 of this
Agreement. The term may be extended beyond the completion of the initial
work by agreement of Attorney and Client.
4. Independent Contractor
Attorney shall perform services hereunder as an independent contractor
and not as an employee, partner, or agent of Client.
Note: independent contractor - фирма, выполняющая работу по договору
5. Protection of Confidential Information
5.1 All work product of Attorney in the performance of this Agreement,
including without limitation, analyses, reports, documents and other
information, shall be considered Confidential Information. Any information
disclosed to Attorney by Client or others on behalf of Client in connection
with this Agreement shall also be considered Confidential Information.
5.2 Except as Client may authorize in writing, Attorney shall not disclose
any Confidential Information or use it for any purpose other than the
performance of services under this Agreement. Promptly upon Client's
request, Attorney shall deliver to Client all Confidential Information received
from Client or others which Attorney has in his possession, but Attorney is
authorized to retain copies for archival purposes.
6. Termination
This Agreement may be terminated by either party on written notice by
one party to the other party. Immediately upon receipt of such notice,
Attorney shall stop all work, but any work done through the date of
termination shall be paid for as provided in Section 2 above.
7. Applicable Law / Entire Agreement
7.1 This Agreement shall in all respects be governed by and construed in
accordance with the laws of .
7.2 This Agreement constitutes the entire agreement and supersedes all
prior agreements and understanding, both written and oral, between the
parties relating to the subject matter hereof. It shall not be amended,
supplemented or superseded except by a written agreement signed by both
parties.
8. Notices
All notices, invoices, correspondence, consents, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to
have been duly given when actually received. Such notices may be given
personally, by registered or certified mail, or by facsimile transmission,
242
if to Attorney:
Name Address City Telephone: Facsimile: Email:
if to Client: Name Address City Telephone: Facsimile: Email:
or to such other address as either party shall have last designated by notice
to the other party.
9. Waiver
Failure of either party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of
such provisions nor in any way affect the validity of this Agreement or any
part thereof or the right of either party thereafter to enforce each and every
provision thereof. The waiver of any provisions of this Agreement or any
breach thereof shall not constitute waiver of any subsequent breach of the
same or any other provisions of this Agreement.
10. Survival
The obligations of Attorney under Section 5 of this Agreement shall
survive termination or expiration of this Agreement for a period of five (5)
years.
11. Dispute Resolution
In the event of any disagreement or dispute concerning this Agreement,
Attorney and Client shall exercise reasonable efforts to resolve the matter
amicably. Failing that, any matter concerning the fees charged to client
hereunder, or failure to pay the same, shall be first brought before the fee
arbitration process of (state) Bar Association for resolution.
Attorney retains the right to bring a collection action in any court of
competent jurisdiction, and Client agrees to submit to the jurisdiction of the
courts of (state) . In any such action, the prevailing party shall be
entitled to attorneys fees and costs from the non-prevailing party.
IN WITNESS WHEREOF, the parties have executed this Legal Services
Agreement on .
Client:
Attorney:
Note: prevailing party - сторона, выигравшая дело
1.
The Client has read the agreement and, as it often happens, wants to
check if he's got everything right. The following statements show how
he/she understands the provisions. Confirm or correct and explain.
- I have to pay for services full hourly payment plus all the expences incurred
while providing the services.
- When you complete the work I ordered, you'll send me an invoice and I
have to pay promptly by the receipt of the invoice within 15 days.
243
- If I fail to pay in due time, you may charge me or terminate the agreement.
- The term of the Agreement begins on the day of signing it and may be
extended any time I want.
- Neither you or me must disclose the confidential informaion that we come
to obtain. You receive my documents - reports, correspondence and such,
and keep them in your office archive.
- The Agreement may be terminated any time by giving a written notice.
- This Agreement is governed by the law of the State and can never be
amended or changed.
- The waiver clause is the most difficult to understand. I guess, it's about the
denial to fulfil the provisions, right? If I fail to perform something under the
provisions, it doesn't mean that I refuse to acknowledge this provisions or
other, or the Agreement itself, right? Thus, I'm still liable for whatever
I agreed to.
- As for dispute resolution. It's really always better to solve problems out of
court. But if it comes to a real dispute, shall I or you choose the venue?
I mean is there any difference where the case is arbitrated?
2. Fill out the missing information in the gaps: names, services
description, fees rates, addresses and other particulars. Arrange to
discuss the Agreement with your partner as kind of "negotiating" practice.
3. Refer to the Legal Forms Supplement I section. There is another
Sample - Retainer Agreement, a more extensive version. Compare
that one with the Legal Services Agreement.
Define if Retainer Agreement 2 has the provisions stated in the task
before the Legal Services Agreement.
Are the clause titles the same? What clauses are there in the Retainer
Agreement?
What are the Firm's responsibilities (obligations) concerning Intellectual
Property?
What services does the Firm render? Why does the Client retain the Firm
for that?
Pairwork
The two copies of a Business Consultrant Agreement are by chance
incomplete. Two clerks review one copy against the other and enquire
for the necessary information
Student A. In your copy you've got the name and address of the Company,
the term dates and sums of payment set forth in the Agreement. But you are
missing a lot of facts. Ask Student B to clarify the details. Start your query:
- Look at the part of identification of the parties. Will you give me the
name and address of the Consultant?
- Look at the clause I miss information after the words
Ask a question. The question words are given to you.
244
BUSINESS CONSULTANT AGREEMENT

Student A
This agreement dated _12.12.2005_, is made By and Between CHAMP,
Inc_, whose address is 10 East ave, Springtown, Alaska , ("Company"), AND
, whose address is , ("Consultant.")
1. Consultation Services. The company hereby employs the consultant to
perform the following services in accordance with the terms and conditions set
forth in this agreement: What?
2. Terms of Agreement. This agreement will begin _12.12.2005_ and will
end 12.12.2006 . Either party may cancel this agreement on thirty (30) days
notice to the other party in ...How? In what manner?
3. Time Devoted by Consultant. It is anticipated the consultant will spend
approximately 4_hours_ in fulfilling its obligations under this contract. The
particular amount of time may vary from day to day or week to week. However,
the consultant shall devote a minimum of _80_hours per month to its duties in
accordance with this agreement.
4 . P l a c e W h e r e S e r v i c e s W i l l B e R e n d e r e d . T h e c o n s u l t a n t will p e r f o r m
most services in accordance with this contract at a location of consultant's
discretion. In addition What other services ?
5. Payment to Consultant. The consultant will be paid at the rate of
$ 200_ per hour for work performed in accordance with this
agreement. However, the consultant will be paid at least $_1600_ per month
regardless of the amount of time spent in accordance with this agreement. The
consultant will submit an ...What?., setting forth the time spent and services
rendered, and the company will pay the consultant the
6. Confidential Information. The consultant agrees that any information
received by the consultant during any progress of the consultant's obligations in
accordance with this contract, which concerns What? will
be treated by the consultant in full confidence and will not be revealed to any
other persons, firms or organizations.
7. Employment of Others. The company may from time to time request
What? the consultant arrange for the services of others. All costs to
the consultant for those services will be paid by the company but in no event
shall the consultant do What?
By:
By:
Student B. In your copy you have the name and address of the Consultant
and the full text of the Agreement. But you miss the term dates and sums of
payment set forth in the Agreement - there are gaps with ??? (question)
245
marks. In your query you are to find it out, and provide information for
Student A. Start your query:
- Look at the part of identification of the parties. Will you give me the
name and address of the Company?
- Look at the clause I miss information after the words
Ask a question.
BUSINESS CONSULTANT AGREEMENT

Student B
This agreement dated ?? , is made By and Between
__??? , whose address is _, ("Company"), AND
Andrew White_, whose address is 12 West street, Springtown, Alaska ,
("Consultant.")
1. Consultation Services. The company hereby employs the consultant to
perform the following services in accordance with the terms and conditions set
forth in this agreement: The consultant will consult with the officers and
employees of the company concerning matters relating to the management and
organization of the company, their financial policies, the terms and conditions of
employment, and generally any matter arising out of the business affairs of the
company.
2. Terms of Agreement. This agreement will begin _??? and will end
??? . Either party may cancel this agreement on thirty (30) days notice
to the other party in writing, by certified mail or personal delivery.
3. Time Devoted by Consultant. It is anticipated the consultant will spend
approximately ??? in fulfilling its obligations under this contract. The
particular amount of time may vary from day to day or week to week. However,
the consultant shall devote a minimum of ??? per month to its duties in
accordance with this agreement.
4 . P l a c e W h e r e S e r v i c e s W i l l B e R e n d e r e d . T h e c o n s u l t a n t will p e r f o r m
most services in accordance with this contract at a location of consultant's
discretion. In addition the consultant will perform services on the telephone and at
such other places as necessary to perform these services in accordance with this
agreement.
5. Payment to Consultant. The consultant will be paid at the rate of
$ ??? per ??? for work performed in accordance with this
agreement. However, the consultant will be paid at least $ ??? per month
regardless of the amount of time spent in accordance with this agreement. The
consultant will submit an itemized statement setting forth the time spent and
services rendered, and the company will pay the consultant the amounts due as
indicated by statements submitted by the consultant within ten (10) days of
receipt.
246
6. Confidential Information. The consultant agrees that any information

received by the consultant during any furtherance of the consultant's
obligations in accordance with this contract, which concerns the personal,
financial or other affairs of the company will be treated by the consultant in
full confidence and will not be revealed to any other persons, firms or
organizations.
7. Employment of Others. The company may from time to time request that
the consultant arrange for the services of others. All costs to the consultant for
those services will be paid by the company but in no event shall the consultant
employ others without the prior authorization of the company.
By:
By:
Information Processing for Legal Counseling

Most of the time lawyers spend working on documents, reading and
drafting contracts. You are offered to review or study contracts that can
be found in the Legal Forms Supplement I for the following purpose:
the client asked you to prepare a contract.
For the beginning every smart lawyer will look through the
ready-made samples on the web, or reference guides. Study them closely,
choose the better one and fill out the necessary information.
But a smarter lawyer will check up the provisions to make sure they
comply with all the rules of Contract law and document drafting
requirements.
The clients are:
1. An owner of a small business who is intending to have a garage
built.
(Agreement between Owner and Contractor)
2. A footwear manufacturer who is opening a sales office.
(Sales Representatives Agreement)
3. A bar owner who intends to lease acoustic equipment.
(Lease Contract)
You are to scan the agreements in the Legal Forms Supplement I
section.
The first two have simple structure (no titles provided) and the
language is also qiute understandable. The third, Lease Agreement,
needs special study as the notion of lease may be new to you.
The following is "Help" material.
247
Owner - Contractor Agreement
Reference:
A contractor is in a legal sense one who enters into a binding agreement to
perform a certain service or to provide a certain product in exchange for
valuable consideration, usually money but sometimes other goods or services
in a barter arrangement. In the building trades, a contractor is one who is
engaged in the construction of a building or buidlings for a client. The
construction site is often overseen by a general contractor, who may perform
the work entirely through the efforts of himself and his employees or who may
employ subcontractors to perform some or all of the work.
1. Find out what information you are lacking to draft the agreement.
2. Make sure that there are all four elements of a contract.
3. Define where it's necessary to provide clear term.
4. Jot down the obligations and responsibilities of a contractor.
5. Check if there is an insurance clause - it's construction work.
6. Find if anything is said about Force Majeur.
7. Finally define what is said about liquidated damages, or the
compensation calculated before entering into the agreement (liquidated
damages - заранее оговоренное возмещение убытков).
Fill in the gaps with any data you need find appropriate. As for the project
description, use your imagination.
Sales Representatives Agreement

A sales representative is a person who represents a certain company in a
defined geographical area and is responsible for sales in this area. His
responsibility is also to provide information and submit reports to the
company. The company pays commission to sales reps.
Scan the Agreement to define and highlight the following provisions:
1) obligations of the parties;
2) money terms;
3) termination;
4) entire agreement clause;
5) the clause showing that the parties are bound by mutual obligations
stated above.
Fill in the gaps the form with any data you can devise.
248
Lease Agreement
Leasing allows a company or entity to have the benefits of using equipment
without the requirements of ownership. This might offer the company the tax
benefits of writing the use of the equipment as an operating expense versus
depreciating it as an asset.
Leasing goods are mobile (automobiles, ships, aircraft, IT equipment) as
well as immobile (buildings).
Steps to work with the document:
1. First scan the agreement to view the clauses that are only enumerated to
find out that the provisions mainly concern the obligations and liabilities
of Lessee.
2. The gaps that have numbers should be filled out with the information
given below:
Make and Model Manufacturer's Serial No. Registration No.
Yamaha EG - 112 electric guitar / Yamaha RGX1215 - electric guitar /
Yamaha Stage Custom Standard Drumkit
It's advisable now to use names or titles of the parties in Lease Agreements,
so you can substitute all words Lessor and Lessee with the names.
See (3) (5).
(1) musical equipment
(2) date - your choice
(3) BestSounds,Inc (Lessor, or better Sound)
(4) address - your choice
(5) Jack Sanders (Lessee, or better Sanders)
(6) address - your coice
(7) electro guitars - 2; drumkit - 1
(8) stage performance
(11) four hundred fifty dollars ($450) a week
(12) due on the first day of each month
3. You have prepared the interpretation of the Agreement for Jack Sanders.
Check if everything is true while reading the provision 4 a-j.
Jack Sanders must safely keep and carefully handle the eqipment. He must
maintain the equipment in its present condition and if a repair is necessary to
be done, he must do it at his own expenses. Jack ensures that nobody causes
any harm to the equipment.
He can't sell it, or let it be stored or mortgaged. Jack is responsible and
liable for any occasional damage. He has to insure the equipment against loss
or damage for the benefit of BestSound.
Jack must return the guitars and drumkit in good working condition.
249
The optional activity here is a pairwork or role play when a lawyer

discusses the drafted agreement with the above said clients.
After you have studied the "art", or craft of contract drafting, and
after you've learnt so many special terms and phrases, refer to the
Reading Supplement to read a curious text. You'll like the title: Top 10
Phrases not to be Used in a Contract. Find out which phrases you
should forget.
International Contracts
Core Vocabulary 3
letter of credit - аккредитив
shipment - отправка, доставка грузов, транспортирование, пере-
возка грузов
clearing - безналичные расчеты, клиринг
freight - стоимость перевозки
replacement value - стоимость страхового возмещения, оценка по восстано-
вительной стоимости
The negotiation, drafting and operation of a business under an
international business contract can be different from doing business
within a home country. Differences in laws, language, customs,
currency, credit practices and many other important elements of a
business transaction can have a significant impact on the success of the
transaction. The following are some on the main issues that should be
addressed in any international agreement.
Essential elements of an international agreement for the purchase of
goods will include: identification of the parties, identification of the
goods being purchased, statement of the price of the goods, identifying
what currency is used to determine price, statement of method of
payment and the payment terms, statement of time for delivery,
identification of method of delivery, statement of insurance requirements,
statement of who bears risk of loss and when risk of loss shifts, statement
of what constitutes a breach and/or a default of the agreement and
statement of when, where and how contract disputes will be resolved.
All the above said has appropriate titles of contract clauses.
The titles below should be placed in the proper blanks starting each
abstract with explanations.
250
и n i t 3. Contract Drafting Outline i
a) Letters of Credit and Other Forms of Payment g)Language

b) Currency h) Applicable Law
c) Terms for Delivery, Insurance, Freight and Risk of Loss i) Clearing Customs
d) Identification of the Parties j) Pre-Shipment Inspection
e) Acceptance or Rejection of Delivery k) Time for Payment
f) Time For Delivery l) Insurance
1) - It is important that any international business contract clearly

identifies the parties to the agreement. Identification of individuals,
corporations, limited liability companies, partnerships, joint ventures or
other forms of doing business can have a significant impact on the legal
rights of the parties to the transaction and can affect the laws used to
interpret the agreement.
2) - If the language of both parties is the same, that language can be
the language for interpretation of the agreement. If the languages of the
parties are different, one language should be chosen for the controlling
version of the agreement with a translation of the agreement into the
other language as a second version of the agreement. Both language
versions of the agreement must be signed by both parties.
3) - As with language, one form of currency needs to be the
controlling basis for pricing under the agreement. Because of the
fluctuation of the value of currencies against each other, it is also wise to
include a provision allowing either party to cancel the transaction if
currency fluctuations cause a substantial reduction in the profits either
party expects to receive from the deal.
4) - Payment under most international transactions will be made
by Letter of Credit. These are very specific bank documents that
guarantee payment from the buyer's bank account to the seller's bank
account upon the occurrence of certain events related to the transaction
(e.g. goods placed on board the ship, goods clear customs).
5) - One of the most important issues in the international purchase
of goods is the assurance that the goods delivered are in substantial
conformance with the goods ordered. Most experienced international
traders will use an independent agent for a pre-shipment inspection of the
goods before they leave the factory and/or the dock for delivery to the
customer. Issues covered in these pre-shipment inspections will include:
product quantities, internal product packaging, product quality,
compliance with labeling requirements, confirmation that delivery
addresses are correct.
6) - Many international shipments of larger products will be by
container ship over one or more of the world's oceans. Because of the
possibility for delay due to weather, international disputes or other
251
events outside the control of the parties, it is important to have a clear

understanding of how delays in delivery will be handled.
7) - Some of the vital elements of an international contract for the
purchase of goods relate to who pays the cost to ship the goods, pays for
replacement insurance and bears the risk of loss from the point of
shipment. Certain terms and abbreviations have been developed for
designation of these issues in a contract and anyone engaged in
international business must be aware of how these issues are treated for
their particular transactions.
8) - Any international shipment of goods should be covered by the
full replacement value of the products being purchased. Depending upon
the economics of the deal, additional insurance coverage can be obtained
for lost profits if the shipment is lost or destroyed.
9) - International shipments of goods will be required to clear
customs in the country of delivery. Different goods and products will
have different customs requirements and the procedure for compliance
with these requirements should be stated in the agreement. Use of an
experienced Customs Broker is strongly recommended.
10 ) - Every international contract should contain a provision
addressing how the buyer of the goods will provide the seller with notice
of acceptance or rejection of the shipment. This provision should include
a requirement that the shipment is opened and inspected for breakage or
non-conforming goods within a short time after the goods clear customs.
11 ) - Every business contract needs to contain a provision stating
the time for the payment for the goods. Payment can be divided so that
part of the payment is made when the order is placed and the balance
upon delivery or some other combination of terms. Payment may be (i) in
advance; (ii) upon delivery or (iii) upon some date after delivery.
12 ) - Every agreement for international business should have a
provision stating what laws will apply to the transaction and any dispute
that may arise as a result of the transaction. Such terms would also
include a provision for what dispute resolution procedure will be used
(e.g.. mediation, arbitration or action in the courts).
See p. 259.
The United Nations Convention on Contracts for the International

Sale of Goods (CSIG)
Prior to 1998, each country had its own set of laws governing business
transactions. In 1988, the United Nations established standards to govern the
international sale of goods between parties in over 40 countries and there are
currently approximately 60 countries that have adopted the provisions of
CSIG.
252
Terms for International Sale of Goods

In 1990, the International Chamber of Commerce completed a revision to
its International Commercial Terms (Incoterms) for the international
shipment of goods. Intended to better describe modern shipping practices
than just by FOB and CIF, the Incoterms consist of the following descriptions
of the delivery and acceptance obligations of seller and buyer:
EXW (Ex Works - buyer pick up goods); FCA (Free Carrier - buyer
receives goods when delivered to first carrier);
FAS (Free Along Side - buyer receives goods when transferred from first
carrier to second carrier);
FOB (Free on Board - buyer receives goods after seller delivers the goods to
a designated shipment point);
CFR (Cost and Freight - buyer pays for cost of goods and shipment);
CIF (Cost, Insurance and Freight - buyer pays for cost of goods,
replacement insurance and shipment);
CPT (Carriage Paid To - seller pays for delivery of the goods to a certain
point);
CIP (Carriage and Insurance Paid To - seller pays for delivery of the goods
and replacement insurance to a certain point);
DAF (Delivered at Frontier - seller pays to deliver the goods to the border);
DES (Delivered Ex Ship - seller pays to deliver the goods to a described
mode of transportation);
DEQ (Delivered Ex Quay - seller pays to deliver the goods to a
trans-shipment location);
DDU (Delivered Duty Unpaid - the goods are delivered to a designated
location without payment of duty, value added taxes or other costs imposed by
receiving country) and
DDP (Delivered Duty Paid - the goods are delivered to the designated
location with all duties and taxes prepaid). It is important to note that these
terms address not only the cost of shipment and insurance, but also where the
risk of loss transfers from the seller to the buyer.
Commentary on some provisions of International Sales Contract
(C - means Comment)
This Agreement is made on [date].

C: When dealing internationally, you should remember that the
conventional format for dates differs from country to country. In some, the
day is stated before the month; in others, the month is given before the day. To
avoid confusion, it is highly recommended that you spell out the month when
dating your contract.
253
This Agreement is made between [full name of party A] of [address of

party A], a/an [description and nationality of party A] ("Seller"), and [full
name of party B] of [address of party B], a/an [description and nationality
of party B] ("Buyer").
C: The common practice is to include the address of each party in this
provision, although sometimes the addresses are included at the end of the
agreement with the signatures of the parties. The address given should be the
business address for the party. If a party has more than one business address,
the address given should be for the registered office or the principle place of
business. Unless otherwise specified in the contract, this address is where the
party will receive the goods, the payment for the goods, and any notices
related to the transaction.
In international contracts, the description of each party includes the
party's nationality
Terms of Payment. The Buyer will pay the purchase price [specify e.g.,
on or before (date) or not later than (number) days before the Delivery
Date]. The payment must be remitted to the Seller at [the address stated
above or specify other address]. The payment must be made in [currency]
by means of [instrument of transfer].
C: In international contracts, you should always specify the acceptable
currency and the instrument of payment. The currency selected should be
strong and stable to allow some protection against fluctuating exchange rates,
and the means of payment should be secure. For example, the payment may be
made by delivery of a documentary letter of credit or documents against
payment, by advance payment in cash or wire transfer, or by a line of credit for
a specified number of days.
Delivery and Transport of Goods. The Goods will be delivered [trade
term, e.g.,F.O.B.[ [place] on or before [date] ("Delivery Date"). The
Seller will deliver the Goods in a single shipment. The mode of transport to
the point of delivery is at the Seller's discretion. The Seller will make every
effort to commence transport of the Goods so that they will arrive by the
Delivery Date. If there is any delay, the Seller will immediately notify the
Buyer of the delay, the expected time for delivery, and the reason for the
delay. The Buyer will then have the option to renegotiate with the Seller
for a new Delivery Date, which the parties will confirm in writing as a
modification to this Agreement, or to notify the Seller that the Agreement
is terminated.
C: Contracts for the sale of goods most commonly use international trade
terms-usually Incoterms as defined by the International Chamber of
Commerce in Paris-to assign responsibility for the risks and costs of transport.
If you do not use an Incoterm, the delivery and transport provision may
254
simply state the name of the carrier who will handle the freight shipment,
designate the point at which and the date on which the goods will be delivered
to the buyer, and identify the party who will pay for transportation from point
A to point B.
Insurance. The [Buyer/Seller] will obtain and pay, on its own account,
for all insurance on the Goods while in transit, provided that the insurance
obtained will include for the protection of the [Seller/Buyer] coverage for
the following: [specify]. Evidence of this insurance, in the form of a copy of
the policy or other statement provided by the insurer, will be provided to
the [Seller/Buyer] before the Goods are shipped. Each party is responsible
for obtaining on its own account any other insurance coverage for the
Goods that he/she may desire.
C: You should specify the insurance required, the beneficiary of the policy,
the party who will obtain the insurance and who will pay for it, and the date
by which it must be obtained. You should also agree on which documents will
be considered satisfactory evidence of insurance.
Indemnification of Buyer. Provided the Buyer has not altered the
Goods or the packaging of the Goods in any manner before sale, the Seller
will defend any suit for damages brought against the Buyer based on a
defect in the materials, design, or manufacturing of the Goods or on patent
or trademark infringement in connection with the sale or use of the Goods.
If an action is brought against the Buyer, it will promptly notify the Seller.
The Seller will indemnify the Buyer against any liability, damage, or
expenses incurred in connection with any such suit and will pay any
judgment entered against the Buyer in such suit.
C: An indemnification clause is optional. In international contracts, the

seller will sometimes agree to hold the buyer harmless from damages that arise
from specific causes, such as a design flaw or manufacturing defect, in order to
encourage the buyer to debut the seller's products in a new market. If an
indemnity is given, the seller should always insist that there is no change in
the goods, packaging, labeling, or markings before the sale; any alteration by
the buyer should cancel the indemnity, unless the alteration was approved by
the seller.
Intellectual Property Protection. The Buyer understands that the Seller
owns the exclusive rights in the designs, patents, trademarks, trade
names, and company names (the "Intellectual Property") used in
connection with the Seller's Goods. The Buyer is given no rights in any of
the Seller's Intellectual Property. The Buyer will not use the Seller's
Intellectual Property as if it were the Buyer's own property, nor will the
Buyer register the Seller's Intellectual Property in any country as if it were
the Buyer's own. The Buyer acknowledges that its unauthorized use or
255
registration of the Seller's Intellectual Property, or of any intellectual

property that is confusingly or deceptively similar to the Seller's
Intellectual Property, will be deemed an infringement of the Seller's
exclusive rights.
C: The infringement of rights in intellectual property, trademarks, service
marks, trade names, patents, designs, and similar rights, should be prevented if
at all possible from the outset of the relationship between the parties. All too
often, a company will make a small sale to a foreign buyer, who never places
another order. Then, five or ten years later, the company decides to expand
into that same foreign market only to find that it cannot register its
intellectual property there because the foreign buyer has acquired registration
of the same or nearly identical trademarks, trade names, or patents. If the
company tries to sell in that country, it will be charged with infringement. Its
only remedy is to buy out the infringer or expend substantial time and costs in
fighting the infringement through the courts. The value of intellectual
property rights should not be underestimated-even for a one-time sale-and
they should be protected. The legal remedies available against infringers are
often inadequate relative to the harm caused, and therefore a liquidated
damages clause is recommended.
Force Majeure. This Agreement will be deemed canceled, and neither

party will have any liability to the other for losses resulting from
nonperformance, if delivery is prevented by causes beyond the control of
the Seller. Such causes include, but are not limited to, acts of nature, labor
disputes, failure of essential means of transportation, or changes in policy
with respect to exports or imports by the [country] government or the
[country] government.
C: A common clause in all contracts, the force majeure clause merely
expresses what is no doubt the intent of the parties: if performance is
prevented by a natural disaster or other catastrophic event beyond the control
of the parties, the agreement is canceled.
Forum and Governing Law. The parties understand and agree that the
laws of [location] will be applied to interpret this Agreement. This
Agreement [is/is not] to be interpreted by application of the United
Nations Convention on International Sale of Goods. Any action fded to
resolve a dispute between the parties must be brought in [location].
C: Choose the law of a specific jurisdiction to control any interpretation of
the contract terms. The law that you choose will usually affect where you can sue
or enforce a judgment and what laws, rules, and procedures will be applied. If you
file suit in your own country, where domestic counsel and commercial laws are
familiar to you, your experience will be different than if you litigate in a foreign
country, where you will be subject to unfamiliar laws, rules, and procedures and
256
will have to rely on foreign counsel. You should also identify the place where a
dispute may be settled-for example, the country of origin of the goods, the
country of destination, or a third country that is convenient to both parties.
The following provisions are for a complete, simple, international contract
for the one-time sale of goods. Not every provision listed is applicable to every
contractual arrangement. The purpose for referring to the following checklist
js to ensure that you have defined your relationship with the other party as
clearly as possible and that you have considered and provided for as many
contingencies as may be anticipated in advance.
Regardless of whether you draft the terms of your contract by yourself, you
need to be aware of the key provisions because it is up to you to insist on the
protection of your own interests. Although the law of many countries will imply
certain terms to encourage fair dealing, this law is generally applied through
costly and time-consuming legal processes, whether court, arbitration, or
mediation proceedings. Moreover, the application of provisions implied by law is
up to disinterested third persons, and the end result may not be what you want.
The best course of action is to define all of the provisions of your contract in
writing at the time you enter into it. These provisions should include:
1. Contract date 16. Transportation-carrier 31. Cancellation

2. Identification of parties 17. Transportation-storage 32. Liquidated damages
3. Goods-description 18. Transportation-notice 33. Attorneys' fees
provisions
4. Goods-quantity 19. Transportation-shipping 34. Force majeure
time
5. Goods-price 20. Transportation-insurance 35. Inurement and
or risk of loss protection assignment
6. Payment-method of 21. Import/export 36. Conditions precedent
payment documentation
7. Payment-medium of 22. Invoice preparation 37. Governing law
exchange and delivery
8. Payment-exchange rate 23. Re-exportation prohibition 38. Choice of forum
9. Costs and charges-duties 24. Inspection rights 39. Severability of provisions
and taxes
10. Costs and 25. Indemnities 40. Integration of provisions
charges-insurance
11. Costs and charges- 26. Intellectual property 41. Notices
handling and transport rights
12. Packaging arrangements 27. Warranties 42. Authority to bind
13. Delivery-date 28. Enforcement and remedies 43. Independent counsel
14. Delivery-place 29. Arbitration provisions 44. Acceptance and execution
15. Delivery-transfer of title 30. Modification of contract
257
The Legal Forms Supplement II section contains Sample Forms of

Agreements (Contracts) concerning nearly every topic covered in the
book.
To review the Units and to continue to master contract reading skills
you can either scan or study the following samples:
1. Employment Agreement.
2. Partnership Agreement.
3. Franchising Agreement (short form).
4. Joint Venture Agreement.
5. Copyright License Agreement (2 versions).
6. Purchase Agreement (abridged with focus on Product Liability
clause).
7. Contract of Sale of Goods (short form).
Additional (and Final) Reading Task

You've studied the book. You've learnt a lot about laws and lawyers:
what they do, how they counsel, what they now, where they work.
Do you know if there are special rules for lawyers that instruct them
what they have to do, what they shouldn't or even must not do?
Refer to the Reading Supplement section and read the Mode Rules
of Professional Behavior concerning lawyers.
While you are reading make notes. You are supposed to discuss the
issue.
P. 231:
1. No. There is no consideration in the contract. The contract is binding
and enforceable when all the four elements are present. You should
negotiate the contract again.
2. You must make the obligations clear. Ambiguousness doesn't make
the contract binding.
3. In fact, under the US law no, as you're not a competent party to a
contract. But the age limit varies from state to state.
4. Actually, if you've been delivered the copy, you are to execute the
contract.
5. Yes, it's quite possible. But it will be a counteroffer and you are to
start a new process of negotiations.
6. A contract is binding if the four elements exist, that is competent
parties, legal subject matter, mutual agreement and mutual
obligations.
258
7. The company has breached the contract. Bring the case to court. You
either claim damages or, what is better, the specific performance.
You want the repair completed, don't you?
P. 235:
1T 2F 3QT 4T 5T 6T 7T 8F 9F 10T
P. 252:
1d 2g 3b 4a 5j 6f 7c 81 9i 10e 11k 12h
GRAMMAR SUPPLEMENT
Gender-Neutral Legal Writing
The law applies to persons, namely individuals of both sexes and a

variety of entities, such as corporations. Some laws, or statements about
the law are, by their nature, capable of application to persons of one
particular sex or to natural persons or legal entities. Statements
concerning the legal matters of husbands, mothers and companies are
examples. The vast majority of laws, however, apply to persons who can
be both men and women, and also corporations. The examples here are
numerous: producer, owner, seller, employer, plaintiff, defendant,
claimant, offender etc.
The issue of gender concerns the usage of personal and reflexive

pronouns in legal writing works, including publications on legal matters.
The pronouns are:
he, she, him, her, his, hers, himself, herself, it, its, itself.
When and how is it proper to use them?
Many just use the masculine pronouns referred to all entities and
filling the blanks with "he" and "his" is acceptable and appropriate.
Some writers adopt the feminine pronouns "she" and "her" as a kind of
opposition to total masculine pronouns.
Sometimes the use of pronouns is balanced, for example, in one
passage the judge is refered to as "he" and in another passage as "she".
Other writers set out both forms of the pronoun in a "he or she" and
"him or her" kind of formulation. In some contexts these approaches may
be satisfactory.
That is why some writers suggest that the reference to gender should
be avoided and gender-neutral style should be used. That means
applying other grammatical forms in order to convey the idea.
260
Gender-Neutral Legal Writing
Ways to apply gender-neutral style

Replace "his" with "the" or "a"
Administering justice a judge decides a case and gives his judgment.
Administering justice a judge decides a case and gives the judgment.
Use Third Person Plural Form "they" and "their"

A solicitor can speak for his client in lower courts.
Solicitors can speak for their clients in lower courts.
The use of "who" or "whose"

A business lawyer can provide expertise in financial planning. He'll
help the client to deal with banks and trusts.
A business lawyer, who can provide expertise in financial planning,
will help the client to deal with banks and trusts.
Use the Passive Voice

At the trial the plaintiff must present his evidence of the suffered loss.
At trial the evidence of suffered loss must be presented by the
plaintiff.
Use "personally" where appropriate
This liability will arise even though the owner is guilty of no
wrongful act himself.
This liability will arise even though the owner is not personally
guilty of a wrongful act.
Use "he or she", "his or her"
Every lawyer has his or her unique way of doing business.
A franchisor grants the rights to use his or her trademark to a
franchisee.
There are other ways to deal with the pronouns to avoid the
indication of gender but no definite grammar rules to do it because
gender-neutral style is more ethical than language issue.
The aim of this reference is to provide the information that will help
you to understand why this or that way is applied in the materials you
study.
You may keep to whatever method you choose appropriate for the
context, still to do so you're supposed to read more original texts.
261
Grammar Supplement
Modal Verbs
Modal verbs are auxiliaries, that means they aren't used alone, only
with the conceptual verb. Modal verbs have different functions that add
certain shade of meaning to the conceptual verb. These are mainly:
Necessity - необходимость, obligation - обязанность; ability - способ-
ность; permission - разрешение; prohibition - запрещение; advice - совет;
possibility or probability - возможность или вероятность; logical assumption
логическое умозаключение, and some other functions.
The table below illustrates the major functional positions of modals
(verbs and verb phrases or semimodals).
The following functions of modals and semimodals are considered
here in the context of legal and business subjects.
The usage will be shown by a number of examples from the texts of
the Units, or other from other sources.
. Table of Modal Verbs Usage
Necessity MUST HAVE TO NEED TO NEED

No necessity DO NOT HAVE NEED NOT
TO
Obligation MUST HAVE TO OUGHT TO SHALL
(formal)
Ability CAN BE ABLE TO COULD
Permission CAN MAY
Prohibition MUST NOT MAY NOT CAN NOT
(formal)
Advice SHOULD OUGHT TO
Possibility / MAY/ MIGHT CAN COULD
probability
Logical CAN'T/ MUST
assumption COULDN'T
Obligation and necessity

MUST, HAVE TO, NEED TO - are used to express that something is obligatory,
compulsory or required either by law, rule, or
instruction
262
Modal Verbs
Examples:
People must observe law. (moral obligation) [должны, обязаны |
The firm's lawyers have to provide professional counseling of the clients,
(imposed obligation or responsibility) [должны]
In order to get admitted to a law school you must pass a special exam LSAT.
(it's a compulsory requirement for the admmission) [должны, обязаны]
Students have to take a number of fundamental courses, (it's a necessary
requirement of the curriculum) [необходимо]
Law students need to develop analytical skills, (this is required necessity: it
is necessary that students develop such skills, but it depends on them whether
they succeed in doing so) [надо]
Those who intend to practise as barristers in the UK or abroad, will need to
enrol on the Bar. [надо будет]
A candidate must have a 2-year experience of working at a law firm,
(required necessity) [должен - требуется иметь ...]
You have to send your CV and a cover letter, (the requirement that is
necessary to fulfil) [необходимо]
Before you submit your CV you need to revise it carefully, (it's necessary to
do so) [надо]
All businesses must register with the state authorised bodies, (required by
law) [должны, обязаны]
You must create corporate bylaws, (it's a compulsory rule) [должен]
As a business owner you have to obtain permit, (it's a necessary requirement
imposed on the person), [надо, необходимо]
To set up a business you'll need to send some documents and forms to the
Registrar of Companies, (obligation expressed in future) [потребуется]
Absence of obligation / necessity

DON'T HAVE TO - there is no obligation / necessity to do smth (нет необходи-
мости; не должен)
Businesspersons don't have to complete these forms, their lawyers will do
that for them.
NEEDN'T - it's absolutely unnecessary (не надо, не стоит)
Running a franchise you needn't think about the brand promotion.
Trade secret needn't be registered.
Permission and prohibition

CAN - permission (можно)
You can ask as many questions as you want, (informal permission)
263
Grammar Supplement
MAY - formal permission (позволено)

The defendant may appeal after the judgment has been made.
CANNOT / CAN'T - refuse permission (нельзя)

The name cannot be the same as the name of another corporation, (it's not
permitted)
Can I file the papers later? - No, you can't.
MUST NOT / MUSTN'T - strong prohibition (запрещено)

The merging company must not initiate price fixing, (it's prohibited)
You must not disclose to anybody the know-how even after the termination
of the agreement, (it's forbidden)
MAY NOT (formal) - not allowed (не позволено)

Agreement may not be modified without a written notice, (line from a
contract)
National courts of the member state may not give effect to any national law
which is inconsistent with applicable EU rules.
Possibility / probability
MAY, MIGHT, CAN, COULD AND MUST - used to show that an
action is possible, the degree of possibility is expressed by different modal
verbs.
Possibility
CAN and MAY - express possibility.
Can shows that the thing or activity is quite possible.
May shows that the thing or activity is possible (= maybe; perhaps).
Compare:
Preparing properly the student can pass the exam. / If the student is lucky
he may pass the exam.
Examples:
Corporations can have perpetual existance.
Partners may terminate the partnership by agreement or by guarantee.
The companies can merge in order to continue the operations together.
Joint venture usually is a temporary enterprise but may become
permanent.
264
Modal Verbs
Probability
The degree of probability is shown by the examples. The situation is
explained in brackets.
sure - MUST - This case must be easy to win. (facts and evidence
clearly show this)
not so sure - CAN - The case can be easy to win. (facts are clear, and
evidence should be added)
even less sure - COULD - The case could be easy to win. (but there are still
some difficulties)
more or less sure - MAY - The case may be easy to win. ( but some facts are
still contradictory)
absolutely unsure - MIGHT - The case might be easy to win. (but there are a lot
of unsolved issues, no good witnesses, better not to
try it now)
Special use in legal documents - statutes, rules, ordinances,
contracts
MUST SHALL MAY SHOULD
Shall - means a high degree of statutory obligation.
That date shall be not sooner than ten days after the order is issued and not
later than fifteen days after the order is issued (Lanham Trademark Act, Sec.
1116. Injunctive Relief)
Client shall pay to Firm, as compensation for services to be rendered, the
amount set out on a flat fee or hourly basis, (a contract clause)
Must - obligation
The matters must be submitted to binding arbitration in accordance with
the rules of the American Arbitration Association, (a contract clause)
Since we conclude that the plaintiff failed to prove the infringement, the
order of district court must be reversed, (court's decision)
Should - mild obligation, but not advice when used in ethical codes,
memoranda, directives, etc.
An arbitrator should perform duties diligently and conclude the case as
promptly as the circumstances reasonably permit. (The AAA's Code Of Ethics
For Arbitrators)
May - as privilege
A trade secret may consist of any formula, pattern, device, or compilation of
information (Restatement of Torts, Section 757(b))
A person who suffers damage shall be entitled to recover such relief as
may be appropriate, ( Lanham Trademark Act, Sec. 1116. Injunctive Relief)
265
Grammar Supplement
Advice
S H O U L D - used to express advice
You should make your CV easy to read.
The letter should include the reasons why you are applying to the firm.
OUGHT - conveys the idea of mild obligation that can be
accepted as advice or necessity.
The applicant ought to post a covering letter to introduce the CV.
Ability
CAN BE ABLE TO COULD
Can - is used to apply any kind of ability to the conceptual verb.
A lawyer can advise clients on different legal issues.
Be able to - is used to express an ability in a specific situation.
We are not able to submit the documents as they aren't ready yet.
Could - in the meaning of ability is the past form of can.
Be able to is also used in the past and future tenses and with other modals.
The corporate attorney must be able to assist a client to incorporate.
Modals used in communication
The purpose is to express such functions as request, offer and
suggestion.
Will y o u . . . ? -request
Could I...? - request
Could y o u . . . ? -request
Can I...? -offer
Shall I...? -offer
Shall we ...? - suggestion
Would you ...? - offer, request
Other ways to express:

Obligation:
to be to do smth - an order from a person in authority
to be obliged to do smth - it is required to do smth in formal context
to be supposed to do smth - expresses lesser obligation that may be
ignored
Permission:
to be allowed to do smth
266
Conditional Clauses
Conditional Clauses
W e use c o n d i t i o n a l sentences t o t a l k a b o u t t h e r e l a t i o n s h i p b e t w e e n
events a n d t h e i r consequences or c o n d i t i o n a n d result - u n d e r w h a t
c o n d i t i o n t h i s o r t h a t r e s u l t i s possible.
C o n d i t i o n a l sentences c o n s i s t o f t w o clauses - I f c o n d i t i o n a l clause
a n d t h e m a i n clause.
Note. In the table the verb DO is the symbol of the form. Substitute any
verb here in appropriate form.
TYPE USE IF-clause Main clause
0 Under this condition Present Simple Present Simple

result is always the same IF DO DO
I Under this condition Present Simple Future Modal verb +
the result will or can be Infinitive
possible in the future IF DO WILL DO CAN/MAY... DO
II Under this condition Past Simple Would + Infinitive
the result is unlikely IF DID WOULD DO
possible in the present or
impossible in the future
III Under this imaginary Past Perfect Would + Present Perfect
condition that very IF DONE W O U L D HAVE DONE
result is already
impossible in the past
Type 0 - universal condition. The speaker shows that the same result always
follows this condition.
If you pay all the taxes, you don't have problems with tax authorities.
Type I - result is true in the future or present. The speaker indicates that under
this condition the result will follow.
If a plaintiff proves the infringement, the court will award a relief.
If the company's secret information is disclosed by an employee, the
company will sue him/her for trade secret misappropriation.
If-clause + Present Cont./ Present Perfect - modal verb in the main clause
If you have created a work of art, you can obtain copyright with the
Copyright Office.
If you are developing your own web site, you have to register the domain
name.
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Grammar Supplement
Type II - result is unlikely possible in the present and impossible in the future,
condition is unreal.
If all entities and individuals followed the rules of intellectual property laws,
the technologies would develop even faster.
Type III - the result is already impossible, the condition is imaginary - the
events happened in the past and nothing can be changed.
If the manufacturer had exercised the duty of care, the dangerous defect
wouldn't have appeared in the product.
If the seller had taken precautions when storing the goods, nobody would
have been injured.
Alternatives to IF
Unless - negative condition
Unless means if not (если не, пока не); or if only .... not (если только не...)
Don't make a move unless you consult a lawyer. (= don't make a move if you
don't consult a lawyer)
The court will award relief unless the defendant proves the fair use of
copyright. (= the court will award relief if the defendant doesn't prove the fair
use of copyright)
The term of agreement may automatically renew after the expiration unless
otherwise stated in the provisions.
Provided / providing (that) - used in Type I and II (если только ...)
Either party may terminate this Agreement at any time before its initial
term, provided that at least 10 days' advance written notice of termination is
given to the non-terminating party by the terminating party.
On condition that - used in Type I and II (при условии, что ...)
The court will reject a claim for damages on condition that the defendant
presents incontestable evidence.
In case (smb does smth) - used in Type I (в случае, если ...)
In case the producer finds the defects but fails to recall the whole line of
faulty goods, products liability case will be brought to court.
In the case of (smth) - Type I (при условии чего-л.)
In the case of contract breach the injured party will start the legal action to
seek remedies.
I n t h e e v e n t t h a t ( s m t h h a p p e n s / i s d o n e o r s m b d o e s ) - Type / ( в том
случае, если ...)
The Employer is hereby given the option to terminate this agreement in the
event that during the term Employee shall become permanently disabled.
268
Conditional Clauses
In the event of (smth) - Type I (в случае ...)

In the event of any disagreement or dispute concerning this Agreement,
Attorney and Client shall exercise reasonable efforts to resolve the matter
amicably.
Inverted constructions
Inverted constructions are used in formal legal written
documents.
Type I (present condition)
S h o u l d ...
Should the competitors start exercising deceptive practices we immediately
sue them for violation of antitrust laws. (Случись так, что ...)
These royalties are based upon a suggested retail price for the Work of US$
and will be adjusted up or down on a prorata basis should the suggested retail
price of the Work change.
Type II (imaginary present condition)
W e r e ... t o
Were the franchisor fail to disclose the possible risks in franchise business he
will be held liable for franchise law violation. (Если вдруг случится так, что...)
Type III (imaginary past condition)
P a s t P e r f e c t - H a d ... d o n e
Had the party amended the terms without notification, the party would
have terminated the agreement. (Если представить, что одна сторона вдруг
(уже) изменила условия без предупреждения, то вот тогда это считалось бы
расторжением договора.)
FUNCTIONS SUPPLEMENT
Connectors
Connectors are words that connect clauses in a sentence, or connect

ideas in a text.
The ways to connect clauses are:
1. Coordination - sentence - connector - sentence (e.g. and; but;
or), (see Table 1)
2. Subordination - the main clause - connector - subordinate clause
(e.g. because, when, though), (see Table 1)
3. Relation (relative clause) - sentence - who / which - sentence.
4. Adverbial: adverbs used as connectors of ideas - these are logical
connectors, textual links and sequence markers (e.g. however, yet,
so, thus), (see Table 2)
Table 1
Function Coordination Subordination
Addition AND
Contrast / BUT THOUGH ALTHOUGH EVEN THOUGH
opposition WHILE WHEREAS
Cause / effect SO BECAUSE SINCE AS SO THAT
Time BEFORE UNTIL WHILE ONCE WHEN
WHENEVER
H o w to use logical connectors, textual links

and sequence markers
Today I'm going to speak about logical connectors, textual links and
sequence markers, and in one brief text to illustrate the usage of these
small but important words and phrases. Obviously, the text will be a bit
overloaded with them, nevertheless, it must be done because an
example is better than a long explanation.
So, let's start.
270
Connectors Table 2
LOGICAL AND TEXTUAL CONNECTORS
Cause therefore consequently as a result thus that's why
Причина поэтому следовательно в результате таким образом; итак поэтому
Contrast yet however still
Противопоставление все же тем не менее все-таки
Condition in that case
Условие в таком случае
Concession anyway at any rate
уступка во всяком случае по крайней мере
Contradiction in fact actually as a matter of fact indeed
Возражение на самом деле фактически; в действительности; действительно
Опровержение на самом деле в сущности
TEXTUAL LINKS AND SEQUENCE M A R K E R S
Addition also in addition moreover besides what's more
Добавление также к тому же более того кроме того более того
Summary to sum up then in brief in general
Подытоживание в итоге, подводя итак короче вообще, в общем
итог
Conclusion in conclusion finally to conclude
Заключение в заключение и наконец в заключение
Inclusion for example for instance say such as as follows (written) e.g. (formal and
Включение (примера, например к примеру скажем такие как как указано далее, сле- written)
пояснения) дующим образом например
Highlight in particular especially mainly
подчеркнуть мысль в частности особенно главным образом
Generalization usually as a rule in general for the most part on the whole in most cases
Обобщение обычно как правило в общем большей частью в целом в большинстве случаев
Equivalence in other words that means that is to say namely
Уточнение иными словами что значит то есть, именно а именно
Stating the obvious obviously naturally of course clearly
Указание на очевид- безусловно, конечно как и следовало конечно несомненно
ность ожидать
Functions Supplement
In brief, connectors connect, links link and sequence markers mark

the sequence of ideas. Naturally, it is so when you have any ideas at all.
Actually, a person who is preparing a presentation or is going to write a
report or an article can't do without connectors, links and markers since
they serve as function keys.
For example, you want to speak out on an important issue. On the
whole, you know what to say, but, as a matter of fact, you are not
quite sure how to approach it, that is how to structure your statement.
Technically speaking, you are to divide your text into three main
parts, namely the introduction, the essential and the conclusion or
summary. While you are thinking it over, decide how to illustrate your
concept.
Firstly, you'll express a common opinion on the issue, although there
may be different opinions that contradict each other. However, it will
be wise to show your awareness of the problematic subject matter under
discussion, let alone the fact that you can break in here with the novelty
of your vision.
Next, you move on to the core idea - your opinion statement. You
are to deliver it clearly and distinctly, that means you should go into
many subsidiary details calling off from the core subject. Consequently,
such details mislead the audience, or readers. Alternatively, if you still
want to support your ideas prepare some visuals.
Finally, you are supposed to make a good summary. As a rule, it's a
brief and clear statement. Thus, I've come up to the end of the essay
that, I hope, has illustrated how to make connectors, links and markers
work for you. Besides, the essay also explains how to structure the
report or presentation.
To sum up, the essay is quite helpful.
Presentation
(Part IV. Unit I, Intellectual Property)
Presentations may be given for different reasons, on different sub-

jects and on various occasions, but the structure is always the same.
There are three main sections:
- Introduction.
- Main body ( 1,2, ... points).
- Conclusion.
272
Presentation
You needn't make the language of a presentation formal as in a

report. W h a t you really need is appropriate sequence markers, which
will help to move from one point to another. Besides, logical connectors
and textual links will serve to develop the ideas and convey them to the
audience (see the Connectors section).
1. Introduction consists of the following points:

a) greeting the audience and introducing yourself:
- Good morning, ladies and gentlemen. Let me introduce myself...
- Good morning, ladies and gentlemen. I'm ... from ...
b) introducing the topic: the purpose of the presentation, what the
speaker is going to speak about:
- Today I'm going to talk about...
- I'll be talking about...
- The subject of my presentation is ...
c) signposting - the order in which the presenter is going to develop
the main idea:
- My presentation will be in ... parts
- I've devided my presentation into ... parts.
- First / Firstly I'll be talking about...
- Secondly, I'll move on to ... / Then, I'm going .to look at...
- Finally, I will / am going to ...
d) stating the rules:
- I am going to answer the questions in the end.
- If you have any questions, don't hesitate to interrupt me.
- If you're not clear about anything, go ahead and ask any questions.
2. The main body of presentation

Moving from one point to another:
- So, let's get started.
- I'd like to go on to the next point which is ...
- I'd like to move on to the next point...
- Here I'll turn to ...
- Now let's look at...
Highlighting:
- I'd like to draw your attention to ...
- The main thing here is ...
- It should be pointed out that...
273
Drawing conclusions of the ideas:

- This means that...
- As you now can see ...
- Consequently,...
3. Closing t h e talk:
- To sum up,...
- To finish I would like to say / remind you ...
- In conclusion,...
Presentation sample
Good morning, ladies and gentlemen.
Let me introduce myself, I'm Jerry Parker, Marketing Director of the
company HighUp a renown manufacturer of sports equipment for hikers and
mountaneers and the owner of a hotel chain business.
Today I'm going to talk about the company's profile so that you could see
what we do and how we are performing. So, I've divided my presentation into
three parts. Firstly, I'll be talking about our main range of production.
Secondly, I'll move on to our publishing business. Finally, I'm going to
introduce our new development - a chain of highland hotels. You're welcome
to ask the questions in the end
So, let's get started. As you may know, the company manufactures
equipment and tools for mountaineering and hiking. The widest range
includes rucksacks, tents and camp furniture items. Naturally, the models are
variuos and can satisfy the most sophisticated demand. I'd like to point out
that our clients are not only amateur hikers but professional alpinists as well.
That is why we are developing special customized products. Our R&D have
been working out new technologies that we successfully apply in the
production of the equipment, tools and devices. It should be pointed out that
the company's brand is recognized throughout the country and abroad.
The marketing department has effectively promoted our brands through
various promotional materials and large-scale advertising. We've created not
only a distinctive trademark but quite exclusive tradedress of our products.
Furthermore, in cooperation with the Information Technologies we have
developed a website and have arranged e-commerce.
Now I'd like to move on to the next point - our publishing activity.
HighUp issues 2 magazines: one for the public, and one for the professionals.
The publishing team consists of qualified editors and phtographers, so every
issue is just unique in style and presentation. You can look through the copies
of the last issue which my assistants are distributing now. On the cover you
can see the photo of our hotel HighUp Inn.
Meanwhile, I'll turn to the last point of my presentation and tell you about
the highland hotel chain. We built the first hotel for mountaneers five years
274
Interactive Presentation
ago. It provided all facilities for the special guests from sledge rent to ski lift.
The service has become popular, and the demand in such hotels was growing,
so we decided to launch a franchise hotel service business. Now there are ten
HighUp Inns - six in this country, and four abroad, and we are currently
negotiationg new opportunities.
To finish my talk, I would like to say that HighUp is really going higher
and higher to the leading market positions.
That's all for now. Thank you. If you have any questions you are free to ask.
Interactive Presentation
A presenter can invite the audience to ask questions so as to have

response and see if everybody is following the ideas. The following list of
phrases provides for practicing the techniques of such presentation.
Clarifying
Let me spell out...
Have I made that clear?
Do you see what I'm getting at?
Let me put this another way...
I'd just like to repeat that...
Requesting Information
Please, could you...
I'd like you to...
Would you mind...
I wonder if you could...
Asking for Repetition

I'm afraid I didn't understand that. Could you repeat what you just said?
I didn't catch that. Could you repeat that, please?
I missed that. Could you say it again, please?
Could you run that by me one more time?
Asking for Clarification

I don't quite follow you. What exactly do you mean?
I'm afraid I don't quite understand what your are getting at.
275
Could you explain to me how that is going to work?

I don't see what you mean. Could we have some more details, please?
Asking for Verification

You did say next week, didn't you? ('did' is stressed)
Do you mean that...?
Is it true that...?
Asking for Spelling

Could you spell that, please?
Would you mind spelling that for me, please?
Asking for Contributions

We haven't heard from you yet, (name of participant).
What do you think about this proposal?
Would you like to add anything, (name of participant)?
Has anyone else got anything to contribute?
Are there any more comments?
Correcting Information
Sorry, I think you misunderstood what I said.
Sorry, that's not quite right.
I'm afraid you don't understand what I'm saying.
That's not quite what I had in mind.
That's not what I meant.
Correspondence
Business correspondence is the area of special study. In order to

develop good skills you will need some extra guides. Here you are
offered the general principals of letter writing and tips for lawyers
concerning their correspondence with the clients
Business letters consist of the following parts:
1. The heading that informs about the organization sending the
letter.The firm's stationary has carries the printed heading.
276
Correspondence
2. The receiver's address.

3. The date.
4. Salutation: Dear...,
5. The reference a n d / o r the reason of writing.
6. The body of the letter: giving information (options - request /
answer to the request / ) .
7. (option) Referring to action taken or needed.
8. Enclosure: reference to some additional documents or papers
enclosed.
9. Closing remarks.
10. Referring to fiture contact.
11. Complimentary close: Yours sincerely / yours faithfully
/ Yours truly (American English).
12. Signature.
Note. It's possible first to write the date on the left and then the receiver's
address.
1.
Hammond & Williams LLP

1453 Bridgeway ave.
Birmingham B7 6HL
2.
Write the address: the 1 - name, 2 - street, 3 - city and zip code (4 - country).
Mr A.B. Cedrick
Cedrick Engineering
487 Ashton Road
Birmingham BM 4
3.
Dates are written as follows:

12 October 2004
12th October 2004
October 12 2004 - American
277
4.
The style of the salutation effects the style of the complimentary close
Dear Sir / Madam, (you don't know the name) Yours faithfully,
Dear Sirs,
Dear Mr Cedrick, Yours sincerely,
Dear Mrs / Miss / Ms Edwin,
Dear Alfred, (close business contact / friend) Best wishes
A m e r i c a n English:
Sincerely yours,
Yours truly,
5.a
The reference
With reference to your advertisment in ...
your letter of 4th May ...
your phone call
our telephone conversation ...
Thank you for your letter ...
I apologise for not giving a prompt answer
5.b
The reason of writing

I'm writing in connection with ...
with regard to ...
to enquire about
to provide (further) information ...
to advise you on ...
6, 7.
The body of the letter gives all the information and details, starting with the
most important. The style here is simple and direct.
If you request information you can start with:
Could you possibly ...
I'd be grateful if you could ...
I would like to know ...
Referring to actions taken or needed - you either give account of what you have
done or advise what is necessary to be done, or what you are going to do next.
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Correspondence
8.
Refer to the enclosure you are attaching.

I'm enclosing ...
Find enclosed ...
... and Fm enclosing ...
Referring to actions taken or needed - you either give account of what you have
done or advise what is necessary to be done, or what you are going to do next.
9.
Here you invite for further contacts.

Thank you for your help, (option)
Please contact us again if there are any problems.
you have any questions.
you need more information on the matter.
10.
The standard phrase here:

I'm looking forward to hearing from you.
meeting you ... (day or date)...
seeing you ... (day or date) ...
11.
See point 4
SIGNATURE
Note.
Salutation:
Dear Mrs Rider: - married woman.
Dear Miss Spears: - unmarried girl.
Dear Ms Tyler: (use Ms if you don't know the marital status or the preference).
If you don't know the name of the individual, address it to the individual's title
in the company and then use dear Sir or Madam. Here is an example:
Head of Human Resource
ABC Company
123 Sesame Street
Dear Sir or Madam:
Please only use this if you really cannot find out the name of the person. Most
companies will tell you who the person is. All it takes is a phone call.
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Sample
The sample letter is a letter of a lawyer to a client. It doesn't contain much
information or details that are usually found in a real letter.
1453 Bridgeway ave.

Birmingham B7 6HL
Mr A.B. Cedrick
Cedrick Engineering
487 Ashton Road
Birmingham BM 4
12 October 2004
Dear Mr Cedrick,
With reference to our telephone conversation I'm writing to provide the

requested information.
I've studied the documents that you sent two days ago, and I'm sure we can
start a legal action against the offending company. The provisions of the latest
legislation confirm my opinion.
I'm enclosing the copies of some abstracts from the Act of Parliament and my
opinion implied in law and other authorities.
My next step will be writing a claim and filing it to the court. This must be done
promptly, so we need to have the conference no later than 15 October.
Please contact me if you have any questions
Yours sincerely,
Anthony Williams
OTHER TYPES OF CORRESPONDENCE

Memo
The word memo is short for memorandum. It is used for short
reminders, quick announcements or concise pieces of information. When
using the memo format, don't communicate something of vital
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Correspondence
importance. Use the business letter format instead. Memo tends to be

given less attention than a business letter written on the company
letterhead. Memos should not be used for communications to people
outside the company.
Though, memorandum is a usual type of legal writing.
There is no rule for the format of the memo. Pick one and make it a
standard for your company. The vital information in a memo are the
date, the recipient, the sender and the subject matter.
The following is an example:
Date: 5 February 2004
To: General Counsel

From: CEO
RE: Investment strategy
e-mail
The e-mail has replaced many functions of the business letter. Here
are some tips on writing effective e-mail.
Format. Do use the format provided by the software properly.

Include the e-mail you are sending to on the proper column. To is for the
individuals the letter is directed to, cc for those you want to have a copy
and bcc to those you want to have a copy but don't want people to know
they are in the list. And do fill in the subject line. Begin the e-mail with
the salutation.
Contents. As with the business letter, keep it brief. All the business
letter essentials apply to the e-mail as well.
Links. If you are referring to a web site, do provide a link.
Don't use ALL CAPS. In the real world, all caps mean that you
are stressing a point. However when online, all caps means that you
are YELLING! Bold the word or put asterisks around it to stress the
word.
Don't get too informal. The tendency when it comes to e-mail is to
write less formally, just remember, you are still writing a business letter
only via e-mail.
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Sample
NEW MESSAGE
From : hammondwilliams@send.uk
To: acedrick@send.uk
Subject: answer to request
Dear Mr Cedrick,
I've studied the documents you provided and confirm that we're starting a legal
action against the offending company under the provisions of the latest
legislation.
Some abstracts from the Act of Parliament and my opinion implied in law and
other authorities are attached to this message.
My next step will be writing a claim and filing it to court. This must be done
promptly, so we need to fix the conference for no later than 15 October.
Please contact me if you have any questions.
Best wishes
Anthony Williams
ATTACHMENT
Types of letters
Formal letters to organizations, administrative bodies or companies
written on behalf of a client
Some tips how to start the letters:
Dear Mr....,
- I'm writing on behalf of Mr .... whom I represent as an attorney
- The law firm represents Mr and I'm writing to you on his behalf.
- We act on behalf of
Letter of intent - письмо о намерениях

This is a letter in which the intention to enter into a formal
agreement (as a contract) or to take some specified action is stated
A notice to third parties given by a principal to his agent designating
and identifying the agent as one having the principal's authority to act
in his place and stead, i.e., on his behalf. In almost all jurisdictions, a
power of attorney must be in writing, signed with formalities.
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Correspondence
General Power of Attorney - доверенность

A general power of attorney is very broad and provides extensive
powers to the person or organization you appoint as your agent. These
powers usually include:
Handling banking transactions
Entering safety deposit boxes
Handling transactions involving US securities
Buying and selling property
Purchasing life insurance
Settling claims
Entering into contracts
Exercising stock rights
Buying, managing or selling real estate
Filing tax returns
Handling matters related to government benefits
GENERAL POWER OF ATTORNEY
I, , of , hereby appoint , of
, as my attorney in fact to act in my capacity to do every act that I
may legally do through an attorney in fact. This power shall be in full force and
effect on the date below written and shall remain in full force and effect until
or unless specifically extended or rescinded earlier by either
party.
Dated , 20 .
Bv:
STATE OF COUNTY OF
BEFORE ME, the undersigned authority, on this day of

, 20 , personally appeared to me well known to
be the person described in and who signed the Foregoing, and acknowledged to
me that he executed the same freely and voluntarily for the uses and purposes
therein expressed.
WITNESS my hand and official seal the date aforesaid.
NOTARY PUBLIC
My Commission Expires:
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Example of a formal letter
Informing of a possible legal action

on trademark infringement
27 March 2000
Mr Craig Ian Dewick,
t/a Sun System
9 Sea Avenue,
Waterfall, NSW 5546
Dear Mr Dewick
Re: Sun Microsystems Inc
We act on behalf of Sun Microsystems Inc of the United States of America. As

you are no doubt aware, our client has, for many years, manufactured and sold,
throughout the world (including Australia), a range of computer hardware
products under and by reference to it's famous "SUN" and Device trade marks,
copies of which are enclosed and marked "A".
Our client is also a registered proprietor under the Australian Trade Marks Act
1995 of a number of trade mark registrations for trade marks which consist of or
include the word "SUN" and Device ("Our Client's Trade Mark
Registrations"). Enclosed and marked "B" is a schedule of those registrations.
As a result of its activities, our client now enjoys an extensive reputation and
goodwill through the word (including Australia) in relation to its "SUN" and
Device trade marks in connection with computer hardware products and
related products and associated services.
It has recently come to our client's attention that you are, under New South
Wales Business Name Registration No. U03459806 "SUN SYSTEM"
("Offending Business Name Registration"), offering for sale and selling in
Australia a range of computer hardware components (both new and used)
which were originally of our client's manufacture, and selling both these
components and complete computer work stations and main frame computer
systems including those components ("Offending Products") and, in that
connection, using our client's "SUN" and Device trade marks.
We refer to your Internet web site www.sunrk.com.au ("Offending Web Site").
Enclosed and marked "C" is a printout from that website which we note, inter
alia, states:
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" - SUN
- surplus and pre-loved
- Sun Microsystems equipment...
- Powered by "SUN" Microsystems [and Device] ...
- Sun Microsystems...
- My computing and electrotechnology where you'll find the Sun Shack
Microsystems data ... As an offshoot of my keen interest in work stations from
Sun Microsystems, I run a small operation ... called Sun Systems through
which I maintain a stock of surplus parts for these machines. There are no Sun
surplus dealers in Australia other than SRK, and I can also try to source any
parts that I don't have on hand ..."
We further note that the Offending Web Site has, on it's first page, two direct
"hyperlinks" ("Offending Hyperlinks") with the web site of our client's
Australian subsidiary, www.sun.com.au.
Whilst our client has no concern with the bona fide use of its trade marks
in connection with the sale of genuine new and unaltered components
(in original packaging) of our client's manufacture, it is concerned that
such activities should not take place in any misleading or deceptive way
including, by way of example, suggesting (contrary to fact) that the seller's
conduct is in some manner authorised by our client or indicating that the
seller if offering warranties on behalf of our client which would not otherwise
apply.
In regard to the above, our client reserves it rights.
However, our client is concerned as to your particular conduct which, as
indicated above, includes the assembly of reconditioned computer work
stations and main frame computer systems (using both new and used
components manufactured by our client - referred to above as "Offending
Products") and, in the connection, using our client's "SUN" & Device trade
marks. Clearly such conduct would indicate, contrary to fact, that your conduct
is licensed or authorised by our client, and that the Offending Products are
manufactured with the license or authority of our client.
As you must appreciate, members of the public are likely falsely to conclude
that our client, or its Australian subsidiary, is responsible for the Offending
Products and warranty claims on those products.
Your conduct in the offering for sale and selling of the Offending Products
under and by reference to our client's "SUN" and Device trade marks and your
use of the Offending Web Site is a clear attempt by you to trade off our client's
reputation and goodwill in those trade marks. We have advised our client that
your unauthorised use of those trade marks in relation to the Offending
Products is calculated to and will deceive members of the trade and members of
the public and will pass-off the Offending Products as products manufactured
by or on behalf of our client.
285
We have further advised our client that your offering for sale and sale of the
Offending Product infringes one of more of our client's Trade Mark
Registrations.
We have also advised our client that your conduct constitutes a breach of
section 42 and section 44 of the Fair Trading Act (NSW) 1987, in that it is
conduct which is misleading and deceptive or is likely to mislead or deceive
members of the public into believing, contrary to fact, that the Offending
Products are manufactured by or on behalf of our client or with it's license,
sponsorship or approval.
The remedies available to our client include:
- an injunction;
- either damages of an account of profits;
- delivery up for destruction; and
- costs.
Accordingly, Sun Microsystems Inc has instructed us to demand from you the
following written interim undertakings:
Forthwith by yourself, your servants and agents and all associates (as that term
is defined in the Corporations Law) to cease all further use of the trade marks
"SUN" and Device and all other trade marks substantially identical with or
deceptively similar thereto upon or in relation to computer products (including
but not limited to computer work stations and main frame computer systems)
and all other products but excluding bona fide products (in their original
packaging complete with all original materials and in unaltered form)
manufactured and sold on behalf of our client in Australia ("Authorised
Products");
is defined in the Corporations Law) to cease all use of the word "SUN"
(together with all other words substantially identical or deceptively similar
thereto) as or within any corporate name, business name, trade mark or
otherwise;
is defined in the Corporations Law) to cease all further manufacturing or
manufacture for you, distribution, offer for sale and sale of the Offending
Products and other dealings in the Offending Products;
Forthwith in writing to recall from all retailers and wholesalers all stocks of the
Offending Products which have been sold or distributed by you to date and to
supply us with copies of all such letters of recall;
Forthwith to deliver to us all stocks of the Offending Products and all other
products bearing the trade marks "SUN" and Device (other than the
Authorised Products), together with all advertising and promotional literature
containing reference to the Offending Products, which remain or come into
your possession, custody, or power;
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Correspondence
Forthwith to provide us with copies of all orders, invoices, and other

correspondence concerning the supply of the Offending Products to you and by
you;
Forthwith to cancel the Offending Business Name Registration; and
Forthwith to ammend or procure the ammendment of the Offending Web Site
in order to delete all reference to out client's trade marks "SUN" and Device
including but not limited to the deletion of all use of the words "SUN", "SUN
MICROSYSTEMS", "SUN MICROSYSTEMS EQUIPMENT" and further
delete the Offending Hyperlinks;
Our client requires the above undertakings to be furnished to us no later than
4:00 pm, Tuesday, 4 April 2000.
These undertakings may be given by signing, dating and returning to us the
enclosed copy of this letter.
In the event that you fail to provide the above undertakings or fail to honour
them once given, our client reserves the right immediately to commence legal
proceedings against you without further notice.
Please note that our client otherwise reserves its rights in relation to damages
or an account of profits and costs.
Yours faithfully,
[Law firm's name]
Client Opinion Letter

Writing to a Client
Many lawyering activities, such as meeting the client or advising the

client, include correspondence from the lawyer. For example, after
meeting a client you might write a follow up letter to confirm your
understanding of that meeting and perhaps ask for some additional
information. You might also advise a client in a letter which evaluates
the client's position and suggests a course of action.
Style
A. Be Concrete
Be selective in the information you give. Make sure it is helpful to
your reader. Your client wants to know what is going to happen. The
287
"why" of it is secondary. You want to provide a legal basis for your

answer. However, a long explanation of the applicable law without any
application to your client's case will not be helpful to your client. Keep
your analysis grounded in the facts.
B. Select an Appropriate Tone

You want to sound like a lawyer without sounding like a lawyer.
W H A T ? Sound like a lawyer by being professional - direct, simple,
precise. Avoid being too familiar. Don't sound like a lawyer - avoid
legalese and legal terms your client won't understand.
C. Pay Attention to Grammar and Spelling
Answer t h e Question
Take the opportunity, if you haven't already done so, to state your
understanding of the facts. Your opinion is based on the facts as you
understand them, so make sure you and your client are talking about the
same situation.
Based on the facts, give your client the best prediction you can of the
likely outcome of the situation. Be honest. If things don't look good,
your client needs to know.
Give your client a legal basis for your answer. Even though this is
a different context, be just as accurate in your explanation of the law
as you are in the memo to your partner. However, you need to keep
your audience in mind. The depth of legal analysis will depend on your
client.
Although your client wants to know what is going to happen, don't
promise what you cannot deliver. Be careful not to create unrealistic
expectations. On the other hand, be prepared to take a stand based on
your opinion. That's what your client is paying you for.
Make sure that your client understands and can evaluate all options
based on the information you provide. Thus, in addition to including a
sound legal basis for your answer, you need to address any special
concerns your client might have. For example, your client might have
reasons for not wanting to litigate a claim even though the chances of
success are high.
Be concrete and specific about your proposed plan of action. Make
sure to include a time framework. If anything is required of the client , be
clear about what is required and when it is required.
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Correspondence
Outline for a Client Letter
I. Opening paragraph
Restate client's question and summarize your answer.
II. Review the facts
Set out the facts on which your opinion is based and solicit
corrections and additions.
III. Explain the law
Explain the law in plain English. Make sure your explanation is
balanced and objective so that your client is well informed.
IV. Present the options
Present as many options as possible for your client's consideration.
Explain the pros and cons taking into account both legal and non-legal
factors.
V. Provide copies of documents
Enclose copies of any documents you have prepared or received on
your client's behalf. Explain what they are and whether your client
needs to respond to them. If a response is required, highlight the
deadline.
VI. Request additional information
If you need additional information, ask for it and encourage your cli-
ent to provide any other details about the case.
VII. Closing paragraph
Solicit your client's questions and invite your client to a conference.
Let your client know what needs to be done and whether there are any
deadlines. Warn your client if a statute of limitations is running and
when it will expire.
(Margaret Z.Johns, Professional Writing for Lawyers
(Carolina Academic Press 1998).
The Art of Legal Writing

I. General Comments
This section covers some of the mechanics of good legal writing.
Legal writing, as you are beginning to see, is different from the other
types of writing you may have done in your life. It is imperative that you
be clear, concise, and accurate. Otherwise, you cannot convey the
complexities of the legal thought process.
289
Most writing problems are thinking problems. If you have analyzed a

legal issue thoroughly, if you understand the legal principles that apply,
if you have looked at your problem from every possible angle, and if you
are confident that your analysis and conclusions are sound, your writing
probably will be good. Why? Because the structure of your analysis will
be fixed in your mind, and you will have plugged all the holes. If you
begin to write without a clear understanding of where you are going and
how you get there, your writing will simply reflect the fog in your mind.
Writing may help you clear up the fog, but rarely will a first (or even
second) draft be as clear and concise as a finished product must be.
Once you have thoroughly analyzed your issue and you have begun
to write, there are some straightforward, simple ways to make your
writing clear and concise. Some of them may be familiar to you because
they are standards for ordinary English, not just legal writing. We cover
these not to insult you, but to emphasize that good legal writing requires
particular emphasis on basic writing. You have good basic writing skills,
or you would not be here. But good legal writing requires extra
vigilance.
Keep in mind that your goal, always, is to be clear and concise.
II. Clarity
A. Checklist for clear writing:
1. Avoid elegant variation. Unlike other types of writing, it's all right
to use the same word more than once. In fact, a change in terms implies a
change in meaning.
2. Limit use of adjectives, adverbs, flowery terms. Choose precise
terms instead. Especially avoid "clearly," "obviously," and "very." Your
writing itself should convey these qualities.
3. Use subheadings and lists where helpful to show your
organization.
4. Keep language simple. Avoid legalese. Avoid Latin terms if there is
a plain English substitute. A letter is not a report or a contract.
Examples of terms to avoid: hereinbefore, party of the first part, said
party, ergo. Remember that legal writing is formal, not pompous.
5. Use your own words; keep quotations to a minimum. On the other
hand, when what someone said and what words she used are meaningful,
be sure to quote rather than paraphrase. When you do quote, quote
accurately. [Of course you will give attribution to the ideas of others,
whether paraphrased or directly quoted.]
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Correspondence
6. Use short sentences. The longer the sentence, the more likely that
you will lose your reader.
7. Use words that are serious and professional. Do not use slang,
colloquialisms, or informal expressions. These are acceptable in
everyday spoken language, but do not belong in legal writing.
B. Real errors:
1. Misspellings, misuse of apostrophes, run-on sentences: Editing
should be a regular part of your writing process. Get help with these
skills if you are not already proficient and persnickety. Also, keep a
dictionary close by.
2. Using gerunds and participles ("ing" words) as verbs by
themselves.
EXAMPLE: Plaintiff, seeing that Defendant was about to leave.
This is an incomplete sentence.
CORRECT: Plaintiff saw that Defendant was about to leave.
3. Misplaced modifiers - a common problem with legal writing
because you are trying to express complex thoughts.
EXAMPLE: My client has discussed your proposal to sell the property with
her partners.
COMPARE: My client has discussed with her partners your proposal to sell
the property.
4. Sexist language: There is no definitive rule on how best to avoid
this. At least, recognize and be sensitive to the problem. Avoid terms like
fireman , widow. Replace with firefighter, survivor.
Avoid s/he. Sometimes alternating the subjects is effective - in one
section, use "he" and in the next section, use "she." Sometimes these
switches are distracting. Use your own judgment.
5. Consistency in verb tenses: W h e n you tell a story that happened in
the past, use the past tense. Stay in the past tense. Don't alternate verb
tense.
EXAMPLE: Mrs. Fields had purchased two lots in 1962. She built a house
on the north lot. She believes that the fence is the boundary.
BETTER: Mrs. Fields purchased two lots in 1962. She built a house on the
north lot. She believed that the fence was the boundary.
7. Accuracy: Accuracy is critical to legal writing. You must not fudge
on the facts or cite a case for something the court did not say.
291
LEGAL FORMS SUPPLEMENT 1
Sample Legal Services (Retainer) Agreement
This agreement (Agreement) is made this day between Law

Firm (hereinafter Firm) and (hereinafter Client).
RECITALS
Firm is rendering the wide range of legal services for businesses.
Client deals in and hires the firm to provide legal services.
This Agreement modifies all prior agreements:
IN CONSIDERATION of the foregoing and of the mutual covenants

herein contained, the parties agree as follows:
1. Retention as a law firm

Client hereby retains Firm, and Firm hereby agrees to provide legal
services to Client, upon the terms and conditions set forth herein.
The legal services are:
2. Payment and Fees

a. Client shall pay to Firm, as compensation for the services to be
rendered, the amount set out on a flat fee or hourly basis.
b. Firm shall charge $250 p/h unless modified in writing by Firm partner.
c. Firm maintains no obligation to perform additional work once work has
been completed.
d. Firm reserves the right to charge additionally for, but are not limited to:
copying, mailing, faxing, and telephoning, depositions, travel, filing and
recording fees, photocopies, and any other expenses that are incident
and necessary to Client's business and understands that reimbursement
of said expenses is in addition to the attorneys' fees, unless a written
fixed rate is in effect.
292
3. Covenant of Non-Disclosure
Firm shall not disclose, or communicate to any person, firm, corporation or
other entity, or use for its own benefit or for the benefit of any person, firm,
corporation or other entity, any information acquired from Client, its parent
or subsidiaries, without prior consent, unless the work ordered implies that
such a disclosure is necessary in order to do the work ordered. Firm reserves
the right to assign the work to any of its employees or current subcontractors.
4. Miscellaneous Terms including Fee Division
a. Discussion Time Limits: max 30 minutes during work, otherwise
hourly.
b. No contracts are binding unless made by Firm.
c. Government fees not included in quotes, except for the Invention
Disclosure.
d. Work done without a written flat fee quote shall be billed hourly.
e. Client agrees to pay for any work ordered, and that all orders are
irrevocable, and that failure to pay within 60 days of when promised
shall be breach and accept judgment on the basis of that breach.
f. By hiring Firm to do work Client accepts Firm's partners judgment as
to the competence of the person(s) doing the work and understands
that Firm and all of its personnel shall do their utmost best to deliver
the highest quality work and representation possible. Further, the
Client understands and explicitly accepts that from time to time Firm
personnel may engage the services of other attorney's who may or may
not work on a full time basis with or in other law firms for the purpose of
delivering to Client the highest level of work possible. Client explicitly
gives permission to Firm to reveal all information provided to Firm by
Client to said additional attorney's or firms under the same terms of
confidentiality as provided between Firm and Client. Further, Client
accepts the judgment of Firm and its partners as to when it is necessary
to use said other attorney's.
5. Terms Specific to Patents, Trademarks, Copyright

b. Firm shall not be liable for the actions of the federal government
including, but not limited to: the denial of registration of intellectual
property, the cancellation of intellectual property.
c. In the process of doing work Firm will have to mail copies of drafts of
patent and trademark applications and signature forms thereof to
Client. It shall be Client's responsibility to respond to said mailings.
Firm shall not be liable for delays in filings due to the client's failure to
respond to said mailings.
d. The client should be aware that intellectual property, patents,
trademarks, & copyrights may be lost if the piece of intellectual
property obtained by Firm for Client is not protected by policing the
field. Policing services shall be understood to mean a review of the field
293
Legal Forms Supplement 1
which the client's intellectual property resides in order to see if another

entity is infringing on Client's intellectual property. Firm offers
policing services. It is understood by Client that by providing such
policing services Firm does not guarantee that any and all infringers will
be found. Further, if Client does not order policing services, the firm
shall not be liable for any failure to notify Client of a third party
infringer even if such information may be known by Firm.
e. Under no circumstances shall Firm be liable for the devaluation of a
client's intellectual property due to the actions of any third party or
actions of the client.
6. Legal Relief
a. In the event Client breaches, or attempts to breach any of the covenants
expressed herein, the Firm may apply to a court of competent
jurisdiction for injunctive or other equitable relief to restrain such
breach or threat of breach, without disentitling Firm from any other
relief in either law or equity.
b. Additionally, if Client breaches this agreement, Client agrees to accept
complete liability for all costs and judgment thereof. Costs shall include,
but not be limited to: all charges as expressed above, any attorney's fees,
costs and associated expenses, work done on a clients behalf or time
spent on performing work for Client.
7. Arbitration
The matters must be submitted to binding arbitration in accordance with
the rules of the American Arbitration Association. There shall be one
arbitrator who shall be chosen by the arbitration association. Neither party
shall have any input towards the choosing of the arbitrator. At no time may
the arbitrator award punitive damages unless she believes beyond a reasonable
doubt that the party in the wrong acted with malicious intent to breach the
contract. The goal of the arbitrator shall be to put the wronged party in the
same position they would have been if the party in the wrong had not acted
incorrectly and to finalize the situation as quickly as possible.The arbitrator
shall take all terms and conditions found herein as binding on both parties.
8. Termination
This Agreement may be terminated by either party on written notice by
one party to the other party. Immediately upon receipt of such notice, Firm
shall stop all work, but any work done through the date of termination shall be
paid for as provided in Section 2 above.
Additionally, Firm will have the right to terminate this agreement if:
1. Client fails to comply with the terms of this agreement; 2. Client non-payment
of fees and expense; 3. Client fails to reasonably cooperate, or fails to comply with
reasonable requests of attorney, or engages in conduct rendering it unreasonably
difficult for attorney to work for or represent Client.
294
9. Governing Law
This Agreement and all future dealing between Client and Firm shall be
construed in accordance with the domestic laws of - . The parties
hereto agree that any actions related to this Agreement or between the parties
shall be venued solely in . No other court shall have jurisdiction over
this agreement, any actions taken under this agreement or work done by Firm.
10. Waiver of Breach
The waiver by either party hereto of any breach of the terms and
conditions hereof will not be considered a modification of any provision, nor
shall such a waiver act to bar the enforcement of any subsequent breach.
12. Entire Agreement
This Agreement shall constitute the entire agreement between the parties
hereto and replaces and supersedes all prior agreements, written and oral,
relating to the subject matter hereof, between the parties to this Agreement.
Each time Client orders additional work, it shall be deemed again accept and
confirm the terms found in this agreement.
13. Modification of this agreement
No provisions of this Agreement may be modified, waived, or amended
except with the written consent of the parties.
14. Enforcement
Any failure by any Party to enforce the other Party's strict performance of
any provision of this Agreement will not constitute a waiver of its rights to
enforce subsequently such provision or any other provision of this Agreement.
16. Acceptance
The execution of any Firm Order Form or Retainer by Client shall indicate
that this Agreement conforms to Client's understandings and is acceptable to
the Client. It is further understood and agreed that (1) Client has read the
terms of this Agreement; (2) Client has had the opportunity to consult or has
consulted with counsel of her choice regarding this Agreement; (3) Client has
been given a reasonable and sufficient period of time in which to consider and
execute this Agreement; and (4) Client has entered into this Agreement freely
and voluntarily without coercion or undue influence of any kind.
17. Authority
Client executing this Agreement represents and warrants that he or she
has the authority and power to do so from the Party on whose behalf he or she
is executing.
IN WITNESS WHEREOF, the parties have executed this Retainer
Agreement on .
Client:
Firm:
295
Agreement between Owner and Contractor

This agreement is hereby made and entered into this day of
, 20 , by and between , of
, hereafter called Owner, and , of
, hereafter called Contractor.
The said parties, for the considerations hereinafter mentioned, hereby

agree to the following:
1. The Contractor agrees to provide all of the material and labor required
to perform the following work for:
(Describe work to be Performed)
as shown by the drawing(s) and described in the specifications prepared by
and provided by the Owner, which are
identified by the signatures of the parties to this agreement and which form a
part of this agreement.
2. The Owner hereby agrees to pay the Contractor, for the aforesaid
materials and labor, the sum of $ , in the following
manner:
(Describe Method and Timing of Payment)
3. The Contractor agrees that the various portions of the above-described

work shall be completed on or before the following dates:
(Insert Dates)
and the entire above-described work shall be completed no later than the
_(10)_ day of , 20 .
4. The Contractor agrees to provide and pay for all materials, tools and
equipment required for the prosecution and timely completion of the work.
Unless otherwise specified, all materials shall be new and of good quality.
5. In the prosecution of the work, the Contractor shall employ a sufficient

number of workers skilled in their trades to suitably perform the work.
6. All changes and deviations in the work ordered by the Owner must be in
writing, the contract sum being increased or decreased accordingly by the
Contractor. Any claims for increases in the cost of the work must be presented
by the Contractor to the Owner in writing, and written approval of the Owner
shall be obtained by the Contractor before proceeding with the ordered
change or revision.
296
II. Agreement between Owner and Contractor
7. The Owner, Owner's representative and public authorities shall at all

times have access to the work.
8. The Contractor agrees to re-execute any work which does not conform
to the drawings and specifications, warrants the work performed, and agrees
to remedy any defects resulting, from faulty materials or workmanship which
shall become evident during a period of one year after completion of the work.
9. The Owner agrees to maintain full insurance on the above-described

work during the progress of the work, in his own name and that of the
Contractor.
10. In the event the Contractor is delayed in the prosecution of the work
by acts of God, fire, flood or any other unavoidable casualties; or by labor
strikes, late delivery of materials; or by neglect of the Owner; the time for
completion of the work shall be extended for the same period as the delay
occasioned by any of the aforementioned causes.
11. In the event the work is delayed due to neglect of the Contractor, the
Contractor agrees to pay the Owner the sum of $ per
as liquidated damages until such time as the work is completed.
12. The Contractor agrees to obtain insurance to protect himself against

claims for property damage, bodily injury or death due to his performance of
this agreement.
13. Neither the Owner nor Contractor shall have the right to assign any
rights or interest occurring under this agreement without the written consent
of the other, nor shall the Contractor assign any sums due, or to become due,
to him under the provisions of this agreement.
14. This agreement shall be interpreted under laws of the State of
15. Attorney's fees and court costs shall be paid by the defendant in the
event that judgment must be, and is, obtained to enforce this agreement or any
breach thereof.
IN WITNESS WHEREOF, the parties hereto set their hands and seals the
day and year written above.
297
Sales Representatives Agreement

Agreement between (Company) and
(Sales Representative).
Sales Representative agrees to:
1. Represent and sell the Company's

products/services in the geographic area of .
2. Accurately represent and state Company policies to all potential and
present customers.
3. Inform the sales manager of all problems concerning Company
customers within the sales territory.
4. Inform the sales manager if the Sales Representative is representing, or
plans to represent any other business firm. In no event shall sales
representative represent a competitive company or product line either within
or outside the designated sales area.
5. Telephone the Company with reasonable frequency to discuss sales
activity within the territory.
6. Provide company 30-days' notice should the Representative intend to
terminate this agreement.
7. Return promptly all materials and samples provided by the Company to
the Representative, if either party terminates this agreement.
The Company Agrees to:

1. Pay the following commissions to the Sales Representative:
(a) percent of all prepaid sales, except as stated in (4) below.
(b ) percent of all credit sales, except as stated in (4) below.
2. To negotiate in advance of sale the commissions percentage to be paid on
all orders that the Company allows a quantity discount or other trade
concession.
3. Commissions on refunds to customers or merchandise returned by the
customer in which a commission has already been paid to the Representative
shall be deducted from future commissions to be paid to the Representative by
the Company.
4. To provide the Sales Representative with reasonable quantities of business
cards, brochures, catalogs, and any product samples required for sales purposes.
5. To set minimum monthly quotas after consultation with the Sales
Representative.
6. To grant Representative 30-days' notice should the Company wish to
terminate this agreement.
298
IV. Lease
7. To pay commissions to the Representative on sales from existing

customers for a period of ( ) months after this agreement
is terminated by either party.
8. This constitutes the entire agreement.
9. This agreement shall be binding upon the parties and their successors
and assigns.
Signed this day of , 20
COMPANY: SALES REPRESENTATIVE:
[signature above/printed or typed [signature above/printed or typed

name below] name below]
Lease
This lease of (1) , made _(2) , by and
between (3) , whose address is (4) , hereinafter
called Lessor, and (5) , whose address is
(6) , hereinafter called Lessee,
Witnesseth:
1. That Lessor hereby leases to Lessee, and Lessee leases from Lessor,
subject to the terms and conditions herein set forth, the following (hereinafter
sometimes referred to as the "Property"):
Make and Model Manufacturer's Serial No. Registration No.
Together with all equipment and accessories attached thereto or used
in connection therewith including the following:
(7)
All of which are included in the term Property as used herein. Lessee
hereby acknowledges delivery and acceptance of the aforesaid Property upon
the terms and conditions of this lease.
2. Lessor hereby leases to Lessee said Property for the purpose of
(8) -
3. The term of this lease is (9) , beginning this day
and ending (10) .
4. In consideration of said lease, Lessee covenants and agrees as follows:
(a) To pay to Lessor for the possession and use of said Property for the
purpose aforesaid, (11) dollars ($ ),
payable as follows: .
(b)To safely keep and carefully use the Property and not sell or attempt to
sell, remove or attempt to remove, the same or any part thereof, except
reasonably for the purpose aforesaid.
299
(c) Lessee shall, during the term of this lease and until return and delivery
of the Property to Lessor, comply with, and cause others to comply
with, all laws and governmental, rules and regulations, including any
future amendments thereto, controlling or in any manner affecting
operation, use or occupancy of said Property.
(d) Lessee shall pay all taxes, assessments and charges on said Property or its
use during the time he is in possession of the same, imposed by federal,
state, municipal or other public, or other authority; save Lessor free and
harmless therefrom; and to these ends reimburse Lessor on a pro rata basis
for such taxes or charges paid by Lessor hereto or hereafter.
(e) Lessee accepts the Property in its present condition, and during the
term of this lease and until return and delivery of the Property Lessor
the Lessee shall maintain it in its present condition, reasonable wear
and tear occurring despite standards of good maintenance of Property
excepted, and shall repair at his own expense any damages to said
Property caused by operation or use by lessee or by others during the
term of this lease and until delivery of the Property to Lessor.
(f) Neither Lessee nor others shall have the right to incur any mechanic's
or other damage in connection with the repair, maintenance or storage
of said Property, and Lessee agrees that neither he nor others will
attempt to convey or mortgage the said Property.
(g) Lessee shall be responsible and liable to Lessor for, and indemnify
Lessor against, any and all damage to the Property, which occurs in any
manner from any cause or causes during the term of this lease or until
return and delivery of the Property to Lessor.
(h)Lessee will keep insured from and including this day until return and
delivery of the Property to Lessor, in such company or companies as
Lessor shall approve, according to applicable standard forms of policy,
and for the benefit of Lessor, against loss or damage from any cause or
causes to the Property for the full value thereof in the amount of one
hundred thousand dollars
(i) Lessee shall return and deliver, at the expiration of the term herein
granted, the whole of said Property to the Lessor in as good condition
as the same is, reasonable wear and tear excepted.
(j) It is mutually agreed that in case Lessee shall violate any of the
aforesaid covenants, terms and conditions Lessor may at his option
without notice terminate this lease and take possession of said
Property wherever found.
Signed this the day of 20
LESSOR
LESSEE
300
LEGAL FORMS SUPPLEMENT 2
Employment Agreement
Partnership Agreement
Joint Venture Agreement
Copyright Agreements (2)
Franchise Agreement (extracts)
Purchase Agreement (extracts)
Contract of Sale of Goods
EMPLOYMENT AGREEMENT
This Agreement made and entered into this day of ,

20 , by and between ("employer"), and
("employee"). The parties recite that:
A. Employer is engaged in and maintains business premises

at .
B. Employee is willing to be employed by employer, and employer is

willing to employ employee, on the terms and conditions hereinafter set forth.
For the reasons set forth above, and in consideration of the mutual covenants
and promises of the parties hereto, employer and employee covenant and agree
as follows:
1. AGREEMENT TO EMPLOY AND BE EMPLOYED

Employer hereby employs employee as at the
above-mentioned premises, and employee hereby accepts and agrees to such
employment.
2. DESCRIPTION OF EMPLOYEE'S DUTIES

Subject to the supervision and pursuant to the orders, advice, and
direction of employer, employee shall perform such duties as are customarily
performed by one holding such position in other businesses or enterprises of
the same or similar nature as that engaged in by employer. Employee shall
additionally render such other and unrelated services and duties as may be
assigned to him from time to time by employer.
301
3. MANNER OF PERFORMANCE OF EMPLOYEE'S DUTIES

Employee shall at all times faithfully, industriously, and to the best of his
ability, experience, and talent, perform all duties that may be required of and
from him pursuant to the express and implicit terms hereof, to the reasonable
satisfaction of employer. Such duties shall be rendered at the abovementioned
premises and at such other place or places as employer shall in good faith
require or as the interests, needs, business, and opportunities of employer shall
require or make advisable.
4. DURATION OF EMPLOYMENT
The term of employment shall be years, commencing on
19 , and terminating , 19 .subject, however, to prior
termination as otherwise provided herein.
5. COMPENSATION; REIMBURSEMENT
Employer shall pay employee and employee agrees to accept from
employer, in full payment for employee's services hereunder, compensation at
the rate of Dollars ($ ) per annum, payable .
In addition to the foregoing, employer will reimburse employee for any and all
necessary, customary, and usual expenses incurred by him while traveling for
and on behalf of the employer pursuant to employer's directions.
6. EMPLOYEE'S LOYALTY TO EMPLOYER'S INTERESTS

Employee shall devote all of his time, attention, knowledge, and skill solely
and exclusively to the business and interests of employer, and employer shall
be entitled to all benefits, emoluments, profits, or other issues arising from or
incident to any and all work, services, and advice of employee. Employee
expressly agrees that during the term hereof he will not be interested, directly
or indirectly, in any form, fashion, or manner, as partner, officer, director,
stockholder, advisor, employee, or in any other form or capacity, in any other
business similar to employer's business or any allied trade, except that nothing
herein contained shall be deemed to prevent or limit the right of employee to
invest any of his surplus funds in the capital stock or other securities of any
corporation whose stock or securities are publicly owned or are regularly
traded on any public exchange, nor shall anything herein contained by deemed
to prevent employee from investing or limit employee's right to invest his
surplus funds in real estate.
7. NONDISCLOSURE OF INFORMATION CONCERNING

BUSINESS
Employee will not at any time, in any fashion, form, or manner, either
directly or indirectly divulge, disclose, or communicate to any person, firm, or
corporation in any manner whatsoever any information of any kind, nature, or
description concerning any matters affecting or relating to the business of
302
Employment Agreement
employer, including, without limitation, the names of any its customers, the
prices it obtains or has obtained, or at which it sells or has sold its products, or
any other information concerning the business of employer, its manner of
operation, or its plans, processes, or other date of any kind, nature, or
description without regard to whether any or all of the foregoing matters
would be deemed confidential, material, or important. The parties hereby
stipulate that, as between them, the foregoing matters are important, material,
and confidential, and gravely affect the effective and successful conduct of the
business of employer, and its good will, and that any breach of the terms of this
section is a material breach of this agreement.
8. OPTION TO TERMINATE ON PERMANENT DISABILITY OF

EMPLOYEE
Not withstanding anything in this agreement to the contrary, employer is
hereby given the option to terminate this agreement in the event that during
the term hereof employee shall become permanently disabled, as the term
"permanently disabled" is hereinafter fixed and defined. Such option shall be
exercised by employer giving notice to employee by registered mail,
addressed to him in care of employer at the above stated address, or at such
other address as employee shall designate in writing, of its intention to
terminate this agreement on the last day of the month during which such
notice is mailed. On the giving of such notice this agreement and the term
hereof shall cease and come to an end on the last day of the month in which
the notice is mailed, with the same force and effect as if such last day of the
month were the date originally set forth as the termination date. For
purposes of this agreement, employee shall be deemed to have become
permanently disabled if, during any year of the term hereof, because of ill
health, physical or mental disability, or for other causes beyond his control,
he shall have been continuously unable or unwilling or have failed to perform
his duties hereunder for thirty (30) consecutive days, or if, during any year of
the term hereof, he shall have been unable or unwilling or have failed to
perform his duties for a total period of thirty (30) days,whether consecutive
or not. For the purposes hereof, the term "any year of the term hereof' is
defined to mean any period of 12 calendar months commencing on the first
day of and terminating on the last day of of the
following year during the term hereof.
9. DISCONTINUANCE OF BUSINESS AS TERMINATION OF

EMPLOYMENT
Anything herein contained to the contrary notwithstanding, in the event
that employer shall discontinue operations at the premises mentioned above,
then this agreement shall cease and terminate as of the last day of the month in
which operations cease with the same force and effect as if such last day of the
month were originally set forth as the termination date hereof.
303
10. EMPLOYEE'S COMMITMENTS BINDING ON EMPLOYER

ONLY ON WRITTEN CONSENT
Employee shall not have the right to make any contracts or other
commitments for or on behalf of employer without the written consent of
employer.
11. CONTRACT TERMS TO BE EXCLUSIVE

This written agreement contains the sole and entire agreement between
the parties, and supersedes any and all other agreements between them. The
parties acknowledge and agree that neither of them has made any
representation with respect to the subject matter of this agreement or any
representations inducing the execution and delivery hereof except such
representations as are specifically set forth herein, and each party
acknowledges that he or it has relied on his or its own judgment in entering
into the agreement. The parties further acknowledge that any statements or
representations that may have heretofore been made by either of them to the
other are void and of no effect and that neither of them has relied thereon in
connection with his or its dealings with the other.
12. WAIVER OR MODIFICATION INEFFECTIVE UNLESS IN

WRITING
No waiver or modification of this agreement or of any covenant, condition,
or limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. Furthermore, no evidence of
any waiver or modification shall be offered or received in evidence in any
proceeding, arbitration, or litigation between the parties arising out of or
affecting this agreement, or the rights or obligations of any party hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The provisions of this paragraph may not be waived except as herein set forth.
13. CONTRACT GOVERNED BY LAW

This agreement and performance hereunder shall be construed in
accordance with the laws of the State of .
14. BINDING EFFECT OF AGREEMENT

This agreement shall be binding on and inure to the benefit of the
respective parties and their respective heirs, legal representatives, successors,
and assigns.
Executed on the date first above written.
, Employer
, Employee
304
Partnership Agreement
PARTNERSHIP AGREEMENT
This PARTNERSHIP AGREEMENT is made on , 20_
between and
of .
1. NAME AND BUSINESS. The parties hereby form a partnership under

the name of to conduct a
. The principal office
of the business shall be in .
2. TERM. The partnership shall begin on , 20 ,

and shall continue until terminated as herein provided.
3. CAPITAL. The capital of the partnership shall be contributed in cash by

the partners as follows: A separate capital account shall be maintained for each
partner. Neither partner shall withdraw any part of his capital account. Upon
the demand of either partner, the capital accounts of the partners shall be
maintained at all times in the proportions in which the partners share in the
profits and losses of the partnership.
4. PROFIT AND LOSS. The net profits of the partnership shall be divided
equally between the partners and the net losses shall be borne equally by them.
A separate income account shall be maintained for each partner. Partnership
profits and losses shall be charged or credited to the separate income account
of each partner. If a partner has no credit balance in his income account, losses
shall be charged to his capital account.
5. SALARIES AND DRAWINGS. Neither partner shall receive any salary

for services rendered to the partnership. Each partner may, from time to time,
withdraw the credit balance in his income account.
6. INTEREST. No interest shall be paid on the initial contributions to the

capital of the partnership or on any subsequent contributions of capital.
7. MANAGEMENT DUTIES AND RESTRICTIONS. The partners shall

have equal rights in the management of the partnership business, and each
partner shall devote his entire time to the conduct of the business. Without
the consent of the other partner neither partner shall on behalf of the
partnership borrow or lend money, or make, deliver, or accept any commercial
paper, or execute any mortgage, security agreement, bond, or lease, or
purchase or contract to purchase, or sell or contract to sell any property for or
305
of the partnership other than the type of property bought and sold in the
regular course of its business.
8. BANKING. All funds of the partnership shall be deposited in its name

in such checking account or accounts as shall be designated by the partners.
All withdrawals therefrom are to be made upon checks signed by either
partner.
9. BOOKS. The partnership books shall be maintained at the principal

office of the partnership, and each partner shall at all times have access
thereto. The books shall be kept on a fiscal year basis, commencing
and ending , and
shall be closed and balanced at the end of each fiscal year. An audit shall be
made as of the closing date.
10. VOLUNTARY TERMINATION. The partnership may be dissolved at

any time by agreement of the partners, in which event the partners shall
proceed with reasonable promptness to liquidate the business of the
partnership. The partnership name shall be sold with the other assets of the
business. The assets of the partnership business shall be used and distributed
in the following order: (a) to pay or provide for the payment of all partnership
liabilities and liquidating expenses and obligations; (b) to equalize the income
accounts of the partners; (c) to discharge the balance of the income accounts
of the partners; (d) to equalize the capital accounts of the partners; and (e) to
discharge the balance of the capital accounts of the partners.
11. DEATH. Upon the death of either partner, the surviving partner shall
have the right either to purchase the interest of the decedent in the
partnership or to terminate and liquidate the partnership business. If the
surviving partner elects to purchase the decedent's interest, he shall serve
notice in writing of such election, within three months after the death of the
decedent, upon the executor or administrator of the decedent, or, if at the time
of such election no legal representative has been appointed, upon any one of
the known legal heirs of the decedent at the last-known address of such heir,
(a) If the surviving partner elects to purchase the interest of the decedent in
the partnership, the purchase price shall be equal to the decedent's capital
account as at the date of his death plus the decedent's income account as at the
end of the prior fiscal year, increased by his share of partnership profits or
decreased by his share of partnership losses for the period from the beginning
of the fiscal year in which his death occurred until the end of the calendar
month in which his death occurred, and decreased by withdrawals charged to
his income account during such period. No allowance shall be made for
306
goodwill, trade name, patents, or other intangible assets, except as those assets
have been reflected on the partnership books immediately prior to the
decedent's death; but the survivor shall nevertheless be entitled to use the
trade name of the partnership, (b) Except as herein otherwise stated, the
procedure as to liquidation and distribution of the assets of the partnership
business shall be the same as stated in paragraph 10 with reference to
voluntary termination.
12. ARBITRATION. Any controversy or claim arising out of or relating to

this Agreement, or the breach hereof, shall be settled by arbitration in
accordance with the rules, then obtaining, of the American Arbitration
Association, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. In witness whereof the parties have signed
this Agreement.
Executed this day of , 20

in [CITY], [STATE],
JOINT VENTURE AGREEMENT
This JOINT VENTURE AGREEMENT ("Agreement") is made on

_, 20 between and
RECITALS
The Joint Venturers have agreed to make contributions to a common fund

for the purpose of acquiring and holding:
called the business interest.
The Joint Venturers consider it advisable to acquire and to hold their

business interest through a nominee so as to avoid the necessity of numerous
separate agreements, to maintain the legal title to the business interest in
a simple and practicable form, and to facilitate the collection and distribution
of the profits accruing under the business interest, and has agreed to act
as nominee of the Joint Venturers with the understanding that he is
also acquiring a participating interest in this joint venture on his own
account,
307
It is therefore agreed:
1. Purpose. The Joint Venturers form this joint venture to acquire and hold
the business interest in common and to provide the finances required for its
acquisition. To the extent set forth in this Agreement, each of the Joint
Venturers shall own an undivided fractional part in the business. The Joint
Venturers appoint as their agent
, whose duty it shall be to hold each of the
undivided fractional parts in the business interest for the benefit of, and as
agent for, the respective Joint Venturers.
2. Contributions. The Agent acknowledges that he has received from each
of the Joint Venturers, for the purpose of this joint venture, the sum set after
the name of each Joint Venturer as follows:
Name of Joint Venturer Contribution
3. Acquisition of Business Interest. The Agent is authorized to acquire and

to hold in his own name, but on behalf of the Joint Venturers (of which the
Agent is one), the business interest, and to pay $ for it as
follows: $ in cash, and the balance of $
by a note in that amount. The note shall bear interest at the rate of %,
shall be due and payable on [due date], with
prepayment privileges, and shall be secured by
which the Agent is
authorized to execute and deliver.
4. Profits. The Agent shall hold and distribute the business interest and
shall receive the net profits as they accrue for the term of this Agreement or so
long as the Joint Venturers are the owners in common of the business interest,
for the benefit of the Joint Venturers as follows:
Name of Joint Venturer Proportion
5. Expenses of Venture. All losses and disbursements incurred by the

Agent in acquiring, holding and protecting the business interest and the net
profits shall, during the period of the venture, be paid by the Joint Venturers,
on demand of the Agent, in the ratio which the contribution of each Joint
Venturer bears to the total contributions set forth in Paragraph 2.
6. Liability of Agent. The Agent shall be liable only for his own willful
misfeasance and bad faith, and no one who is not a party to this Agreement
shall have any rights whatsoever under this Agreement against the Agent for
any action taken or not taken by him.
7. Term. This Agreement shall terminate and the obligations of the Agent
shall be deemed completed on the happening of either of the following events:
308
(a) the receipt and distribution by the Agent of the final net profits accruing
under the business interest; or (b) termination by mutual assent of all joint
ventures.
8. Compensation of Agent. Unless otherwise agreed to in the future by a

majority in interest of the Joint Venturers, the Agent shall not receive any
compensation for services rendered by him under this Agreement.
9. Arbitration and Attorneys Fees.The Joint Venturers agree that any

dispute, claim, or controversy concerning this Agreement or the termination
of this Agreement, or any dispute, claim or controversy arising out of or
relating to any interpretation, construction, performance or breach of this
Agreement, shall be settled by arbitration to be held in
_ _ [City], [State]
in accordance with the rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction. The Joint Venturers will
pay the costs and expenses of such arbitration in such proportions as the
arbitrator shall decide, and each Joint Venturer shall separately pay its own
counsel fees and expenses.
10. Governing Law; Consent to Personal Jurisdiction. THIS

AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE
OF WITHOUT REGARD FOR CONFLICTS
OF LAWS PRINCIPLES. EACH JOINT VENTURER HEREBY
EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF
FOR ANY LAWSUIT FILED THERE
AGAINST ANY PARTY TO THIS AGREEMENT BY ANY OTHER
PARTY TO THIS AGREEMENT CONCERNING THE JOINT VENTURE
OR ANY MATTER ARISING FROM OR RELATING TO THIS
AGREEMENT.
In witness whereof the Agent and the Joint Venturers have signed and
sealed this Agreement.
[Signature of Joint Venturer] [Date]
[Printed or Typed Name of Joint Venturer]
309
SAMPLE COPYRIGHT LICENSE

This Agreement (the "Agreement") is made by and between
("Owner"), and , with its
principal place of business at ("Organization").
RECITALS
A. Organization is [describe organization], engaged in [describe activities
that are relevant to the desire to license Owner's copyrighted material].
B. Owner owns the copyright to certain materials relating to [describe
activity] and is willing to allow Organization to copy and utilize such
materials under the terms herein set forth.
NOW THEREFORE, in consideration of the mutual covenants and
promises herein contained, the Owner and Organization agree as follows:
1. This Agreement shall be effective as of (the "Effective Date").
2. Owner hereby grants Organization a non-exclusive right to copy certain
materials described in Attachment A (the "Material"), in whole or in part, and
to incorporate the Material, in whole or in part, into other works (the
"Derivative Works") for Organization's internal use only.
3. All right, title and interest in the Material, including without limitation,
any copyright, shall remain with Owner.
4. Owner shall own the copyright in the Derivative Works.
5. This Agreement may be terminated by the written agreement of both
parties. In the event that either party shall be in default of its material
obligations under this Agreement and shall fail to remedy such default within
sixty (60) days after receipt of written notice thereof, this Agreement shall
terminate upon expiration of the sixty (60) day period.
6. Attachment A is incorporated herein and made a part hereof for all
purposes.
7. This Agreement constitutes the entire and only agreement between the
parties and all other prior negotiations, agreements, representations and
understandings are superseded hereby.
8. This Agreement shall be construed and enforced in accordance with the
laws of the United States of America and of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement.
[Full Name of Owner] [Full Name of Organization]

By: By:
[Name] I Name]
[Title] [TitleL
Date: Date:
310
Sample Copyright License Agreement
SAMPLE COPYRIGHT LICENSE AGREEMENT

This AGREEMENT is entered into this day of , 199 , by and between
Major Publishing House ("Licensor") and Multimedia Publications Inc.
("Licensee").
RECITALS
A. Licensor owns the copyright, title, trademarks and all other related
rights in and to the work entitled " " (hereinafter
"Material").
B. Licensee is engaged in the development of interactive multimedia titles.
C. Licensee desires to obtain the rights to incorporate portions of the
Material into one (1) new interactive multimedia work (hereinafter "Work").
NOW, THEREFORE, in consideration of the promises, conditions,
covenants and warranties herein contained, the parties agree as follows:
1. Rights Granted.
Licensor hereby grants to Licensee, its successors and assigns, an exclusive
right, license and privilege worldwide (the "Territory") to:
a. incorporate the Materials into the Work and reproduce, distribute,
import and sell the Work on CD-ROM for the following platforms
throughout the Territory; [itemize platforms];
b. utilize the phrase "incorporating excerpts from [ ]" on or in connection
with the packaging, advertising, publicizing, marketing and distribution of the
Work; and
c. publicly perform and authorize others to perform the Work (and those
portions of the Material incorporated therein) in connection with the
advertising, publicizing, marketing, distribution and use of the Work.
2. Licensor's Rights and Obligations.
a. Licensor warrants and represents that it owns all right, title and interest
in and to the Material.
b. Licensor reserves unto itself all rights of every kind and nature except
those specifically granted to Licensee herein; provided, that Licensor shall not
grant any rights to use the Material or any portion thereof in any other
interactive multimedia work without Licensee's written consent, unless
Licensee fails to release Work to the public on or before [date].
3. Licensee's Rights and Obligations.
a. Licensee shall be solely responsible for providing all funding and
technical expertise for the development and marketing of the Work.
b. Licensee shall be the sole owner of the Work and all proprietary rights in
and to the Work; except, such ownership shall not include ownership of the
copyright in and to the Material or any other rights to the Material not
specifically granted in Section 1 above.
311
4. Payments.
a. For the rights granted by Licensor herein, Licensee shall pay to Licensor
a royalty calculated as follows:
[ ] per unit on the first [ ] units of the Work sold by Licensee.
[ ] per unit on the next [ ] units of the Work sold by Licensee.
[ ] per unit on all sales of the Work over | | units.
These royalties are based upon a suggested retail price for the Work of
US$ and will be adjusted up or down on a prorata basis should the suggested
retail price of the Work change. However, under no circumstances shall
royalties to Licensor be less than [ ] per unit.
b. Licensee shall pay to Licensor [ ] on the signing of this agreement as an
advance against the royalties set forth in Section 4.a above.
c. Licensee shall render to Licensor on a quarterly basis, within forty-five
(45) days after the end of each calendar quarter during which the Work is sold, a
written statement of the royalties due to Licensor with respect to such Work.
Such statement shall be accompanied by a remittance of the amount shown to be
due. Licensor shall have the right, upon reasonable request, to review those
records of Licensee necessary to verify the royalties paid. Any such audit will be
conducted at Licensor's expense and at such times and in such a manner as to not
unreasonably interfere with Licensee's normal operations. If a deficiency is
shown by such audit, Licensee shall immediately pay that deficiency.
5. Warranty and Indemnification.

a. Licensor warrants and represents that it has the full right, power and
authority to enter into this Agreement and to grant the rights granted herein;
that it has not previously licensed the interactive multimedia rights to the
Material to any third party; and that Licensee's inclusion and use of the Material
will not violate any rights of any kind or nature whatsoever of any third party.
Licensor shall indemnify and hold harmless Licensee, its successors, assigns and
licensees, and the respective officers, directors, agents and employees, from and
against any and all claims, damages, liabilities, costs and expenses (including
reasonable attorneys' fee), arising out of or in any way connected with any
breach of any representation or warranty made by Licensor herein.
b. Licensee shall indemnify and hold harmless Licensor, its successors,
assigns and licensees, and the respective officers, directors, agents and
employees, from and against any and all claims, damages, liabilities, costs and
expenses (including reasonable attorneys' fees), arising out of or in any way
connected with any claim that the Work infringes any intellectual property
rights or other rights of any third party, except to the extent such claim arises
from a breach by Licensor of Section 5.a above.
6. Term and Termination.
a. The term of this Agreement shall be fifteen (15) years from the date of
execution by both parties, unless terminated earlier pursuant to this section.
312
Sample Copyright License Agreement
b. This Agreement shall be subject to termination at the election of

Licensor, in the event that Licensee fails to begin distributing Work within
one (1) year of the date on which all parties have signed this Agreement, by
written notice given by Licensor to Licensee within thirty (30) days of the
running of that one (1) year period.
c. This Agreement shall be subject to termination at the election of
Licensor, by written notice to Licensee, where there has been a default in the
due observance or performance of any material covenant, condition or
agreement herein by Licensee, and such default has continued for a period of
thirty (30) days after written notice specifying the same shall have been given
to Licensor.
d. This Agreement shall be subject to termination at the election of
Licensee, by written notice to Licensor, where there has been a default in the
due observance or performance of any material covenant, condition or
agreement herein by Licensor and such default has continued for a period of
thirty (30) days after written notice specifying the same shall have been given
to Licensee.
e. Upon termination or expiration of this Agreement, Licensee shall cease
reproducing, advertising, marketing and distributing the Work as soon as is
commercially feasible. Notwithstanding the foregoing, Licensee shall have the
right to fill existing orders and to sell off existing copies of the Work then in
stock, provided, the sell-off period shall not exceed six (6) months from the
date of termination. Licensor shall have the right to verify the existence and
validity of the existing orders and existing copies of the Work then in stock
upon reasonable notice to Licensee.
f. Termination or expiration of this Agreement shall not extinguish any of
Licensee's or Licensor's obligations under this Agreement (including, but not
limited to, the obligation to pay royalties) which by their terms continue after
the date of termination or expiration.
7. General Provisions.
a. Successors/Assigns.
This Agreement is binding upon and shall inure to the benefit of the
respective successors and/or assigns of the parties hereto.
b. Integration.
This Agreement sets forth the entire agreement between the parties with
respect to the subject matter hereof, and may not be modified or amended
except by written agreement executed by the parties hereto.
c. Governing Law: Forum.
This Agreement shall be governed by the laws of the State of New York,
applicable to agreements made and to be wholly performed therein.
313
d. Notice.
The address of each party hereto as set forth below shall be the appropriate
address for the mailing of notices, checks and statements, if any, hereunder. All
notices shall be sent certified or registered mail and shall not be deemed re-
ceived or effective unless and until actually received. Either party may change
their mailing address by written notice to the other.
IN WITNESS WHEREOF, the parties have caused this License

Agreement to be executed the day and year set forth above.
[Name and Address of Licensor] [Name and Address of Licensee]

By: By:
Title: Title:
SEMICONDUCTOR PURCHASE AGREEMENT

(abstract)
This Semiconductor Purchase Agreement, its Supplement and
Attachments (collectively "Agreement"), effective as of , 2004 (the
"Effective Date"), is by and between Motorola, Inc., a Delaware corporation,
acting through its Personal Communications Sector and the iDEN Subscriber
Group of its Global Telecom Solutions Sector, or their successor organizations
within Motorola ("Motorola") and Freescale Semiconductor, Inc., a Delaware
corporation, acting through its wireless and mobile systems group or its
successor group within Freescale ("Freescale").
RECITALS
A. Freescale is in the business of designing and manufacturing
semiconductor and related software products.
B. Motorola desires to purchase products from Freescale, and Freescale
desires to sell products to Motorola in accordance with the terms and
conditions of this Agreement.
AGREEMENT
1. PRODUCTS.
1.1 Sale of Products. This Agreement governs all product purchases
made by Motorola from Freescale. Subject to the terms of this Agreement,
Freescale will sell to Motorola, and Motorola will buy from Freescale
hardware, software, or a combination of hardware and software (collectively
"Products").
1.2 Standard and Special Products
1.3 Purchase Commitment Terms
314
Semiconductor Purchase Agreement
2. PRICES. Motorola will receive Product pricing in accordance

with the process set forth in Attachment A.
3. PURCHASE ORDERS.
4. TERM & TERMINATION.
5. ORDER CANCELLATION AND RESCHEDULING.
6. MINIMUM ORDER
7. FORCE MAJEURE. Neither party will be liable for any delay or
non-performance of its obligations (except for payment obligations) under
this Agreement resulting from a "Force Majeure Event". "Force Majeure
Event" means an event that is: (1) beyond the reasonable control of the party
claiming a Force Majeure Event, (2) not reasonably foreseeable, (3) not due to
the fault or negligence of the party claiming a Force Majeure Event, and
(4) not capable of being overcome without unreasonable expense. The party
claiming a Force Majeure Event will notify the other party immediately upon
learning of the likelihood or existence of the Force Majeure Event. The party
claiming a Force Majeure Event must exercise commercially reasonable efforts
to mitigate the effect of the Force Majeure Event. A party impacted by a Force
Majeure Event will be entitled to an equitable adjustment in the performance
of its obligations that were excused by the Force Majeure Event.
8. DELIVERY TERMS. All deliveries will be made F.C.A. nearest
airport or seaport to Freescale's applicable manufacturing or storage facility
(Incoterms 2000), with title and risk of loss passing to Motorola at that point.
Each delivery will be separately invoiced.
9. PAYMENT TERMS. During the first two years of the term of this
Agreement, Motorola will pay each invoice within 30 days from the date
Freescale issues the invoice to Motorola. Prior to the end of the second year of
the term, the parties will mutually determine payment terms that will be
applicable for the third year of the term and thereafter.
10. UNAUTHORIZED APPLICATIONS.
11. RESALE RESTRICTIONS
12. EXPORT/REEXPORT
13. LIMITATION OF LIABILITY. EXCEPT FOR PERSONAL
INJURY, AND EXCEPT FOR THE LIMITED LIABILITIES
OTHERWISE PROVIDED IN SECTIONS 4.4, 14, 15, 16, 20, AND THE
PURCHASE COMMITMENT SUPPLEMENT, THE PARTIES' TOTAL
LIABILITY, WHETHER FOR BREACH OF CONTRACT, WARRANTY,
NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE, IS
LIMITED TO THE PRICE OF THE PARTICULAR PRODUCTS SOLD
HEREUNDER WITH RESPECT TO WHICH LOSSES OR DAMAGES
ARE CLAIMED. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
315
14. WARRANTY.
14.1 General. Except as provided in Section 14.5 and 14.6, Freescale
warrants that its Products sold hereunder will, at the time of shipment, be (i)
free from defects in material and workmanship, (ii) will conform to Freescale's
published or approved specifications ("Specifications"), including all mutually
agreed production test specifications that are included within the
Specifications, and (iii) will be new and unused
16. PRODUCT LIABILITY INDEMNIFICATION.

16.1 Freescale will defend, at its expense, any suits against Motorola
based upon a claim by a third party that a material defect in any Product
furnished by Freescale under this Agreement caused death or bodily injury to
any person and to pay costs and damages finally awarded based upon such
claim in any such suit; provided that Freescale is: (1) promptly notified by
Motorola in writing as soon as reasonably practicable after Motorola first
became aware of the claim, but in no event later than 15 days after the date on
which Motorola first received notice of such claim; and (2) at Freescale's
request and expense, given sole control of the suit and all requested assistance
for defense of same. Freescale will not be liable for any settlement made
without its written consent.
16.2 This indemnity does not extend to any suit based upon death or
bodily injury arising from Product(s) furnished by Freescale that are:
(1) altered in any way by Motorola or any third party if the alleged death
or bodily injury would not have occurred but for such alteration;
(2) combined with any other products or elements not furnished by Freescale
if the alleged death or bodily injury would not have occurred but for such
combination; or (3) designed and/or manufactured in accordance with
Motorola's designs, specifications, or instructions if the alleged death or
bodily injury would not have occurred but for such designs, specifications or
instructions.
16.3 THE INDEMNITY PROVIDED IN THIS SECTION IS THE
SOLE, EXCLUSIVE, AND ENTIRE LIABILITY OF FREESCALE AND
THE REMEDIES PROVIDED IN THIS SECTION WILL BE
MOTOROLA'S EXCLUSIVE REMEDIES AGAINST FREESCALE FOR
CLAIMS BY THIRD PARTIES FOR DEATH OR BODILY INJURY AND
IS PROVIDED IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED
OR STATUTORY IN REGARD THERETO.
23. GENERAL TERMS AND CONDITIONS.

23.1 Entire Agreement. This Agreement, including its Purchase
Commitment Supplement and Attachments constitutes the entire agreement
316
Semiconductor Purchase Agreement
between the parties regarding its subject matter and supersedes all prior
communications, negotiations, understandings, agreements or
representations, either written or oral, between the parties regarding its
subject matter. In the event of any conflict between terms of any of the
following documents, the order of precedence will be:
(A) Purchase Commitment Supplement and Attachments to this
Agreement;
(B) The body of the Agreement; and
(C) Any other document related to Product purchases by Motorola from
Freescale, whether asserted electronically or otherwise.
23.14 Attachments. The following attachments are hereby made a part

of this Agreement:
• Attachment A - Special Customer Terms
• Attachment B - Schedule Sharing and Order Terms
IN WITNESS WHEREOF, the parties hereto have caused this Agreement

to be executed by their duly authorized representatives effective as of the
Effective Date.
FREESCALE
MOTOROLA
By: By:
(Signature of Authorized Representative) (Signature of Authorized Representative)
Name: Name:
(Typed/Printed) (Typed/Printed)
Title: Title:
Date: Date:
317
SAMPLE PAGE OF FRANCHISE AGREEMENT
(Information to be filled in)
NAME OF FRANCHISE CORPORATION
Franchise Agreement
PARTIES
THIS AGREEMENT is made by and between NAME OF
CORPORATION, a STATE OF INCORPORATION Corporation,
hereinafter known as RETAIL NAME OF BUSINESS or "Franchisor" and
the persons signing as Franchisee or Guarantors' and referenced to herein
individually or collectively as "Franchisee," to evidence the agreement and
understanding between the parties as follows:
RECITALS
WHEREAS, Franchisor has developed, operates and has the right to
license a system or business program, including expertise for conducting
and operating a business under the mark RETAIL NAME OF BUSINESS;
and
WHEREAS, Franchisor has entered into an exclusive license with NAME
OF OWNER OF TRADEMARK, a STATE OF INCORPORATION
Corporation, dated MONTH, DAY & YEAR OF SIGNING LICENSING
AGREEMENT (the "License Agreement") to use certain trade names,
trademarks, logos, service marks and other property in connection with the
operation of business and has developed expertise (including confidential
information) and a unique, distinctive and comprehensive system (the
"System") for the establishment and operation of a franchised business
offering:
LIST PROPRIETARY PRODUCTS AND SERVICES PROVIDED

for the promotion and identification of the mark RETAIL NAME OF
BUSINESS OR TRADEMARK IF DIFFERENT and stylized logo for the
sale of products and services at RETAIL NAME OF BUSINESS locations
(the hereinafter referred to a, Franchise Location or "Business"); and
WHEREAS, Franchisor has devised a uniform system for the
establishment and operation of Businesses, including a distinctive exterior
318
Sample Page of Franchise Agreement
and interior design, trade dress decor and color scheme; uniform standards,
specifications, and procedures for operations; procedures for quality control;
training and ongoing operational assistance; advertising and promotional
programs; and other related benefits for use of Franchisee under the Names
and Marks, all of which may be changed, improved, and further developed by
NAME OF CORPORATION from time to time; and
WHEREAS, RETAIL NAME OF BUSINESS of STATE OF
INCORPORATION identifies its System by means of certain trade names,
service marks, trademarks, logos, emblems, trade dress and other indicia of
origin, including but not limited to the mark LIST ALL TRADEMARKS &
TRADE NAMES, and such other trade names, service marks, trademarks
and trade dress as are now designated (and may hereafter be designated by
NAME OF BUSINESS in writing) for use in connection with its System
(the "Names and Marks").
WHEREAS, NAME OF BUSINESS continues to develop, use, and
control the use of such Names and Marks to identify for the public the source
of services and products marketed thereunder and under its System, and to
represent the System's high standards of consistent quality, appearance, and
service.
WHEREAS, Franchisor has established substantial goodwill and business
value in its Names and Marks, expertise and System; and
WHEREAS, Franchisee desires to obtain a franchise from Franchisor for
the right to use the "Names and Marks" and the expertise for operating a
NAME OF BUSINESS and to obtain the benefits and knowledge of
Franchisor's System including, but without limitation, business design,
operating methods, product preparation, advertising, sales techniques and
materials, signs, personnel management, control systems, bookkeeping and
accounting methods, and in general a style, method and procedure of
business operation utilizing the Names and Marks as a Franchisee of
Franchisor; and
WHEREAS, Franchisee recognizes the benefits to be derived from being
identified, with and licensed by Franchisor and Franchisee understands and
acknowledges the importance of NAME OF BUSINESS high standards of
quality, cleanliness, appearance, and service and the necessity of operating the
Business in conformity with NAME OF BUSINESS standards and
specifications.
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
319
CONTRACT FOR THE SALE OF GOODS

Agreement made September 01, 2000, between California
Microtechnologies, 425 Sunnyvale Avenue, Santa Rosa, California 92138, a
California Limited Partnership ("Seller"), and A.O. Sunset Computers,
11 Tverskaya Ulitsa, Moscow, Russia, a Russian Open Stock Company
("Buyer").
1. ITEMS PURCHASED. For value received and other consideration, the

Seller agrees with the Buyer to provide the Buyer the following products
("Goods") in accordance with the terms and conditions of this Contract:
Description Quantity Unit Price Total Price
Total Price
2. TITLE / RISK OF LOSS. Goods shall be delivered F.O.B. Port of

destination (St. Petersburg). All shipping terms shall be as defined in the
Uniform Commercial Code of California.
3. PAYMENT. The full amount of the purchase price shall be paid to

California Microtechnologies, 425 Sunnyvale Avenue, Santa Rosa, California
92138, within 30 days of receipt of the invoice, unless otherwise agreed upon
in a "Credit Purchase Agreement" attached as an addendum to this Contract.
If any invoice is not paid when due, interest will be added to and payable
on all overdue amounts at 5.00 percent per annum, or the maximum
percentage allowed under applicable laws, whichever is greater; and Buyer
shall also pay all costs of collection including without limitation, reasonable
attorney fees.
4. WARRANTIES. Seller warrants to Buyer that the Goods will conform

substantially to the applicable samples.
The Seller makes no warranties, expressed or implied, except as specifically
stated above. SUCH WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESSED OR
IMPLIED, INCLUDING WITHIUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
320
Contract for the Sale of Goods
SELLER SHALL IN NO EVENT BE LIABLE FOR ANY

INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY
NATURE, EVEN IF SELLER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
5. INSPECTION. The Buyer, upon receiving possesion of the Goods, shall

have a reasonable opportunity to inspect the Goods to determine if the Goods
conform to the conditions of this Contract. If the Buyer, in good faith,
determines that all or a portion of the Goods are non-conforming, the Buyer
will return the Goods in accordance with Seller's instructions and at Seller's
expense. The Buyer must provide written notice to the seller of the reason for
rejecting the Goods. The Seller will have 30 days from the return of the Goods
to cure any and all defects or be held in breach.
6. TERMINATION. In case of material breach by either party of any of the

provisions contained in this Contract, the other party shall have the right to
terminate this Contract at its option. Furthemore, if either party becomes
insolvment, makes a general assignment for the benefit of creditors, has a
petition or any proceedings under the bankruptcy laws or under any other law
relating to debtor's relief filed by or against it, or if a receiver is appointed to
take control of the business of either party, the other party may, at its option,
cancel this Contract.
7. FORCE MAJEURE. If performance of this Contract or any obligation

under this Contract is prevented, resticted, or interfered with by
unanticipated causes beyond either party's reasonable control ("Force
Majeure"), and if the party unable to carry out its obligations gives the other
party prompt written notice of such event, then the obligations of the party
invoking this provision shall be suspended to the extent rendered necessary by
such event. The term Force Majeure shall include, withiot limitation, acts of
God, fire, explosion, vamdalosm, storm or other similar occurance, orders or
acts of military or civil authority, national emergencies, labor strikes,
insurrections, riots, and wars.
The excused party shall use reasonable efforts under the circumstances to
avoid or remove such causes of non-performance and shall proceed to perform
with reasonable dispatch whenever such causes are removed or ceased.
8. ARBITRATION. Any controversies or disputes arising out of this

Contract shall be resolved by binding arbitration in accordance with the then
current Commercial Arbitration Rules of the American Arbitration Association.
The parties shall endeavor to select a mutually acceptable arbitrator
knowledgeable about issues relating to the subject matter of this Contract. In the
event the parties are unable to agree to such a selection, each party will select an
321
arbitrator and the arbitrators in turn shall select a third arbitrator. The
arbitration shall take place at a location that is reasonably centrally located
between the parties, or otherwise mutually agreed upon by the parties.
All documents, materials, and information in the possession of each party
that are in any way relevant to the claim(s) or dispute(s) shall be made
available to the other party for review and copying no later than 60 days after
the notice of arbitration is served.
The arbitrator(s) shall not have the right to amend, add to, or subtract
from any provision of this contract, nor to award punitive damages. The
arbitrator shall have the power to issue mandatory orders and restrain orders
in connection with the arbitration. The award rendered by the arbitrator shall
be final and binding on the parties, and judgment may be entered thereon in
any court having jurisdiction.
9. ENTIRE CONTRACT, SEVERABILITY, MODIFICATION &

WAIVER. This Contract contains the entire agreement of the parties and
there are no other promises or conditions in any other agreement whether
oral or written. This Contract supersedes any prior written or oral agreements
between the parties. If any provision of this Contract shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. This Contract may not be modified or
amended except in a writing signed by both parties. The failure of either party
to enforce any provision of this Contract shall not be construed as a waiver or
limitation of that party's right to subsequently enforced and compel strict
compliance with every provision of this Contract.
10. APPLICABLE LAW. This Contract shall be governed by the laws of

the State of CA.
The parties have executed this Contract at Los Angeles, California, USA,
on the day and year above written.
Buyer: Seller:
A.O. Sunset Computers California Microtechnologies
Ivan Ivanovich Ivanov John Smith

by: Ivan Ivanovich Ivanov, General Director by: John Smith, Sales Manager
READING SUPPLEMENT
Learning Business Law by Doing It
Real Transactions in Law School Clinics
(Business Law Today)
Some say you can only learn to be a lawyer by practicing it - for real.
That's what business law clinics in law schools are all about.
In the past 10 years, an innovative approach to teaching business law has
been gaining momentum in law schools across North America - clinical
education for aspiring business lawyers.
The pedagogical models for business clinics vary widely from school to
school, but a typical business clinic course consists of several components,
including representing clients, meeting with a clinic supervisor, participating
in classroom instruction, and maintaining a journal. Obviously, the most
important part of the mix is the representation of clients since performing
legal services for a real client is the hallmark of clinical education.
Clinic students take responsibility for all aspects of representing their
clients including scheduling meetings, drafting legal documents, consulting on
the phone, maintaining files, and keeping clients abreast of their work and
progress.
Students who have participated in small business clinics agree that
representing a real client instead of a simulated or hypothetical one makes all
the difference. One of the benefits is that the clinic forces law students to
understand their clients' business needs. In many cases, clients find the law to
be an obstacle to what they want to do; in the clinic students are pushed to
find ways to help the clients overcome that obstacle.
The learning process begins with an initial client interview. Often students
are videotaped as they work through their first client meeting so they can
review the interaction with the instructor afterwards. Although most students
initially feel they did a good job with the interview, after going over the tape
they often find they failed to ask key questions or to pick up on the client's
nonverbal communication.
Most clinical programs are premised on the idea that business lawyers
must not only master the legal knowledge and analysis necessary for
competent performance, but they must also understand the needs of their
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Reading Supplement
clients, the underlying business, and entrepreneurship in general. The initial

client interview can be a real eye-opener for the students in this regard.
Because their legal education has focused on the primacy of law, the students
have to be re-educated to start their relationship with the client by learning a
great deal of nonlegal information about the business, such as what it does,
how it makes money, and what its short- and long-term goals are.
Many clinics use a "law firm" model where the professor acts as the partner
and the' students play the role of associates. Others have a model where
students are placed with existing law firms and supervised by lawyers
practicing with those firms. Some charge modest fees, while others are free.
Regardless of whether they are billing for their time, most business clinics
require their students to maintain timesheets and submit bills.
Providing legal services to clients is the centerpiece of the educational
project in the clinic. Opportunities for learning arise in many situations - the
ethical dilemmas involved in multiple client representation, the
professionalism aspects of how to conduct a client interview, the substantive
knowledge of the legal matters presented, and the cultural understanding of
what it means to be a business lawyer.
Actually performing the legal work teaches lessons that are simply not
available in the classroom. "Perhaps one of the best learning experiences the
students receive in the clinic is the opportunity to work with various
governmental agencies," says Joseph Stone, director of the Business Law
Center at Loyola University Chicago School of Law. "They get first-hand
experience in how frustrating it can be to deal with certain government
bureaucracies, and they learn the importance of professional skills like
patience and diplomacy in reaching their goals."
The experience in the clinic pays dividends for the students when they
enter the profession. Stone notes that former students currently in practice
regularly report to him that they got more useful information and skills from
the clinic than from any other course in law school. Similarly, on-campus
interviewers for law firms often remark to clinic participants that they wish
they had had a course like the clinic when they were in law school since much
of what was covered in the clinic took a long time to learn on the job.
Although client representation lies at the heart of the clinic, the most
significant teaching often occurs not in the classroom or the conference room,
but in the clinical professor's office where the student and instructor work
closely to review draft documents and brainstorm approaches to a client's
problems.
While each client has some specific needs, there are many legal matters
common to all small businesses. Therefore, in addition to the client
representation and supervisor meetings, the clinics typically include a
classroom component where students are exposed to a survey of substantive
business law topics. The classroom component usually is not carried out in
typical law school style.
324
2. Business Lawyer's Handbook
The courses are designed to be a bridge between law school and law
practice. An important lesson students need to learn is that in practice lawyers
must teach themselves about the law on a continuing basis. The clinics get
students into the practice of doing that. Because the actual needs of a given
client can never be known ahead of time with certainty, the classroom
instruction does not always coincide with the matters the students are
handling in the clinic. Indeed, students, like lawyers, often find themselves in
a crash course tutorial as they learn how to address an actual problem.
Business clinics may help students better appreciate the challenges of
business lawyering, which they sometimes misunderstand as merely a forms
practice. By putting students in the middle of real transactions, they gain a
deeper understanding of the subtleties of making a transaction come together.
"Once it's done, it looks so simple - but it's the making of the deal that
presents the difficulty," notes Schlossberg of Penn. "Without seeing the deal,
the students don't know how much of an art business lawyering can be."
(Abridged from Business Law Today Volume 14, Number 1 - September/October 2004
By Eric J. Gouvin
Gouvin is associate dean at the Western New England
College School of Law, in Springfield)
Business Lawyer's Handbook
By Clifford R. Ennico
(Abridged from the book overview article)
1.01 What This Book Does and Why It Is Needed

BUSINESS LAWYER'S HANDBOOK is for the college pre-law student,
the aspiring lawyer, the law school student, the recent law school graduate,
and the novice lawyer (zero to five years in practice) who wants to practice
law for a living but does not want to become a courtroom lawyer, or
"litigator". I believe it is the first book ever to introduce the reader to the day
to day work of perhaps the majority of lawyers in the United States today.
[ 1] The Problem: Ignorance of What Business Lawyers Do

Each year thousands upon thousands of young men and women graduate
from law schools in the United States not having the foggiest idea what they
will do when they begin their practice. Some of course do, and they generally
fall into one of two groups. First are the sons, daughters and spouses of
lawyers. Having been part of a legal household for some time, they can be
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Reading Supplement
presumed to have some working knowledge of what lawyers actually do each

day (although in light of the lawyer's traditionally long working hours away
from home, this may be a large presumption). Second are the ex-paralegals
who spend one to three years between college and law school performing
clerical tasks for a large law firm, usually in a big city. This second group
has seen firsthand what lawyers do; they have served in the trenches with
the junior attorneys of the firm, they know only too well what the lifestyle of
the working lawyer is like, and they have received considerable advice from
the firm's junior attorneys about how to succeed in law school and in
practice.
I would be surprised if both of these groups together make up more than
five percent of the typical first year law school class. For the remaining ninety
five percent (and, one suspects, more than a smidgin of the elite five percent as
well), the entry into the practice of law comes as an extreme shock, for two
reasons. First, most young people who decide to enter the legal profession base
their decisions on imperfect information, and fail to focus their career plans.
Second, the traditional American, law school curriculum emphasizes the
development of skills that are useful to the courtroom lawyer or litigator, not
the business lawyer as this book defines the term.
[a] Unfocused Career Planning

As a young lawyer almost a decade ago, who did not have the foggiest idea
what "corporate lawyers" did (but knew somehow he wanted to be one), I
searched in vain for a book that described, in clear simple English, what
lawyers did for a living outside the courtroom, with perhaps some insight into
how and why these lawyers did what they did. The HANDBOOK is designed
to fill this gap in legal literature. While it cannot possibly take the place of
interviewing business lawyers (the young reader should talk to lawyers
practicing in law firms AND in corporate .legal departments), or working a
year or two in a law office environment, it hopefully will enlighten you
sufficiently on what business lawyers do for a living.
[2] The Business Lawyer and the Advocate: A Study in Contrasts

What do we mean when we refer to a "business lawyer"? In the real world
of practice, the term has a flexible meaning; it refers generally to a lawyer
whose specialty encompasses one of the areas of substantive law (such as
corporate law, antitrust law, or securities regulation) which forms part of the
legal environment of a business corporation, partnership or other entity (such
as a joint venture or limited liability company). Thus a litigator who
specializes in shareholders' derivative suits or administrative proceedings
before the Environmental Protection Agency is a "business lawyer", while the
lawyer who drafts wills for individuals and never sees the inside of a
courtroom is not.
326
This book uses a different definition of "business lawyer". As used herein,

the term refers to one who spends most of his professional time on tasks that
do not involve advocacy or representing clients in court. Thus it does not
matter whether the business lawyer's specialty is corporate law, tax law, real
property law, estates and trusts, matrimonial law, environmental law or
labor/employment law; for the purposes of this book a lawyer is a "business
lawyer" if he seldom or never sees the inside of a courtroom in performing his
work. The term "office lawyer" will occasionally appear as a synonym for
"business lawyer" in this book.
The English legal system has always recognized the difference between
litigators and business lawyers. In the United Kingdom, a BARRISTER is a
"specialist pleader who also gives expert opinions on all legal matters".
Barristers have almost exclusive rights of appearing in English courts on
behalf of clients. A SOLICITOR on the other hand, is a "general law agent
dealing with litigious and non-litigious matters". It is the solicitor who drafts
wills, counsels business corporations and partnerships on their legal problems,
negotiates marital separation agreements, and closes title to real property.
While the barrister in court can only act on the instructions of the client's
solicitor, who often sits at the barrister's side throughout the proceedings, the
solicitor cannot speak in court except to instruct the barrister. Curiously, in
this arrangement the barrister is the only one of the two-lawyer team who is
referred to as "counsel".
In contrast, the American legal system blurs the distinction between the
"barrister" and "solicitor" functions. Aside from the obvious fact that, once
one has been admitted to practice law in one or more of the American states,
one does not need an additional license to appear in court in that state
(although an increasing number of jurisdictions are imposing additional
licensing requirements for lawyers who wish to specialize in certain highly
technical areas of practice, such as tax law), an American lawyer, even a
business lawyer, is expected to serve his clients as both advocate and
counselor.
A lawyer who has developed only advocacy skills is not likely to be
successful as a business lawyer. The businessperson who visits with counsel to
discuss a problem or a proposed transaction with another company is not
interested in knowing "what the law is" or what his side of the issue should be.
She wants to know, quite simply, what she should do (or, more precisely, what
others commonly do when faced with her situation). Close logical reasoning,
even if completely accurate, will not give her the advice she seeks.
What distinguishes the business lawyer from the litigator is the ability not
only to furnish legal information but to relate it to the client's needs and
objectives, so that the client may achieve those objectives and satisfy those
needs with the smallest possible risk of litigation or violating the law, without
giving nonlegal or business advice (no matter how much such advice is desired
by the client) which the lawyer is not competent to give.
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1.02 The Several Types of Business Lawyer

[1] The Business Lawyer in Private Practice
While the growth of corporate legal departments has been explosive in the
past decade, it is still the case that most business lawyers practice their craft in
private law firms, which can range in size from two lawyers to over 1,000
lawyers. Business lawyers in a small firm usually are generalists, and often are
expected to handle litigation as well as office matters.
In larger firms, the business lawyers are usually segregated from the
litigators in their own department, which is most commonly called the
"corporate department" even though lawyers in that department do not
confine their practice to corporate law. In many large firms, there will be
several such departments, each of which will be devoted to a particular
specialty (such as antitrust law, tax law or securities regulation), or to a
particular group of clients.
[2] The Corporate or In-House Business Lawyer

As the costs of using outside law firms skyrocketed during the past decade,
many business organizations have cultivated in-house legal departments of
business lawyers who are also employees of the organization. At some of the
largest Fortune 500 corporations, the law department is a law firm within the
corporation, consisting of dozens if not hundreds of litigators and business
lawyers with assigned tasks, corporate titles and reporting responsibilities
The corporate law department in most large business organizations is
expected to perform most of the routine, day-to-day legal tasks once
performed by junior attorneys in the organization's outside law firm. When a
matter arises that is too large, too politically sensitive, or too specialized for
the in-house legal team, it usually will be referred to outside lawyers by the
general counsel. While in theory the general counsel is free to choose any law
firm he believes can do the job, and while most general counsel these days shop
their referrals around to several firms in an effort to generate price
competition that will lower the organization's overall legal costs, in practice
most general counsel will refer matters to the law firm from which they came,
as it is rare even today for a general counsel to have spent his entire career
solely in the corporate legal environment.
[4] The Staff Attorney for a Government or Administrative Agency

A special type of business lawyer is the lawyer who works for a federal,
state or local government, legislative committee, or administrative agency
such as the Federal Trade Commission or the Securities and Exchange
Commission. These individuals perform a number of tasks, including the
preparation of new laws and regulations, the drafting of legislative history
(such as the releases which always accompany new Securities and Exchange
328
Commission pronouncements), the interpretation of agency rules and

regulations in ruling letters to business lawyers and their clients, and the
approval of documents required to be filed with the agency before a particular
course of action (such as a corporate acquisition or the construction of a
public facility) can begin.
While the practice of government attorneys is in many ways similar to that
of business lawyers in private practice or in-house legal departments, it differs
in one fundamental respect: there is but one client, and that client is the State.
1.03 The Three Basic Functions of the Business Lawyer

The business lawyer in the United States serves three basic functions for
her clients: monitoring the client's legal and business environment; counseling
the client on legal problems raised by the client's present and proposed
business activities; and managing the client's business transactions with
others.
[1] The Client Monitoring Function

A vital yet underappreciated function of the business lawyer is the
constant monitoring of the legal and regulatory landscape as it relates to the
client's particular business activities. As an example, a business lawyer who
notices in his professional reading a new case or statute that he knows will
have an adverse effect on a client's proposed merger with another corporation
may wish to prepare a brief memorandum to the client discussing the case or
statute and showing both why and how the proposed merger will be affected.
While a business lawyer should not render unsolicited legal advice on a
regular basis, he is not expected to sit on his hands when he discovers a
potentially dangerous development and wait for the client to ask him about it.
[2] The Client Counseling Function

A major part of the business lawyer's work involves advising and
counseling clients on matters which they bring to the lawyer's attention. As an
example, an inventor may call a business lawyer to tell him he has obtained a
patent for a new type of widget, wants to go into business to produce and
market it, and has a few questions of a "technical legal nature". Should he go
into business as a sole proprietorship, a partnership or a corporation (either a
regular corporation or an S corporation which receives certain benefits' under
the federal and state tax laws)? How should he raise his operating funds, from
friends and neighbors, from a bank, from a venture capital firm, or from a
public offering of the new company's stock? Would he be better off from a tax
viewpoint by contributing his patent to the newly formed company or by
licensing it to the company? Some of these questions may be beyond the
lawyer's competence, but he is nonetheless called upon to advise and counsel
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Reading Supplement
the client by looking up the relevant law, determining how the law applies to
the client's business situation, and educating the client on the options
available to him and the pros and cons of each available option. By counseling
the client before the client takes action, the business lawyer often can reduce
or eliminate the risk that the client's proposed activity will violate a law or
regulation, will require him to pay unnecessary taxes, or will cause him to be
sued by someone whose legally protected rights were infringed by the client's
conduct. As a friend of mine puts it, "the primary role of the business lawyer is
to make sure the litigators don't get involved later on".
[3] The Transaction Management Function

Finally, business lawyers are often called upon to manage their clients'
business transactions.
Because many business transactions have significant legal consequences in
this era of high taxes and complex government regulation, it is common to
have business lawyers draft all of the transaction documents from beginning to
end and manage the negotiations, so that legal issues will be spotted and
papered over before the documents are signed and the transaction is closed. As
a result, a majority of the time spent by many business lawyers (especially the
younger ones) in large law firms will be spent drafting, proofreading,
redrafting, reproofreading, collating, stapling, unstapling, "redlining"
(marking the draft of a legal document to show the changes made from the
immediately prior draft), "blacklining" (comparing two different legal
documents and marking one of them word for word to show how it differs from
the other), Xeroxing and binding together dozens and dozens of pieces of
paper. Over and over and over again.
1.04 Mindsets and Perceptions: How Business Lawyers, Advocates and

Businesspeople View Each Other and Themselves
[2] Lawyers and Businesspeople
It is no secret that lawyers are not loved by businesspeople; at best they are
tolerated by their business clients as necessary evils, at worst they are detested
by clients who will use every means to circumvent them and prevent them
from performing the work they feel it is necessary to do. Part of the reason can
be illustrated by the old story about the young swain who asked his girlfriend
to marry him and, when rejected, asked "Why? We've been such a part of each
other's lives for so long".
HE: When you fell down skiing two winters ago and broke your leg, wasn't I
at your side all the time talking to you and reading books to you by your
bedside?
SHE: You certainly were.
330
HE: And when you had pneumonia years ago, didn't I visit you in the
hospital every day and bring you candy and flowers?
SHE: You certainly did.
HE: And earlier this month, when the IRS audited your tax return, didn't I
personally stay up with the accountants to make sure your meeting with the
auditors went well?
SHE: You certainly did.
HE: Then I don't understand. Why won't you even consider marrying me?
SHE: Because I associate you with every rotten thing that's ever happened
to me in my life!
Thus do clients, and especially business clients, view lawyers in general.

Like the girlfriend in the story, the client only sees his business lawyer when
something is going wrong, or when he is planning to do something and is
worried that something might go wrong. In any case the circumstances under
which the business lawyer and his client get together to conduct business are
usually stressful ones, and it is not uncommon for businesspeople to transfer
responsibility for this stress from the situation to the lawyer (and to be fair,
some business lawyers give businesspeople good reason to make the transfer.
Another source of misunderstanding between business clients and their
lawyers is not as obvious. Whether litigators or business lawyers, attorneys are
viewed by most businesspeople (even those well disposed to the profession
generally) as a cost of doing business in the modern world which, like any cost,
is to be minimized. The lawyer, on the other hand, especially a lawyer in
private practice, views himself as a profit center and measures his productivity
by the number of hours spent on a matter and the quality (some would say the
perfection) of the finished work product. The lawyer, being a professional who
is guided by the dictates of rigid deductive logic, will want to produce an
airtight brief or legal document that leaves nothing to chance and thoroughly
research all legal points that are not one hundred percent clear, no matter how
many hours it takes. The businessperson, on the other hand, will usually be
willing to trade some protection for a smaller legal bill. The businessperson
does not always appreciate that when he tells his lawyer to do only a fifty
percent job because that is all he can afford to pay for, the lawyer is nonetheless
professionally obligated to provide not less than 100 percent service, and will
not take it upon herself to decide where the 50 percent cut in service will be
made. As a former colleague of mine once put it, "in this business there are only
two grades: 100 percent and failure. Even a grade of 99 percent is a failing
grade if the one percent error causes the client to suffer a loss or exposes him to
an unnecessary risk." Thus the lawyer will insist, in a subtle way of course, that
the client be the one to make the determination of what concessions shall be
made to the other side, or which of the customary provisions shall be left out of
the legal documents, and will be sure to document for his own protection that
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it was the client who specifically requested that work deemed necessary or
proper by the lawyer not be done in the interest of holding costs down. The
businessperson, who is accustomed to taking risks and may not fully appreciate
that the lawyer cannot do so, will often misinterpret the lawyer's behavior as
squeamishness, cowardice or worse.
[4] Businesspeople and Business Lawyers
Generally, business lawyers find they are not treated with the same degree
of awe and deference as litigators. First, business lawyers do not operate in a
world that is foreign to the businessperson; the businessperson, after all, took
courses in business law and taxation in studying for his M.B.A. degree, and
believes he knows something about the legal and regulatory climate of his
business. Moreover, the businessperson and her business lawyer speak
basically the same language, although they may sometimes define words such
as "fraud" or "cash flow" in different ways. It is human nature that when one
hears a common word pronounced differently by someone else (perhaps with a
different accent, or with the emphasis placed on the second rather than the
first syllable), one assumes the other person and not he is the country bumpkin
that does not know how to speak English.
If, however, the business lawyer calls the businessperson into his office,
explains the problem, and carefully points out all of the available alternatives
and the pros and cons of each, without indicating his own personal preference
unless invited to do so, two things will happen: the businessperson, in picking
the alternative that will achieve her objectives at the lowest possible level of
legal risk to the organization, will be exercising her business judgment
properly; while the lawyer, by demonstrating his expertise and nimbleness of
mind in showing the many ways in which the transaction can be accomplished
(thereby not threatening the businessperson's faith in the soundness of her
business judgment), will gain a better image in the businessperson's mind.
It is the business lawyer's job to lead the client to water, but only the client
can decide whether or not to drink. To put it another way: the lawyer can
provide information that will help the client make the best possible business
decision, the lawyer may even help organize the client's analysis of the
situation by discussing the available realistic options and pointing out the
pros and cons of each along the way, but the business lawyer does not make
the final business decision to "go or no go" which is the client's ultimate
responsibility The lawyer, whether a litigator or a business lawyer, must
educate the client on the limits of his role as advisor and counselor.
To summarize, the business lawyer, unlike the litigator, cannot rely on his
status or his specialized knowledge to command the respect and admiration of
the client. The business lawyer earns her client's respect by demonstrating her
knowledge of the client's business and objectives in a way that does not
threaten the client, and his flexibility and creativity in showing the client not
"why he cannot do what he wants to do" but "how to do what he wants to do".
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3. Seeking a Position of an Attorney
Seeking a Position of an Attorney

Edwin Coldwell
My Statement
Always inquisitive, I usually ask "Why not?" instead of "Why?" From
traveling alone to unfamiliar places, to learning to sail, to fighting speeding
tickets, to learning new computer programming languages, my philosophy of
learning from doing has served me well, and I am sure it will continue to do so
in the legal profession. Additionally, I am an excellent problem solver,
continually searching for new and creative solutions to old problems. This
outlook has given me a fundamental understanding of people, business, and
the world, which makes me a strong candidate for a wide variety of positions.
Goal
I am seeking a full time position as an attorney. My interests are varied,
but below are some of the areas of law I am considering.
Bankruptcy, Creditor / Debtor Rights
Business Litigation
Civil Litigation
Contracts
Intellectual Property Law
International Law
Mediation / Negotiation
Real Estate Litigation
My ideal job will be challenging, working with dynamic and honest people,
have room for exploring opportunities that interest me, require a level of responsibility,
involve work related travel, courtroom appearances, and direct client contact.
Education
Member, California Bar
Santa Clara University School of Law
Juris Doctorate, May 2001
Witkin Award, Criminal Procedure (Spring 2001)
Honors Moot Court, board member (Spring 2001/Fall 2000)
Honors Moot Court, participant (Spring 2000)
Galloway Moot Court Competition, participant (Spring 1999), Argued for
defense in criminal law moot court
University of California, Davis
Bachelor of Arts, June 1998
Major: Political Science
Minor: Rhetoric and Communication
Resident Advisor (1997-98 academic year), UC Davis
Pi Alpha Sigma, UC Davis, (1996-98). Academic Honor Society
UC Davis Symphony, member violin section (Fall 1996 - Spring 1998)
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Reading Supplement
Experience
Wilmor Estate (Belmont, March 2001-Present), Provide legal consulting
services on issues of land use, real estate development, and city planning
Pacific Online Internet Services (Santa Rosa, July 2000-Present), Provide
legal research services, consultation on employment law, contracts and other
documents; assist with marketing program
Stanford Linear Accelerator Center (Stanford University, Summer 2000),
Assisted general counsel and provided intellectual property research for the
Technology Transfer Office
Mansfield & Mailey LLP, Law Clerk (Santa Rosa Office, Summer 1999).
Drafted complaints, answers, demurrers; prepared motions, wrote demand letters,
assisted with general research, indexed documents; Specific areas of work included
Internet law, securities law, personal injury cases, and breach of contract cases
East San Jose Law Clinic, (Spring semester 1999). Interviewed and
provided advice to clients seeking assistance with worker's compensation
claims and bankruptcy
Sonoma County District Attorney, Legal Intern (Summer 1997). Assisted
with trial preparation, wrote subpoenas, researched legal issues in a fraud, and
a vehicular manslaughter case
Law Office of Peter Slater, Legal Intern (Sacramento, Spring 1997).
Assisted in case preparation for personal injury attorney; Prepared deposition
summaries, interviewed clients, and wrote demand letter
Yolo County District Attorney, Investigative Intern (Winter 1997). Assisted
with discovery, interviewed witnesses and suspects, served subpoenas
Personal
Computers / Internet - experienced with Lexis-Nexis and Westlaw digital
research services; created comprehensive estate planning resource website;
webmaster for Sacramento Consumer Attorneys; former web applications
developer and designer; knowledgeable in computer networking; proficient in
Windows, Macintosh, Linux and Internet applications; experience
programming in C, Perl, Visual Basic, and Javascript.
Music - accomplished violinist; former member of Stanford University
Symphony Orchestra, UC Davis Symphony Orchestra, Sonoma County
Baroque Sinfonia
Travel - extensive travel experience in Austria, Belize, Canada, Czech
Republic, France, Germany, Greece, Hong Kong, Italy, Malaysia, Mexico, I
Slovenia, Switzerland, Taiwan, Thailand, and the United States
Hobbies - sailing, skiing, ham radio, inventing/product enhancement,
photography
Vocabulary Note:
subpoena [s3(b)'pi:nsj - повестка с вызовом в суд
ham radio - радиолюбительская связь
334
4. Interview at a Law Firm
Interview at a Law Firm
( George Grisham
The Firm, abstract)
The hero of the book Mitchell McDeer a young lawyer and law school
graduate is having an interview at a law firm. He is interviewed by three senior
partners.
"Mitchell McDeere?" he asked with a huge smile and a hand thrust

forward.
"Yes." They shook hands violently.
"Nice to meet you, Mitchell. I'm Lamar Quin."
"My pleasure. Please call me Mitch." He stepped inside and quickly
surveyed the spacious room.
"Sure, Mitch."
Oliver Lambert, the senior partner, leaned forward on his elbows and took
control of the preliminary chitcat.
"Are you tired of interviewing?" asked Oliver Lambert.
"Not really. It's part of it,"
Yes, yes, they all agreed. Seemed like yesterday they were interviewing and
submitting resumes and scared to death they wouldn't find a job and three
years of sweat ant torture would be down the drain. They knew he was going
through, all right.
"May I ask a question?" Mitch asked.
"Certainly".
"Sure".
"Anything".
"Why are we interviewing in this hotel room? The other firms interview
on campus through the placement office".
"Good question." They all nodded and looked at each other and agreed it
was a good question.
"Perhaps I can answer that, Mitch", said Royce McKnight, the managing
partner. "You must understand our firm. We are different, and we take pride
in that. We have forty-one lawyers, so we are small compared with other firms.
We don't hire too many people; about one every year. We offer the highest
salary and fringes in the country, and I'm not exaggerating. So we are very
selective. We selected you. The letter you received last month was sent after
we screened over two thousand third year law students at the best schools.
Only one letter was sent. We don't advertise openings and we don't solicit
applications. We keep a low profile, and we do things differently. That's our
explanation".
"Fair enough. What kind of firm is it?"
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Reading Supplement
"Tax. Some securities, real estate and banking, but eighty percent is tax
work. That's why we wanted to meet you, Mitch. You have an incredibly
strong tax background."
"How are you ranked in your class?" Mr. Lambert asked.

"Top five." Not top five percent, but top five. That was enough of an
answer for all of them. Top five out of three hundred. He could have said
number three, a fraction away from number two, and within striking distance
of number one. But he didn't. They came from inferior schools - Chicago,
Columbia and Vanderbilt, as he recalled from a cursory examination of
Martindale-Hubbell's Legal Dictionary. He knew they would not dwell on
academics.
"Why did you select Harvard?"
"Actually, Harvard selected me. I applied at several schools and was
accepted everywhere. Harvard offered more financial assistance. I thought it
was the best school. Still do."
"You've done quite well here, Mitch." Mr. Lambert said, admiring the
resume. The dossier was in the briefcase, under the table.
"Thank you. I've worked hard."
"You made extremely high grades in your tax and securities courses."
"That's where my interest lies."
"We've reviewed your writings sample, and it's quite impressive."
"Thank you. I enjoy research."
They nodded and acknowledged this obvious lie. It was part of the ritual.
No law student or lawyer in his right mind enjoyed research, yet, without fail,
every prospective associate professed a deep love for the library.
The three looked at each other, then at Mitch. This meant they had
reached the point in the interview where the interviewee was supposed to ask
one or to intelligent questions. Mitch recrossed his legs. Money, that was the
big question, particularly how it compared to his offers.
But, he knew, like all the other firms they had to shadowbox around the
issue until things got awkward and it was apparent they had discussed
everything in the world but money. So, hit them with a soft question first.
"What type of work will I do initially?"
They nodded and approved of the question. Lambert and McKnight
looked at Lamar. This answer was his.
"We have something similar to a two-year apprenticeship, although we
don't call it that. We'll send you all over the country to tax seminars. Your
education is far from over. You'll spend two weeks next winter in Washingtom
at the American Tax Institute. We take great pride in our technical expertise,
and the training is continual, for all of us. If you want to pursue a master's in
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4. Interview at a Law Firm
taxation, we'll pay for it. As far as practicing law, it won't be very exciting for
the first two years. You'll do a lot of research and generally boring stuff. But
you'll be paid handsomely."
"How much?"
Lamar looked at Royce McKnight, who eyed Mitch and said, - We'll
discuss the compensation and other benefits when you come to Memphis.
"I wrant a ballpark figure or I may not come to Memphis." He smiled,
arrogant but cordial. He spoke like a man with three job offers.
The partners smiled at each other, and Mr. Lambert spoke first.
"Okay. A base salary of eighty thousand the first year, plus bonuses.
Eighty-five the second year, plus bonuses. A low interest mortgage so you can
buy a home. Two country club memberships. And a new BMW. You pick the
color, of course."
...............
"That's incredible," he mumbled.
............
The smile vanished and he regained his composure. He looked sternly,
importantly at Oliver Lambert and said, as if he'd forgotten about the money
and the home and the BMW, - Tell me about your firm.
"Forty-one lawuers. Last year we earned more per lawyer than any firm our
size or larger. We take only rich clients - corporations, banks and wealthy
who pay our healthy fees and never complain. We've developed a specialty in
international taxation, and it's both exciting and very profitable. We deal only
with people who can pay."
"How long does it take to make partner?"
"On the average, ten years, and it's a hard ten years. It's not unusual for our
partners to earn half a million a year, and most retire before they're fifty.
You've got to pay your dues, put in eighty-hour weeks, but it's worth it when
you make partner."
"How many partners in the firm?"

"Twenty, active. We try to keep a ratio of one partner for each associate.
That's high for the industry, but we like it. Again, we do things differently."
"All of our partners are multi-millionaries by the age of forty-five," Royce
McKnight said.
"All of them?"
"Yes, sir. We don't guarantee it, but if you join our firm, put in ten hard
years, make partner and put in ten more years, and you are not a millionaire at
the age of forty-five, you'll be the first in twenty years."
"That's impressive statistic."
"It's an impressive firm, Mitch, - Oliver Lambert said, - and we're very
proud of it. We're close knit fraternity. We're small and we take care of each
other. We don't have the cutthroat competition the big firms are famous for.
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We're vera careful whom we hire, and our goal is for each new associate to
become a partner as soon as possible. Toward that end we invest an enomorous
amount of time ant money in ourselves, especially our new people.lt is a rare,
extremely rare occasion when a lawyer leaves our firm. It is simply unheard of.
We go extra mile to keep careers on track. We want our people happy. We
think it is the most profitable way to operate."
They watched him carefully to make sure all of this sank in. Each term
and each condition of the employment was important, but the permanence,
the finality of his acceptance overshadowed all other items on the checklist.
They explained as best they could, for now. Further explanation would come
later.
Corporations
One of the best-known and most widely used business entity forms is the
corporation.
Traditionally, corporations are viewed as having four identifying
characteristics. The four corporate characteristics are: continuity of life,
centralization of management, limited liability, and free transferability of
interests.
The main advantage of a corporation is the liability protection it provides
its owners or shareholders. Liability is limited because the corporation is a
legal entity that is separate from its shareholder owners. As a separate legal
entity, the corporation has a perpetual life. Also, as a separate legal entity, the
corporation is liable for its own debts and can only be held liable to the extent
of the corporation's assets.
The assets of a shareholder are personal assets that cannot be reached by
corporate creditors, unless the "veil" of corporate limited liability is "pierced."
The corporate veil is pierced when the required corporate formalities, such as
having annual directors' and shareholders' meetings, etc., aren't followed. In
effect, the corporate veil will be pierced (by a court when a lawsuit is filed
against the corporation and its shareholders) when the corporate form is a
mere sham that exists to enable shareholders to avoid personal liability. If the
veil is pierced, the shareholders will be liable for the obligations of the
corporation.
Although the corporate form generally results in limited liability, lenders
usually require the shareholders of small, closely held corporations to
personally guarantee corporate loans. If you personally guarantee the loans,
you will have to pay the lender if the corporation is unable to pay.
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5. Corporations
Formation
Forming a corporation is more complicated and more expensive than
forming a sole proprietorship or a simple partnership. However, the formation
process is not that difficult. To form a corporation, articles of incorporation
must be filed with the secretary of state's office in the state in which the
corporation is being organized. If the secretary of state's office accepts the
articles of incorporation, it will send a certificate of incorporation. Many
states require that a copy of the certificate of incorporation be recorded in the
local recorder's office where the corporation resides.
A corporation does not have to be organized in the state in which it is
going to do business. It can be organized in any state. Many corporations
organize in states like Delaware to take advantage of favorable corporate laws.
However, corporations must register as "foreign" corporations in any states in
which they do business, outside of the state in which they were organized.
Both organization and foreign registration entail the payment of initial and
annual fees which can add up to substantial amounts of money over time.
Work Smart
A corporation's name must be unique. If the name is already in use by
another corporation, the incorporation documents will be rejected. Save time
and effort by determining whether the proposed corporate name is available
before filing the incorporation documents.
In fact, you should register the name as soon as you know what it will be.
Call your state's secretary of state's office and ask them to reserve the name for
you. If the name already exists, they'll tell you.
Operation
A corporation is owned by its shareholders. The shareholders don't have
any control over the day-to-day operations of the business directly. The
shareholders are responsible for electing directors of the corporation. The
directors oversee the operation of the corporation and make major corporate
decisions, such as appointing the officers of the corporation. The directors
meet at least annually to assess the past performance of the corporation and to
plan for the future. The officers of the corporation are responsible for the
day-to-day operations of the company.
Once the directors are elected and the corporate officers are appointed, the
corporation can begin to operate. However, it is important that the
corporation observe all the formalities of being a corporation. The formalities
include, among other things, issuing stock certificates to the shareholders,
holding annual meetings, recording the minutes of the meetings in the
corporate register, and electing directors or ratifying the status of existing
directors.
Observing all the corporate formalities provides evidence that the
corporation is a separate legal entity rather than an extension of the
shareholders. The reason it is necessary to enforce the notion that the
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corporation is a separate legal entity is to protect the limited liability of the

shareholders.
In small, closely held corporations, take extra precautions to see that all
corporate formalities are observed. If the corporate formalities are not
observed, someone suing the corporation may be able to show that the
corporation is not a separate entity from its shareholders. The shareholders
will then be liable for the corporation's debts.
Advantages of a corporation:
Earnings can be retained. The corporation can retain its earnings for
future investment or dividends.
Limited liability. Corporate shareholders are generally not responsible for
the debts and obligations of the corporation.
Ease of formation. Forming a corporation is generally a mechanical
process dictated by state law.
Disadvantages of a corporation:
Formalities required. A corporation must follow certain formalities
dictated by law to maintain its corporate status.
Administration. The administration of a corporation is complicated since
certain federal and state tax procedures are necessary and certain accounting
methods may not be available.
Cost. The cost to incorporate an entity can be considerable, and there are
annual filing fees that must be paid in most states. Also, the administrative
costs of accounting and tax preparation may be expensive due to the
complexity of complying with corporate laws.
Protective measures. A corporation with two or more shareholders may
require the efforts of all of the shareholders to succeed, especially in the early
life of the business. If one shareholder withdraws or dies, the existence of the
corporation may be threatened. To protect the corporation and the remaining
shareholders, consider buy/sell agreements and key man life insurance policies
on the shareholders.
A buy/sell agreement specifies how the value of a shareholder's interest
will be determined if a shareholder wants to leave the corporation. Key man
life insurance is a life insurance policy on the life of key members of an
organization to provide cash in the event of the death of a key member.
Tax issues. In general, corporations are separate taxable entities that are
subject to federal and state taxation. Corporate income is taxed at the
corporate level. When that income is passed on to the shareholders as a
distribution or dividend, it is taxed again on the shareholder's individual tax
return. Double taxation may be partially or completely avoided in a small
business by paying a salary to the employee shareholder. However, the tax
laws governing this area are complex and should be discussed with your
accountant or your attorney.
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Franchise and 10 Rules of Success in Business
About P o s t N e t
With the combined experience of over twenty years in the franchised

postal and business services industry, PostNet V founders Steven Greenbaum
and Brian Spindel launched the PostNet franchise program in July of 1993
and never looked back. In just ten short years, PostNet International
Franchise Corporation has become the fastest growing, largest privately-held
company in both the postal and business services, and copy and print shop
industries.
Dennis and Sherry Coogle
By Pamela Gold
PostNet, a leader in the one-stop business services and shipping center

industry is prospering. Why? One reason could be the devoted franchisees
who own PostNet franchises across the country. Meet Dennis Coogle. For the
last 4 years, Dennis and his wife Sherry have owned a highly successful
PostNet in North Carolina. A decorated franchisee, Dennis and his wife have
received numerous awards from PostNet, FedEx, and from the International
Franchise Association for their devotion and success as franchisees. I recently
spoke to Dennis about what it's really like to be a franchisee.
W h a t f a c t o r s led to you deciding to b u y a f r a n c h i s e ?

I was employed, with two college-bound daughters. My wife and I wanted
something else to do and we thought my wife would be able to run the
business on her own. As the business got larger, I ended up retiring from my
other job. So, for the last 2 years I've been working on the business, full-time.
W h e r e did y o u begin y o u r search for t h e right f r a n c h i s e ?

We started by looking in magazines and publications. We were actually
accepted to buy a Dairy Queen but someone else had already bought the
rights to the location we wanted. Then, we looked to TCBY, but all of the
locations in our area were already "claimed".
W h a t eventually led t o y o u r f i n d i n g and p u r c h a s i n g t h e right f r a n c h i s e ?

While pursuing Dairy Queen, a Developer sent us a PostNet brochure and
we then thought about franchises like PostNet and all its competitors.
PostNet was the only franchise that gave us that warm, fuzzy feeling. We liked
the fact that we had immediate access to Steve and Brian (Founders, and
CEO and COO, respectively). That availability is very important to us. With
PostNet, one also has the advantage of adding extra profit centers, which we
capitalize on.
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What hurdles have you had to overcome to become a successful

franchisee?
I really haven't had many! I guess one issue I had was with my employees.
Sometimes the true colors of an employee come out after they are already
hired. The other hurdle was simply learning how to operate a business. As you
run the business, you learn.
How did you overcome the Money Factor?
Well, we didn't want to go the conventional loan route, so we simply used
our savings. We had plenty of equity and we were in the black in 60-90 days!
What makes you a successful franchisee?
Location, location, location, as well as dedication to our customer. I also
listen to our customer needs and respond accordingly.
Plus, the atmosphere in our store - Our customers think they've entered
Cheers, because 'everybody knows your name.' You have to get to know your
customers. Our customers will drive past competitors; drive extra mileage because
of the way they're treated here. We also offer more services than the typical
PostNet - We have a full-time graphic artist and so much equipment that it is
crammed into our 1200 sq. ft. store. We have-no extra room for more equipment!
In our store, we work very hard and we also have lots of fun - it's almost a
party atmosphere and our customers really enjoy every visit. An example: Our
customers think about us -They bring us presents during the holiday season.
They send us e-mails with pictures and jokes. They truly enjoy being our
clients!
What is a typical day in your life like?
I get into work by 8:30 am and since we have the last FedEx pick-up at our
store, we're opened until 6:30, which is late for most PostNets. I usually don't
leave the store until 7-7:30 pm at the earliest. Having the last FedEx pick-up
in our town has been a huge success for us and is well worth it in my opinion.
In fact, we recently won the FedEx appreciation award.
The business has been a huge success because of the devotion and hard
work we put into the store, as well as our strong commitment to our
customers. In the last 4 years, we've won 10 awards and we are the most
decorated PostNet store. In 2001, we were awarded International Franchisee
of the Year by the International Franchise Association (IFA). In the same
year, we also were awarded the PostNet Domestic Franchisee of the Year! It's
definitely a team effort to make the business such a success.
During the day, I concentrate on customers as soon as they're in the door.
I talk to and listen to them - that is very, very important.
We have same day or next day turnaround on most jobs here, so I don't have
a whole lot of flexibility in my schedule. By the time we close the store in the
evening, it is time for dinner. I'll eat dinner and recuperate. That's pretty much
my day. If I had a typical store that closed at 5, my day would be much more
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6. Franchise and 10 Rules of Success in Business
flexible and I'd have much more time, but we'd lose a lot of our customers as well.
It's a real trade-off - stores that are owned and operated by the same person are
the best and most prosperous stores. And if I closed my doors at 5, I'd have so
much more time, but the store wouldn't be as successful either. So, we have
chosen to run our store in this manner. It's really a matter of choice.
An additional word of advice:
Never, ever underestimate the customer. Never prejudge people. Always
inform every customer of all the services you have to offer - and learn as much
as you possibly can about them! You might be able to offer them services that
they didn't even know were available, or they might come back to your shop
when they need a particular service you've mentioned.
For example, one of our customers was talking to his partner and stated
that they need to get to the printer. I have never been characterized as being
very shy so I asked them if I could bid on their job. After several more minutes
of conversation, the job was ours. They have been so happy with our work that
they now use us as their printing source. Don't be afraid to listen, try new
things, and suggest that you can do a job.
Franchise range of services

Digital Services
Customers can complete their own work utilizing our equipment, or
PostNet can produce their projects for them. Either way, PostNet centers offer
a full suite of services to support customers' digital needs; including Internet
services, resume services, scanning, digital media storage, and digital printing.
Customers can also e-mail a file or bring in a disk for easy output to the
center's fully connected digital equipment.
Computer Time Rental Resume Services
Desktop Publishing Scanning
Internet Services Digital Printing
Copying & Printing

High-quality black and white and color copies are offered for self- or
full-serve customers on the go, as are competitive prices for larger volumes.
Because our customers want their projects to look their best, we also provide
custom finishing services; including laminating, binding, cutting, folding and
stapling. Additionally, PostNet centers provide full service business printing;
including business cards, letterhead, envelopes, invitations, flyers, brochures,
business forms, and advertising specialties.
Volume Copying Finishing Services Stapling

Digital Color Copies Digital Printing Laminating
Printing Services Binding Cutting
Specialty Papers Collating Folding
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Packing & Shipping

PostNet centers offer complete packaging services - from fragile and
custom packaging to crating and freight. Through relationships with UPS®
and FedEx®, PostNet center owners enjoy discounted rates and incentive
programs geared towards enhancing profitability and increasing market share.
PostNet's multi-center delivery services include priority and standard
overnight, 2nd and 3rd day guaranteed delivery, and ground services. Also,
international delivery services to almost any global destination.
Business & Additional

PostNet centers offer a wide variety of business and additional services;
including notary services, passport photos, signs and banners, and greeting
cards.
PostNet also carries a convenient assortment of office supplies and a wide

range of shipping and packaging products; including boxes, photo mailers and
envelopes, mailing tubes, packaging tapes and cushioning materials.
Passport Photos
Fax Services
Office Supplies
Packaging Supplies
Paper Supplies
Boxes & Cartons
Why Antitrust Lawyer?
(From aba..net)
Antitrust is hot as we approach the new millennium! Every week there are
articles on the front pages of major newspapers worldwide involving antitrust
issues and antitrust lawyers are playing an increasingly prominent role in
major business decisions. It does not matter if the decision is whether to merge
with a business down the block, buy a company across the globe, launch a new
product, change distribution methods, or challenge a major competitor in
court, antitrust lawyers are involved in all these issues.
A hypothetical example illustrates how active antitrust lawyers are today.
Let's take as our example an associate named Mary, who works in the antitrust
practice group in a medium-sized firm. Assume that one of the clients for
whom Mary works is a large pharmaceutical company that is purchasing a
competitor with operations spanning the globe. As an antitrust lawyer, Mary
would be involved in many phases of this transaction, from evaluating the
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7. Why Antitrust Lawyer?
potential antitrust risks before the client makes a bid, to advising the client on
how to phrase any relevant non-compete clauses in the actual contract and
participating in both the U.S. and global merger reviews.
But Mary's work for the pharmaceutical company most likely would not
end with this transaction. She also could help it set up an appropriate
distribution system for a new or existing product, counsel the company on
consumer protection issues associated with the product, advise on issues
involving the licensing of patents and trade secrets, and advise on how to deal
with competitors in arenas ranging from trade associations to the courtroom.
In addition, Mary could work with the company on adopting and formulating
a position on the recently proposed legislation advocating an antitrust
exemption for health care providers, a topic of great interest to a company that
deals with medical providers on a daily basis. All these issues could arise from
just one client!
These issues also could be seen from the antitrust enforcement side. While
Mary is busy responding to the government's inquiries into her
pharmaceutical company transaction, another hypothetical young lawyer,
Bob, could be working on the same issues as an attorney in the Antitrust
Division of the Department of Justice or at the Federal Trade Commission.
Similar to Mary, Bob's role as an antitrust regulator would not stop at merger
review. He could be involved in investigations of anticompetitive conduct,
such as price fixing, work on various competition policy issues, or even discuss
those issues with foreign competition authorities in Europe, Asia and Latin
America. What these examples illustrate is that today's increasingly global
economy raises numerous antitrust issues for companies, whether they do
business in a small town or around the world. As a result, antitrust lawyers are
in high demand.
This is particularly true because significant cooperation between different
countries' antitrust enforcement authorities is occurring both in the merger
context and in a broader enforcement context. Antitrust, and the lawyers who
practice antitrust, have gone global. Over half of the mergers investigated in
recent years by U.S. agencies involve an international element. In 1998, the
United States and the European Union ("EU") signed a Positive Comity
Agreement pursuant to which U.S. antitrust enforcement agencies can request
that the European Commission conduct an investigation regarding alleged
anti-competitive conduct in the EU. Similarly, the European Commission can
request that the U.S. agencies investigate possible anti-competitive conduct
in the United States. A similar Positive Comity Agreement between the
United States and Japan currently is being negotiated. There is extensive
cooperation between the U.S. and Canada on mergers, criminal investigations,
and civil investigations.
Today's headlines provide many examples of transactions raising
challenging multinational antitrust issues. Names such as BP/Amoco,
Exxon/Mobil, British Telecom/AT&T, and Daimler/Chrysler are in the front
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pages and all of these mergers are global. In 1998, there were 4,728 U.S.
premerger filings, with a similar number expected this year. Many of these
transactions involve international companies and, consequently, merger
notifications in multiple jurisdictions. Learning and practicing antitrust law
now often involves learning the rules of overseas jurisdictions and dealing
with foreign counsel in an unfamiliar forum. This is a challenge any lawyer
would relish.
In some jurisdictions, most notably the U.S., the merger review process is
time consuming, expensive, and arduous, involving significant document
production, interrogatory answers, and numerous depositions. Basic litigation
skills, such as drafting, document review and deposition defense, are
requirements for this work. Indeed, advanced litigation skills and advocacy
are becoming more important in merger review investigations as government
authorities increasingly turn to litigation to block transactions they believe to
be anticompetitive.
Merger review is not the only antitrust area in which there has been
increased activity. There also has been a recent upsurge in both criminal and
civil antitrust enforcement actions. High profile criminal cases, such as the
indictments of Hoffman LaRoche, Pfizer, and Rhone Poulenc - vitamin
manufacturers engaged in an international cartel - and the criminal
conviction of ADM executives, have resulted in record fines and prison
sentences. Fines for some individual companies have been in excess of $500
million or more, with over $745 million in fines for the vitamin industry.
Foreign nationals have surrendered to U.S. authorities to serve time in U.S.
prisons for antitrust violations. There are approximately 30 grand juries still
investigating international cartels, ensuring that the upsurge in criminal
antitrust enforcement will continue. Additionally, the Justice Department has
proposed legislation to increase the maximum criminal fines available under
the antitrust laws because it has concluded that the current $10 million
statutory maximum is inadequate given the scope and scale of recent criminal
cases, particularly international cartel cases. This means increasing
involvement in criminal proceedings for most antitrust practitioners.
Civil antitrust enforcement also is on the rise. The FTC, the Department
of Justice, and State Attorneys General have brought cases against major
companies, such as Microsoft, Intel, American Airlines, Visa, and MasterCard.
Some of these cases raise novel issues and theories. These cases also attract
heavy press attention and Congressional interest, turning the antitrust lawyer
into a spokesperson at times. In addition, there are more private antitrust
cases being filed now than in the past.
Finally, as shown by our hypothetical associate, Mary, the application of
the antitrust laws to health care continues to be an issue of major importance
in the U.S., where our health care system has been transformed by
competition. The significance of antitrust issues in health care is illustrated by
the recent decision by the American Medical Association to allow physicians
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7. Why Antitrust Lawyer?
to form unions and negotiate collectively with managed care plans in an effort
to escape challenge as cartel behavior. Legislation proposing an antitrust
exemption for health care professionals is currently pending in Congress. This
will continue to be an active area for antitrust counselors, litigators, and
legislative advisors.
Antitrust law presents myriad different issues for the lawyers who practice
it, and there are numerous different settings in which it can be practiced.
Antitrust law can be practiced in big firm in a large city or in a smaller firm or
smaller city. Many companies have in-house antitrust counsel. Antitrust
lawyers also practice at the Antitrust Division, FTC, FCC, FERC, other
federal agencies, and in state attorneys general's offices. Competition issues
arise every day for almost every business, regardless of size or location. Indeed,
an antitrust lawyer even has the ability to be more litigation-oriented, more
transaction-oriented, or both. In today's booming economy, the competition
lawyer is in demand everywhere. For those interested in pursuing a career in
antitrust law, classes in antitrust law, business law and economics are useful.
This is an exciting time to be an antitrust lawyer!
Antitrust Lawyers
(From King&Spalding LLP website)
King & Spalding's antitrust lawyers provide sophisticated,
solution-oriented advice on all aspects of trade regulation and competition
law, including mergers and acquisitions, joint ventures and other strategic
alliances, government civil and criminal investigations, private antitrust
litigation, and counseling. Our antitrust practice group has been recognized as
one of the top antitrust practices in the country, and many of our antitrust
attorneys have been singled out by Chambers USA, The Best Lawyers in
America, and other publications as leaders in the field. Our antitrust lawyers
have handled antitrust issues in a broad variety of industries, including:
biotechnology; broadcast, cable and radio; cement; chemicals; electronic
networks; energy; food and beverage; financial services; health care; lighting;
metals; oil and gas; paper; pharmaceuticals, publishing; telecommunications;
textiles; and vitamins.
We accurately assess potential competitive risks and then work with clients
to structure a plan to reach their goals. Clients rely on our antitrust lawyers for
constructive counseling on legitimate arrangements with competitors, entry into
new markets, product distribution systems and appropriate participation by
clients at trade associations and standard setting organizations.
Our lawyers regularly appear before all key competition authorities,
including the European Commission in Europe and the Federal Trade
Commission and the Antitrust Division of the Department of Justice in the
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U.S. Members of our antitrust group have served with the U.S. agencies,
including as a federal antitrust prosecutor, and as a senior attorney advisor to
a Federal Trade commissioner.
Members of our group are also active in the International Bar Association
Anti-trust and Trade Law Committee and the Antitrust Section of the
American Bar Association, where our lawyers hold leadership positions,
including:
- ABA Antitrust Section's International Officer.
- Co-chair of the ABA Antitrust Section Criminal Practice and Procedure
Committee and the Annual Meeting Program Chair of the ABA
Antitrust Section for the annual meeting that took place in August 2003.
- Vice Chair of the ABA Antitrust Section Sherman Act Section 2

Committee.
- Former Vice Chair of the ABA Antitrust Section Section 1 Committee.
- Former Chair of the ABA Antitrust Section M&A (Clayton Act)
Committee.
Mergers, Acquisitions, Joint Ventures and Strategic Alliances
Mergers, joint ventures and strategic alliances have become increasingly

important for companies that want to retain their market leadership position
and remain competitive in a global economy. Simultaneously, regulatory and
enforcement agencies worldwide have increased their scrutiny of all
competition practices-from distribution networks to mergers of equals. To
ensure they achieve their objectives, clients turn to King & Spalding to
minimize antitrust risks and successfully resolve antitrust concerns.
We assist in structuring a transaction that achieves a client's desired goals
while minimizing antitrust risks. Our antitrust lawyers are skilled at planning
and implementing strategies to gain U.S. and international approval of
transactions, including complex, large-scale mergers in concentrated industries.
We also advise clients on collaborations with competitors and customers to
ensure that these joint ventures and strategic alliances are structured and
operated lawfully under the antitrust laws in the U.S. and Europe
Our attorneys are also well-versed in the pre-merger notification practice
under the Hart Scott-Rodino Antitrust Improvements Act for even the most
complex filings. We routinely assist clients responding to government "second
requests" and other merger reviews before the U.S. Department of Justice, the
FTC, and the states.
King & Spalding attorneys also have substantial experience coordinating
efforts to gain approval of transactions from the EU and other European and
non-U.S. antitrust authorities, including guiding clients through Phase II
merger investigations, responding to Article 11 letters and guiding clients on
issues of jurisdiction and disclosure of informat ion from abroad.
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8. Antitrust Lawyers
In addition, we assist clients who want to provide input to competition

agencies regarding other parties' transactions. Here, we have been successful
in convincing these agencies to take actions against these transactions.
International and Domestic Cartel Litigation

Government and criminal antitrust investigations and prosecutions involve
high stakes for a client and its employees. King & Spalding's antitrust and special
matters attorneys represent clients in antitrust investigations and enforcement
actions conducted by government agencies, including the U.S. Department of
Justice, the European Commission, and the Canadian Competition Bureau.
With broad investigative powers, these entities routinely execute search
warrants, issue subpoenas for documents and other information, and conduct
other types of inquiries, including covert monitoring of employee activity. For
companies with international operations, these activities often include
investigations by a coordinated group of international enforcement agencies.
Having been involved in all significant cartel cases over the past decade,
including almost most of the major cartel cases brought by the U.S. Department
of Justice, and participating in four cartel related Statement of Objection/Oral
Hearing proceedings before the European Commission in the last three years,
our group knows how to guide clients through all phases of these investigations,
including search warrants, subpoenas, "dawn raids," and immunity and plea
negotiations. Experience has shown us how each agency approaches their
investigation and how to fact-find to increase efficiency and minimize risk. Our
lawyers assist clients in anticipating and limiting private treble damage actions
that often follow these government investigations. When appropriate, we obtain
amnesty under leniency programs now in place worldwide.
Clients look to the firm to manage the civil litigation that frequently
accompanies these types of investigations, including antitrust class and direct
actions, securities and shareholder derivative actions, and other types of civil
claims. If necessary, we take such matters to trial in an effective manner.
We also have found that our experiences defending clients in such cases
benefit our clients in identifying and prosecuting plaintiff antitrust actions.
We have successfully represented major corporations in actions involving
market manipulation and price fixing claims, and obtained significant
recoveries for them. We also monitor antitrust class actions on an ongoing
basis for those clients that could potentially be included in the class.
Complex Litigation
When a client finds itself under investigation regarding agreements with
competitors, tying, exclusive dealing or other vertical restraints,
monopolization or other alleged anti-competitive actions, or in a "bet the
company" civil or criminal litigation, we bring strong agency relationships and
deep hands-on experience.
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To ensure the best possible outcome when clients must litigate to protect
or defend their competitive practices, they rely on King & Spalding's high
degree of experience gained from handling the most complex civil and criminal
antitrust cases for over 100 years. Our experience in such cases ranges from
responding to the threat of litigation to litigating cases to appellate and
Supreme Court advocacy. We have been counsel for clients in every type of
antitrust litigation setting, ranging from class actions and multi-district
litigation to disputes between particular suppliers and their customers or
competitors. King & Spalding's antitrust attorneys also have been counsel in
cases involving a variety of claims such as: illegal bundling, denial to an
essential facility, exclusive dealing, group boycotts, an illegal joint venture, an
illegal merger or acquisition, an illegal patent settlement, market allocation,
monopolization, non-price predation, patent misuse, predatory pricing, price
fixing, price discrimination under the Robinson-Patman Act, refusals to deal
and tying. Eleven of our Firm's trial lawyers are also fellows of the American
College of Trial Lawyers.
Because our antitrust partners have successfully managed both complex
antitrust investigations and litigations, we can efficiently guide clients
through comprehensive document submissions and quickly assemble the
appropriate legal team to provide the strongest defense. At the outset of a
matter, we establish a defense strategy and then implement it with the best
combination of lawyers from each of our offices, seamlessly and transparently
to the client.
In each case, we make the commitment to understand each client's
business and legal needs so we can set forth a course of action that is
cost-effective and efficient. Our lawyers become an integral part of each
client's team, working closely with in-house counsel to achieve the desired
result. Our practice of teaming with in-house counsel and other outside
counsel on complex cases is a model that enables effective and efficient
implementation of legal strategies. The American Lawyer recently recognized
King & Spalding for its superior litigation skills and management.
During the past decade, clients have seen a heightened level of government
enforcement and private litigation relating to competition issues arising from
the acquisition, licensing and protection of intellectual property rights. In
addition, in the context of mergers and asset acquisitions, companies
increasingly find that their intellectual property ranks as their most valuable
asset, or is even the sole asset being acquired.
Our antitrust lawyers advise clients on the complex interplay between the
antitrust laws and the defense of their intellectual property, working with
them to reach strategic licensing and enforcement decisions that make
efficient use of their intellectual property without risking antitrust exposure,
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and to manage the antitrust risks that attend mergers and asset acquisitions
involving intellectual property. Our lawyers counsel clients and represent
them before government agencies, including the Department of Justice,
Federal Trade Commission, and International Trade Commission, and in
federal court litigation in a variety of antitrust/intellectual property
investigations and disputes. Recently, our lawyers have litigated large,
multi-jurisdictional IP/antitrust cases on behalf of clients in the cable
television and digital watermarking industries.
Antitrust Counseling
As part of each client's business team, we provide ongoing antitrust
counseling on a daily basis. This counseling takes the form of proactive advice
and policies to help our clients identify and avoid potential antitrust red flags.
We routinely assist clients in structuring their product distribution systems,
addressing issues such as price discrimination, resale price maintenance, tying
and bundling of products, exclusive dealer arrangements, customer and
territorial limitations, and refusals to deal. When a competitor attempts to
achieve a leadership position by utilizing unfair marketing or advertising
practices, we work with our clients to take the offensive. We also vigorously
defend our clients when it is alleged that their marketing practices give them
an unfair advantage. Our daily interaction with competition agencies on our
clients' behalf ensures that we understand the agencies' current thinking in
terms of enforcement policies and plans and can guide clients accordingly.
King & Spalding's antitrust lawyers work in tandem with each client,
helping them contend with and manage the complex challenges and
day-to-day issues that invariably arise as they pursue their business objectives.
From the beginning we set our sights on the end result and then draw on deep
experience and innovative thinking to get our clients there.
Microsoft Antitrust Case
(From Wikipedia, the free encyclopedia)
U.S. v. Microsoft was a widely publicized antitrust trial in which the US

Department of Justice (DOJ), joined by twenty U.S. states, alleged that
Microsoft abused monopoly power in its handling of operating system sales
and web browser sales. The DOJ and states filed this antitrust case against
Microsoft on May 18, 1998. The case was tried before US District Court
Judge Thomas Penfield Jackson. The DOJ was initially represented by David
Boies.
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The issue central to the case was whether Microsoft was allowed to bundle
its flagship Internet Explorer web browser software with its Microsoft
Windows operating system. Bundling them together is alleged to have been
responsible for Microsoft's victory in the browser wars as every Windows user
had a copy of Internet Explorer, severely hurting the market for competing
web browsers (such as Netscape Communicator) which were slow to
download over a modem or had to be purchased at a store. This also meant
that the bookmarks, search engine, and other links and software provided by
default with Internet Explorer were guaranteed to have very high visibility to
users. Companies paid Microsoft large amounts of money for the large
audiences this would bring them.
Underlying these disputes were questions over whether Microsoft altered
or manipulated its application programming interfaces to favor Internet
Explorer over third party web browsers, Microsoft's conduct in forming
restrictive licensing agreements with OEM computer manufacturers, and
Microsoft's intent in its course of conduct.
Microsoft claimed that the merging of Microsoft Windows and Internet
Explorer was the result of innovation and competition, that the two were now
the same product and inextricably linked, and that consumers were now
getting all the benefits of IE for free. Those who opposed Microsoft's decision
countered that the browser was still a distinct and separate product which
didn't need to be tied to the operating system, since a separate version of
Internet Explorer was available for Mac OS. They also asserted that IE was
not really free, because its development and marketing costs may have kept
the price of Windows higher than it would otherwise have been. Competitors
complained that Microsoft was illegally tying two separate products together
and attempting to use the dominance of Windows to kill off the web browser
market, and that funding the development and marketing of its web browser
with profits from other unrelated areas of the company constituted an unfair
trade practice and an abuse of its operating system monopoly.
The antitrust case was launched by an accusation, made by the
Department of Justice, that Microsoft had violated a consent decree to which
it had agreed a few years earlier. Government interest in Microsoft's affairs
had begun in 1991 with an inquiry by the Federal Trade Commission over
whether Microsoft was abusing its monopoly on the PC operating system
market. The FTC commissioners deadlocked with a 2-2 vote in 1993 and
closed the investigation, but the DOJ opened its own investigation on August
21 of that year, resulting in a settlement on July 15, 1994 in which Microsoft
consented not to tie other Microsoft products to the sale of Windows but
remained free to integrate additional features into the operating system. In the
years that followed, Microsoft insisted that Internet Explorer (which first
appeared in the Plus Pack sold separately from Windows 95) was not a
product but a feature which it was allowed to add to Windows; the
government opposed that definition.
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9. Microsoft Antitrust Case
Princeton University professor Edward Felten presented a modified

version of Windows from which he claimed the Internet Explorer function
had been removed. On cross-examination, he was guided through a sequence
of steps that produced a fully functional Internet Explorer window.
During the antitrust case it was revealed that Microsoft had threatened
PC manufacturers with revoking their license to distribute Windows if they
removed the Internet Explorer icon from the initial desktop, something that
Netscape had requested of its licensees.
Microsoft submitted as evidence a videotape showing that removing
Internet Explorer from Microsoft Windows causes slowdowns and
malfunctions in Windows. In the videotaped demonstration of what Microsoft
claimed to be a seamless segment filmed on one PC, the plaintiff noticed that
some icons mysteriously disappear and reappear on the PC's desktop,
suggesting that the effects might have been falsified. Microsoft then admitted
that the tape had been edited together from video of multiple PCs.
Microsoft submitted a second falsified videotape into evidence later the
same month as the first. The issue in question was how easy or hard it was for
America Online users to download and install Netscape Navigator onto a
Windows PC.
When the judge ordered Microsoft to offer a version of Windows which
did not include Internet Explorer, Microsoft responded that the company
would offer manufacturers a choice: one version of Windows that was
obsolete, or another that did not work properly. The judge asked, "It seemed
absolutely clear to you that I entered an order that required that you
distribute a product that would not work?" A Microsoft vice president
replied, "In plain English, yes. We followed that order. It wasn't my place to
consider the consequences of that."
Judge Jackson issued a preliminary ruling on November 5, 1999 that
Microsoft's dominance of the personal computer operating systems market
constituted a monopoly. Then on April 3, 2000, he issued a two-part ruling:
his findings of fact were that Microsoft had used its monopoly power against
competitors in ways that stifled innovation and harmed consumers, and
his remedy was that Microsoft must be broken into two separate units, one
to produce the operating system, and one to produce other software
components.
Microsoft appealed against the verdict, and Judge Jackson's remedy was
overturned on the grounds that interviews he gave to the news media during
the case gave an appearance of bias against Microsoft. Judge Jackson's
response to this was that Microsoft's conduct itself was the cause of any
"perceived bias;" he said that Microsoft executives had "proved, time and time
again, to be inaccurate, misleading, evasive, and transparently false. ...
Microsoft is a company with an institutional disdain for both the truth and for
rules of law that lesser entities must respect. It is also a company whose senior
management is not averse to offering specious testimony to support spurious
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defenses to claims of its wrongdoing." Only the remedy was rejected; Jackson's
findings of fact remained substantially unchanged.
The D.C. Circuit, in the end, found that Microsoft had abused its
monopoly power position and remanded the case for consideration of a proper
remedy, under Judge Colleen Kollar-Kotelly.
The DOJ, now under the administration of U.S. President George W.
Bush, announced on September 6, 2001 that it was no longer seeking to break
up Microsoft and would instead seek a lesser antitrust penalty.
On November 2, 2001, the DOJ reached an agreement with Microsoft to
settle the case. The proposed settlement required Microsoft to share its
application programming interfaces with third-party companies and appoint a
panel of three people who will have full access to Microsoft's systems, records,
and source code for five years to ensure compliance, but did not require
Microsoft to change any of its code nor prevent Microsoft from tying other
software with Windows in the future. On August 5, 2002, Microsoft
announced that it would make some concessions towards the proposed final
settlement ahead of the judge's verdict.
On November I, 2002, Judge Kollar-Kotelly released a judgment
essentially accepting the proposed DOJ settlement. Nine States and the
District of Columbia (which had been pursuing the case together with the
DOJ) have not agreed with the settlement, arguing that it does not go far
enough to curb Microsoft's anti-competitive business practices. The
dissenting States regard the settlement as merely a slap on the wrist. That
sentiment is shared by many people in the computer industry, especially those
who advocate open source and alternatives to Microsoft. Many believe that
free market competition can only be restored by government intervention to
break up the Microsoft monopoly. Industry pundit Robert X. Cringely
believes not even this is possible, and that "now the only way Microsoft can
die is by suicide"
History of Taxes
Taxes, we hate them but we can't seem to live without them. There are
sales taxes, income taxes, corporate taxes, payroll taxes and the list just keeps
going on and on. But where did the idea of taxes come from? Is the idea of
financing a country or state or even city for that matter by taxes new? Let us
see.
It is important to know that banking started somewhere between
3000-2000 B.C. in Mesopotamia. Without banking there could not have been
any meaningful accounting of taxes.
Ancient Mesopotamia, instituted a tax, when translated was called
'burden'. Of course this tax wasn't on money since there wasn't any. A citizen
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10. History of Taxes
might be required to bring a cow or sheep to the government office once a

year. Merchants would try then as now to avoid taxes. Here is a portion of a
translated letter from 1900 BC:
"Irra's son sent smuggled goods to Pushuken but his smuggled goods were
intercepted. The Palace then threw Pushuken in jail! The guards are
strong...please don't smuggle anything else!"
Almost everything you did was taxed, even funerals. But the hardest tax
was the labor tax. Every able bodied man who was the head of a household
owed the government many months of labor. The government might make you
harvest government fields or serve in the military. The rich would send people
in their place, which was illegal but overlooked.
Every Egyptian paid taxes. As early as 3000 BC the Pharaoh would appear
in a ceremony before his people, this was called the Following of Horus.
He would then collect taxes. The Egyptians were taxed on cattle and grain.
They also had to meet a labor requirement. On top of all this the Pharaoh
would tax them when he needed. As is now there were tax shelters in the form
of royal charters of immunity from taxes.
Princeton University has a papyri document from Philadelphia, Greece,
dated 35 A.D. which is a tax roll. Since it is a fragment most of the details are
missing. In the fifth century BC the Greeks were the first to establish a system
based on universal coinage, which made taxing easier.
The Romans having spread out into the known world, built expensive
cities with sewers, running water, and superb roads. To finance this, they
instituted a system of taxes. If a Roman was working he paid the tax collector
a portion of his earnings and the tax collectors paid the Senators a portion of
what they collected. The Senators kept most of the money for themselves but
provided a small part of the funds for the poor.
The population of ancient China was mostly farmers. Everyone in China
had to pay taxes. Farmers usually paid their taxes in the form of grain or labor.
Italian city-states in the 1200s and 1300s levied a dazio tax on mercantile
property in time of war. This tax could be levied up to several times in a year
during wartime.
Britain faced a threat from the French in 1797. Revolution spread by the
French had reached Germany, parts of Italy and the Netherlands. French
troops were on their way to help the Irish rebels and British sailors were
mutinying at Spithead. William Pitt the Prime Minister knowing, the
treasury was almost empty, started an income tax. The tax worked and Britain
was saved.
In America, the first income tax was introduced in 1861. It was required to
pay for the Civil War. The citizens were taxed at the rate of three percent on
incomes over $800.00 per year. The next year it was raised to five percent of
all incomes over $10,000.00. Most of the ordinary citizens didn't make enough
to pay taxes. In 1893 Congress passed an income tax but the Supreme Court
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ruled it unconstitutional in 1895. President William Howard Taft pushed for

a constitutional amendment over turning the decision and an income tax was
passed when the 16th Amendment was ratified in 1913.
As you can see from the above where we have only touched on a few
societies, taxing is a very old idea. In many places it was much more popular in
war time than in peace time and because of this was suspended in time of
peace, but many places retained it.
Income Tax USA
What follows is an editorial written by Neil Cavuto from Fox News. In my

opinion, it is insightful about our country's income tax system and how people
in different tax brackets can view a tax cut (reduction).
Wednesday, May 15, 2002
By Neil Cavuto, FOX News
"Let's put tax cuts in terms everyone can understand. Suppose that
everyday, 10 men go to dinner. The bill for all 10 comes to $ 100. If it was paid
the way we pay our taxes, the first four men would pay nothing; the fifth
would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the
ninth $18. The tenth man (the richest) would pay $59.
The ten men ate dinner in the restaurant every day and seemed quite
happy with the arrangement until the owner threw them a curve. "Since you
are all such good customers," he said, "I'm going to reduce the cost of your
daily meal by $20. Now dinner for the 10 costs $80.
The first four are unaffected. They still eat for free. Can you figure out how
to divvy up the $20 savings among the remaining six so that everyone gets his
fair share? The men realize that $20 divided by six is $3.33, but if they
subtract that from everybody's share, then the fifth man and the sixth man
would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man's
bill by roughly the same amount and he proceeded to work out the amounts
each should pay.
And so, the fifth man paid nothing, the sixth pitched in $2, the seventh
paid $5, the eighth paid $9, the ninth $12, leaving the tenth man with a bill of
$52 instead of $59. Outside the restaurant, the men began to compare their
savings. "I only got a dollar out of the $20," declared the sixth man pointing to
the tenth, "and he got $7."
"Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too. It's
unfair that he got seven times more than me!"
"That's true," shouted the seventh man. "Why should he get $7 back when
I got only $2? The wealthy get all the breaks."
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12. History of Intellectual Property
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor."
The nine men surrounded the tenth and beat him up. The next night he
didn't show up for dinner, so the nine sat down and ate without him. But when
it came time to pay the bill, they discovered something important: they were
$52 short!
And that, boys and girls and college instructors, is how the tax system
works. The people who pay the highest taxes get the most benefit from tax
reduction. Tax them too much, attack them for being wealthy, and they just
may not show up at the table anymore. There are lots of good restaurants in
Switzerland and the Caribbean."
Some of you might argue that this little story trivializes the tax debate.
But not me. I think it puts it in good perspective. When opponents of tax cuts
play the class game, remember that dinner scene and ask yourself this
question: Who is feasting on whom? The rich guy that got a break, but still
paid the largest share of the bill, or the poorer guys, some of whom didn't pay
anything at all? The rich guy could afford it and paid. The poorer guys could
not and did not.
Some people want something for nothing and others say nothing for those
who have something. I say, enough. Because the only one really feasting at this
dinner is the guy who owns the restaurant. And the only one feasting at this
ridiculous tax system is the guy who owns the trough - Uncle Sam.
He might like to keep us arguing like this. After all, he's getting the money
and lately he's been feasting pretty well. We give. He takes. We argue. He
takes more. We stop and start thinking about the lunacy of it all, he takes out
ads.
The problem, my friends, isn't the rich and what they pay, but the
government and what it takes. Because trust me, the restaurant owner is
happy and so is Uncle Sam.
History of Intellectual Property
It is not exactly clear where the concept of intellectual property

originated.
The first patent in England was granted by Henry VI in 1449 to a Flemish
man a 20 year monopoly (co-incidentally, the current length of UK/EU
patents is still 20 years) on the manufacture of stained glass (destined for Eton
College). This was the start of a long tradition by the English Crown of the
granting of "letters patent" (meaning 'open letter', as opposed to a letter under
seal) which granted "monopolies" to favoured persons (or people who were
prepared to pay for them). This became increasingly open to abuse as the
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Crown granted patents in respect of all sorts of known goods (salt, for
example). After public outcry, James I was forced to revoke all existing
monopolies and declare that they were only to be used for 'projects of new
invention'. This was incorporated into the Statute of Monopolies 1623. In the
reign of Queen Anne the rules were changed again so that a written
description of the article was given.
Outside of England, patent law was the subject of legislative protection in
the Venetian Statute of 1474.
Copyright was not invented until after the advent of the printing press and
wider public literacy. In England the King was concerned by the unfair
copying of books and used the royal prerogative to pass the Licencing Act
1662 which established a register of licensed books and required a copy to be
deposited with the Stationers Company. The Statute of Anne was the first real
act of copyright, and gave the author rights for a fixed period. Internationally,
the Berne Convention in the late 1800's set out the scope of copyright
protection and is still in force to this day.
Design rights started in England in 1787 with the Designing & Printing of
Linen Act and have expanded from there.
The term intellectual property appears to have originated in Europe
during the 19th century. French author A. Nion mentions "proprifttft
intellectuelle" in his Droits civils des auteurs, artistes et inventeurs, published in
1846, and there may well have been earlier uses of the term.
During the period in question, there was some controversy over the nature
of copyright and patent protections in Europe; those who supported unlimited
copyrights frequently used the term property to advance that agenda, while
others who supported a more limited system sometimes used the term
intellectual rights (droits intellectuels).
The system currently used by much of the Western world is more in line
with the second view, with limited copyrights that eventually expire.
Regardless, the term intellectual property has gained prominence throughout
the world, as evidenced by the United Nations World Intellectual Property
Organization (WIPO), formed in 1967.
Internet Law
(IPWatchdog Legal Services web resources)
There is no such thing as "Internet Law." Notwithstanding the previous

statement, the Internet forces us to deal with issues that are substantially
different from those issues that are traditionally faced in the "real world."
Moreover, due to the technology that makes the Internet work, the "real
world" law of Contracts, Torts, Constitutional Law, Criminal Law and
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13. Internet Law
Intellectual Property (to name but a few substantive areas) cannot be neatly
applied to Internet scenarios that at first glance seem very similar to familiar
"real world" fact patterns. The "Internet Lawyer" must understand
substantive law, but simply understanding "real world" substantive law does
not guarantee the understanding of how that law does and/or should apply to
the Internet. Many of our most basic legal presumptions must be questioned
before we are able to determine what law does and/or should apply to Internet
scenarios.
Intellectual Property in Cyberspace
Many legal issues arise in cyberspace, but no other single area of law
presents such a variety of interesting and diverse legal problems. This is true
in no small part due to the fact that people all over the world are increasingly
becoming connected via the global telecommunications networks. As Internet
usage grows, new legal questions associated with the technology continue to
surface, as do certain bitter and painful business realities. The sad but simple
truth is that digital communications and the digitization of information of all
types make the infringement of intellectual property rights, particularly
copyrights and trademarks, easier than ever before. For support of this
statement one need look no farther than the myriad of examples of copyright
piracy that are plaguing the Internet. The music industry is facing significant
problems that were thrust upon it by Napster and other music sharing web
sites. Likewise, piracy of computer software has risen to an alarming level, and
continues to affect even those large companies that are best equipped to
mount a campaign against these counterfeiters. The stories about software
piracy are certainly only increasing in number, and the damage suffered by the
industry is staggering. By way of example, the software industry estimates
that if software piracy in the United States were eliminated, and reduced
abroad, the industry as a whole would produce an additional 1 million jobs by
2005 and contribute $25 billion in tax revenues.
In addition to the copyright and trademark issues present on the net,
patent law is also becoming a concern. In 1998 the United States Court of
Appeals for the Federal Circuit began allowing business method patents, an
type of invention never before patentable. With the growth of the Internet
and electronic commerce real world and dot com companies rushed to patent
all kinds of business models and methods for conducting business via the
Internet. These e-commerce patents are a little bit business method and a little
bit software patent, and are causing great concern for entrepreneurs and small
businesses who are finding themselves paying royalties for patents that may
well be obvious.
Moreover, the Internet has not spared trade secret law either. Perhaps less
of a trade secret problem and more of a criminal problem, hackers are gaining
access to the most sensitive secrets of US companies.
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Electronic Commerce
When you are an e-business you are simply doing business with the aid of
the Internet. When you are engaged in e-commerce you are actually engaged
in the sale of a product or service through the use of the Internet. There is a
subtle, but important difference between these two methods of doing business.
In the former you simply have a storefront, perhaps conveying information
about your company, directions, frequently asked questions. In the later you
are taking orders, processing payments, making arrangements for shipping,
and truly engaging the power of the Internet to fascilitate your business.
With respect to e-commerce, there are many different ways take part in the
ongoing e-commerce revolution. Many people will tell you that if you are not
selling a product on line through the use of a sophisticated automated system
you are not really doing e-commerce. This is simply not true. Like many things in
life there are no asbsolutes when it comes to e-commerce. E-commerce should be
looked at like a sliding scale. If you are selling product over the Internet with the
use of an automated system then you are at the high end of sliding scale of
e-tailers. If you are at this end of the spectrum, however, it is important to know
that you are not going to get rich without an initial investment. Far too often we
hear advertisements for seminars or we see infomercials that sing the praises of
the Internet and e-commerce by saying you can make huge returns with virtually
no initial investment. This is simply not true.
It may well be true that you can realize huge returns selling your product
over the internet. The Internet lets you sell 24 hours a day, 7 days a week, but
what happens if your system goes down? Can your system handle
extraordinary traffic, or will it crash? Do you respond to customer e-mail
inquiries? What happens if your computer system needs repair? Do you have
multiple redundancies?
As you can see, selling product over the Internet is not simple. It takes
planning, capital investment and a good product. The rewards can be great,
but like anything worth doing it will not be as easy as some would have you
believe.
So you are having second thoughts about e-commerce? Perhaps you are
new to computers and are becoming overwhelmed. Remember, not wanting to
go all the way and be one of those companies selling product over the Internet
does not mean you are prohibited from engaging in e-business. E-bommerce is
simply doing business with the aid of the Internet. You might want to start
out with a passive website that simply lists your phone number, address and
what it is that you do. You might also want to provide an online map so that,
real world customers can find you. From there, as your computer
sophistication increases and as your business matures, exploring more
traditional forms of e-commerce makes sense.
The key is not to be overwhelmed. Take small steps if necessary, but taking
those steps no matter how small is critical. In a few years having a website will
be as essential as having an ad in the Yellow Pages.
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14. Cybercrimes
Cybercrimes
(IP Watchdog Legal Services web resources)
The use of new technologies to commit traditional crimes is not something

that is new. Virtually every advance in technology has provided wrongdoers
with new means for engaging in unlawful conduct. In this regard, the global
communications network that is the Internet is no different than such past
technological advances as the automobile and the telephone. The Internet is
simply a new medium through which traditional crimes (such as securities
fraud, credit card fraud and trade secret misappropriation, to name but a few)
can now be carried out.
The Internet, however, is very different from previous technologies, at
least insofar as its applicability to crime, becuase of one simple reality -
through the use of inexpensive and widely available computer and
telecommunications systems individuals are able to commit wrongs with
unprecedented speed and on scale never before seen. At the same time,
however, these same tools and capabilities associated with the Internet do in
many instances help law enforcement agencies solve crimes. The reality,
however, is that in certain circumstances the careful cyber-criminal can and
often does go undetected. To be sure, in the usual case everyone knows a crime
has been committed, but finding out who committed that crime can be very
difficult if not impossible. This is true because the Internet offers complete (or
almost complete) anonymity to the careful, knowledgeable cyber-criminal.
In the past governments have largely been able to catch and convict
criminals by bringing to bear superior resources. Given the advent of widely
available and sophisticated technology available to cyber-criminals government
is increasingly unable to resort to overwhelming alleged criminals with superior
resources. Sometimes the superior resources (i.e., technology, etc.) are in fact in
the hands of the criminal and not in the hands of the government.
Adding to the inherent complexities associate with Cybercrime is the fact
that in addition to traditional crimes that may be committed because of this
new technology, the Internet also allows for an whole new array of crimes not
possible in the real world, or at very least crimes that are not neatly addressed
by real world paradigms.
How should society, and government in particular, respond to the advent
of these new ways of committing crimes? This is indeed a good question.
Answering this question, however, is not at all easy. Wrapped up in this
question are a subset of questions dealing with individual privacy on the
Internet, and a specific subset of questions relating to appropriate use and
limitation of encryption technologies.
One thing is certain, the Internet provides criminals with new
opportunities. As business-to-consumer and business-to-business E-commerce
grows many if not all of the financial crimes perpetrated on individuals will be
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preventable. There is simply too much money at stake for an alternative

conclusion. Remaining, however, are a host of crimes that will not be as easy to
address. Things are going to be interesting for quite a while.
Hacking, Cracking & Viruses

The threat posed by hacking, cracking and viruses is growing. As any
internet user can testify, the number and severity of viruses is only increasing.
Additionally, every year surveys show that as many as 90% of all businesses
have been hacked. The Internet is a wonderful tool, but there are those who
would harness its power to destroy. If you are interested in keeping up to date
with all that is happening in this important area I suggest that you sign up for
the IPWatchdog.com Week in Review. Every week a section of the newsletter
is dedicated to reporting on hacking, cracking & viruses. In the meantime,
here is some information to get you started:
Spam and the Law

Most people now refer to spam as any unsolicited e-mail. While any
unsolicited e-mail may technically be spam, an e-mail message from a long lost
friend who recently discovered your e-mail address is probably not considered
spam by anyone even though it was in fact unsolicited. Perhaps a better
definition for spam is "unsolicited e-mail that is objectionable." This
definition, however, leaves open the quesiton of what is objectionable, and
more importantly who gets to decide what is objectionable. If we have learned
anything from obscenity law it is that what one community thinks of as
obscene is far from obscene in another community. A better general definition
is, therefore, necessary.
In its most socially objectionable form spam advertises for websites
containing pornographic or, in some cases, obscene material, or perhaps
products claiming to increase sexual prowess. Spam, however, can and does
include peddle other products and services from the Pasta Pro Cooker to
Antivirus Software to Viagra and beyond.
The e-mail that most people refer to as spam generally takes the form of
bulk e-mail advertising for some product or service. It is bulk e-mail that most
people refer to as spam, and certainly that which AOL, Microsoft and others
are so dead set against fighting. The cost associated with sending spam is tiny
in comparison to the cost of sending real world junk mail. Once you have a list
of e-mail addresses clicking "send" is so easy. If 1 billion e-mail messages are
sent advertising a product, even 0.001% conversion rate results in 10,000 sales.
With percentages like that those who rely on spam are able to annoy virtually
everyone and still make a small fortune. If you think 1 billion e-mail messages
are an exaggeration, think again. Billions and billions of spam messages are
sent. Microsoft alone sued 15 spammers in June 2003 and alleged they sent
2 billion e-mail messages!
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14. Cybercrimes
Spam can use a large portion of network resources and cause system slow
downs. This is because the limited bandwidth is being used sending and/or
receiving bulk e-mail messages. Consequently, there are many organizations,
as well as individuals, who have taken it upon themselves to fight spam with a
variety of techniques. Because the Internet is public there is very little that
can be done to absolutely prevent spam, while at the same time allowing all
legitimate e-mails to get through. Spam prevention software does indeed help,
but everyone seems to have a favorite story or two where such software weeds
out legitimate e-mail. A student of mine recently told me that his company
sends invoices to clients via e-mail and 10% of these invoices get returned as
undeliverable because the spam software being employed views these invoices
as objectionable. This one example clearly identifies the problem. In order to
do away with the objectionable e-mails spam software over filters. If you are a
business that relies upon unsolicited contact from protential clients and
potential customers you cannot afford to implement spam software. The risk
associated with losing even one potential client or customer usually outweighs
the benefit derived.
Nothwithstanding, failure to weed out spam also prevents problems. We
all have undoubtedly accidentally deleted a legitimate message as we were
scrolling through countless spam messages. If and when that occurs the net
result is potentially damaging, especially for businesses.
Everyone is now agreeing there something must be done about the spam
problem. Identification of the problem is the first step. The next step is a
solution. Given the global nature of the Internet any attempt by state
governments is hopelessly going to fail. Attempts by the United States
government, while more likely to provide some relief, are also likely to miss
the target. What is needed is a global solution to this growing epidemic.
If you would like to speak with an attorney regarding possible legal action
you can take against spammers go to the IPWatchdog Legal Services Page and
fill out the form there.
W h y Do They Call It SPAM?

There is some debate about the exact source of the term "spam." There are
two widely accepted versions of how unsolicited bulk e-mails became known
as "spam." First, many believe the term "spam" comes from the Monty Python
song, "Spam spam spam spam, spam spam spam spam, lovely spam, wonderful
spam." Just like the lyrics of the song, spam is an endless repetition of
worthless text. The second version is that the term "spam" comes from a
computer lab group at the University of Southern California who gave
unsolicited bulk e-mails the name "spam" because it has many of the same
characteristics as the lunchmeat Spam (i.e. nobody wants it or ever asks for it;
no one ever eats it; and it is the first item to be pushed to the side when eating
the entree).
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The Digital Millennium Copyright Act
On October 12, 1998, the U.S. Congress passed the Digital Millennium
Copyright Act, ending many months of turbulent negotiations regarding its
provisions. Two weeks later, on October 28th, President Clinton signed the
Act into law.
The Act is designed to implement the treaties signed in December 1996 at
the World Intellectual Property Organization (WIPO) Geneva conference,
but also contains additional provisions addressing related matters.
As was the case with the 'No Electronic Theft' Act (1997), the bill was
originally supported by the software and entertainment industries, and
opposed by scientists, librarians, and academics.
Highlights Generally:
• Makes it a crime to circumvent anti-piracy measures built into most
commercial software.
• Outlaws the manufacture, sale, or distribution of code-cracking devices
used to illegally copy software.
• Does permit the cracking of copyright protection devices, however, to
conduct encryption research, assess product interoperability, and test
computer security systems.
• Provides exemptions from anti-circumvention provisions for nonprofit
libraries, archives, and educational institutions under certain
circumstances.
• In general, limits Internet service providers from copyright
infringement liability for simply transmitting information over the
Internet.
• Service providers, however, are expected to remove material from users'
web sites that appears to constitute copyright infringement.
• Limits liability of nonprofit institutions of higher education -
when they serve as online service providers and under certain
circumstances - for copyright infringement by faculty members or
graduate students.
• Requires that "webcasters" pay licensing fees to record companies.
• Requires that the Register of Copyrights, after consultation with
relevant parties, submit to Congress recommendations regarding how to
promote distance education through digital technologies while
"maintaining an appropriate balance between the rights of copyright
owners and the needs of users."
• States explicitly that "[n]othing in this section shall affect rights,
remedies, limitations, or defenses to copyright infringement, including
fair use..."
364
16. How Strict Product Liability Became the Law
How Strict Product Liability Became the Law

(American Bar Association web resources)
The American Law Institute drafts documents that it titles Restatements

of the Law. Generally, one or two ALI members are appointed to serve as
Reporters and these Reporters act as chief correspondents, head analysts, and
recording secretaries for the organization. The supposed objective of drafting a
Restatement is to study an area of the law and generate a clear statement of
the rules of the common law. This is valuable and important because common
law rules are derived piecemeal from individual cases involving particular
facts and unique litigants. Restatements read more like statutes and state the
law as a set of rules. Restatements do not necessarily stop with a condensation
of the law, but, in some areas, articulate a rule proposed and advocated by the
American Law Institute.
The original Restatement of Torts was published in four volumes between
1934 and 1939. The Restatement (Second) of Torts was published between
1954 and 1979 and contained a controversial strict products liability proposal
at section 402A. Restatement (Second) of Torts section 402A was an attempt
by the American Law Institute to implement what the ALI perceived as valid
economic principles to accomplish a social engineering purpose. The ALI
argued that social policy should support spreading the cost of all damages
caused by defective products to the entire population of product users. Under
this theory, manufacturers are presumed to be insured or are large enough to
spread the cost of injuries and damages caused by their products to all
purchasers by adjusting the price of each unit upward. Then, when someone is
injured by a defective product, whether or not anyone is at fault, the injured
person recovers damages.
Since fault, negligence, and culpability are not relevant to the analysis, it
should not matter whether the injury was foreseeable, according to the ALI.
Therefore, the proximate cause standard which was traditionally used as the
standard link between an incident and claimed damages was abandoned in
favor of producing cause. Producing cause is easier to prove than proximate
cause.
Since fault, negligence, and culpability do not matter, the trier of fact,
which is the judge or jury, is asked to judge the product, not the manufacturer,
wholesaler, distributor, transporter, or retailer. If the product is found
defective and unreasonably dangerous, all of the parties in the marketing
chain are liable to the injured plaintiff and they must sort out, among
themselves, an apportionment of liability.
Section 402A was written in broad terms with interpretive commentary to
provide a general explanation of its meaning. Strict products liability was a
new concept using new terminology, all of which was left open to
interpretation by the courts. Over time, at least thirty-four states adopted the
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section 402A formulation of strict liability in some form. Forty-seven states,

the District of Columbia, Puerto Rico and the Virgin Islands all use some form
of strict product liability, whether they rely on the Restatement (Second) of
Torts or an extension of implied warranty laws.
By the late 1970's, the backlash against liability without fault was at a
crescendo. Business interests were lobbying the state legislatures and the
federal government. In 1979 a model uniform product liability act was
proposed, but this was not widely accepted. The tort reform movement
continued to gain momentum into the 1990's and various laws were passed
modifying product liability.
Shortly after the publication of the Restatement (Second) of Torts,
the American Law Institute was urged to draft a third Restatement of Torts.
The volume of cases and vast number of rules and definitions that grew up
around the section 402A of the Restatement (Second) of Torts prompted
the ALI to expand its brief statement of the rules of product liability in of the
Restatement (Second) of Torts to a full volume of the Restatement Third
of Torts. This volume was adopted by the ALI and promulgated May 20,
1997 and was copyrighted in 1998. This third Restatement is being
vigorously defended by the ALI, but is interpreted by some as liberalizing
strict liability rules. Several states are considering the adoption of all or
some of the Restatement (Third) of Tort rules, either by statute or court
decision.
With each State's law growing independently, but with reference to the
others, and with many State legislatures passing sweeping tort reform
measures, there is wide variation in the laws of the different states and
territories. Products, by their nature, are tangible and often last through
changes in the law. They freely cross borders and can become subject to a
myriad of different laws. For people in the marketing chain, including
manufacturers, wholesalers, distributors, and retailers, it is important to
understand some general principles of product liability and to be able to ask
appropriate questions.
Consider, then, for our purposes, a sample set of strict product liability
rules and a sample set of questions that might be asked about your case, if you
become involved in a product liability claim or suit. In the general rule of
strict liability in product, a defendant pays when its product in commerce
reached the consumer without substantiated change, was defective and
unreasonably dangerous, and the defect produced the plaintiffs damages.
Lessors of products, i.e., dive shops that rent equipment to divers, are
generally treated in the same way as sellers of products.
All parties in the chain of distribution are considered as a group. Then, the
various contribution and indemnity rules kick in to determine how much of
the damages, if any, each defendant has to pay. The consumer plaintiff need
not be the party that purchased the product, but may be anyone who is a user
of the product.
366
17. The McDonald's Scalding Coffee Case
The McDonald's Scalding Coffee Case
Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of

her grandson's car when she was severely burned by McDonald's coffee in
February. Liebeck, now 81, ordered coffee that was served in a styrofoam cup
at the drive thru window of a local McDonald's.
After receiving the order, the grandson pulled his car forward and stopped
momentarily so that Liebeck could add cream and sugar to her coffee. (Critics
of justice, who have pounced on this case, often charge that Liebeck was
driving the vehicle or that the vehicle was in motion when she spilled the
coffee; neither is true.) Liebeck placed the cup between her knees and
attempted to remove the plastic lid from the cup. As she removed the lid, the
entire contents of the cup spilled into her lap.
The sweatpants Liebeck was wearing absorbed the coffee and held it next
to her skin. A vascular surgeon determined that Liebeck suffered full thickness
burns (or third degree burns) over 6 percent of her body, including her inner
thighs, perineum, buttocks, and genital and groin areas. She was hospitalized
for eight days, during which time she underwent skin grafting. Liebeck, who
also underwent debridement treatments, sought to settle her claim for
$20,000, but McDonald's refused.
During discovery, McDonald's produced documents showing more than
700 claims of people burned by its coffee between 1982 and 1992. Some claims
involved third-degree burns substantially similar to Liebeck's. This history
documented McDonald's knowledge about the extent and nature of this
hazard.
McDonald's also said during discovery that, based on a consultant's
advice, it held coffee at between 180 and 190 degrees Fahrenheit to maintain
optimum taste. He admitted that he had not evaluated the safety
ramifications at this temperature. Other establishments sell coffee at
substantially lower temperatures, and coffee served at home is generally 135
to 140 degrees.
Further, McDonald's quality assurance manager testified that the
company actively enforces a requirement that coffee be held in the pot at 185
degrees, plus or minus degrees. He also testified that a burn hazard exists with
any food substance served at 140 degree or above, and that McDonald's coffee,
at the temperature at which it is poured into styrofoam cups, was not fit for
consumption because it would burn the mouth and throat. The quality
assurance manager admitted that burns would occur but testified that
McDonald's had no intention of reducing the "holding temperature" of its
coffee.
Note: scald - ошпарить
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Plaintiffs expert, a scholar in thermodynamics as applied to human skin

burns, testified that liquids, at 180 degrees, would cause a full thickness burn
to human skin in two to seven seconds. Other testimony showed that as the
temperature decreases toward 155 degrees, the extent of the burn relative to
that temperature decreases exponentially. Thus, if Liebeck's spill had involved
coffee at 155 degrees, the liquid would have cooled and given her time to avoid
a serious burn.
McDonald's asserted that customers buy coffee on their way to work or
home, intending to consume it there. However, the company's own research
showed that customers intend to consume the coffee immediately while
driving.
McDonald's also argued that consumers know coffee is hot and that its
customers want it that way. The company admitted its customers were
unaware that they could suffer third-degree burns from the coffee and that a
statement on the side of the cup was not a "warning" but a "reminder", since
the location of the writing would not readily notify customers of the hazard.
The jury awarded Liebeck $200,000 in compensatory damages. This
amount was reduced to $160,000 because the jury found Liebeck 20 percent at
fault in the spill. The jury also awarded Liebeck $2.7 million in punitive
damages, which equals two days of McDonald's coffee sales.
Post-verdict investigation found that the temperature of coffee at the local
Albuquerque McDonald's had dropped to 158 degrees Fahrenheit.
The trial court subsequently reduced the punitive award to $480,000 or
three times compensatory damages-even though the judge called McDonald's
conduct reckless, callous and willful. Subsequent to remitting, the parties
entered a post-verdict settlement.
Class Action
(From Wikipedia, the free encyclopedia)
In law, a class action is an equitable procedural device used in litigation for

determining the rights of and remedies, if any, for large numbers of people
whose cases involve common questions of law and fact.
Class Actions in the United States

Federal Class Actions
In the United States federal courts, class actions are governed by Rule 23
of the Federal Rules of Civil Procedure.
Class action lawsuits may be brought in Federal court if the case involves
issues that affect potential class members in different states and has a nexus
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18. Class Action
with federal law. However, such class action suits must have a certain equality
of issues across state lines. This may be difficult as the civil law in the various
states has significant differences and thus each state's set of claims may have
to be handled separately or through the device of multi-district litigation
(MDL). It is also possible to bring class action lawsuits under state law, and in
some cases the court may extend its jurisdiction to all the members of the class
both within the state and without (even internationally) as the key element is
the jurisdiction that the court has over the defendant.
The procedure for filing a class action is to file suit with one or several
named plaintiffs on behalf of a putative class. The putative class must consist
of a group of individuals or business entities that have suffered a common
wrong. Usually, these kinds of cases are connected to some standard action on
the part of a business, or some particular product defect or policy that was
applied to all potential class members in a uniform matter. After the summons
and complaint is filed, the plaintiff usually has to bring a motion (sometimes at
the same time as filing the summons and complaint) to have the class certified.
In some jurisdictions class certification may require additional discovery in
order to determine: if the proposed class has any cohesiveness.
Upon the motion to certify the class, the defendants may attack the named
plaintiffs, their relationship with the law firm or firms handling the case, and
their ability to finance the litigation. The court will also examine the ability of
the firm to prosecute the claim for the plaintiffs, and their resources for
dealing with class actions; the court may require complex notices to be sent,
published, or broadcast to the public, in any place where the class members
can be found.
As part of this notice procedure, there may have to be several notices, first a
notice giving class members the opportunity to opt out of the class, i.e. if
individuals wish to proceed with their own litigation they are entitled to do so,
only to the extent that they give timely notice to the class counsel or the court
that they are opting out. Second, if there is a settlement proposal, the court will
usually direct the class counsel to send a settlement notice to all the members
of the certified class and all the members of any subclasses (that might have
slightly different but uniform claims), informing them of the settlement offer
being made by the defendants, and the fact that the named plaintiffs have
agreed to accept the settlement. Usually, the court will also state the legal fees
being paid to the class counsel as part of the settlement, which may be
considerable shich makes class actions appealing to many plaintiff law firms.
In federal civil procedure law, which has generally been accepted by most
states (through adoption of rules paralleling the FRCP), the class action must
have certain definite characteristics, (1) the class must be so large as to make
individual suits impractical, (2) their must be legal or factual claims in
common (3) the claims or defences must be typical of the plaintiffs or
defendants (4) the representative parties must adequately protect the
interests of the class.
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State Class Actions

Since 1938, many states have adopted rules similar to the FRCP. However,
some states like California have homegrown civil procedure codes which they
have been reluctant to abandon. The law of class actions in California
developed in a rather chaotic fashion, and has never been cleaned up (in the
way that the FRCP cleaned up the thicket of federal procedural law); as a
result, there are entire treatises dedicated to the topic.
Criticisms of Class Actions

There have been many criticisms of class actions. Some say that many class
actions are brought by lawyers too willing to settle for coupon settlements for
their clients when they can get very substantial legal fees for their efforts.
These coupon settlements (which usually allow the plaintiffs to receive some
kind of minimal benefit such as a small check or a coupon off future services or
products with the defendant company) are also a way that the defendants
forstall major liability; if a large number of people do not litigate their claims
separately, then the business is not adversely affected.
Some conservative critics also attack the institution of the class action as
being a form of taxation upon large business corporations that prevents them
from aggressively pursuing innovation. For example, although primitive
self-driving cars have already been developed, no rational automobile
manufacturer will sell such cars in the open market until their artificial
intelligence is perfect; they are terrified of being hit with class actions from
vehicle owners and pedestrians who are injured as a result of the slightest bug
in the car's software.
This kind of argument is generally seen among those involved in tort
reform.
Advantages of Class Actions

On the other side of the debate many lawyers see class actions as one of
the most important legal tools to develop in the twentieth century. Class
actions make it possible for a few people to change corporate practices and
to bring wrongs to the attention of the court on more than a piecemeal
basis. The claims may result in a settlement but they usually force the
defendant business into adapting their policies to eliminate the practices
that lead to the class action. In this way all of society benefits in way that
are hard to quantify beyond the members of the class who receive
compenstation.
Finally there are several other mechanisms which allow the litigation of
large claims by a small number of law firms. The most well known is mass tort
litigation which has. been used in asbestos claims and also with various drugs
that have had adverse effects after being released by major drug companies
such drugs as Rezulin, Propulsid, and Serzone to name a few.
370
19. Top 10 Phrases Not to Use in a Contract
Top 10 Phrases Not to Use in a Contract
(A Lesson from Dr. Frankenstein by David T. Daly)
When a lawyer drafts a contract, the creative process is more like Dr

Frankenstein's than like God's. Instead of creating something out of nothing,
we take whatever parts we can find and try to knit them together into a
coherent whole.
As I remember the story, Dr. Frankenstein's creation turned into a
monster because his assistant, Igor, gave him a criminal brain instead of a
normal one.
We lawyers can learn a lesson from this. In drafting contracts, we need to
carefully scrutinize the parts other attorneys give us, and reject those that aren't
going to work well. Over the years, I've had the privilege of working with many
fine lawyers and clients in drafting, reviewing, and negotiating commercial
contracts. I've also seen my share of drafting monstrosities. From this experience,
here is my list of the top 10 common contract phrases that we should reject
because they impede saying what needs to be said clearly and concisely.
1. N a m i n g a c o n t r a c t " A g r e e m e n t " and n o t h i n g m o r e

One of the most important things a contract drafter can do is give the
contract a specific, descriptive title. For example, your reader will probably
find the title "Widget Sales & Services Agreement" more helpful than the
simple title "Agreement." Adding a good title takes little time for the drafter,
but it can greatly help a reader understand what the contract is about.
I once had to search 20 boxes of documents to find a particular contract.
During my search, I found dozens of contract drafts titled simply
"Agreement" before I found the one I was looking for.'How much time and effort
it would have saved if the drafters had given each contract a descriptive title!
"Agreement" as a defined term Sparingly used, definitions are a useful tool
in drafting a clear, concise contract. But there is one definition that we can
almost always do without: the defined term "Agreement" (referring to the
contract itself). Since the word "Agreement" is vague, lawyers often create a
defined term, the "Agreement."
When you refer to your contract, use the words "this contract" (not
defined) instead. Only lawyers and their groupies use the term "Agreement."
The word "contract" is also more precise than "agreement," since all contracts
are agreements, but not all agreements are contracts.
2 . " N o w , t h e r e f o r e , i n c o n s i d e r a t i o n o f t h e f o r e g o i n g and t h e mutual
p r o m i s e s and c o v e n a n t s herein c o n t a i n e d , t h e r e c e i p t and s u f f i c i e n c y o f
which is hereby acknowledged, the parties hereby agree as follows..."
A good contract clearly explains each party's consideration. Usually, one
party supplies goods or services, and the other pays money. If the
consideration is clear, the phrase quoted above is unnecessary and should be
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omitted. If the consideration is not clear, it's risky to rely on this formalistic
statement to fix the problem.
Like a display window in the front of a department store, the space on the
first page of a contract is precious for its value to attract and hold the reader's
attention and to tell the reader what the contract is about. You shouldn't
waste it on empty boilerplate language.
3. "The parties (expressly) agree"

Presumably, the parties agree to everything in the contract, or they
wouldn't sign it. You should just set out the parties' rights and duties, without
repeatedly saying "the parties agree." Lawyers sometimes, use the phrase "the
parties expressly agree" to emphasize the idea that follows. It has the effect of
saying "and I really mean it!" But unfortunately, using the phrase "the parties
expressly agree" to create emphasis implies that other statements in the
contract are less important. If an idea needs emphasis, consider instead
whether you can create that emphasis by reorganizing the contract, or by
working out the idea in greater detail.
4. "Unless otherwise agreed"

The phrase "unless otherwise agreed" is logically unnecessary so long as
the parties remain free to amend the contract. You may, however, want to use
it sparingly to indicate a section where the parties specifically expect a change,
such as for prices or credit terms that may vary from time to time.
When you do, you will probably also want to specify how the change will
be documented. Of course, you could add the phase "unless otherwise agreed"
to every sentence in the contract. The danger is that if you include "unless
otherwise agreed" in some sentences but not in others, you may create the
implication that some sentences can be amended orally, or in some other way
that does not constitute a formal contract amendment.
5. "Hereby"
Always eliminate this unnecessary word. I have been looking for the last
few years to find an example of a necessary hereby, and I am still looking. In
his Dictionary of Modern Legal Usage, Bryan Garner states that "hereby is
often a flotsam phrase that can be excised with no loss of meaning." 1 Garner
adds that "here- and there- words... abound in legal writing (unfortunately
they do not occur just here and there), usually thrown in gratuitously to give
legal documents that musty smell."
6. "Notwithstanding anything in this contract to the contrary"

This phrase indicates that the writer doesn't know what the rest of the
contract says, or how the provision in question relates to the rest of the
contract. Instead of using this crutch phrase, create the sense of priority and
emphasis through good contract organization. Eliminate the inconsistency.
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19. Top 10 Phrases Not to Use in a Contract
At the least, specify, by number, which provision overrides which other

provision.
7. "Written notice"
It is better to say-once in the notice provision-that all notices must be in
writing. Then delete the word "written" wherever it appears in connection
with notice. This eliminates redundancy and avoids the unfortunate
implication that there is more than one kind of notice. If one contract section
says that a party must give "written notice" but another section says that a
party must give "notice," the difference could logically be interpreted to imply
that the latter notices may be oral.
8. "Headings used in this Agreement are included for convenience of

reference only and shall not constitute a part of this Agreement for any
other purpose and will have no force or effect in the construction of this
Agreement."
Like a good contract title, carefully chosen section headings greatly help
the reader to understand a contract. Therefore, choose section headings as
carefully as the text of the contract. A provision to the effect that section
headings don't count is a poor substitute for good headings that do in fact
guide the reader. It also adds unnecessary words-words that don't help the
reader understand the contract's substantive content.
9. "In witness whereof, the parties have caused this contract to be

executed by their duly authorized representatives."
Eliminate this needless phrase and, instead, just jump to the signature
lines.
If a contract signer is not duly authorized, this statement doesn't fix the
problem (except that it may make an unauthorized signer personally liable for
the contract obligations).
Of course, authorization is important. If there is any doubt about whether
a signer is duly authorized, have the other party show due authorization
through a source outside the contract (for example, by having the company's
secretary provide a certificate of incumbency and certified board resolution
approving the contract).
10. Conclusion
Obviously, clear legal writing goes far beyond any short list of dos and
don'ts.
I hope this list challenges you to reject any clause that doesn't help make
your contract clear and concise. Learn that simple lesson from Dr.
Frankenstein. If you scrutinize contract forms carefully, you'll never look at
the contract you've just written and say, "I've created a monster!"
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Model Rules of Professional Conduct
(American Bar Association, abanet.org)
Preamble: A Lawyer's Responsibilities

[1] A lawyer, as a member of the legal profession, is a representative of
clients, an officer of the legal system and a public citizen having special
responsibility for the quality of justice.
[2] As a representative of clients, a lawyer performs various functions. As
advisor, a lawyer provides a client with an informed understanding of the
client's legal rights and obligations and explains their practical implications.
As advocate, a lawyer zealously asserts the client's position under the rules of
the adversary system. As negotiator, a lawyer seeks a result advantageous to
the client but consistent with requirements of honest dealings with others. As
an evaluator, a lawyer acts by examining a client's legal affairs and reporting
about them to the client or to others.
[3] In addition to these representational functions, a lawyer may serve as a
third-party neutral, a nonrepresentational role helping the parties to resolve a
dispute or other matter. Some of these Rules apply directly to lawyers who are
or have served as third-party neutrals. See, e.g., Rules 1.12 and 2.4. In
addition, there are Rules that apply to lawyers who are not active in the
practice of law or to practicing lawyers even when they are acting in a
nonprofessional capacity. For example, a, lawyer who commits fraud in the
conduct of a business is subject to discipline for engaging in conduct involving
dishonesty, fraud, deceit or misrepresentation. See Rule 8.4.
[4] In all professional functions a lawyer should be competent, prompt and
diligent. A lawyer should maintain communication with a client concerning
the representation. A lawyer should keep in confidence information relating to
representation of a client except so far as disclosure is required or permitted by
the Rules of Professional Conduct or other law.
[5] A lawyer's conduct should conform to the requirements of the law,
both in professional service to clients and in the lawyer's business and personal
affairs. A lawyer should use the law's procedures only for legitimate purposes
and not to harass or intimidate others. A lawyer should demonstrate respect
for the legal system and for those who serve it, including judges, other lawyers
and public officials. While it is a lawyer's duty, when necessary, to challenge
the rectitude of official action, it is also a lawyer's duty to uphold legal process.
[6J As a public citizen, a lawyer should seek improvement of the law, access
to the legal system, the administration of justice and the quality of service
rendered by the legal profession. As a member of a learned profession, a lawyer
should cultivate knowledge of the law beyond its use for clients, employ that
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20. Model Rules of Professional Conduct
knowledge in reform of the law and work to strengthen legal education. In

addition, a lawyer should further the public's understanding of and confidence
in the rule of law and the justice system because legal institutions in a
constitutional democracy depend on popular participation and support to
maintain their authority. A lawyer should be mindful of deficiencies in the
administration of justice and of the fact that the poor, and sometimes persons
who are not poor, cannot afford adequate legal assistance. Therefore, all
lawyers should devote professional time and resources and use civic influence
to ensure equal access to our system of justice for all those who because of
economic or social barriers cannot afford or secure adequate legal counsel. A
lawyer should aid the legal profession in pursuing these objectives and should
help the bar regulate itself in the public interest.
[7] Many of a lawyer's professional responsibilities are prescribed in the
Rules of Professional Conduct, as well as substantive and procedural law.
However, a lawyer is also guided by personal conscience and the approbation
of professional peers. A lawyer should strive to attain the highest level of skill,
to improve the law and the legal profession and to exemplify the legal
profession's ideals of public service.
18] A lawyer's responsibilities as a representative of clients, an officer of the
legal system and a public citizen are usually harmonious. Thus, when an
opposing party is well represented, a lawyer can be a zealous advocate on
behalf of a client and at the same time assume that justice is being done. So
also, a lawyer can be sure that preserving client confidences ordinarily serves
the public interest because people are more likely to seek legal advice, and
thereby heed their legal obligations, when they know their communications
will be private.
[9J In the nature of law practice, however, conflicting responsibilities are
encountered. Virtually all difficult ethical problems arise from conflict
between a lawyer's responsibilities to clients, to the legal system and to the
lawyer's own interest in remaining an ethical person while earning a
satisfactory living. The Rules of Professional Conduct often prescribe terms
for resolving such conflicts. Within the framework of these Rules, however,
many difficult issues of professional discretion can arise. Such issues must be
resolved through the exercise of sensitive professional and moral judgment
guided by the basic principles underlying the Rules. These principles include
the lawyer's obligation zealously to protect and pursue a client's legitimate
interests, within the bounds of the law, while maintaining a professional,
courteous and civil attitude toward all persons involved in the legal system.
[10] The legal profession is largely self-governing. Although other
professions also have been granted powers of self-government, the legal
profession is unique in this respect because of the close relationship between
the profession and the processes of government and law enforcement. This
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Reading Supplement
connection is manifested in the fact that ultimate authority over the legal
profession is vested largely in the courts.
[11] To the extent that lawyers meet the obligations of their professional
calling, the occasion for government regulation is obviated. Self-regulation
also helps maintain the legal profession's independence from government
domination. An independent legal profession is an important force in
preserving government under law, for abuse of legal authority is more readily
challenged by a profession whose members are not dependent on government
for the right to practice.
[12] The legal profession's relative autonomy carries with it special
responsibilities of self-government. The profession has a responsibility to
assure that its regulations are conceived in the public interest and not in
furtherance of parochial or self-interested concerns of the bar. Every lawyer is
responsible for observance of the Rules of Professional Conduct. A lawyer
should also aid in securing their observance by other lawyers. Neglect of these
responsibilities compromises the independence of the profession and the
public interest which it serves.
[ 13] Lawyers play a vital role in the preservation of society. The fulfillment
of this role requires an understanding by lawyers of their relationship to our
legal system. The Rules of Professional Conduct, when properly applied, serve
to define that relationship.
Scope
[14] The Rules of Professional Conduct are rules of reason. They should be
interpreted with reference to the purposes of legal representation and of the
law itself. Some of the Rules are imperatives, cast in the terms "shall" or "shall
not." These define proper conduct for purposes of professional discipline.
Others, generally cast in the term "may," are permissive and define areas under
the Rules in which the lawyer has discretion to exercise professional
judgment. No disciplinary action should be taken when the lawyer chooses not
to act or acts within the bounds of such discretion. Other Rules define the
nature of relationships between the lawyer and others. The Rules are thus
partly obligatory and disciplinary and partly constitutive and descriptive in
that they define a lawyer's professional role. Many of the Comments use the
term "should." Comments do not add obligations to the Rules but provide
guidance for practicing in compliance with the Rules.
[15] The Rules presuppose a larger legal context shaping the lawyer's role.
That context includes court rules and statutes relating to matters of licensure,
laws defining specific obligations of lawyers and substantive and procedural
law in general. The Comments are sometimes used to alert lawyers to their
responsibilities under such other law.
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[16] Compliance with the Rules, as with all law in an open society, depends
primarily upon understanding and voluntary compliance, secondarily upon
reinforcement by peer and public opinion and finally, when necessary, upon
enforcement through disciplinary proceedings. The Rules do not, however,
exhaust the moral and ethical considerations that should inform a lawyer, for
no worthwhile human activity can be completely defined by legal rules. The
Rules simply provide a framework for the ethical practice of law.
[17] Furthermore, for purposes of determining the lawyer's authority and
responsibility, principles of substantive law external to these Rules determine
whether a client-lawyer relationship exists. Most of the duties flowing from
the client-lawyer relationship attach only after the client has requested the
lawyer to render legal services and the lawyer has agreed to do so. But there
are some duties, such as that of confidentiality under Rule 1.6, that attach
when the lawyer agrees to consider whether a client-lawyer relationship shall
be established. See Rule 1.18. Whether a client-lawyer relationship exists for
any specific purpose can depend on the circumstances and may be a question
of fact.
[18] Under various legal provisions, including constitutional, statutory
and common law, the responsibilities of government lawyers may include
authority concerning legal matters that ordinarily reposes in the client in
private client-lawyer relationships. For example, a lawyer for a government
agency may have authority on behalf of the government to decide upon
settlement or whether to appeal from an adverse judgment . Such authority in
various respects is generally vested in the attorney general and the state's
attorney in state government, and their federal counterparts, and the same
may be true of other government law officers. Also, lawyers under the
supervision of these officers may be authorized to represent several
government agencies in .intragovernmental legal controversies in
circumstances where a private lawyer could not represent multiple private
clients. These Rules do not abrogate any such aut hority.
[19] Failure to comply with an obligat ion or prohibition imposed by a Rule

is a basis for invoking the disciplinary process. The Rules presuppose that
disciplinary assessment of a lawyer's conduct will be made on the basis of the
facts and circumstances as they existed at the time of the conduct in question
and in recognition of the fact that a lawyer often has to act upon uncertain or
incomplete evidence of the situation. Moreover, the Rules presuppose that
whether or not discipline should be imposed for a violation, and the severity of
a sanction, depend on all the circumstances, such as the willfulness and
seriousness of the violation, extenuating factors and whether there have been
previous violations.
[20] Violation of a Rule should not itself give rise to a cause of action
against a lawyer nor should it create any presumption in such a case that a
377
Reading Supplement
legal duty has been breached. In addition, violation of a Rule does not
necessarily warrant any other nondisciplinary remedy, such as disqualification
of a lawyer in pending litigation. The Rules are designed to provide guidance
to lawyers and to provide a structure for regulating conduct through
disciplinary agencies. They are not designed to be a basis for civil liability.
Furthermore, the purpose of the Rules can be subverted when they are
invoked by opposing parties as procedural weapons. The fact that a Rule is a
just basis for a lawyer's self-assessment, or for sanctioning a lawyer under the
administration of a disciplinary authority, does not imply that an antagonist
in a collateral proceeding or transaction has standing to seek enforcement of
the Rule. Nevertheless, since the Rules do establish standards of conduct by
lawyers, a lawyer's violation of a Rule may be evidence of breach of the
applicable standard of conduct.
[21] The Comment accompanying each Rule explains and illustrates the
meaning and purpose of the Rule. The Preamble and this note on Scope
provide general orientation. The Comments are intended as guides to
interpretation, but the text of each Rule is authoritative.
Client-Lawyer Relationship
Rule 1.1 C o m p e t e n c e
A lawyer shall provide competent representation to a client. Competent

representation requires the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the representation.
Comment
Legal Knowledge and Skill
[1] In determining whether a lawyer employs the requisite knowledge and
skill in a particular matter, relevant factors include the relative complexity
and specialized nature of the matter, the lawyer's general experience, the
lawyer's training and experience in the field in question, the preparation and
study the lawyer is able to give the matter and whether it is feasible to refer
the matter to, or associate or consult with, a lawyer of established competence
in the field in question. In many instances, the required proficiency is that of a
general practitioner. Expertise in a particular field of law may be required in
some circumstances.
[2] A lawyer need not necessarily have special training or prior experience
to handle legal problems of a type with which the lawyer is unfamiliar.
A newly admitted lawyer can be as competent as a practitioner with long
experience. Some important legal skills, such as the analysis of precedent, the
evaluation of evidence and legal drafting, are required in all legal problems.
378
Perhaps the most fundamental legal skill consists of determining what kind of
legal problems a situation may involve, a skill that necessarily transcends any
particular specialized knowledge. A lawyer can provide adequate
representation in a wholly novel field through necessary study. Competent
representation can also be provided through the association of a lawyer of
established competence in the field in question.
[3] In an emergency a lawyer may give advice or assistance in a matter in
which the lawyer does not have the skill ordinarily required where referral to
or consultation or association with another lawyer would be impractical. Even
in an emergency, however, assistance should be limited to that reasonably
necessary in the circumstances, for ill-considered action under emergency
condit ions can jeopardize the client's interest.
[4] A lawyer may accept representation where the requisite level of
competence can be achieved by reasonable preparation. This applies as well to
a lawyer who is appointed as counsel for an unrepresented person.
Thoroughness and Preparation

[5] Competent handling of a particular matter includes inquiry into and
analysis of the factual and legal elements of the problem, and use of methods
and procedures meeting the standards of competent practitioners. It also
includes adequate preparation. The required attention and preparation are
determined in part by what is at stake; major litigation and complex
transactions ordinarily require more extensive treatment than matters of
lesser complexity and consequence. An agreement between the lawyer and the
client regarding the scope of the representation may limit the matters for
which the lawyer is responsible. See Rule 1.2(c).
Maintaining Competence
[6] To maintain the requisite knowledge and skill, a lawyer should keep
abreast of changes in the law and its practice, engage in continuing study and
education and comply with all continuing legal education requirements to
which the lawyer is subject.
Counselor
Rule 2.1 Advisor
In representing a client, a lawyer shall exercise independent professional

judgment and render candid advice. In rendering advice, a lawyer may refer
not only to law but to other considerations such as moral, economic, social and
political factors, that may be relevant to the client's situation.
379
Reading Supplement
Comment
Scope of Advice
[1] A client is entitled to straightforward advice expressing the lawyer's
honest assessment. Legal advice often involves unpleasant facts and
alternatives that a client may be disinclined to confront. In presenting advice,
a lawyer endeavors to sustain the client's morale and may put advice in as
acceptable a form as honesty permits. However, a lawyer should not be
deterred from giving candid advice by the prospect that the advice will be
unpalatable to the client.
[2] Advice couched in narrow legal terms may be of little value to a client,
especially where practical considerations, such as cost or effects on other
people, are predominant. Purely technical legal advice, therefore, can
sometimes be inadequate. It is proper for a lawyer to refer to relevant moral
and ethical considerations in giving advice. Although a lawyer is not a moral
advisor as such, moral and ethical considerations impinge upon most legal
questions and may decisively influence how the law will be applied.
[3] A client may expressly or impliedly ask the lawyer for purely technical
advice. When such a request is made by a client experienced in legal matters, the
lawyer may accept it at face value. When such a request is made by a client
inexperienced in legal matters, however, the lawyer's responsibility as advisor may
include indicating that more may be involved than strictly legal considerations.
[41 Matters that go beyond strictly legal questions may also be in the
domain of another profession. Family matters can involve problems within the
professional competence of psychiatry, clinical psychology or social work;
business matters can involve problems within the competence of the
accounting profession or of financial specialists. Where consultation with a
professional in another field is itself something a competent lawyer would
recommend, the lawyer should make such a recommendation. At the same
time, a lawyer's advice at its best often consists of recommending a course of
action in the face of conflicting recommendations of experts.
Offering Advice
[5] In general, a lawyer is not expected to give advice until asked by the
client. However, when a lawyer knows that a client proposes a course of action
that is likely to result in substantial adverse legal consequences to the client,
the lawyer's duty to the client under Rule 1.4 may require that the lawyer
offer advice if the client's course of action is related to the representation.
Similarly, when a matter is likely to involve litigation, it may be necessary
under Rule 1.4 to inform the client of forms of dispute resolution that might
constitute reasonable alternatives to litigation. A lawyer ordinarily has no
duty to initiate investigation of a client's affairs or to give advice that the
client has indicated is unwanted, but a lawyer may initiate advice to a client
when doing so appears to be in the client's interest.
380
Advocate
Rule 3.4 Fairness to Opposing Party and Counsel
A lawyer shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter,
destroy or conceal a document or other material having potential evidentiary
value. A lawyer shall not counsel or assist another person to do any such act;
(b) falsify evidence, counsel or assist a witness to testify falsely, or offer an
inducement to a witness that is prohibited by law;
(c) knowingly disobey an obligation under the rules of a tribunal except
for an open refusal based on an assertion that no valid obligation exists;
(d) in pretrial procedure, make a frivolous discovery request or fail to make
reasonably diligent effort to comply with a legally proper discovery request by
an opposing party;
(e) in trial, allude to any matter that the lawyer does not reasonably believe
is relevant or that will not be supported by admissible evidence, assert personal
knowledge of facts in issue except when testifying as a witness, or state a
personal opinion as to the justness of a cause, the credibility of a witness, the
culpability of a civil litigant or the guilt or innocence of an accused; or
(f) request a person other than a client to refrain from voluntarily giving
relevant information to another party unless:
(1) the person is a relative or an employee or other agent of a client; and
(2) the lawyer reasonably believes that the person's interests will not be
adversely affected by refraining from giving such information.
Transactions with Persons other than Clients

Rule 4.1 Truthfulness in S t a t e m e n t s to Others
In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person; or
(b) fail to disclose a material fact to a third person when disclosure is
necessary to avoid assisting a criminal or fraudulent act by a client, unless
disclosure is prohibited by Rule 1.6.
Transactions with Persons other than Clients

Rule 4.2 Communication with Person
Represented by Counsel
In representing a client, a lawyer shall not communicate about the subject

of the representation with a person the lawyer knows to be represented by
another lawyer in the matter, unless the lawyer has the consent of the other
lawyer or is authorized to do so by law or a court order.
381
Reading Supplement
Public Service
Rule 6.1 Voluntary Pro B o n o Publico Service
Every lawyer has a professional responsibility to provide legal services to

those unable to pay. A lawyer should aspire to render at least (50) hours of pro
bono publico legal services per year. In fulfilling this responsibility, the lawyer
should:
(a) provide a substantial majority of the (50) hours of legal services
without fee or expectation of fee to:
(1) persons of limited means; or
(2) charitable, religious, civic, community, governmental and educational
organizations in matters that are designed primarily to address the needs of
persons of limited means; and
(b) provide any additional services through:
(1) delivery of legal services at no fee or substantially reduced fee to
individuals, groups or organizations seeking to secure or protect civil rights,
civil liberties or public rights, or charitable, religious, civic, community,
governmental and educational organizations in matters in furtherance of their
organizational purposes, where the payment of standard legal fees would
significantly deplete the organization's economic resources or would be
otherwise inappropriate;
(2) delivery of legal services at a substantially reduced fee to persons of
limited means; or
(3) participation in activities for improving the law, the legal system or the
legal profession.
In addition, a lawyer should voluntarily contribute financial support to
organizations that provide legal services to persons of limited means.
Maintaining the Integrity of the Profession

Rule 8.4 Misconduct
It is professional misconduct for a lawyer to:

(a) violate or attempt to violate the Rules of Professional Conduct,
knowingly assist or induce another to do so, or do so through the acts of
another;
(b) commit a criminal act that reflects adversely on the lawyer's honesty,
trustworthiness or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
382
(e) state or imply an ability to influence improperly a government agency

or official or to achieve results by means that violate the Rules of Professional
Conduct or other law; or
(f) knowingly assist a judge or judicial officer in conduct that is a violation
of applicable rules of judicial conduct or other law.
Comment
[1] Lawyers are subject to discipline when they violate or attempt to
violate the Rules of Professional Conduct, knowingly assist or induce another
to do so or do so through the acts of another, as when they request or instruct
an agent to do so on the lawyer's behalf. Paragraph (a), however, does not
prohibit a lawyer from advising a client concerning action the client is legally
entitled to take.
[2] Many kinds of illegal conduct reflect adversely on fitness to practice law,
such as offenses involving fraud and the offense of willful failure to file an income
tax return. However, some kinds of offenses carry no such implication.
Traditionally, the distinction was drawn in terms of offenses involving "moral
turpitude." That concept can be construed to include offenses concerning some
matters of personal morality, such as adultery and comparable offenses, that have
no specific connection to fitness for the practice of law. Although a lawyer is
personally answerable to the entire criminal law, a lawyer should be
professionally answerable only for offenses that indicate lack of those
characteristics relevant to law practice. Offenses involving violence, dishonesty,
breach of trust, or serious interference with the administration of justice are in
that category. A pattern of repeated offenses, even ones of minor significance
when considered separately, can indicate indifference to legal obligation.
[3] A lawyer who, in the course of representing a client, knowingly manifests
by words or conduct, bias or prejudice based upon race, sex, religion, national
origin, disability, age, sexual orientation or socioeconomic status, violates
paragraph (d) when such actions are prejudicial to the administration of justice.
Legitimate advocacy respecting the foregoing factors does not violate paragraph
(d). A trial judge's finding that peremptory challenges were exercised on a
discriminatory basis does not alone establish a violation of this rule.
[4] A lawyer may refuse to comply with an obligation imposed by law upon
a good faith belief that no valid obligation exists. The provisions of Rule 1.2(d)
concerning a good faith challenge to the validity, scope, meaning or application
of the law apply to challenges of legal regulation of the practice of law.
[5] Lawyers' holding public office assume legal responsibilities going
beyond those of other citizens. A lawyer's abuse of public office can suggest an
inability to fulfill the professional role of lawyers. The same is true of abuse of
positions of private trust such as trustee, executor, administrator, guardian,
agent and officer, director or manager of a corporation or other organization.
383
STATUTES SUPPLEMENT
Statutes Enforced by the Antitrust Division of the U.S. Department of

Justice
SHERMAN ANTITRUST ACT, 15 U.S.C. §§ 1 - 7

§ 1 Sherman Act, 15 U.S.C. § 1
T r u s t s , e t c . , i n r e s t r a i n t o f t r a d e illegal; p e n a l t y
Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States, or with
foreign nations, is declared to be illegal. Every person who shall make any
contract or engage in any combination or conspiracy hereby declared to be
illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be
punished by fine not exceeding $10,000,000 if a corporation, or, if any other
person, $350,000, or by imprisonment not exceeding three years, or by both
said punishments, in the discretion of the court.

Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine
or conspire with any other person or persons, to monopolize any part of the
trade or commerce among the several States, or with foreign nations, shall be
deemed guilty of a felony, and, on conviction thereof, shall be punished by fine
not exceeding $10,000,000 if a corporation, or, if any other person, $350,000,
or by imprisonment not exceeding three years, or by both said punishments, in
the discretion of the court.

T r u s t s in T e r r i t o r i e s or D i s t r i c t of C o l u m b i a illegal; c o m b i n a t i o n a f e l o n y
Every contract, combination in form of trust or otherwise," or conspiracy, in
restraint of trade or commerce in any Territory of the United States or of the
District of Columbia, or in restraint of trade or commerce between any such
Territory and another, or between any such Territory or Territories and any
State or States or the District of Columbia, or with foreign nations, or between
384
Antitrust Laws
the District of Columbia and any State or States or foreign nations, is declared
illegal. Every person who shall make any such contract or engage in any such
combination or conspiracy, shall be deemed guilty of a felony, and, on conviction
thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or,
if any other person, $350,000, or by imprisonment not exceeding three years, or
by both said punishments, in the discretion of the court.
CLAYTON ACT
§ 2 Clayton Act, 15 U.S.C. §§ 13(2)
Discrimination in price, services, or facilities
(a) Price; selection of customers
It shall be unlawful for any person engaged in commerce, in the course of
such commerce, either directly or indirectly, to discriminate in price between
different purchasers of commodities of like grade and quality, where either or any
of the purchases involved in such discrimination are in commerce, where such
commodities are sold for use, consumption, or resale within the United States or
any Territory thereof or the District of Columbia or any insular possession or
other place under the jurisdiction of the United States, and where the effect of
such discrimination may be substantially to lessen competition or tend to create
a monopoly in any line of commerce, or to injure, destroy, or prevent competition
with any person who either grants or knowingly receives the benefit of such
discrimination, or with customers of either of them.
§ 7 Clayton Act, 15 U.S.C. § 18

Acquisition by one corporation of stock of another
No person engaged in commerce or in any activity affecting commerce
shall acquire, directly or indirectly, the whole or any part of the stock or other
share capital and no person subject to the jurisdiction of the Federal Trade
Commission shall acquire the whole or any part of the assets of another person
engaged also in commerce or in any activity affecting commerce, where in any
line of commerce or in any activity affecting commerce in any section of the
country, the effect of such acquisition may be substantially to lessen
competition, or to tend to create a monopoly
This section shall not apply to persons purchasing such stock solely for
investment and not using the same by voting or otherwise to bring about, or in
attempting to bring about, the substantial lessening of competition. Nor shall
anything contained in this section prevent a corporation engaged in commerce
or In any activity affecting commerce from causing the formation of subsidiary
corporations for the actual carrying on of their immediate lawful business, or
the natural and legitimate branches or extensions thereof, or from owning and
holding all or a part of the stock of such subsidiary corporations, when the
effect of such formation is not to substantially lessen competition.
385
Statutes Supplement

Interlocking directorates and officers
(a)
No person shall, at the same time, serve as a director or officer in any two
corporations (other than banks, banking associations, and trust companies)
that are
- engaged in whole or in part in commerce; and
- by virtue of their business and location of operation, competitors, so that
the elimination of competition by agreement between them would
constitute a violation of any of the antitrust laws;
if each of the. corporations has capital, surplus, and undivided profits
aggregating more than $10,000,000 as adjusted pursuant to paragraph (5) of
this subsection.

Liability of directors and agents of corporation
Whenever a corporation shall violate any of the penal provisions of the
antitrust laws, such violation shall be deemed to be also that of the individual
directors, officers, or agents of such corporation who shall have authorized,
ordered, or done any of the acts constituting in whole or in part such violation,
and such violation shall be deemed a misdemeanor, and upon conviction
therefor of any such director, officer, or agent he shall be punished by a fine of
not exceeding $5,000 or by imprisonment for not exceeding one year, or by
both, in the discretion of the court.
International Antitrust Enforcement Assistance Act of 1994,

15 U.S.C. § § 6 2 0 1 - 6 2 1 2
Disclosure to a foreign antitrust authority of antitrust evidence, 15 U.S.C.
§6201
In accordance with an antitrust mutual assistance agreement in effect

under this chapter, subject to section 6207 of this title, and except as provided
in section 6204 of this title, the Attorney General of the United States and the
Federal Trade Commission may provide to a foreign antitrust authority with
respect to which such agreement is in effect under this chapter, antitrust
evidence to assist the foreign antitrust authority-
in determining whether a person has violated or is about to violate any of
the foreign antitrust laws administered or enforced by the foreign antitrust
authority, or
in enforcing any of such foreign antitrust laws.
386
Taxes
Related Statutes and Penalties
Title 26 U S C § 7201
Attempt to evade or defeat tax
Any person who willfully attempts to evade or defeat any tax imposed by
this title or the payment thereof shall, in addition to other penalties provided
by law, be guilty of a felony and, upon conviction thereof:
Shall be imprisoned not more than 5 years

Or fined not more than $250,000 for individuals ($500,000 for
corporations)
Or both, together with the costs of prosecution.
Title 26 U S C § 7202
Willful failure to collect or pay over tax
Any person required under this title to collect, account for, and pay over
any tax imposed by this title who willfully fails to collect or truthfully account
for and pay over such tax shall, in addition to penalties provide by the law, be
guilty of a felony:

corporations)
Or both , together with the costs of prosecution.
Title 26 U S C § 7203
Willful failure to file return, supply information, or pay tax
Any person required under this title to pay any estimated tax or tax, or
required by this title or by regulations made under authority thereof to make a
return, keep any records, or supply any information, who willfully fails to pay
such estimated tax or tax, make such return, keep such records, or supply such
information, at the time or times required by law or regulations, shall, in
addition to other penalties provided by law, be guilty of a misdemeanor and,
upon conviction thereof:

corporations)
Or both, together with cost of prosecution
387
Statutes Supplement
Title 26 U S C § 7 2 0 6 ( 1 )
Fraud and false statements
Any Person who... (1) Declaration under penalties of perjury - Willfully
makes and subscribes any return, statement, or other document, which
contains or is verified by a written declaration that is made under the
penalties of perjury, and which he does not believe to be true and correct as to
every material matter; shall be guilty of a felony and, upon conviction thereof:
Or fined not more than $250,000 for individuals ($500,000 for corporations)
Or both, together with cost of prosecution.
Title 26 U S C § 7206(2)
Fraud and false statements
Any person who...(2) Aid or assistance - Willfully aids or assists in, or
procures, counsels, or advises the preparation or presentation under, or in
connection with any matter arising under, the Internal Revenue laws, of a return,
affidavit, claim, or other document, which is fraudulent or is false as to any
material matter, whether or not such falsity or fraud is with the knowledge or
consent of the person authorized or required to present such return, affidavit,
claim, or document; shall be guilty of a felony and, upon conviction thereof:
corporations)
Or both, together with cost of prosecution.
Statute United States Code on copyright fair use

1 7 U . S . C . §107
Limitations on exclusive rights: Fair Use
Notwithstanding the provisions of sections 106 and 106A, the fair use of a
copyright work, including such use by reproduction in copies or phonerecords
or by any other means specified by that section, for purposes such as criticism,
comment, news reporting, teaching (including multiple copies for classroom
use), scholarship, or research, is not an infringement of copyright. In
determining whether the use made of a work in any particular case is a fair use
the factors to be considered shall include -
(1) the purpose and character of the use, including whether such use is of
commercial nature or for nonprofit educational purposes;
388
(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use
if such finding is made upon consideration of all the above factors.
Lanham Trademark Act

15 U S C §§ 1114-27
TITLE 15 - COMMERCE AND TRADE
CHAPTER 22 - TRADE-MARKS
SUBCHAPTER III - GENERAL PROVISIONS
Sec. 1114. Remedies; Infringement; Innocent Infringement By Printers

And Publishers
(1) Any person who shall, without the consent of the registrant -
(a) use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake, or to deceive;
or
(b) reproduce, counterfeit, copy, or colorablv imitate a registered niark and
apply such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with the sale, offering for sale,
distribution, or advertising of goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for the remedies hereinafter
provided. Under subsection (b) hereof, the registrant shall not be entitled to
recover profits or damages unless the acts have been committed with
knowledge that such imitation is intended to be used to cause confusion, or to
cause mistake, or to deceive.
2-314 of the Uniform Commercial Code:

Implied Warranty: Merchantability; Usage of Trade
(1) Unless excluded or modified (Section 2-316), a warranty that the
goods shall be merchantable is implied in a contract for their sale if the seller is
a merchant with respect to goods of that kind. Under this section the serving
for value of food or drink to be consumed either on the premises or elsewhere
is a sale.
389
Statutes Supplement
(2) Goods to be merchantable must be at least such as:

(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the
description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run within the variations permitted by the agreement, of even kind,
quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged and labeled as the agreement may
require; and
(f) conform to the promise or affirmations of fact made on the container or
label if any.
(3) Unless excluded or modified (Section 2-316) other implied warranties
may arise from course of dealing or usage of trade.
2-315 of the Uniform Commercial Code:

Implied Warranty: Fitness for Particular Purpose
Where the seller at the time of contracting has reason to know any
particular purpose for which the goods are. required and that the buyer is
relying on the seller's skill or judgment to select or furnish suitable goods,
there is, unless excluded or modified under the next section, an implied
warranty that the goods shall be fit for such purpose.
Contents
P a r t I. LEGAL CAREER 3
U n i t 1. Legal Terminology Basics. Areas of Law .... 3
Business File 1 13
U n i t 2. Legal Education 16
U n i t 3. Legal Professions 28
U n i t 4. Applying for a Job 46
P a r t II. COMPANY FORMATION 71

Business File 2 71
U n i t 1. Business Organizations 74
U n i t 2. Incorporation and Registration 92
U n i t 3. Franchising 106
U n i t 4. Mergers and Acquisitions. Antitrust Laws 126
P a r t III. TAXATION OUTLINE 149

Business File 3 149
U n i t 1. Tax Basics 152
U n i t 2. Tax Crimes 168
P a r t IV. LEGAL FRAMEWORK OF COMPANY OPERATION 175

Business File 4 175
U n i t 1. Intellectual Property 180
U n i t 2. Products Liability 204
U n i t 3. Contract Drafting Outline 227
GRAMMAR SUPPLEMENT 260

Gender-Neutral Legal Writing 260
Modal Verbs 262
Conditional Clauses 267
391
Contents
FUNCTIONS SUPPLEMENT 270

Connectors 270
Presentation 272
Interactive Presentation 275
Correspondence 276
LEGAL FORMS SUPPLEMENT 1 292
LEGAL FORMS SUPPLEMENT 2 301
READING SUPPLEMENT 323
STATUTES SUPPLEMENT 384

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АНГЛИЙСКИЙ ЯЗЫК ДЛЯ ЮРИСТОВ

A brief review of major legal terms

The state establishes the system of rules - law

law - laws - lawyer

area of law - область права (практика)

Verb combinations with the word LA W

Parliament or some other administrative bodies create law.

Why are you studying/did you study law?

Choose the proper Russian definition for the following:

lawful act профессия в области права

LEGAL ENTITY BUT: NATURAL PERSON / INDIVIDUAL

Explain each word phrase in plain English.

legislation [,led3is'leijh] - законодательная деятельность, законодательство

The three branches of power are: legislative, executive and judicial.

Legislative body - Parliament (GB), Senate (USA), State Duma (Russia) -

Law as subjects to study:

Criminal Law History of State and Law Sales Law

Common law is the law based on precedent.

Law is unwritten in common law countries.

CASE - SUIT - судебное дело

Authority also means: a) an important source of law; b) power or a

SUIT - 1) иск; 2) судебная тяжба; 3) судебное дело; процесс

1. Opposed as a legal system

the precedents to the facts to come up with a judgment.

2. Opposed as the body of law

Tort Law or Law of Torts - деликтное право; касается нарушений против

Tort is a civil wrong against a person or person's property, meaning both

Areas of Law Practice

Areas of Law Practice

International Law is a group of laws, rules, or principles that are

Civil Procedure - гражданский процесс;

Criminal Procedure - уголовный процесс;

The language of business is becoming international.

business director manager fax printer export import bank client

The main "business" verbs

Perform - operate - function - carry out - execute - accomplish - fulfil

Sell - buy - purchase

Direct to be in charge, to guide, organize and control - возглавлять

Director one that is in Manager one that exercises executive

Employer - one that employs, provides job - работодатель

Producer / manufacturer ~ производитель

Agent - one who is authorized to act for or in the place of another -

Customer - one that purchases goods - заказчик, клиент

Clerk - one employed to keep records or accounts or to perform

optional / elective courses - предметы по выбору (факультатив)

What are the optional / elective courses?

Legal Education in the USA

Interview with an American Attorney

especially analytical thinking skills. These

They participate in the school's moot moot

1. Go back to the Concept section questions. Answer the questions

Civil Procedure Constitutional Law I

In Legal Research and Writing, a year-long course, students work

Second- and Third-Year Courses Offered

Business and Commercial Law Accounting

Constitutional Law and Theory

A number of law schools have clinical programs in which students

of areas, including law and business administration or public

Activate the information about the curriculum of graduate course.

Legal Education in the UK

assess / assessment - оценивать / оценка, аттестация

Find out more information on above given items 1 - 6 .

Studying law in the United Kingdom means a three-year undergraduate