АЛОНЦЕВА Право Єкономика крассная

Н.В.
Алонцева
Профессиональный
английский
для юристов
и экономистов
Практическое пособие
Professional English in Use
Law and Economics
Пособие состоит из двух частей. В первой части представлены

ключевые темы по частному праву и соответствующие
задания, направленные на развитие и совершенствование
умений, обеспечивающих профессионально-коммуникативную
деятельность специалистов в области права и экономики.
Во вторую часть пособия включены дополнительные тексы на
английском и русском языках для реферирования и перевода.
Пособие снабжено ключами, что позволяет использовать его
как для аудиторной, так и для самостоятельной работы. Пособие
адресовано студентам юридических и экономических факультетов,
аспирантам, а также всем желающим усовершенствовать владение
английским языком в области честного права.
2
СОДЕРЖАНИЕ
CONTENTS
ЧАСТЬ I
PART I
УРОК 1 КОРПОРАТИВНОЕ ПРАВО

UNIT 1 C O R P O R A T E LAW 7
УРОК 2 МЕЖДУНАРОДНЫЕ ИНВЕСТИЦИИ

UNIT 2 INTERNATIONAL I N V E S T M E N T 37
УРОК 3 ДОГОВОРЫ
UNIT 3 CONTRACTS 65
УРОК 4 КОММЕРЧЕСКИЕ ДОКУМЕНТЫ

UNIT 4 C O M M E R C I A L PAPER 91
УРОК 5 ИНТЕЛЛЕКТУАЛЬНАЯ СОБСТВЕННОСТЬ

UNIT 5 I N T E L L E C T U A L P R O P E R T Y 112
УРОК 6 ДЕЛИКТНОЕ ПРАВО

UNIT 6 T O R T LAW 130
УРОК 7 СЕМЕЙНОЕ ПРАВО

UNIT 7 F A M I L Y LAW 150
УРОК 8 АРБИТРАЖ
UNIT 8 ARBITRATION 171
ЧАСТЬ I I Т Е М А Т И Ч Е С К И Е ТЕКСТЫ
PART II ADDITIONAL T E X T S
УРОК 1 КОРПОРАТИВНОЕ ПРАВО

UNIT 1 C O R P O R A T E LAW 196
3
УРОК 2 МЕЖДУНАРОДНЫЕ ИНВЕСТИЦИИ
UNIT 2 INTERNATIONAL I N V E S T M E N T 205
УРОК 3 ДОГОВОРЫ
UNIT 3 CONTRACTS 213
УРОК 4 КОММЕРЧЕСКИЕ ДОКУМЕНТЫ

UNIT 4 C O M M E R C I A L PAPER 221
УРОК 5 ИНТЕЛЛЕКТУАЛЬНАЯ СОБСТВЕННОСТЬ

UNIT 5 I N T E L L E C T U A L P R O P E R T Y 229
УРОК 6 ДЕЛИКТНОЕ ПРАВО

UNIT 6 T O R T LAW 239
УРОК 7 СЕМЕЙНОЕ ПРАВО

UNIT 7 F A M I L Y LAW 249
УРОК 8 АРБИТРАЖ
UNIT 8 ARBITRATION 257
КЛЮЧИ
KEYS 268
СПИСОК ИСПОЛЬЗОВАННОЙ ЛИТЕРАТУРЫ

LIST OF R E F E R E N C E BOOKS 343
4
ПРЕДИСЛОВИЕ
В X X I веке общественная жизнь приобретает все более ярко
выраженный интернацщональный характер. Одной из основных
причин этих изменений является глобализация, которая затро¬
нула все сферы общественной жизни: экономическую и полити¬
ческую, правовую и экологическую, культурную и социальную.
Однако именно глобализация экономики образует основу всех
глобализационных процессов и бросает вызов сложившемуся
мироустройству. Не остались в стороне от этих изменений Ре
спублика Беларусь и Российская Федерация, где за последние
20 лет появилось огромное количество частных предприятий,
которые наряду с государственными структурами осуществляют
экономическую деятельность, предлагая свои товары и услуги не
только на внутреннем, но и зарубежном рынке. Эти изменения
сказались и на профессиональной деятельности юристов и эко¬
номистов, круг обязанностей которых значительно расширился,
а использование иностранного языка стало необходимым усло¬
вием для их успешного выполнения.
Предлагаемое пособие предназначено для студентов юридиче¬
ских и экономических факультетов, а также для широкого круга
лиц, интересующихся правовой и экономической терминологией
и стремящихся усовершенствовать владение английским языком
в этих областях.
Учебное пособие состоит из двух частей. Первая часть содер
жит 8 разделов, в которых рассмотрены ключевые темы частно¬
го права, такие как корпоративное право, международные ин¬
вестиции, договоры (контракты), оборотные документы, право
интеллектуальной собственности, семейное право, деликты и
коммерческий арбитраж. В зависимости от объема каждый раз¬
дел содержит три или четыре части, каждая из которых вклю¬
чает предтекстовые задания, текст и послетекстовые задания и
упражнения. Материал каждой части предназначен для изучения
на одном занятии. Задания и упражнения направлены на раз¬
витие умений работы с текстом, обсуждения правовых вопросов,
реферирования, перевода с русского языка на английский и с ан¬
глийского языка на русский; на изучение и закрепление лексики
(соотнесение конкретной лексической единицы с антонимами и
синонимами; определение значения лексической единицы; овла¬
дение правилами словообразования и сочетания слов; овладение
5
умением выбора и употребления лексической единицы в тексте).
Текстовый материал помогает творчески варьировать различные
виды учебной деятельности, а также предоставляет широкие воз¬
можности для организации учебных дискуссий по обсуждаемым
темам. В конце каждого раздела содержится тест, который слу¬
жит средством контроля усвоения материала. Первая часть по¬
собия снабжена ключами, что позволяет использовать его как на
аудиторных занятиях, так и в рамках самостоятельной работы.
Во вторую часть пособия включены дополнительные тексты
(по каждому разделу пособия) на английском и русском языках
для реферирования и перевода.
При составлении пособия автор использовал материалы из
трудов известных российских, европейских и американских
юристов.
Материалы данного учебного пособия прошли апробацию на
занятиях со студентами старших курсов отделения международ¬
ного права факультета международных отношений Белорусского
государственного университета.
Автор выражает искреннюю признательность рецензентам:
зав. кафедрой иностранных языков филологического факульте¬
та РУДН, доктору филологических наук, профессору, академику
МАН ВШ Н.Ф. Михеевой, зав. кафедрой профессионально ори
ентированной английской речи БГЭУ, кандидату филологиче
ских наук, доценту Н. А. Новик. А также благодарит за помощь
в подготовке данного пособия преподавателей кафедры между
народного частного права факультета международных отношений
Белорусского государственного униврситета, кандидата юриди¬
ческих наук, доцента, зав. кафедрой международного частного
права ФМО БГУ Е.В. Бабкину, кандидата филологических наук,
доцента, зав. кафедрой английского языка гуманитарных специ¬
альностей ФМО БГУ Т.В. Караичеву, а также старшего препо¬
давателя кафедры английского языка гуманитарных специаль¬
ностей ФМО БГУ Е.В. Растишевскую.
6
C O R P O R A T E LAW
PART I
UNIT 1 C O R P O R A T E LAW
1. What do you know about Corporate Law? Choose the right

answer.
1. ... are the investors in, and owners of, a corporation.
a) Directors b) Officers c) Shareholders
2. Many corporations get their start through the efforts of a per-
son called a who goes about developing and organizing a business
venture.
a) director b) promoter c) shareholder
3. ... would be considered private, but their business serves the pub-
lic's needs, such as by offering utilities or telephone service.
a) Municipal corporations b) Quasi-public corporations c) Non¬
profit corporations
4. ... can continue indefinitely despite the death or withdrawal of a
shareholder; partnerships and limited partnerships, however, dissolve
with the death or withdrawal of a partner.
a) Limited partnerships b) Sole proprietorships c) Corporations
5. ... is an association of two or more people to carry on business as
co-owners, with shared rights to manage and to gain profits and with
shared personal liability for business debts.
a) A sole proprietorship b) A partnership c) A corporation
2. Read the following texts and explain the words in bold.
CORPORATIONS
Artificial entities that are created by state statute, and that are treated
much like individuals under the law, having legally enforceable rights,
the ability to acquire debt and to pay out profits, the ability to hold and
transfer property, the ability to enter into contracts, the requirement to pay
taxes, and the ability to sue and be sued.
The rights and responsibilities of a corporation are independent and
distinct from the people who own or invest in them. A corporation
simply provides a way for individuals to run a business and to share in
profits and losses.
7
UNIT 1
HISTORY
The concept of a corporate personality traces its roots to Roman law
and found its way to the American colonies through the British. After
gaining independence, the states, not the federal government, assumed
authority over corporations.
Although corporations initially served only limited purposes, the
Industrial Revolution spurred their development. The corporation
became the ideal way to run a large enterprise, combining centralized
control and direction with moderate investments by a potentially
unlimited number of people.
The corporation today remains the most common form of business
organization because, theoretically, a corporation can exist forever and
because a corporation, not its owners or investors, is liable for its
contracts. But these benefits do not come free. A corporation must
follow many formalities, is subject to publicity, and is governed by
state and federal regulations.
Many states have drafted their statutes governing corporations
based upon the Model Business Corporation Act. This document,
prepared by the American Bar Association Section of Business Law,
Committee on Corporate Laws, and approved by the American Law
Institute, provides a framework for all aspects of corporate governance
as well as other aspects of corporations. Like other model acts, the
Model Business Corporation Act is not necessarily designed to be
adopted wholesale by the various states, but rather is designed to
provide guidance to states when they adopt their own acts.
T Y P E S O F CORPORATIONS
Corporations can be private, nonprofit, municipal, or quasi-public.
Private corporations are in business to make money, whereas nonprofit
corporations generally are designed to benefit the general public.
Municipal corporations are typically cities and towns that help the
state to function at the local level. Quasi-public corporations would be
considered private, but their business serves the public's needs, such as
by offering utilities or telephone service.
There are two types of private corporations. One is the public
corporation, which has a large number of investors, called shareholders.
Corporations that trade their shares, or investment stakes, on securities
exchanges or that regularly publish share prices are typical publicly
held corporations.
The other type of private corporation is the closely held corporation.
Closely held corporations have relatively few shareholders (usually 15
to 35 or fewer), often all in a single family; little or no outside market
exists for sale of the shares; all or most of the shareholders help run the
8
business; and the sale or transfer of shares is restricted. The vast majority
of corporations are closely held.
West's encyclopedia of American law
3. Give synonyms for the underlined words.
4. Match the words in column A with the appropriate words in
column B. Make up sentences using them.
A B
1) to enter into g) a) guidance
2) to make b) profits
3)to pay c)taxes
4) to provide d) money
5) to run e) a business
6) to share in f) property
7) to transfer g) contract
5. In the above text find the English equivalents for the fol¬
lowing words and phrases.
1) частная корпорация; 2) зарабатывать деньги; 3) некоммер
ческая организация; 4) общественность; 5) муниципальная кор
порация; 6) квазигосударственная корпорация; 7) коммунальные
услуги; 8) акционерное общество открытого типа; 9) подавляю
щее большинство; 10) корпорация закрытого типа; 11) торговое
право; 12) Ассоциация американских юристов; 13) федеральное
правительство; 14) участвовать в прибылях; 15) выплачивать
налоги; 16) заключать договор; 17) вести дело, управлять пред¬
приятием; 18) передавать имущество; 19) прибыли и убытки;
20) Примерный закон "О коммерческой корпорации".
6. Translate the following table into English and speak on the
Types of Corporations.
Акционерные общества
открытого типа
Частные корпорации
Корпорации закрытого
Общественные организации типа
Муниципальные корпорации
Квазигосударственные корпорации
9
UNIT 1
7. Read the texts below and define which of the terms in bold
match the following definitions.
1) a formal agreement between two or more parties;
2) a written agreement setting forth the basic structure of a corporation;
3) one of the equal parts into which the ownership of a company
is divided and which can be bought by members of the public;
4) a person who helps to organize, develop, or finance an undertaking;
5) something demanded or imposed as an obligation;
6) any property owned by a person or firm;
7) a sum of money which is borrowed, often from a bank, and has
to be paid back, esp. together with an additional amount of money
that you have to pay as a charge for borrowing.
G E T T I N G A C O R P O R A T I O N STARTED
Many corporations get their start through the efforts of a person
called a promoter, who goes about developing and organizing a busi¬
ness venture. A promoter's efforts typically involve arranging the need¬
ed capital, or financing, using loans, money from investors, or the pro¬
moter's own money; assembling the people and assets (such as land,
buildings, and leases) necessary to run the corporation; and fulfilling
the legal requirements for forming the corporation.
A corporation cannot be automatically liable for obligations that
a promoter incurred on its behalf. Technically, a corporation does
not exist during a promoter's pre-incorporation activities. A promoter
therefore cannot serve as a legal agent, who could bind a corporation
to a contract. After formation, a corporation must somehow assent
before it can be bound by an obligation that a promoter has made on
its behalf. Usually, i f a corporation gets the benefits of a promoter's
contract, it will be treated as though it has assented to, and accepted,
the contract.
The first question facing incorporators (those forming a corpora¬
tion) is where to incorporate. The answer often depends on the type
of corporation. Theoretically, both closely held and large public cor¬
porations may incorporate in any state. Small businesses operating in
a single state usually incorporate in that state. Most large corporations
select Delaware as their state of incorporation because of its sophisti¬
cation in dealing with corporation law.
Incorporators then must follow the mechanics that are set forth in
the state's statutes. Corporation statutes vary from state to state, but
10
most require basically the same essentials in forming a corporation.

Every statute requires incorporators to file a document, usually called
the articles of incorporation, and pay a filing fee to the secretary of
state's office, which reviews the filing. I f the filing receives approval,
the corporation is considered to have started existing on the date of
the first filing.
The articles of incorporation typically must contain (1) the name of
the corporation, which often must include an element like Company,
Corporation, Incorporated, or Limited," and may not resemble too
closely the names of other corporations in the state; (2) the length of
time the corporation will exist, which can be perpetual or renewable;
(3) the corporation's purpose, usually described as "any lawful busi¬
ness purpose"; (4) the number and types of shares that the corporation
may issue and the rights and preferences of those shares; (5) the ad¬
dress of the corporation's registered office, which need not be the cor¬
poration's business office, and the registered agent at that office who
can accept legal service of process; (6) the number of directors and the
names and addresses of the first directors; and (7) each incorporator's
name and address.
A corporation's bylaws usually contain the rules for the actual run-
ning of the corporation. Bylaws normally are not filed with the Sec-
retary of State and are easier to amend than are the articles of incor¬
poration. The bylaws should be complete enough so that corporate
officers can rely on them to manage the corporation's affairs. The
bylaws regulate the conduct of directors, officers, and shareholders
and set forth rules governing internal affairs. They can include defini¬
tions of management's duties, as well as times, locations, and voting
procedures for meetings that affect the corporation.
column B.
A B
1) small i) a) procedure
2) voting b) incorporation
3) legal c) fee
4) articles of d) law
5) business e) agent
6) filing f) corporation
7) corporation g) venture
8) public i) business
11
UNIT 1
9. Match the synonyms.

A B
1) to set forth j) a) to contain
2) credit b) to order
3) to include c) to revise
4) to choose d) benefit
5) obligation e) commitment
6) to require f) matter
7) agreement g) to select
8) to amend h) creation
9) formation i) to vary
10) profit j) to state
11) affair k) loan
12) to differ l) contract
10. Complete the following sentences using the required infor¬
mation from the above text.
1. The articles of incorporation normally include ... .
2. A promoter's efforts involve ... .
3. Bylaws regulate the conduct of . .
4. Every statute requires incorporators to file . .
5. Most large corporations select Delaware as their state of incor¬
poration because of its . .
6. A corporation's bylaws usually contain the rules for ... .
7. The first question facing incorporators (those forming a corpora¬
tion) is where . .
8. After formation, a corporation must somehow assent before it
can be bound by . .
11. Read the text and give synonyms for the underlined
words.
P E O P L E B E H I N D A CORPORATION:
R I G H T S AND R E S P O N S I B I L I T I E S
The primary players in a corporation are the shareholders, direc¬
tors, and officers. Shareholders are the investors in, and owners of,
a corporation. They elect, and sometimes remove, the directors, and
occasionally they must vote on specific corporate transactions or ope¬
rations. The board of directors is the top governing body. Directors
establish corporate policy and hire officers, to whom they usually de¬
legate their obligations to administer and manage the corporation's
affairs. Officers run the day-to-day business affairs and carry out the
policies the directors establish.
12
SHAREHOLDERS
Shareholders' financial interests in the corporation is determined
by the percentage of the total outstanding shares of stock that they
own. Along with their financial stakes, shareholders generally receive a
number of rights, all designed to protect their investments. Foremost
among these rights is the power to vote. Shareholders vote to elect
and remove directors, to change or add to the bylaws, to ratify (i.e.,
approve after the fact) directors' actions where the bylaws require
shareholder approval, and to accept or reject changes that are not part
of the regular course of business, such as mergers or dissolution. This
power to vote, although limited, gives the shareholders some role in
running a corporation.
Shareholders typically exercise their voting rights at annual or
special meetings. Most statutes provide for an annual meeting, with
requirements for some advance notice, and any shareholder can get
a court order to hold an annual meeting when one has not been held
within a specified period of time. Although the main purpose of the
annual meeting is to elect directors, the meeting may address any
relevant matter, even one that has not been mentioned specifically in
the advance notice. Almost all states allow shareholders to conduct
business by unanimous written consent, without a meeting.
Shareholders elect directors each year at the annual meeting. Most
statutes provide that directors be elected by a majority of the voting
shares that are present at the meeting. The same number of shares
needed to elect a director normally is required to remove a director,
usually without proof of cause, such as fraud or abuse of authority.
A special meeting is any meeting other than an annual meeting.
The bylaws govern the persons who may call a special meeting;
typically, the directors, certain officers, or the holders of a specified
percentage of outstanding shares may do so. The only subjects that
a special meeting may address are those that are specifically listed in
an advance notice.
Statutes require that a quorum exist at any corporation meeting. A
quorum exists when a specified number of a corporation's outstanding
shares are represented. Statutes determine what level of representation
constitutes a quorum; most require one-third. Once a quorum exists,
most statutes require an affirmative vote of the majority of the shares
present before a vote can bind a corporation. Generally, once a quorum
is present, it continues, and the withdrawal of a faction of voters does
not prevent the others from acting.
13
UNIT 1
A corporation determines who may vote based on its records. Cor¬

porations issue share certificates in the name of a person, who be¬
comes the record owner (i.e., the owner according to company re¬
cords) and is treated as the sole owner of the shares. The company
records of these transactions are called stock transfer books or share
registers. A shareholder who does not receive a new certificate is called
the beneficial owner and cannot vote, but the beneficial owner is the
real owner and can compel the record owner to act as the beneficial
owner desires.
Those who hold shares by a specified date before a meeting, called
the record date, may vote at the meeting. Before each meeting, a cor¬
poration must prepare a list of shareholders who are eligible to vote, and
each shareholder has an unqualified right to inspect this voting list.
Shareholders typically have two ways of voting: straight voting or
cumulative voting. Under straight voting, a shareholder may vote his
or her shares once for each position on the board. For example, i f a
shareholder owns 50 shares and there are three director positions, the
shareholder may cast 50 votes for each position. Under cumulative
voting, the same shareholder has the option of casting all 150 votes
for a single candidate. Cumulative voting increases the participation of
minority shareholders by boosting the power of their votes.
Shareholders also may vote as a group or block. A shareholder
voting agreement is a contract among a group of shareholders to vote
in a specified manner on certain issues; this is also called a pooling
agreement. Such an agreement is designed to maintain control or to
maximize voting power. Another arrangement is a voting trust. This
has the same objectives as a pooling agreement, but in a voting trust,
shareholders assign their voting rights to a trustee who votes on behalf
of all the shares in the trust.
Shareholders need not attend meetings in order to vote; they may
authorize a person, called a proxy, to vote their shares. Proxy appoint¬
ment often is solicited by parties who are interested in gaining control
of the board of directors or in passing a particular proposal; their re¬
quest is called a proxy solicitation. Proxy appointment must be in writ¬
ing. It usually may last no longer than a year, and it can be revoked.
Federal law generates most proxy regulation, and the Securities and
Exchange Commission (SEC) has comprehensive and detailed regula¬
tions. These rules define the form of proxy solicitation documents and
require the distribution of substantial information about director candi¬
dates and other issues that are up for shareholder vote. Not all corpora¬
tions are subject to federal proxy law; generally, the law covers only large
corporations with many shareholders and with shares that are traded on
14
CORPORATE LAW
a national securities exchange. These regulations aim to protect investors

from promiscuous proxy solicitation by irresponsible outsiders who seek
to gain control of a corporation, and from unscrupulous officers who seek
to retain control of management by hiding or distorting facts.
In addition to voting rights, shareholders also have a right to in-
spect a corporation's books and records. A corporation almost always
views the invocation of this right as hostile. Shareholders may only
inspect records i f they do so for a "proper purpose"; that is, is a pur¬
pose that is reasonably relevant to the shareholder's financial interest,
such as determining the worth of his or her holdings. Shareholders
can be required to own a specified amount of shares or to have held
the shares for a specified period of time before inspection is allowed.
Shareholders generally may review all relevant records that are needed,
in order to gather information in which they have a legitimate interest.
Shareholders also may examine a corporation's record of shareholders,
including names and addresses and classes of shares.
12. Complete the table.
VERB NOUN NOUN ADJECTIVE ADVERB
(person) (abstract)
share
investment
vote
financial
proxy
protectively
participate
ownership
inspect
preventative /
(un)preventable
13. Solve the puzzle using the information from the above text.
1) quorum — a minimum number of members in an assembly, so¬
ciety, board of directors, etc., required to be present before any valid
business can be transacted;
2) a person who owns some of the equal parts into which the own¬
ership of a company is divided;
3) a person authorized to act on behalf of someone else; agent;
4) one of the equal parts into which the ownership of a company is
divided and which can be bought by members of the public;
5) acquiescence to or acceptance of something done or planned by
another; permission;
6) someone who has an important position in an organization;
15
UNIT 1
7) a member of the governing board of a business concern who

may or may not have an executive function;
8) a person or organization that invests money in order to make a
profit;
9) an event at which people meet to talk and decide things;
10) a person or thing excluded from or not a member of a set,
group, etc.
d o t a f p a r e a k p e q l a m
o f s h a r e h o l d e r u o p e
r f d i m o g h e o z t a o n d r
e i t a k x w s h a r e b r s i t
h c i c h y o n o f f r c u e r i
k e r o u t s i d e r e e m n e u
e r o n j o o m i t a k x w e c l
a s l s n l m e e t i n g o t t e
n j v e p r a b h s r m e t i o l
p q i n v e s t o r a s l o r r a
t o t t p a t a k x w j v r o i b
s r m e k f p a r e a k p e l e o
14. In the above texts find the English equivalents for the fol¬
lowing words and phrases. Then choose any seven phrases and
make up sentences using them.
1) акционер; 2) фондовая биржа; 3) совет директоров; 4) Комиссия
по ценным бумагам и биржевым операциям; 5) политика корпора
ции; 6) нанимать; 7) повседневный; 8) мошенничество; 9) превышение
полномочий; 10) письменное согласие; 11) чрезвычайное собрание;
12) ежегодное собрание акционеров; 13) право участия в голосовании;
14) ликвидация; 15) соглашение о голосовании; 16) слияние, объедине¬
ние; 17) акция; 18) выпускать акции; 19) зарегистрированный владелец,
собственник; 20) единственный владелец; 21) список акционеров, ре¬
естр владельцев акций; 22) собственник-бенефициарий; 23) доверенное
лицо; 24) передача права голоса по доверенности; 25) кумулятивное го¬
лосование; 26) избирательный список; 27) день регистрации.
16
15. Are the following statements true or false?

1. Shareholders may examine a corporation's record of sharehold¬
ers, including names and addresses and classes of shares.
2. The primary players in a corporation are the shareholders, direc¬
tors, and officers.
3. Officers elect, and sometimes remove, the directors, and occasion¬
ally they must vote on specific corporate transactions or operations.
4. Under cumulative voting, a shareholder may vote his or her
shares once for each position on the board.
5. Officers may vote as a group or block.
6. Officers run the day-to-day business affairs and carry out the
policies the directors establish.
7. Shareholders need to attend meetings in order to vote.
8. Federal law governs the persons who may call a special meeting.
9. Shareholders establish corporate policy and hire officers, to
whom they usually delegate their obligations to administer and man¬
age the corporation's affairs.
10. Corporations issue share certificates in the name of a person, who
becomes the record owner and is treated as the sole owner of the shares.
11. Statutes don't require that a quorum exists at any corporation
meeting.
12. The main purpose of the annual meeting is to elect directors.
13. A shareholder who does not receive a new certificate is called
the record owner and cannot vote, but the record owner is the real
owner and can compel the beneficial owner to act as the record owner
desires.
14. Shareholders typically exercise their voting rights at annual or
special meetings.
15. Shareholders elect directors each year at the special meeting.
16. Read the text and give opposites for the underlined words.
DIRECTORS
Statutes contemplate that a corporation's business and affairs will
be managed by the board of directors or under the board's authority or
direction. Directors often delegate to corporate officers their authority
to formulate policy and to manage the business. In closely held corpo¬
rations, directors normally involve themselves more in management
than do their counterparts in large corporations. Statutes empower
17
UNIT 1
directors to decide whether to declare dividends; to formulate pro¬

posed important corporate changes, such as mergers or amendments
to the articles of incorporation; and to submit proposed changes to
shareholders. Many boards appoint committees to handle technical
matters, such as litigation, but the board itself must address important
matters. Directors customarily are paid a salary and often receive in¬
centive plans that can supplement that salary.
A corporation's articles or bylaws typically control the number of
directors, the terms of the directors' service, and the directors' abil¬
ity to change their number and terms. The shareholders' power of
removal functions as a check on directors who may wish to act in a
way that is contrary to the majority shareholders' wishes. The direc¬
tors' own fiduciary duties, or obligations to act for the benefit of the
corporation, also serve as checks on directors.
The bylaws usually regulate the frequency of regular board meet¬
ings. Directors also may hold special board meetings, which are any
meetings other than regular board meetings. Special meetings require
some advance notice, but the agenda of special directors' meetings is
not limited to what is set forth in the notice, as it is with shareholders'
special meetings. In most states, directors may hold board meetings by
phone and may act by unanimous written consent without a meeting.
A quorum for board meetings usually exists i f a majority of the
directors in office immediately before the meeting are present. The
quorum number may be increased or decreased by amending the by¬
laws, although it may not be decreased below any statutory minimum.
A quorum must be present for directors to act, except when the board
is filling a vacancy. Most statutes allow either the board itself or share¬
holders to fill vacancies.
Directors' fiduciary duties fall under three broad categories: the
duty of care, the duty of loyalty, and duties imposed by statute. Gen¬
erally, a fiduciary duty is the duty to act for the benefit of another
— here, the corporation — while subordinating personal interests. A
fiduciary occupies a position of trust for another and owes the other a
high degree of fidelity and loyalty.
A director owes the corporation the duty to manage the entity's
business with due care. Statutes typically define using due care as
acting in good faith, using the care that an ordinarily prudent person
would use in a similar position and situation, and acting in a manner
that the director reasonably thinks is in the corporation's best interests.
Courts seldom second-guess directors, but they usually find personal
liability for corporate losses where there is self-dealing or negligence.
18
Self-dealing transactions raise questions about directors' duty of

loyalty. A self-dealing transaction occurs when a director is on both
sides of the same transaction, representing both the corporation and
another person or entity who is involved in the transaction. Self-
dealing may endanger a corporation because the corporation may be
treated unfairly. I f a transaction is questioned, the director bears the
burden of proving that it was in fact satisfactory.
Self-dealing usually occurs in one of four types of situations: trans¬
actions between a director and the corporation; transactions between
corporations where the same director serves on both corporations'
boards; by a director who takes advantage of an opportunity for busi¬
ness that arguably may belong to the corporation; and by a director
who competes with the corporation.
The usurping of a corporate opportunity poses the most significant
challenge to a director's duty of loyalty. A director cannot exploit the
position of director by taking for himself or herself a business oppor¬
tunity that rightly belongs to the corporation. Most courts facing this
question compare how closely related the opportunity is to the cor¬
poration's current or potential business. Part of this analysis involves
assessing the fairness of taking the opportunity. Simply taking a corpo¬
ration's opportunity does not automatically violate the duty of loyalty.
A corporation may relinquish the opportunity, or the corporation may
be incapable of taking the opportunity for itself.
Directors who are charged with violating their duty of care usually
are protected by what courts call the business judgment rule. Essential¬
ly, the rule states that even if the directors' decisions turn out badly for
the corporation, the directors themselves will not be personally liable
for losses if those decisions were based on reasonable information and
if the directors acted rationally. Unless the directors commit fraud, a
breach of good faith, or an illegal act, courts presume that their judg¬
ment was formed to promote the best interests of the corporation. In
other words, courts focus on the process of reaching a decision, not
on the decision itself, and require directors to make informed, not
passive, decisions.
State statutes often impose additional duties and liabilities on di¬
rectors as fiduciaries to a corporation. These laws may govern conduct
such as paying dividends when a statute or the articles prohibit doing
so; buying shares when a statute or the articles prohibit doing so; giv¬
ing assets to shareholders during liquidation without resolving a corpo¬
ration's debts, liabilities, or obligations; and making a prohibited loan
to another director, an officer, or a shareholder.
19
UNIT 1
If a court finds that a director has violated a duty, the director

still might not face personal liability. Some statutes require or permit
corporations to indemnify a director who violated a duty but acted
in good faith, who received no improper personal benefit, and who
reasonably thought that the action was lawful and in the corporation's
best interests. Indemnification means that the corporation reimburses
the director for expenses incurred defending himself or herself and for
amounts he or she paid after losing or settling a claim.
17. Match the words in column A with the appropriate words
in column B. Translate them into Russian.
A B
1) advance h) a) meeting
2) board b) act
3) fiduciary c) dividends
4) declare d) liability
5) illegal e) care
6) board of f) faith
7) good g) person
8) prudent h) notice
9) personal i) directors
10) duty of j) duty
A B
1) manage b) a) control
2) empower b) run
3) appoint c) threaten
4) handle d) permit
5) regulate e) deal with sb/sth
6) increase f) arise
7) allow g) nominate
8) endanger h) forbid
9) occur i) authorize
10) prohibit j) rise
1. Directors often delegate to corporate officers their authority to
formulate... .
20
2. Statutes empower directors to decide whether to declare ... ; to

formulate and to submit ... .
3. Directors customarily are paid a salary and often receive ... .
4. A corporation's articles or bylaws typically control ... .
5. The directors' own fiduciary duties, or obligations to act for ... .
6. Directors may hold special . .
7. Directors' fiduciary duties fall under three . .
8. I f a court finds that a director has violated a duty, the director
9.Self-dealing usually occurs in one of four types of situations: ... .

10. Directors who are charged with violating their duty of care usu¬
ally are protected . .
20. Fill in the correct word derived from the words in capitals.
OFFICERS
CORPORATION REQUIREMENT
DESCRIBE RATIFICATION
EMPLOY LITIGATE
EXECUTE TRANSACT
MINUTE LIABILITY
AUTHORIZE
The duties and powers of corporate officers can be found in stat¬
utes, articles of incorporation, bylaws, or 0) corporate resolutions.
Some statutes require a corporation to have specific officers; others
merely require that the bylaws contain a 1) ... of the officers. Officers
usually serve at the will of those who appointed them, and they gener¬
ally can be fired with or without cause, although some officers sign
2) . contracts.
Corporations typically have as officers a president, one or more
vice presidents, a secretary, and a treasurer. The president is the pri¬
mary officer and supervises the corporation's business affairs. This of¬
ficer sometimes is referred to as the chief 3) . officer, but the ultimate
authority lies with the directors. The vice president fills in for the
president when the latter cannot or will not act. The secretary keeps
4) . of meetings, oversees notices, and manages the corporation's
records. The treasurer manages and is responsible for the corporation's
finances.
Officers act as a corporation's agents and can bind the corporation
to contracts and agreements. Many parties who deal with corporations
21
UNIT 1
5) ... that the board pass a resolution approving any contract negotiated
by an officer, as a sure way to bind the corporation to the contract. In
the absence of a specific resolution, the corporation still may be bound
if it 6)... the contract by accepting its benefits or i f the officer appeared
to have the authority to bind the corporation. Courts treat corporations
as having knowledge of information i f a corporate officer or employee
has that knowledge.
Like directors, officers owe fiduciary duties to the corporation:
good faith, diligence, and a high degree of honesty. But most 7) .
about fiduciary duties involves directors, not officers.
An officer does not face personal liability for a 8) . i f he or she
merely acts as the corporation's agent. Nevertheless, the officer may
be personally 9) . for a transaction where the officer intends to be
bound personally or creates the impression that he or she will be so
bound; where the officer exceeds his or her 10) and where a statute
imposes liability on the officer, such as for failure to pay taxes.
21. Match the words with their definitions.
1) president a) a person appointed or elected by the company's
board of directors;
2) director b) the chief executive officer of a company, corporati-
on, etc.;
3) officer c) a person who owns one or more shares of stock in a
joint stock company or a corporation;
4) secretary d) an officer ranking immediately below a president and
serving as his deputy;
5) proxy e) an officer of a corporation charged with responsi-
bility for keeping records and taking minutes;
6) shareholder f) someone who is in charge of the money for an orga-
nization, corporation etc.;
7) treasurer g) an individual selected to serve on its board of di¬
rectors and thereby oversee the management of its
affairs;
8) vice h) a person authorized to act on behalf of someone
president else; agent;
9) beneficial i) the owner of real property and stocks, bonds, and
owner other financial instruments as shown by public records;
10) record j) the real owner of an investment, rather than an
owner organization holding the investment for them;
22
22. Fill in the correct prepositions.

1. A bill is discharged by payment in due course by or ... behalf ...
the drawee or acceptor.
2. I f the articles provide . a quorum, that requirement has to be
met before business can be conducted.
3. In English law it is important to examine this requirement
along . consideration.
4. To make sure that there is an adequate number of sufficiently
qualified persons to carry . this task.
5. The government has raised interest rates in an attempt to protect
its currency . speculation.
6. Actions raised in the Court of Session had to pass the signet
and hence members of the society were involved . the early stages
of litigation.
7. The management board has set . its goals for the coming year.
8. Partners in a firm are jointly and severally liable . any breach of
trust committed by one partner, in which they were implicated.
9. When this is done, the property thenceforward belongs ... the
creditor but is subject to a right of redemption in 10 years, known as
the legal.
10. The alleged offender has the option to proceed to refuse and be
charged . the offence.
23. Answer the questions.
1. What is the governing body of a corporation?
2. Do directors often delegate to corporate officers their authority
to formulate policy and to manage the business?
3. Directors' fiduciary duties fall under two broad categories,
don't they?
4. May directors hold special board meetings?
5. Who establishes corporate policy and hires officers?
6. Where do shareholders exercise their voting rights?
7. Do shareholders elect directors twice a year at the annual meeting?
8. Do statutes require that a quorum exists at any corporation
meeting?
9. What must a corporation prepare before each meeting?
10. Can a beneficial owner vote?
11. Do shareholders typically have two ways of voting?
12. What does straight voting mean?
13. May shareholders vote as a group or block?
14. Do shareholders have a right to inspect a corporation's books
and records?
23
UNIT 1
15. What is a pooling agreement?

16. Do shareholders need to attend meetings in order to vote?
17. How long may proxy appointment last?
18. Do officers run the day-to-day business affairs and carry out the
policies the directors establish?
19. Who elects and removes directors?
20. Can officers be fired without cause?
21. Is the secretary responsible for the corporation's finances?
22. Officers owe fiduciary duties to the corporation, don't they?
24. Speak on the rights and responsibilities of people behind a
corporation.
25. Read the following text and explain the words and phrases
in bold.
FINANCES
Shares
A corporation divides its ownership units into shares, and can issue
more than one type or class of shares. The articles of incorporation
must state the type or types and the number of shares that can be is¬
sued. A corporation may offer additional shares once it has begun op¬
erating, sometimes subject to current shareholders' preemptive rights
to buy new shares in proportion to their current ownership.
Directors usually determine the price of shares. Some states require
corporations to assign a nominal or minimum value to shares, called
a par value, although many states are eliminating this practice. Many
states allow some types of non-cash property to be exchanged for shares.
Corporations also raise money through debt financing — also called debt
securities — which gives the creditor an interest in the corporation that
ultimately must be paid back by the corporation, much like a loan.
If a corporation issues only one type of share, its shares are called
common stock or common shares. Holders of common stock typically
have the power to vote and a right to their share of the corporation's
net assets. Statutes allow corporations to create different classes of
common stock, with varying voting power and dividend rights.
A corporation also may issue preferred shares. These are typically
nonvoting shares, and their holders receive a preference over holders
of common shares for payment of dividends or liquidations. Some
preferred dividends may be carried over into another year, either in
whole or in part.
24
Dividends
A dividend is a payment to shareholders, in proportion to their
holdings, of current or past earnings or profits, usually on a regular
and periodic basis. Directors determine whether to issue dividends.
A dividend can take the form of cash, property, or additional shares.
Shareholders have the right to force payment of a dividend, but they
usually succeed only i f the directors abused their discretion.
Restrictions on the distribution of dividends can be found in the
articles of incorporation and in statutes, which seek to ensure that the
dividends come out of current and past earnings. Directors who vote
for illegal dividends can be held personally liable to the corporation. In
addition, a corporation's creditors often will contractually restrict the
corporation's power to make distributions
26. In the above text find the English equivalents for the follow¬
ing words and word combinations. Then choose any five phrases
and make up sentences using them.
1) номинальная стоимость; 2) преимущественное право на по
купку акций; 3) класс акций; 4) незаконный дивиденд; 5) выплата
дивидендов (из прибыли компании); 6) дивиденд по привилеги
рованным акциям; 7) ликвидация (дела, предприятия); 8) пра
во на получение дивиденда; 9) право участия в голосовании;
10) стоимость имущества за вычетом обязательств; 11) обычные,
непривилегированные акции; 12) ценная бумага, представляю¬
щая собой долговое свидетельство.
27. Fill in the missing terms in the sentences below according
to the above text.
1. Under a new law, Swiss companies will be able to lower the n _
_ value of their shares to 10 Swiss francs from 100.
2. Existing shareholders have p rights to buy new
shares in proportion to their existing holdings.
3. The directors may i _ _ _ _ shares only for an authorised purpose
and in the best interests of the company.
4. The company's accounts are considered and the directors' and
auditor's reports are put before the s .
5. He recommended that the company be dissolved and its net a _
_ distributed to shareholders.
6. Currently denominated at 500 yen p _ _ value, the shares will be
changed to 50 yen.
25
UNIT 1
7. Corporations issued a record $56 billion of c _ _ stock.

8. I f there are no available profits there can be no p _ _ of
a dividend.
9. Under the Companies Act 1985, that person is p
_ _ liable on the contract.
10. D must be declared by the annual general
meeting on the recommendation of the directors or by the directors
themselves between such meetings.
28. Read the following text and entitle the paragraphs.
C H A N G E S AND C H A L L E N G E S F A C E D B Y
CORPORATIONS
_L
The most straightforward and common changes faced by corpora¬
tions are amendments to their bylaws and articles. The directors or
incorporators initially adopt the bylaws. After that, the shareholders
or directors, or both, hold the power to repeal or amend the bylaws,
usually at shareholders' meetings and subject to a corporation's voting
regulations. Those who hold this power can adopt or change quorum
requirements; prescribe procedures for the removal or replacement
of directors; or fix the qualifications, terms, and numbers of direc¬
tors. Most modern statutes limit the authority to amend articles only
by requiring that an amendment would have been legal to include in
the original articles. Some statutes shield minority shareholders from
harmful majority-approved amendments.
_2.
A merger or acquisition generally is a transaction or device that
allows one corporation to merge into or to take over another corpora¬
tion. Mergers and acquisitions are complicated processes that require
the involvement and approval of the directors and the shareholders.
In a merger or consolidation, two corporations become one by
either maintaining one of the original corporations or creating a new
corporation consisting of the prior corporations. Where statutes au¬
thorize these combinations, these changes are called statutory mergers.
The statutes allow the surviving or new corporation to automatically
assume ownership of the assets and liabilities of the disappearing cor¬
poration or corporations.
Statutes protect shareholder interests during mergers, and state
courts assess these combinations using the fiduciary principles that are
applied in self-dealing transactions.
26
Mergers can involve sophisticated transactions that are designed

simply to combine corporations or to create a new corporation or to
eliminate minority shareholder interests. In some mergers, an acquir¬
ing corporation creates a subsidiary as the form for the merged or
acquired entity. A subsidiary is a corporation that is majority-owned or
wholly owned by another corporation. Creating a subsidiary allows an
acquiring corporation to avoid responsibility for an acquired corpora¬
tion's liabilities, while providing shareholders in the acquired corpora¬
tion with an interest in the acquiring corporation.
Mergers also can involve parent corporations and their subsidiaries.
A similar, though distinct, transaction is the sale, lease, or exchange
of all or practically all of a corporation's property and assets. The pur¬
chaser in such a transaction typically continues operating the business,
although its scope may be narrowed or broadened.
Not all business combinations are consensual. Often, an aggressor
corporation will use takeover techniques to acquire a target corpora¬
tion. Aggressor corporations primarily use the cash tender offer in a
takeover. The aggressor attempts to persuade the target corporation's
shareholders to sell, or tender, their shares at a price that the aggres¬
sor will pay in cash. The aggressor sets the purchase price above the
current market price, usually 25 to 50 percent higher, to make the
offer attractive. This practice often requires the aggressor to assume
significant debts in the takeover, and these debts often are paid for by
selling off parts of the target corporation's business.
Restraints and protections exist for these situations. In takeovers
of registered or large, publicly held corporations, federal law requires
the disclosure of certain information, such as the source of the money
in the tender offer. In smaller corporations, a controlling shareholder,
who holds a majority of a corporation's shares, may not transfer con¬
trol to someone outside the corporation without a reasonable investi¬
gation of the potential buyer. A controlling shareholder also may not
transfer control where there is a suspicion that the buyer will use the
corporation's assets to pay the purchase price or otherwise wrongfully
take the corporation's assets.
Corporations can employ defensive tactics to fend off a takeover.
They can find a more compatible buyer (a "white knight"); issue addi-
tional shares to make the takeover less attractive (a "lock-up"); create
new classes of stock whose rights increase i f any person obtains more
than a prescribed percentage (a "poison pill"); or boost share prices to
make the takeover price less appealing.
27
UNIT 1
3
I I
A corporation can terminate its legal existence by engaging in the
dissolution process. Most statutes allow corporations to dissolve before
they begin to operate as well as after they get started. The normal
process requires the directors to adopt a resolution for dissolution,
and the shareholders to approve it, by either a simple majority or, in
some states, a two-thirds majority. After approval, the corporation en¬
gages in a "winding-up" period, during which it fulfills its obligations
for taxes and debts, before making final, liquidation distributions to
shareholders.
l± I
Shareholders can bring suit on behalf of a corporation to enforce
a right or to remedy a wrong that has been done to the corporation.
Shareholders "derive" their right to bring suit from a corporation's
right. One common claim in a derivative suit would allege misappro¬
priation of corporate assets or other breaches of duty by the directors
or officers. Shareholders most often bring derivative suits in federal
courts.
Shareholders must maneuver through several procedural hoops be¬
fore actually filing suit. Many statutes require them to put up security,
often in the form of a bond, for the corporation's expenses and at¬
torneys' fees from the suit, to be paid if the suit fails; this requirement
often kills a suit before it even begins. The shareholders must have
held stock at the time of the contested action and must have owned it
continuously ever since. The shareholders first must demand that the
directors enforce the right or remedy the wrong; if they fail to make a
demand, they must offer sufficient proof of the futility of such a de¬
mand. Normally, a committee formed by the directors handles — and
dismisses — the demand, and informed decisions are protected by the
business judgment rule.
_5.
A proxy contest is a struggle for control of a public corporation. In
a typical proxy contest, a nonmanagement group vies with manage¬
ment to gain enough proxy votes to elect a majority of the board and
to gain control of the corporation. A proxy contest may be a part of a
takeover attempt.
Management holds most of the cards in such disputes: It has the
current list of shareholders; shareholders normally are biased in its fa-
28
vor; and the nonmanagement group must finance its part of the proxy
contest, but i f management acts in good faith, it can use corporate
money for its solicitation of proxy votes. In proxy contests over large,
publicly held corporations, federal regulations prohibit, among other
things, false or misleading statements in solicitations for proxy votes.
6:
Federal, and often state, laws prohibit a corporate insider from us¬
ing nonpublic information to buy or sell stock. Most cases involving
violations of these laws are brought before federal courts because the
federal law governing this conduct is extensive. The federal law, which
is essentially an antifraud statute, states that anyone who knowingly
or recklessly misrepresents, omits, or fails to correct a material or im¬
portant fact that causes reliance in a sale or purchase, is liable to the
buyer or seller. Those with inside information must either disclose the
information or abstain from buying or selling.
29. Do the following puzzle.
Across
1) the termination, cessation, or winding up of a legal entity such
as a corporation or partnership;
2) the addition, deletion, correction, or other changes proposed or
made to a document;
3) any property or right that is owned by a person or entity and has
monetary value;
4) any proceeding brought by one or more parties against another
one or more parties in a court of law;
5) someone who is an accepted member of a group and who there¬
fore has special or secret knowledge or influence;
6) to stay away from someone or something, or prevent something
from happening or not allow yourself to do something;
Down
7) to compete with other people to achieve or obtain something;
8) a request or petition intended to obtain something;
9) to forbid (something), esp. by law, or to prevent (a particular
activity) by making it impossible;
10) the acquisition of one company by another, and their combina¬
tion into a single legal entity;
29
UNIT 1
11) finance a certificate of debt issued in order to raise funds;

12) an attempt to assume control or management of a corpora-
tion by another corporation, generally by purchase of all outstanding
stock.
3 8
7
5 10
9
2 12
1 11
4
6

in column B. Make up sentences using them.
A B
1) poison a) knight
2) statutory b) fees
3) cash tender c) proof
4) parent d) pill
5) white e) merger
6) controlling f) assets
7) attorney's g) vote
8) corporate h) corporation
9) sufficient i) shareholder
10) proxy j) offer

1) to pay ... cash; 2) an amendment ... the contract; 3) to sell ...
some of the subsidiaries; 4) to vie ... smb; 5) to abstain ... entering
30
into contract; 6) to engage . business; 7) to take . a firm; 8) to be

merged . smth; 9) to take an interest . property; 10) to put . a
defense;
1) Federal, and often state, laws don't prohibit a corporate insider
from using nonpublic information to buy or sell stock.
2) Mergers only can involve subsidiaries.
3) A proxy contest is a struggle for control of a public corpora¬
tion.
4) Aggressor corporations never use the cash tender offer in a take¬
over.
5) Corporations can employ defensive tactics to fend off a take¬
over.
6) In takeovers of registered or large, publicly held corporations,
federal law requires the disclosure of certain information, such as the
source of the money in the tender offer.
7) A corporation can't terminate its legal existence by engaging in
the dissolution process.
8) In some mergers, an acquiring corporation creates a parent cor¬
poration as the form for the merged or acquired entity.
9) Shareholders can bring suit on behalf of a corporation to enforce
a right or to remedy a wrong that has been done to the corporation.
10) All business combinations are consensual.
33. Choose the words from the group below to complete the
text. It may be necessary to change the form of the given words.
form, held, liability, dividend, carry, offer, sole, business, gain,
depend, own, limit, entity, allocate, cope
PERMUTATIONS
Corporations do not represent the only, or necessarily the best, type
of business. Several other forms of business 1) ... varying degrees of or-
ganizational, financial, and tax benefits and drawbacks. The selection
of a particular form 2) . upon the investors' or owners' objectives and
preferences, and upon the type of business to be conducted.
A partnership is the simplest business organization involving more
than one person. It is an association of two or more people to 3) .
on business as co-owners, with shared rights to manage and to 4) ...
profits and with shared personal liability for business debts. A 5) .
proprietorship is more or less a one-person partnership. It is a business
31
UNIT 1
6) . by one person, who alone manages its operation and takes its
profits and is personally liable for all of its debts. A limited partnership
is a partnership with two or more general partners, who manage the
business and have personal and unlimited 7) . for its debts, and one
or more limited partners, who have almost no management powers
and whose liability is limited to the amount of their investment. In a
limited liability company, the limited liability of a limited partnership
is combined with the tax treatment of a partnership, and all partners
have 8) . liability and the authority to manage. This is a relatively
new business 9) . .
A corporation thus provides limited liability for shareholders, un¬
like a partnership, a sole proprietorship, or a limited partnership, each
of which exposes owners to unlimited liability. A corporation is taxed
like a separate 10) . on earnings, out of which the corporation pays
11) ... , which are then taxed (again) to the shareholders; this is con
sidered double taxation. Partnerships and limited partnerships are not
taxed as separate entities, and income or losses are 12) . to the part¬
ners, who are directly taxed; this "flow-through" or "pass-through"
taxation allocates income or losses only once. Corporations centralize
management in the directors and officers, whereas partnerships divide
management among all partners or general partners. Corporations can
continue indefinitely despite the death or withdrawal of a shareholder;
partnerships and limited partnerships, however, dissolve with the death
or withdrawal of a partner. Shareholders in a publicly 13) . cor¬
poration generally can sell or transfer their stock without limitation.
Holders of interest in a partnership or limited partnership, however,
can convey their interest only if the other partners approve. Corpora¬
tions must abide by significant formalities and must 14) . with a great
volume of paperwork; partnerships and limited partnerships face few
formalities and few limitations in operating their 15) . .
34. Match the English phrases in A with their Russian equiva¬
lents in B. Learn the following collocations.
A B
1) private corporation a голосующая акция
2) transnational corporation b "ядовитая пилюля",
"отравленная таблетка"
3) voting share c корпорация закрытого типа
4) quasi-public corporation d миноритарный акционер
5) controlling shareholder/ e капитал, помещенный в
majority shareholder труднореализуемые активы
32
A B
6) hostile takeover f годовой дивиденд
7) poison pill g юридически не оформленная
корпорация
8) minority shareholder h держатель контрольного пакета
акций
9) equity financing i выпускать акции
10) bull market j двойное налогообложение
11) closely held corporation k частная корпорация
12) lock-up l ограниченная ответственность
13) bear market m враждебное поглощение
14) block [line] of shares n "белый рыцарь"
15) black knight o квазигосударственная
16) to issue shares p неголосующая акция
17) public corporation q пакет акций
18) mergers and acquisitions r "рынок быков"
(M&As)
19) insider trading s транснациональная корпорация
20) annual dividend t слияния и поглощения
21) de facto corporation u покупка (акций) осведомленным
лицом
22) white knight v акционерное [долевое]
финансирование
23) non-voting share w "черный рыцарь"
24) limited liability x "рынок медведей"
25) double taxation y акционерное общество
открытого типа
35. Render the text into English.
МОДЕЛЬ КОРПОРАТИВНОГО УПРАВЛЕНИЯ

П О ЗАКОНОДАТЕЛЬСТВУ США
Американская модель корпоративного управления находится
с начала 2000 г. в процессе изменения и реформирования, вы
званном рядом крупных корпоративных скандалов, потрясших
финансовый рынок Америки.
Скандал начался с концерна Энрон — крупнейшей энерге
тической компании, объявившей себя банкротом в 2001 г. Ком¬
пания признала, что в течение последних пяти лет реальные
показатели ее прибыли были занижены! примерно на 600 млн
33
UNIT 1
долл. Для улучшения своих финансовых показателей компа¬

ния использовала сложные системы взаимозачетов с дочерними
структурами. Аудиторская фирма "Артур Андерсен" подтвержда¬
ла достоверность финансовой отчетности компании. Кроме того,
фирма Артур Андерсен осуществляла внешнюю проверку компа¬
нии Энрон, будучи одновременно и ее внутренним аудитором и
оказывая ей консалтинговые услуги по вопросам финансового
менеджмента. Только в 2000 г. вознаграждение фирме Артур Ан
дерсен за "услуги" составило свыше 50 млн долл.
Дальнейшее расследование показало, что компания Энрон не
единственная "заблудшая овца" в благородном корпоративном
семействе США, что подтасовки финансовых результатов до¬
стигли огромных масштабов, и число компаний, пойманных на
искажении отчетности, растет день ото дня. Инвесторы стали в
панике избавляться от акций абсолютно всех компаний, не же¬
лая разбираться в честности или бесчестности их управляющих.
Одной из основных причин скандала явилась особенность
американской модели корпоративного управления, которая за¬
ключается в крайнем распылении акционерного капитала: боль¬
шинство корпораций не имеет в своих реестрах акционера, чья
доля составляла бы более одного процента от совокупного ка¬
питала.
С одной стороны, распыленность акционерного капитала
облегчает передачу акций от одних собственников к другим. С
другой стороны, так называемый распыленный инвестор не об¬
ладает возможностью контролировать дела в компании, крайне
чувствителен к доступности информации, ко всем внешним про¬
явлениям неблагополучия. Он вложит свои деньги в акции толь¬
ко той компании, которая докажет свое дружественное располо¬
жение к нему. Такие инвесторы "голосуют ногами", т.е. продают
пакет акций при малейших подозрениях на возможные будущие
проблемы.
В такой ситуации в основе работы совета директоров аме¬
риканской корпорации лежат два фундаментальных принципа:
члены совета директоров являются представителями единого
коллектива акционеров и обязаны следовать задачам реализации
их общего интереса; владельцы акций — это единственная груп¬
па, избирающая совет директоров, и члены совета директоров
обязаны служить интересам этой группы, приносить как можно
больше прибыли любыми средствами.
"Культ акционера" стал одной из ключевых причин широко¬
го распространения нечестных бухгалтерских приемов. Данная
34
стратегия предполагала максимизацию богатства акционеров,

т.е. поддержание постоянного роста рыночной цены акций.
Чтобы сохранить рост котировок своих акций, корпорациям
было необходимо не просто поддерживать темпы роста прибыли,
но постоянно отчитываться об их увеличении. Это неизбежно
вело к обману, вынуждая эмитентов заниматься подтасовкой ре¬
зультатов, чтобы не разочаровать своих инвесторов. В результате
получалось расхождение между отчетной прибылью и реальной
прибылью, что и привело в конечном итоге к кризису.
В качестве первоочередных мер по преодолению скандала
было принятие в 2002 г. Закона Сарбайнса — Оксли и разра
ботка новых правил листинга Нью-Йоркской фондовой биржи в
части корпоративного управления.
В частности, правила листинга Нью-Йоркской фондовой
биржи содержат требования о том, что в совете директоров боль¬
шинство голосов должно быть у независимых директоров. Долж¬
ны быть созданы комитеты по аудиту, по назначениям, по возна¬
граждениям, формируемые только независимыми директорами.
Единственное вознаграждение за работу в совете директоров —
заработная плата.
По Закону Сарбайнса — Оксли генеральный и финансовый
директора всех публичных компаний должны подписывать квар¬
тальную и годовую отчетность. Если в ней выявляются наруше¬
ния, директорам грозит уголовное наказание.
Макарова О.А. «Корпоративное право»
36. Summarize the information of the unit and speak on Cor¬
porate Law.
37. Choose any questions (topic, problem) relating to Corpo

rate Law and make a 5—7 minute report in class.
TEST
I. Fill in the missing words.

1) The directors may . shares only for an authorised purpose and
in the best interests of the company.
2) While companies are owned by their members (i.e. sharehold¬
ers), they are managed by a . of directors.
3) The federal administrative agency established by the Securities
... Act of 1934, in order to supervise and regulate the issuing and trad¬
ing of securities and to eliminate fraudulent or unfair practices.
35
UNIT 1
4) The use of poison ... raises the cost of acquisition.

5) A statutory ... occurs when Company A acquires Company B
and dissolves Company B.
6) The potential buyer, to overcome the reluctance of the target
company, may make a tender . , which is to advertise its interest in
buying the target company stock from current stockholders at an at¬
tractive price.
7) For certain types of mergers or the shareholders have the
right to cast a vote to support or reject the bid.
8) Within legal guidelines, . may issue stock, declare dividends,
and provide owners with limited liability.
9) Holders of common stock are invited to attend annual . of
stockholders and they have the right to vote on matters of corporate
policy on the basis of one vote per share held.
10) When corporations are formed, they draw up the ... of Incor¬
poration, usually for approval by shareholders.
II. Fill in the correct prepositions.
1) to abstain . force
2) to be charged . smth.
3) to be liable ... smb's debts
4) to be involved . payment
5) to share . profits
6) to enter . an agreement
7) to be merged . smth
8) to pay . cash
9) to be engaged . export
10) interest . partnership
III. Translate the sentences from English into Russian.
1. The shares reached their highest point on the 13th June 1990,
when they might have been sold for $600.
2. The register of directors and secretaries must be open to/for
inspection by shareholders.
3. When an investor owns between 20% and 50% of the voting
common stock of the investee, the investor is generally deemed to
exercise significant influence over operating and financial policies of
the investee.
4. The company claimed that Mr. White was receiving a director's
fee and attending board meetings.
5. Each Federal Reserve Bank has nine directors.
36
INTERNATIONAL INVESTMENT
6. Dividend-paying companies frequently increase the amount of

dividends they pay, while bond interest is never increased.
7. Most industrial holding companies rely on the upstreaming of
cash from their subsidiaries.
IV. Translate the sentences from Russian into English.
1) Термин "транснациональная корпорация" означает субъ¬
ект экономической деятельности, производящий свои операции
более чем в одной стране, или группу субъектов экономической
деятельности, производящих свои операции в двух или более
странах, независимо от того, в какой юридической форме они
выступают, находятся ли в своей собственной стране или стра¬
не, в которой осуществляются операции, а также независимо от
того, осуществляют ли они свою деятельность в индивидуальном
или коллективном качестве.
2) Транснациональные корпорации и другие предприятия
действуют в соответствии с правилами справедливой деловой
практики, маркетинга и рекламной деятельности, а также прини¬
мают необходимые меры по обеспечению безопасного характера
и надлежащего качества производимых ими товаров и предостав¬
ляемых услуг, включая принцип предосторожности. Они также
не производят, не распространяют, не реализуют на рынках и
не рекламируют среди потребителей вредные или потенциально
вредные товары.
Ст.13. Нормы, касающиеся обязанностей транснациональных
корпораций и других предприятий в области прав человека
UNIT 2 INTERNATIONAL INVESTMENT
1. What do you know about international investment? Choose

the right answer.
1) Friendship, commerce and navigation treaties were common in¬
struments throughout . century.
th th th
a) the 19 century and the beginning of the 20 ; b) the 18 century
th th
and the beginning of the 19 c) the 20 century and the beginning of
th
the 21 .
2) The ICSID Convention was opened for signature on March 18,
... and entered into force on October 14, ... .
a) 1966; 1967 b) 1965; 1966 c) 1964; 1965
37
UNIT 2
3) The WTO's aims are to continue the work of . in agreeing

international trading rules and furthering the liberalization of interna¬
tional trade.
a) OECD b) GATT c) ASEAN
4) . is designed to reduce distortions and impediments to inter¬
national trade while taking account of the need to promote effective
protection of intellectual property rights.
a) NAFTA b) ASCM c) TRIPS
5) . was set up in 1961 to supersede the OEEC.
a) Organization for Economic Cooperation and Development b)
Association of South-East Asia Nations c) International Trade Orga¬
nization.
2. Consult your dictionary for the right stress in the following
words and memorize their meaning.
alien, sojourn, reciprocal, multifaceted, multilateral, insufficient,
eligible, entirely, differentiate, curtailment, tenuous, siege social, tri¬
bunal
3. Read the following text and give synonyms for the underlined
words.
INTERNATIONAL I N V E S T M E N T
International rules related to investment issues have a long history.
They are multifaceted and span the bilateral, regional and multilateral
levels. They can take the form of binding or voluntary instruments set¬
ting out different types of commitments, which often overlap.
BILATERAL RULES
FRIENDSHIP, COMMERCE AND NAVIGATION TREATIES

Friendship, Commerce and Navigation (FCN) Treaties were com-
mon instruments throughout the 19th century and the beginning of the
20th century, primarily concerned with the trade and shipping rights
of individuals. One important feature, sometimes regulated in separate
treaties on establishment, was the reciprocal granting to citizens (but
generally not to corporations) of the other party of rights to entry,
commercial establishment, protection of property, access to courts and
recognition of foreign legal personality. A series of treaties negotiated
before World War I I also gave corporations legal status and access to
foreign courts. However, as corporate involvement in international
38
trade and production expanded, old commercial treaties became in¬

sufficient and it became necessary to negotiate new treaties granting
corporations legal status and the right to function abroad.
The postwar friendship, commerce and navigation treaties are broad
in scope, dealing with such matter as the right to entry and sojourn,
freedom of conscience, of information gathering and dissemination,
the protection of persons, treatment of nationals and companies, ac¬
cess to domestic courts and tribunals, transparency and publication
of laws and regulations, acquisition and disposal of property, protec¬
tion of property and expropriation, taxation, competition, transfer of
payments, shipping, social security and prevention and settlement of
disputes. As under general international law the host state has the right
to regulate the legal situation of aliens and foreign companies in its
territory, within the boundaries of an uncodified, and thus contro-
versial, 'international minimum standard', the purpose of friendship,
commerce and navigation treaties was to extend and clearly define
the rights of the contracting parties' nationals and companies beyond
that minimum standard required by international law. The general
aim was not to give foreign corporations greater rights than domestic
companies, but rather to assure them of the right to conduct business
on an equal basis without suffering discrimination due to their foreign
origin.
BILATERAL INVESTMENT TREATIES

Starting in the 1960s, friendship, commerce and navigation treaties
have gradually given way to more specialized instruments, the Bilateral
Investment Treaties (BITs), mainly — i f not entirely — focused on
investment protection issues.
Bilateral investment treaties are designed to protect, promote and
facilitate foreign investment and constitute to date the most widely used
instrument for these purposes. Unlike friendship, commerce and navi¬
gation treaties, bilateral investment treaties have traditionally been ne¬
gotiated between developing countries seeking to attract international
investment and developed countries as the principal homes to foreign
investors. Developing countries, as hosts to foreign direct investment
(FDI), concluded bilateral investment treaties in order to create a favou¬
rable climate and in some cases to become eligible to participate in political
risk insurance programmes organized by capital-exporting countries.
A BIT's main provisions deal with the scope and definition of
foreign investment; admission of investments; national and most-fa-
39
UNIT 2
voured-nation treatment; fair and equitable treatment; guarantees and

compensation in respect of expropriation; guarantees of free transfer
of funds and repatriation of capital and profits; and dispute-settlement
provisions, both State-to-State and investor-to-State. This latter fea¬
ture is one of the main innovations which differentiate significantly
friendship, commerce and navigation treaties and bilateral investment
treaties, together with a curtailment of the wide right of entry which
characterized many of the friendship, commerce and navigation trea¬
ties. The acceptability of investor-State arbitration was significantly
advanced by the conclusion in 1965 of the Washington Convention.
SCOPE OF APPLICATION
The main objective of bilateral investment treaties is to protect
investment made by investors of one party in the territory of the other
party. In order to maximize such protection, there is a marked ten¬
dency in current bilateral investment treaties practice to use a broad,
asset-based, definition of the term 'investment'. The latter typically
includes movable and immovable property, tangible and intangible
assets, intellectual property, as well as equity and other interest in
companies. Most bilateral investment treaties do not distinguish be¬
tween direct and portfolio investment. Both minority and controlling
interests are generally protected. Furthermore, a broad definition may
cover new forms of investment that parties did not consider specifi¬
cally at the time of negotiation. Instead a more restricted definition
may require re-negotiation of the treaty in order to enlarge the scope
over time.
Bilateral investment treaties must also define to which investors the
substantive provisions set out in a treaty apply. A capital importing
country may be reluctant to grant the benefits of a bilateral investment
treaty to persons and companies having only a tenuous relationship with
its treaty partner (for example, so-called 'shell' or 'mail-box' compa¬
nies). Establishing the nationality of the investor is thus fundamental.
The definition of the term 'investor' usually includes natural persons
and juridical entities, often referred to generically as 'companies'.
Bilateral investment treaties have in recent years tried to address
such complexities, often by combining the traditional nationality tests
or criteria, namely the place of incorporation; the location of the
'seat' of the corporation (sometimes referred to as the siege social,
real seat, or the principal place of management); and the nationality
40
of the shareholders who own or control the corporation. The place of

incorporation, organization or constitution of a company is a widely
used criterion to determine nationality thanks to its ease of applica¬
tion. However, i f used in isolation, such a test lends itself to granting
nationality to a company that has only a formal link with the country
of incorporation and does not engage in any economic activity there.
Americo Beviglia Zampetti and Pierre Sauve
"International investment"
column B. Make up sentences using them.
A B
1) legal a) investment
2) portfolio b) assets
3) movable c) interest
4) minority d) conscience
5) place of e) country
6) intangible f) personality
7) legal g) treaty
8) exporting h) status
9) commercial i) incorporation
10) freedom of j) property
ing words and phrases.
1) развивающиеся страны; 2) развитые страны; 3) прямые
иностранные инвестиции; 4) двустороннее инвестиционное со
глашение; 5) страна-экспортер; 6) в отношении; 7) договор о
дружбе, торговле и мореплавании; 8) документ; 9) право об
ращения в суд, право доступа в суд; 10) правосубъектность;
11) международная торговля; 12) торговый договор; 13) право
вой статус; 14) свобода совести; 15) прозрачность; 16) налогоо
бложение; 17) перечисление платежей; 18) государство пребыва¬
ния; 19) иностранная корпорация; 20) отечественная компания;
21) контрольный пакет акций; 22) слабая связь; 23) миноритар¬
ный [неконтрольный] пакет; 24) недвижимое имущество; 25) не¬
материальные активы; 26) движимое имущество; 27) материаль¬
ные активы 28) портфельные инвестиции; 29) интеллектуальная
собственность; 30) гражданство; 31) физическое лицо; 32) юри¬
дическое лицо; 33) место регистрации компании.
41
UNIT 2
A D M I S S I O N AND P R O M O T I O N O F I N V E S T M E N T
CUSTOM FULFIL
INVEST FACILITATE
ESTABLISH DISSEMINATE
CONSOLIDATION
Under 1) ... international law states have the sovereign right to
regulate and prohibit or condition the admission of 2)... and inves¬
tors in their territory, in line with their right to admit or not aliens.
The exercise of such a right may be motivated by a desire to preserve
national economic or other public policy goals. The current practice
in bilateral investment treaties is to follow this approach. Only a very
few bilateral investment treaties confer any right of 3). to investors.
In general, treaty protection only comes into play after the investment
has been admitted.
With regard to admission, 4)... BITs' practice refers to the need to
admit investment in accordance with the laws and regulation of the
host country. This may mean that admission can be subject to the 5).
of special conditions, such as the training of local personnel or the
reinvestment of profits. Most bilateral investment treaties stress, with
various formulations, the importance of 6). or encouraging invest¬
ment, creating favourable conditions and the like. Other areas that
are often mentioned in 'best endeavour' terms or subject to domestic
legislation, include: the exchange of information on investment oppor¬
tunities, the 7). of law and regulation affecting investment, consulta¬
tion mechanisms, the granting of work permits to key and technical
personnel.
1) The postwar friendship, commerce and navigation treaties are
broad in scope, dealing with such matter as . .
2) Friendship, Commerce and Navigation Treaties were common
instruments throughout . .
3) Bilateral investment treaties have in recent years tried to address
such complexities, often by combining . .
4) Most bilateral investment treaties do not distinguish between . .
5) Unlike friendship, commerce and navigation treaties, bilateral
investment treaties have traditionally been negotiated between . .
42
6) The acceptability of investor-State arbitration was significantly

advanced by the conclusion in . .
7) In general, treaty protection only comes into play after . .
8) Bilateral investment treaties are designed to . .
9) A BIT's main provisions deal with . .
10) The definition of the term 'investor' usually includes . .
1) something given as reparation for loss, injury, etc.; indemnity;
2) to make or become less in amount, intensity, degree, etc;
3) to impose as a necessity; make necessary;
4) to make something certain to happen; guarantee;
5) to make less in size, amount, degree, importance, etc., or bring
into a different, usually worse, state;
6) using unlimited personal power without considering other peo¬
ple's wishes;
7) to begin or originate;
8) of government: the action of forcibly divesting another of a
property interest, as by eminent domain;
9) to spoil or weaken (something) so that it is less effective;
10) coming from a different country, race, or group; foreign.
STANDARDS O F T R E A T M E N T
In addition to any admission standards, bilateral investment treaties
provide for a series of standards of treatment once an investment has
been established. In current practice various formulations are used.
Many bilateral investment treaties explicitly require the host country
to afford investments covered by the treaty treatment no less favour¬
able than that required by international law. Many bilateral investment
treaties also refer to 'fair and equitable treatment', 'full protection and
security', 'prohibition of arbitrary and discriminatory measures' and
the like. All these are minimum standards of treatment provided under
international law.
The prohibition of arbitrary and discriminatory measures refers to
the prohibition of actions against foreign investors in general or spe¬
cific groups of foreign investors. Some bilateral investment treaties
include only general language to this effect, while others specify com¬
mitments with regard to both most favoured nation treatment (MFN)
and national treatment (NT).
43
UNIT 2
Most favoured nation treatment provides that investors and invest¬

ment of one party will not be treated less favourably in the other party
than any third party investor or investment. Thus with regard to post-
establishment treatment (once admission has been granted), the most
favoured nation treatment provision links the existing bilateral invest-
ment treaties concluded by any one country in a network and has the
effect of ratcheting up the treatment of all treaty partners' investors
and investments to the highest agreed denominator. National treat¬
ment ensures that investors and investment of one party will receive
from the host party treatment no less favourable than the treatment
given to investors and investment of the host party.
EXPROPRIATION
In the 1960s many developed countries initiated bilateral invest¬
ment treaties as a way to protect their investments abroad against the
growing risks of expropriation and nationalization. Such risks have
greatly abated in recent years. Provisions on expropriation typically
apply to actions by a country that substantially impair the value of an
investment, regardless of whether they amount to an isolated event or
whether they are part of a major structural reform in the economy.
Most bilateral investment treaties apply the expropriation provisions
to 'indirect expropriations', namely, when the host country takes an
action that substantially impairs the value of an investment without
necessarily assuming ownership of the investment.
Furthermore, most bilateral investment treaties are also understood
to apply expropriation provisions to 'creeping expropriations', which
refer to expropriations carried out by a series of legitimate regulatory
acts over a period of time whose ultimate effect is to substantially re¬
duce the value of an investment.
Bilateral investment treaties impose certain conditions on expro¬
priation if it is to be considered lawful. This follows general inter¬
national law, where there is no rule that would bar expropriation of
alien property provided that such action is undertaken for a public
purpose, in a non-discriminatory manner, in accordance with due
process of law and upon payment of compensation. All these condi¬
tions are generally stipulated in typical bilateral investment treaties.
Thus if a direct or indirect expropriation takes place, compensation is
due. Many disputes have revolved around the amount and modalities
of such compensation.
44
A B
1) dispute b a) defence
2) lawful b) conflict
3) current c) foreign
4) compensation d) modern
5) protection e) obligation
6) general f) redress
7) alien g) legal
8) commitment h) common

1. The Board has the authority to grant authorization to carry .
a restrictive trade practice.
2. The bank thus undertakes to the payee ... the cheque that the
cheque will be honoured regardless ... the state of the customer's ac¬
count . the bank.
3. The system . law regulating the interrelationship of sovereign
states and their rights and duties . regard . one another.
4. The financial system refers . the complex of markets and in¬
stitutions which help move capital (or cash) ... suppliers of capital ...
demanders of capital.
5. . the Trustee Investments Act 1961 trustees could invest not
more than half the trust fund . shares in certain companies.
6. The charterparty may provide . t h e payment of dispatch money
when the charterer saves days . loading or discharging the cargo.
7. He collects the assets, pays debts, and distributes any surplus .
company members . accordance . their rights.
lowing words and phrases and make up sentences using them.
1) режим наибольшего благоприятствования; 2) националь¬
ный режим; 3) собственность иностранцев; 4) налагать условия;
5) выплата возмещения; 6) безопасность
12. Choose the words from the group below to complete the text.
It may be necessary to change the form of the given words.
develop, contract, difficult, require, sufficient, common, obligate,
convert, payment, exhaust
45
UNIT 2
T R A N S F E R O F FUNDS
The provisions on the transfer of 1) . are quite important as
they concern a key aspect on which the interests of the host coun¬
try and the foreign investor may differ. Host countries often prefer
that profit be reinvested or otherwise used in the domestic economy.
Furthermore, 2) . countries often incur balance-of-payments 3) .
that the sudden repatriation of large profits or the proceeds from sale
or liquidation can worsen. As a result they generally seek some form
of flexibility. However, foreign investors regard the timely transfer of
income, capital and other payments as an indispensable 4) . to op¬
erate and benefit from their investment projects, and to meet their
obligations vis-a-vis shareholders, 5) creditors or licensors. Virtu¬
ally every bilateral investment treaty has a provision on the transfer of
payments, but there are important differences among them in terms
of specific wording. With regard to the categories of transfers covered,
bilateral investment treaties generally address the repatriation of the
capital invested, the transfer of returns generated by an investment
and dividends to the investor's shareholders, current payments made
in relation to an investment (i.e. amounts that may be needed to pay
current expenses, the interest and principal on loans, or other 6) .
incurred by the investor, such as royalties), and proceeds from the sale
of all or part of the investment.
Two main approaches are 7) . practice. The first is to guarantee
the free transfer of all payments related to, or in connection with, an
investment, accompanied by an illustrative list of covered payments.
The second approach is simply to include an 8) . list of the types of
payments covered by the transfer provisions. Bilateral investment trea¬
ties, with a variety of solutions, guarantee to investors the possibility
of transferring payments in a freely 9) ... currency, without delay and
at a specified exchange rate (the official rate, the market rate or some
other rate). Exceptions generally allow for a limited delay in cases of
emergencies, such as in instances of 10) ... foreign currency reserves.
However, exceptions are to be administered on a non-discriminatory
basis. In some instances, transfer guarantees are limited by the explicit
application of the exchange control laws of the host country.
DISPUTE RESOLUTION
Investment disputes under bilateral investment treaties may involve
disputes between one State and investors of the other State, or between
46
the two States parties to the treaty. They are addressed in different
provisions. Disputes between purely private parties are normally re-
solved through recourse to the courts of the State that has jurisdiction,
or to commercial arbitration. With regard to disputes between one
party, generally the host country, and investors of the other party, cur¬
rent BITs' practice provides for recourse to agreed third party dispute
settlement mechanisms: consultation and negotiation but above all ar-
bitration. This allows investors to avoid submitting the disputes to the
courts of the host State (which could be biased or perceived as such)
or to ask for the diplomatic protection of its home State.
Only a few bilateral investment treaties require that the investor
exhaust local remedies before resorting to arbitration. The advantage
of arbitration is that the dispute is handled in an international legal
forum, generally removed from political interference and able to de¬
liver a speedy resolution. The methods for resolving disputes between
States parties to bilateral investment treaties involving the application
or interpretation of the treaty are also typically spelled out in a number
of provisions in bilateral investment treaties.
While the provisions regarding State-to-State disputes are generally
rather short, calling for ad hoc arbitration in case consultations fail,
most bilateral investment treaties contain rather elaborate provisions
on the settlement of disputes between an investor and the host country
(so-called investor—State disputes), regarding the composition of the
arbitration panel, timeframes, the scope of arbitrable disputes, and
procedural rules.
While current practice features several variations, the general trend
is to give investors a choice of arbitral mechanisms through institutions
such as the World Bank's International Centre for the Settlement of
Investment Disputes (ICSID) and its affiliated Additional Facility for
host countries which are not party to the Washington Convention, the
International Chamber of Commerce or the various regional arbitra¬
tion centres, or through reference to other arbitral rules, such as those
established by the United Nations Commission on International Trade
Law (UNCITRAL).
The inclusion in bilateral investment treaties of various institutional
options to conduct arbitration is generally regarded as an expression of
consent to arbitration on the side of the host state. Such consent is ex¬
pressly stated in some cases, such as in the US practice. Investors have
to provide their own written consent to arbitration. Arbitration awards
are then binding on the parties. Arbitration proceedings are generally
confidential, and awards are sometimes published. Participation of
47
UNIT 2
amici curiae is normally not allowed. Enforcement is usually carried

out on the basis of the provisions of the New York Convention..
14. Solve the puzzle using the information from the above text.
1) consent — acquiescence to or acceptance of something done or
planned by another; permission;
2) any of the methods available at law for the enforcement, protec¬
tion, or recovery of rights or for obtaining redress for their infringement;
3) a discussion set up or intended to produce a settlement or
agreement;
4) the power of a court to hear and decide a case or make a certain
order;
5) the determination of a dispute by one or more independent third
parties (the arbitrators) rather than by a court;
6) an official agreement that finishes an argument;
7) the process by which funds are deployed with the object of produc¬
ing gain, either in the form of income or addition to capital.
8) a statement within an agreement or a law that a particular thing
must happen or be done, especially before another can be;
9) to violate or break (a law, an agreement, etc.);
10) to involve yourself in matters which are connected with other
people when your involvement is neither wanted nor helpful.
d j t a r b i t r a t i o n t r o
o u r t a e k e o k p e b i t u e
r r e a t s e t t l e m e n t d i
e i p c e o h e s a b e t t o u n
h s o o p r o v i s i o n e r n v
k d a n a e t h k o p n a r a d e
e i h s w r t l p o y t e f c e s
a c l e h w a s o p e m k e e l t
n t i n f r i n g e t u a r t o m
p i p t a r e h u i r e m e d y e
t o v e n o p y t a c o l u t e n
s n e g o t i a t i o n e t u t t
48
15. Give Russian equivalents for the following words and expres¬
sions from the text and use them in the sentences of your own.
1) negotiation; 2) consultation; 3) dispute settlement; 4) with re¬
gard to; 5) commercial arbitration; 6) investment disputes; 7) diplo¬
matic protection; 8) arbitration award; 9) on the basis of; 10) pro¬
vision; 11) exhaust local remedies; 12) resort to; 13) application or
interpretation of a treaty; 14) ad hoc arbitration; 15) arbitration pan¬
el; 16) International Centre for the Settlement of Investment Disputes
(ICSID); 17) International Chamber of Commerce; 18) United Na¬
tions Commission on International Trade Law (UNCITRAL).
1. The prohibition of arbitrary and discriminatory measures refers
to the prohibition of actions against foreign investors in general or
specific groups of foreign investors.
2. Arbitration awards aren't binding on the parties.
3. In the 1960s many developing countries initiated bilateral invest¬
ment treaties as a way to protect their investments abroad against the
growing risks of expropriation and nationalization.
4. Compensation isn't due if a direct expropriation takes place.
5. Bilateral investment treaties don't guarantee to investors the pos¬
sibility of transferring payments in a freely convertible currency, with¬
out delay and at a specified exchange rate.
6. Investment disputes under bilateral investment treaties may in¬
volve disputes only between one State and investors of the other State.
7. Disputes between purely private parties are normally resolved
through recourse to the courts of the State that has jurisdiction, or to
commercial arbitration.
8. Only a few bilateral investment treaties require that the investor
exhaust local remedies before resorting to arbitration.
9. The advantage of arbitration is that the dispute is handled in an
international legal forum, generally removed from political interfer¬
ence and able to deliver a speedy resolution.
10. Arbitration proceedings are rarely confidential, and awards are
never published.
17. Read the texts and choose the most suitable sentence from
the list (A — E) for each gap. There is one extra sentence which
you do not need to use. There is an example in the beginning.
A) Under this charter, investment protection was dependent on the good¬
will of the host State and the principle of national sovereignty was reaffirmed.
49
UNIT 2
1 — B) On the other hand, there are agreements such as the 1998

FTA between the Caribbean Community and the Dominican Republic
or the 2000 US-Vietnam Agreement on Trade Relations that basically
contain bilateral investment treaty-like provisions within the agree¬
ment.
C) The general aim of these agreements is to create a more favour¬
able investment climate through a combination of investment liberali¬
zation and protection measures, with a view to increasing the flow of
investment within or between regions.
D) In response, to more effectively attract foreign equity invest¬
ment, a number of stock exchanges around the world have adopted
audit committees to increase transparency and competence in the
management of their listed member companies.
E) Finally, and most recently, efforts to include investment ne¬
gotiations proper within the WTO negotiating purview have proven
deeply contentious, contributing significantly to the derailment of the
WTO's December 2003 ministerial meeting in Cancun.
REGIONAL RULES
The universe of regional instruments on investment or including
investment rules does not attain the proportions of the bilateral in¬
vestment treaty phenomenon, but is still vast, diverse and growing.
Such instruments are today creating an intricate web of overlapping
commitments. While bilateral investment treaties have a distinct focus
on matters of investment protection, regional integration agreements
(RIAs) are often geared towards liberalization even though an impor¬
tant (and increasing) number of them also address investment protec¬
tion issues. According to notifications made to the WTO, over 190
regional trade agreements are currently in force and several dozens are
reportedly planned or already under negotiation.
Various recent agreements linking the European Union with third
countries also refer to the possible conclusion of bilateral investment
treaties between Member States of the European Union and the third
countries in question. [ 1 — B ]. At a regional level, only a few in¬
struments are entirely devoted to investment, such as the Framework
Agreement on the ASEAN Investment Area and the Andean Com¬
munity's Decision 291 (adopted in 1991). However, a growing number
of regional agreements have included in the last few years a compre¬
hensive set of investment disciplines. The North American Free Trade
Agreement (NAFTA), the MERCOSUR Protocols and the Treaty
Establishing the Common Market for Eastern and Southern Africa
50
(COMESA) are all examples. [ 2 ] . The great diversity of regional

instruments and the country configurations they bring together have
generally meant that the degree of commonality in terms of agreed
rules is much less marked in such agreements than in the case of bi¬
lateral investment treaties.
MULTILATERAL RULES
To this very day, as can be seen from the fact that investment has
failed to stay on the agenda of the World Trade Organization's ongo¬
ing Doha Development Agenda negotiations, the history of multilater¬
al rule-making on investment remains a troubled one. The investment
chapter of the 1948 Havana Charter was one of the main reasons for
the failure of the proposed International Trade Organization (ITO)
project. In the General Agreement on Tariffs and Trade (GATT), no
further investment-related negotiations would take place, up until the
Uruguay Round negotiations launched in the mid-1980s. In the Unit¬
ed Nations, immediately after decolonization, developing countries
clubbed together and pushed through many (non-binding) resolutions,
including the Charter of Economic Rights and Duties. [ 3 ] . The
US and other developed countries opposed this approach and sought
stronger rules to protect investors and their investments. Develop¬
ing countries were generally hostile towards stringent investment rules
for fear of losing their new-found sovereignty to foreign investors.
The attempt to negotiate a U N Code of Conduct on Transnational
Corporations was abandoned in the early 1990s after many years of
deliberations. Yet throughout this entire period, both the bilateral and,
more recently, the regional routes to investment rule-making have
been actively pursued, resulting in generally high standards of invest¬
ment protection and liberalization.
Several other attempts at crafting a global investment regime would
prove stillborn, including the proposed Multilateral Agreement on In¬
vestment (MAI) initiative in the OECD in the late 1990s, which repre¬
sented a major attempt at crafting a multilateral (if far from universal)
regime for investment. [ 4 ]. As part of the price to pay for imparting
renewed momentum to the stalled Doha Development Agenda, WTO
Members agreed in July 2004 that foreign investment would (alongside
two other so-called 'Singapore Issues' — trade and competition and
transparency in government procurement) be taken off the WTO nego¬
tiating table for the duration of the current negotiating round.
Accordingly, in terms of binding multilateral rules, what survives
from the multiple initiatives of the past half century are the rules that
51
UNIT 2
were agreed in the Uruguay Round of trade negotiations, concluded

in 1994. Of these, by far the most important elements are the Agree¬
ment on Trade-Related Investment Measures (TRIMs) and the General
Agreement on Trade in Services (GATS), followed by the Agreement
on Subsidies and Countervailing Measures (ASCM), the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPs), and the
Understanding on the Settlement of Disputes (DSU), the latter three
having a less direct impact on rule-making in the investment field.
A B
1) binding e a) showing strong dislike; unfriendly
2) stringent b) to gather or become gathered into a group
c) requiring strict attention to rules, procedure,
3) transparency
detail, etc.
4) deliberation d) a schedule or list of items to be attended to
5) hostile e) imposing an obligation or duty
6) protect f) is a lack of success in doing something
g) formal discussion and debate, as of a
7) club
committee, jury, etc.
h) an obligation, promise, etc. that restricts one's
8) failure
freedom of action;
9) agenda i) the characteristic of being easy to see through
j) to keep (someone or something) safe from
10) commitment
injury, damage or loss
19. Translate the following abbreviations into Russian.

1) ASEAN; 2) COMESA; 3) NAFTA; 4) ITO; 5) GATT;
6) TRIPs; 7) OECD; 8) WTO; 9) Agreement on TRIMs; 10) ASCM.
20. Translate the following text into Russian.
I N V E S T M E N T - R E L A T E D R U L E S IN T H E WTO
As the discussion below shows, the WTO already features a rich
harvest of investment-related provisions. This may come as a surprise
in light of the determined attempt of many GATT members to eschew
a meaningful discussion of investment matters at the outset of the
Uruguay Round. That the Marrakesh Agreement establishing the WTO
contains as many investment related provisions — most notably in the
TRIMs Agreement and, particularly in the GATS — must be ascribed
to the rapidly changing policy environment within which the Uruguay
Round took place.
52
This fertile environment, characterized by a number of far-reaching

changes in policy and rule-making approaches which gained currency
in a growing number of developed and developing countries, was one
the multilateral trading system was able to internalize (albeit partially)
by the time the Uruguay Round was completed. Among such changes
were: (I) the growing recognition of the increasingly complementary
relationship between trade and investment in a globalizing world
economy; (II) heightened awareness, particularly among developing
countries, of the policy signalling benefits to be derived from credible
commitments in the areas of trade, investment, and intellectual
property protection; (III) a greater appreciation of the key contribution
of services in promoting economy-wide efficiency gains and the central
role played by investment as the principal means of securing market
access and enhancing the contestability of service markets; and (IV)
a significant worldwide push towards investment regime liberalization,
often pursued on a unilateral basis and closely tied to efforts aimed at
regulatory reform in key sectors, many of them key service sectors such
as energy, telecommunications, finance and transportation services. In
what follows, we briefly review the salient features of the Uruguay
Round's harvest of investment-related disciplines.
21. Read the following text and give synonyms for the under¬
lined words.
A G R E E M E N T ON T R A D E - R E L A T E D I N V E S T M E N T
MEASURES
The stated objectives of the Agreement on Trade-Related Invest¬
ment Measures (the TRIMs Agreement) include not only the promo¬
tion of the expansion and progressive liberalization of world trade but
also the facilitation of investment across international frontiers. The
TRIMs Agreement prohibits the application of certain investment mea¬
sures related to trade in goods to enterprises operating within the ter¬
ritory of a Member. It should be noted that the TRIMs Agreement is
concerned with the discriminatory treatment of imported and exported
goods and is not specifically concerned with the treatment of foreign le¬
gal or natural persons. Thus, the basic substantive provision in Article 2
of the TRIMs Agreement prohibits the application of any trade-related
investment measure that is inconsistent with the GATT's provisions
on national treatment or the elimination of quantitative restrictions.
These cover essentially the following types of measures: local content
requirements, trade-balancing requirements, foreign exchange balancing
53
UNIT 2
requirements and restrictions on exportation. The Agreement bans not

only TRIMs that are obligatory in nature, but also those whose com¬
pliance is necessary in order to obtain an advantage. It applies only to
investment measures related to trade in goods. It does not cover trade
in services. Measures concerning service industries are addressed by the
GATS, which does not contain explicit rules dealing with TRIMs, al¬
though these may be subject to specific negotiated commitments.
Article 5 of the TRIMs Agreement contains provisions for the no¬
tification of, and for according transitional periods for the elimination
of, trade-related investment measures inconsistent with the Agreement
existing at least 180 days prior to entry into force of the WTO. Under
Article 5.1 States that were members of WTO on 1 January 1995 were
required to notify to the Council for Trade in Goods, within 90 days
after the date of entry into force of the WTO Agreement, any TRIMs
that were not in conformity with the Agreement. With regard to transi¬
tion periods, developed, developing and least-developed countries were
given, respectively, two, five and seven years from the date of entry into
force of the WTO Agreement to eliminate notified TRIMs (Art. 5.2).
Furthermore, upon request, the transition period could be extended for
developing and least-developed countries that demonstrate particular
difficulties in implementing the provisions of the Agreement (Art. 5.3).
After protracted negotiations, such an extension was granted to Argen¬
tina, Colombia, Malaysia, Mexico, Pakistan, the Philippines, Romania
and Thailand until the end of 2003, subject to certain criteria, such as
the submission of a phase-out plan for the TRIMs measures.
Export performance requirements are another type of performance
requirement often imposed on foreign investors. For various domestic
economic policy reasons, these force foreign affiliates to export a larger
share of the local output than might otherwise be the case. They increase
the cost of local sales by an amount that equals the cross-subsidy needed
to keep the share between export and local sales above the stipulated
limit. Neither the TRIMs Agreement nor any other WTO rules forbid
the imposition on foreign investors of requirements to export a minimum
amount of domestic production. An important GATT dispute settlement
panel ruling clarified this point in 1984. The panel considered a complaint
by the United States regarding certain types of undertaking which were
required from foreign investors by Canada as conditions for the approv¬
al of investment projects. These undertakings pertained to the purchase
of certain products from domestic sources (local content requirements)
and to the export of a certain amount or percentage of output (export
performance requirements). The Panel concluded that the local content
54
requirements were inconsistent with the national treatment obligation of

Article III:4 of the GATT but that the export performance requirements
were not inconsistent with GATT obligations. The Panel emphasized that
at issue in the dispute before it was the consistency with the GATT of spe¬
cific traderelated measures taken by Canada under its foreign investment
legislation and not Canada's right to regulate foreign investment per se.
This panel decision confirmed that existing obligations under the GATT
were applicable to performance requirements imposed by governments in
an investment context in so far as such requirements involve trade-distorting
measures. At the same time, the Panel's conclusion that export performance
requirements were not covered by the GATT also underscored the limited
scope of existing GATT disciplines with respect to such trade-related per-
formance requirements. The subsequent Uruguay Round negotiations would
not change this situation. The coverage of WTO rules on performance re¬
quirements is thus basically limited to the measures included in the TRIMs
Illustrative List and does not extend to export performance requirements.
22. Fill in the gaps using the words from the right column.
1. The sanctions will involve a ... on all military,a) export
economic, cultural and sporting links. e
2. This part of the law is only ... to companies b) force
employing more than five people.
3. Britain must try to ... fewer goods from overseas, c) applicable
so as to help her own industries.
4. They sell to their own country but they don't yet e) ban
... to other countries.
5. The major condition for open ... within Schengen f) existing
is effective controls on the external borders.
6. Goods, which are importable without any g) domestic
may be imported by any person whether he is an
actual user or not.
7. The law comes into ... with effect from January 1. h) frontiers
8. The transfers of funds from . accounts to offshore i) requirements
accounts will only be permitted for transactions
initiated prior to December 1, 1986
9. This Bill is designed to bring our laws into line j) restriction
with ... practice.
10. The government has decided it will comply with k) import
the requirements of the E U Commission.
55
UNIT 2

VERB NOUN NOUN ADJECTIVE
(person) (abstract)
include
prohibition
eliminate
notifiable
exporter
import
1. The Regulations also contain protections ... respect ... night
working.
2. The Perjury Act 1911 also creates various offences related .
perjury.
3. The Act is also concerned . certain aspects of parliamentary
control.
4. Transnational corporations operate in such a way that they exer¬
cise a uniform, cohesive, and common policy . order . further their
economic interests.
5. A hostile witness may, with the permission of the court, be
cross-examined by that party, for example by putting to him a previous
statement that is inconsistent . his present testimony.
6. Shares in private companies and partly paid shares may be sub¬
ject to restrictions . transfer.
7. The Act applies . children under 18.
8. All the arrangement for your shipment will be done . conform¬
ity . your instructions.
9. International law is also known as public international law to
distinguish it from private international law, which does not deal .
relationships between states.
10. Since the establishment of the United Nations, self-help ...
regard . use of force can only be legal in so far as it forms part of a
legitimate claim to self-defence.
11. Conditions may be imposed . a person released on bail by the
police.
25. Read the following text and explain the words and phrases in bold.
CONCLUDING REMARKS
The advantages and disadvantages of international investment
agreements differ depending on whether these are bilateral, regional
56
or multilateral in scope. Advantages and disadvantages can be viewed

from different perspectives, such as those of host versus home
countries, and also specifically with regard to the issues covered, the
inclusion of development-related provisions, the impact on induced
foreign direct investment flows and the bargaining power configuration
in negotiations.
One of the main reasons for the popularity of bilateral investment
treaties is the fact that they provide flexibility to host countries, affording
them the possibility to screen and channel foreign direct investment (as
admission is generally subject to the respect of domestic laws of the host
country), while at the same time extending the necessary protection
to foreign investors. However, bilateral investment treaties generally
involve countries at different levels of development, with asymmetrical
bargaining power and negotiating capabilities. Furthermore, available
empirical evidence does not suggest a significant impact of bilateral
investment treaties on investment flows. Finally, investor-to-State
dispute settlement mechanisms which complement investment
protection provisions may give rise to high costs and liabilities for
developing countries, in addition to raising potentially controversial
issues relating to the right to regulate in the public interest.
Regional instruments use, even to a larger extent than bilateral
investment treaties, all the panoply of traditional international law
tools, such as exceptions, reservations, transition periods and the like, to
ensure flexibility in obligations so as to cater to the needs and capacities
of parties at different levels of development. From the perspective of
developing countries, this, together with the growing recognition of the
links between trade and investment flows, may explain why investment
rules are increasingly found in regional integration agreements that
were hitherto primarily concerned with trade issues. The combination
of investment liberalization and improved trade (market) access at the
regional level has, in some cases, proved very beneficial to developing
country parties to regional integration agreements. As both regional
integration agreements addressing investment issues and bilateral
investment treaties have multiplied in number, they have also created
an intricate web of overlapping commitments.
This is one of the main arguments cited in favour of creating a common,
multilaterally agreed, framework for investment that, in the words of the
WTO Doha Ministerial declaration, would 'secure transparent, stable
and predictable conditions for long-term cross-border investment,
particularly foreign direct investment'. Proponents of a unified WTO
compact on investment have argued that a new multilateral framework
57
UNIT 2
of rules could 'lock in' autonomous as well as bilaterally and regionally

negotiated liberalization and extend the benefits of such openness on
an most favoured nation basis, thus preventing possible policy reversals
where liberalization measures have yet to be consolidated.
The counter-argument that has been voiced recalls that a multi-
layered set of investment rules already exists across bilateral investment
treaties, regional instruments and also at the multilateral level, especially
under the WTO's TRIMs Agreement and the GATS, alongside a host
of soft law instruments and recommendations on issues such as bribery
and corruption, corporate social responsibility, etc. Existing rules
may be far from perfect and coherent, but it has generally proved
difficult for the advocates of investment negotiations at the WTO to
advance proposals suggesting that a clearly superior set of rules could
be agreed upon in a multilateral setting. Furthermore, the complexity
of overlapping investment rules and regulations would likely persist,
unless bilateral investment treaties and investment rules in regional
instruments were superseded by a multilateral agreement. At the same
time, it remains the case that in the current WTO system an imbalance
exists between the treatment enjoyed by investors in service sectors,
which are already covered by GATS rules, and the treatment enjoyed
by all other investors.
From a development perspective, the question of the appropriate
rulemaking 'level' — bilateral, regional or multilateral — cannot be
separated from an examination of the actual or potential content
of investment rules and commitments. A l l international investment
agreements are instruments of cooperation between countries that
are entered into voluntarily. Like all treaties, international investment
agreements are neutral instruments: what counts in determining their
impact on the development prospects of developing countries is their
content and so far the development-specific content of such agreements
has been rather modest. There is, accordingly, considerable scope for
increasing the attention paid to development issues in international
rule-making on investment. This is especially true in light of existing
power and negotiating capacity asymmetries, particularly in the context
of multiissue negotiations where a single undertaking logic prevails at
the end and where great care needs to be exercised in ensuring that the
interests of developing countries are properly addressed.
58
26. Match the opposites.

A B
1) foreign a) compulsory
2) beneficial b) domestic
3) proponent c) unpredictable
4) predictable d) simple
5) increase e) opponent
6) complex f) reduction
7) voluntary g) detrimental
27. Match the words in column A with the words in column B

A B
1) transition a) investment
2) direct b) power
3) host c) sector
4) service d) evidence
5) bargaining e) care
6) domestic f) responsibility
7) empirical g) period
8) social i) law
9) investment j) rule
10) great k) country
28. Answer the following questions.

1. When were Friendship, Commerce and Navigation Treaties
common instruments?
2. Are bilateral investment treaties designed to protect, promote
and facilitate foreign investment and constitute to date the most widely
used instrument for these purposes?
3. Why did developing countries, as hosts to foreign direct invest¬
ment, conclude bilateral investment treaties?
4. When was the Washington Convention concluded?
5. What is the main objective of bilateral treaties?
6. Do states have the sovereign right to regulate and prohibit
or condition the admission of investment and investors in their
territory?
7. The prohibition of arbitrary and discriminatory measures refers
to the prohibition of actions against foreign investors in general or
specific groups of foreign investors, doesn't it?
59
UNIT 2
8. How can you explain "most favoured nation treatment"?

9. When did many developed countries initiate bilateral invest¬
ment treaties?
10. Does every bilateral investment treaty have a provision on the
transfer of payments?
11. Why are the provisions on the transfer of payments quite
important?
12. Disputes between purely private parties are resolved through re¬
course to the courts of the State that has jurisdiction, or to commercial
arbitration, aren't they?
13. Do all bilateral investment treaties require that the investor
exhaust local remedies before resorting to arbitration?
14. Are arbitration proceedings always confidential?
15. What is the general aim of these agreements?
16. Did developing countries push through many (non-binding)
resolutions, including the Charter of Economic Rights and Duties im
mediately after decolonization?
17. Why were developing countries generally hostile towards strin¬
gent investment rules?
18. When was the attempt to negotiate a U N Code of Conduct on
Transnational Corporations abandoned?
19. What does the TRIMs Agreement prohibit?
29. Match the Russian word combinations in B with their Eng
lish equivalents in A. Learn the following collocations.
A B
1) scope for investment a) Международный центр по урегу
лированию инвестиционных споров
(МЦУИС)
2) International Centre for b) вложения в основной капитал
Settlement of Investment
Disputes (ICSID)
3) phasing of investment c) частные инвестиции
4) to encourage productive d) рассмотрение заявок на осуще
investments ствление иностранных инвестиций
5) effectiveness / efficiency e) режим иностранных инвестиций
of capital
6) direct investment abroad f) государственные капи
таловложения
7) fixed investment g) инвестиции в жилищное строи
тельство
8) foreign investment h) долгосрочные инвестиции
60
A B
9) Code of Conduct on i) эффективность капитало
Transnational Corporations вложений
10) foreign investment j) прямые частные инвестиции
screening
11) receptiveness to foreign k) налоги на иностранные инвести
investment ции
12) private investment l) возможности для капиталовло
жений
13) tax penalties on foreign m) экономическая оценка инвести
investments ций
14) nonresidential investment n) инвестиционный потенциал
15) treatment of foreign in o) прямые инвестиции за рубежом
vestment
16) government investment p) план капиталовложений
17) investment appraisal q) планирование капиталовложений
18) investment plan r) капиталовложение, не подлежа
щее обложению налогом
19) investment potential s) Международный кодекс поведе
ния Т Н К
20) investment programming t) поощрять капиталовложения в
производство
21) tax-sheltered investment u) инвестиции в нежилые здания и
сооружения
22) long-range/long-term v) правительственные инвестиции
investment
23) direct private investment w) поэтапное распределение
капиталовложений
24) public investment x) заграничные капиталовложения
25) residential investment y) льготный режим для иностран

ных инвестиций
26) Multilateral Investment z) Многостороннее агентство по га
Guarantee Agency (MIGA) рантированию инвестиций (МАГИ)
30. Render the following text into English.
МЕЖДУНАРОДНО-ПРАВОВОЕ РЕГУЛИРОВАНИЕ
ИНОСТРАННЫХ ИНВЕСТИЦИЙ
Отчетливой тенденцией в общественном развитии современ
ной эпохи выступает интернационализация хозяйственного обо-
61
UNIT 2
рота, обусловившая активизацию процессов движения капита

лов, товаров и услуг через государственные границы. Результатом
интеграции стало всевозрастающее многообразие форм деятель
ности правосубъектных образований за пределами собственных
национальных государств. Наиболее характерными сферами дело¬
вой активности в сегодняшнем мире является вложение матери¬
альных и финансовых ресурсов, техники и технологии, управлен¬
ческого опыта в экономику зарубежных государств в целях более
эффективного их использования как инвесторами, так и при¬
нимающими государствами, производственно-кооперационные
и собственно торговые операции широкого спектра.
Правовое регулирование иностранных инвестиций строится
на сочетании международно-правового и национально-правового
элементов. Международно-правовое регулирование включает
различные категории международных соглашений: многосто
ронние универсальные, региональные и двусторонние. В числе
многосторонних соглашений, получивших значительный ре¬
зонанс в мире, следует назвать Вашингтонскую конвенцию об
урегулировании инвестиционных споров между государствами и
национальными субъектами права иных государств от 18 марта
1965 г., которая вступила в силу 14 октября 1966 г., и Сеульскую
конвенцию о об учреждении Многостороннего агентства по га¬
рантиям инвестиций 1985 г., вступившую в силу 12 апреля 1988 г.
Благодаря этой Конвенции система государственного и частного
страхования дополняется международной системой страхования
иностранных инвестиций, основанной на многостороннем со¬
трудничестве государств. Создаваемое в соответствии с рассма¬
триваемым международным соглашением Агентство по гаранти
ям инвестиций (МАГИ) имеет функцией заключение договоров
страхования и перестрахования некоммерческих рисков, которым
могут подвергаться иностранные инвестиции стран — участниц
Конвенции. Агентство вправе производить дополнительные ас¬
сигнования в целях расширения деятельности по обеспечению
притока инвестиций в развивающиеся страны — участницы до¬
говора, которые рассматриваются в качестве таковых для целей
Конвенции. В Конвенции содержатся понятия гарантий, инве¬
стиций, подпадающих под гарантии, инвестора, подпадающего
под гарантии, содействия капиталовложениям (ст. 12—13).
В качестве форм содействия капиталовложениям Конвен¬
ция рассматривает распространение информации о возмож¬
ностях капиталовложений в развивающихся странах-членах,
предоставление технических консультаций и помощи для
улучшения инвестиционных условий на территории данного
62
участника, заключение соглашений с перспективными с точки

зрения принятия инвестиций странами, в силу которых будут
обеспечиваться в отношении гарантируемых Агентством инве¬
стиций режимы, не менее благоприятные, чем те, которые уже
предоставлены таким государством-членом инвестициям других
агентств или государств, пользующихся режимом наибольшего
благоприятствования. Наряду с этим Агентство способствует
мирному урегулированию споров между инвесторами и прини¬
мающими странами. В этой части Сеульская конвенция допол¬
няет регулирование, содержащееся в Вашингтонской конвенции,
которая предусматривает для отдельной категории инвестицион¬
ных споров — между государством и национальными субъекта¬
ми права других государств — создание Международного центра
по урегулированию инвестиционных споров при Международ¬
ном банке реконструкции и развития. В компетенции Центра
«находится разрешение правовых споров, возникающих непо¬
средственно из отношений, связанных с инвестициями между
Договаривающимся государством (или любым уполномоченным
органом Договаривающегося государства, о котором сообщено
Договаривающимся государством Центру) и лицом другого До¬
говаривающегося государства, при условии наличия письменно¬
го согласия участников о передаче такого спора для разрешения
Центру. Стороны, достигшие такого согласия, не вправе отка¬
заться от него в одностороннем порядке» (ст. 25).
Ануфриева Л.П. «Международное частное право»
31. Summarize the information of the unit and be ready to
speak on International Investment.
TEST

1. Investors fled financial markets, putting their money into gold,
collectibles and other tangible ... .
2. Restrictive practices in their home market have given Japanese
industries an unfair advantage in . trade.
3. Congress approved a commercial . with Ukraine that paved the
way for a joint business venture.
4. The United Nations Commission on International . . and the
United Nations Conference on Trade and Development are actively
increasing the range of international law in the fields of economic,
financial and development activities.
63
UNIT 2
5. Britain has attracted a large proportion of Japanese direct ... in

the EU.
6. . countries, including such giants as India and China, have
insisted they need financial and technological help.
7. The content of the most frequently invoked substantive treaty
provisions — the obligations to accord national treatment and fair and
equitable . to foreign investors, and to expropriate the property of
foreign investors only in accordance with international law and on
payment of due compensation — is far from clear.
8. The . . for Settlement of Investment Disputes was established
under the auspices of the World Bank by the Convention on the Set¬
tlement of Investment Disputes Between States and the Nationals of
Other States, 1965 and administers ad hoc arbitrations.
9. The North American . . . , 1992, linking the US, Mexico
and Canada, aims at the free movement and liberalization of goods,
services, people and investment, and also contains dispute settlement
provisions.
10. . assets such as information, image, and people are the main
drivers of business today.
11. Fill in the prepositions where necessary.
1. ... regard ... truth and justice;
2. a restriction . expenditure
3. . order . avoid obligations
4. . respect . material objects
5. International Centre . t h e Settlement . Investment Disputes
6. . accordance . the general usage
7. provide . a clause
8. refer . a n application
9. Agreement . TRIMs
10 carry . business
III. Translate the article from the Treaty between the United
States of America and the Russian Federation Concerning the
Encouragement and Reciprocal Protection of Investment into Rus¬
sian.
Article II
(a) Investment shall at all times be accorded fair and equitable
treatment, shall enjoy, full protection and security, and shall in no
case be accorded treatment inconsistent with the norms and principles
of international law.
64
CONTRACTS
(b) Neither party shall in any way impair by arbitrary or discrimi¬

natory measures the management, operation, maintenance, use, en¬
joyment, acquisition, expansion, or disposition of investments. For
purposes of dispute resolution under Articles V I and V I I , a particular
measure may be found to be arbitrary or discriminatory notwithstand¬
ing the fact that a party to the dispute has had or exercised the oppor¬
tunity to review such measure in the courts or administrative tribunals
of a Party.
IV. Translate the article from the Treaty between the United
States of America and the Russian Federation Concerning the En¬
couragement and Reciprocal Protection of Investment into Eng¬
lish.
Статья III
Гражданам или компаниям каждой из Сторон, капита¬
ловложениям которых причинен ущерб на территории дру¬
гой Стороны в результате войны или другого вооруженного
конфликта, революции, чрезвычайного положения, мятежа,
гражданских беспорядков или подобных обстоятельств, будет
предоставляться такой другой Стороной недискриминацион¬
ный режим в отношении реституции, возмещения, компенса¬
ции или любых других мер, которые она примет в отношении
такого ущерба.
UNIT 3 CONTRACTS
1. What do you know about Contracts? Choose the right an¬
swer.
1. The requirements for a contract in Anglo-American law are that
there be . .
a) an offer and acceptance b) an offer, acceptance and consider¬
ation c) an acceptance and consideration
2. . are intended to compensate the nonbreaching party for the
actual damages suffered.
a) Remote damages b) Punitive damages c) Compensatory damages
3. . imposes no legal rights or obligations upon the parties and is
not enforceable by a court.
65
UNIT 3
a) A voidable contract b) An aleatory contract c) A void contract

4. Courts often refuse to enforce . on the grounds that a true
meeting of the minds never existed, or that there was no acceptance of
the offer because the purchaser actually had no choice in the bargain.
a) aleatory contracts b) executory contracts c) adhesion contracts
5. Oral contracts are . .
a) void b) enforceable
words.
INTRODUCTION
A contract is a promise or a set of promises for the breach of which
the law gives a remedy, or the performance of which the law in some
way recognizes as a duty.
The freedom to contract has not existed throughout history. I n
medieval England, the courts did not engage in the enforcement of
agreements between individuals. Rather, the feudal society that ruled
personal interaction was relied upon for all forms of trade. As soci¬
ety evolved to emphasize individual freedoms over social caste, the
ability to contract was viewed as a fundamental tenet of individual
liberty. Writers and economic theorists such as Adam Smith, David
Ricardo, Jeremy Bentham, and John Stuart Mill "successively in-
sisted on freedom of bargaining as the fundamental and indispensable
requisite of progress; and imposed their theories on the educated
thought of their times."
Article I , Section 10 of the U.S. Constitution protects the indi¬
vidual right to contract by stating that, "No State shall . pass any .
law impairing the obligations of Contracts." Many state constitutions
contain similar provisions.
Generally, the law of contracts does not come from statutes passed
by Congress or by state legislatures, but rather is a product of the com¬
mon law, the continuing line of court decisions dating back to pre-co-
lonial English courts. The common law is living and constantly evolv¬
ing, as modern courts continue to analyze, revise and even disagree
on its application. The American Law Institute, a collection of legal
scholars and practitioners, attempted to catalogue the common law
of contracts in its Restatements of the Law of Contracts in 1932. The
Restatement, Second, of the Law of Contracts was published in 1979.
The Restatement, although it does not have the force of law itself, is
generally regarded as an excellent source. The law of contracts is also
66
CONTRACTS
significantly influenced by the Uniform Commercial Code (UCC),

which has been adopted in forty-nine states. The UCC is an attempt
to standardize laws dealing with contracts and commerce.
Encyclopedia of Business and Finance

A B
1) remedy a) an arrangement or promise to do something,
made by two or more people or organizations
2) performance of b) discussion to reach agreement about something,
contract for example trade, levels of pay etc
3) agreement c) a belief, opinion, or dogma
4) trade d) something indispensable; necessity
5) tenet e) any of the methods available at law for the
enforcement, protection, or recovery of rights or for
obtaining redress for their infringement
6) requisite f) a legal or moral duty to do something
7) bargaining g) the activity of buying, selling, or exchanging goods
within a country or between countries
8) obligation h) the carrying out of obligations under a contract
4. Fill in the missing words.
1. The GATT trade agreement established a sound basis for inter¬
national c _ _.
2. The seller has undertaken no obligation and there is only a uni¬
lateral c under which the buyer is committed to pay if
the seller delivers.
3. At c law, contracts to commit a crime or promote
sexual immorality are illegal.
4. Scots law also recognizes interference with l .
5. The courts merely interpret the code, which can be altered by
the l .
6. U Commercial Code applies to almost all sales of
goods.
unequivocal, counteroffer, deviation, forbearance, mutuality, pre¬
existing, assent.
67
UNIT 3
6. Read the following text and explain the meaning of the

words and phrases in bold.
F O R M A T I O N O F A CONTRACT
A contract consists of one individual making an offer, another accepting
the offer, and the existence of consideration between the contracting parties.
OFFER
An offer is the expression of a willingness to enter into a bargain.
An offer must be directed to a particular offeree and be sufficiently
clear so as to justify another individual in the belief that acceptance of
the offer would constitute an agreement. Although an offer need not
set forth all terms of the potential bargain (even the price may be left
to be later determined), a valid offer must identify the fundamental
elements of the proposed agreement. An offer may be revoked at any
time before it is accepted or before it is reasonably relied upon by
another individual.
ACCEPTANCE
Acceptance of an offer is the communication by the offeree of
mutual assent, that is, the agreement to be bound by the terms of an
offer. An offer may be accepted only by a person to whom the offer
was directed and only before the offer terminates or is revoked. A
valid acceptance must be communicated to the offeror by the same
or similar means under which the offer was communicated, and must
be unequivocal to make the agreement binding. At common law, it
is generally held that any deviation from the terms of the offer is
not an acceptance, but rather a rejection and a counteroffer. If the
offer identifies a specific mode of acceptance, such as form, date,
time, or place, that mode must be followed for an acceptance to be
valid. Generally, an acceptance is not effective until it comes into the
possession of the offeror, although some states employ the mailbox rule,
which makes acceptance sent by U.S. mail effective upon its deposit
in the mail. If an offer specifically invites acceptance by performance
of a specified act, performance of that act by the offeree constitutes
acceptance without notification of the offeror. Except in very limited
circumstances, such as where the parties have a pattern of previous
dealings or where it would be inequitable to find otherwise, silence
does not constitute acceptance.
68
CONTRACTS
CONSIDERATION
An offer and acceptance alone do not create a valid and binding
contract. A third element, consideration, must exist. Consideration is
a bargained-for exchange, that is, the existence of mutuality of ob¬
ligation. Both parties must derive some benefit — or, alternatively,
both parties must experience some detriment or forbearance — for a
contract to exist. Without consideration, an offer and acceptance rep¬
resent merely a naked, unenforceable promise.
While the existence of consideration is critical to the enforceability
of a contract, the quantity or quality of consideration is immaterial.
Generally, courts are not concerned with the value or adequacy of
consideration and will not interfere with a bargain entered into be¬
tween the parties because of insufficient consideration. Certain acts
or forbearance cannot constitute consideration. A preexisting duty
to perform or refrain from performing may not be consideration for
a contract. Therefore, fulfilling an existing contractual obligation or
refraining from an unlawful act cannot constitute consideration. An
exception to this rule is that the agreement to pay a preexisting debt
may be consideration. A promise to make a gift is not consideration,
nor is a moral obligation. A promise not to sue, so long as the right to
sue actually exists, may be consideration.
noun verb noun verb
offer offer terminate
acceptance bargain
deal communicate
notification oblige
forbearance exchange
benefit sue
8. Fill in the correct prepositions, then choose any two items
1) to enter ... contract; 2) to rely ...smth; 3) to be bound ... the
terms; 4) to refrain ... doing something; 5) to be concerned ... smth
ing words and phrases and make up sentences using them.
1) оферта; 2) адресат оферты; лицо, которому делается
предложение; 3) отменять, аннулировать; 4) акцепт, акцептова
ние; 5) взаимное согласие; 6) прекращать(ся), оканчивать(ся);
69
UNIT 3
7) оферент; лицо, делающее предложение; 8) отклонение, отказ;

9) встречное предложение; 10) юридически обязательный дого
вор; 11) действительный договор; 12) встречное удовлетворение;
13) ущерб, вред; 14) воздержание от действия; отказ от принятия
мер; 15) договорное обязательство; 16) быть связанным условиями.
1. A contract is a promise or a set of promises for the breach of
which the law. .
2. In medieval England, the courts did not engage in . .
3. A contract consists of one individual making . .
4. An offer is the expression of a willingness to . .
5. A valid offer must identify the fundamental elements of . .
6. An offer may be revoked at any time before . .
7. An offer may be accepted only by a person to whom . .
8. An offer and acceptance alone do not create . .
9. Consideration is a bargained-for exchange, that is, the existence of .
10. A promise to make a gift is . .
the list (A — G) for each gap. There is one extra sentence which
A) Undue influence exists where one improperly takes advantage
of one's relationship with another to coerce the other person to enter
a contract.
1 — B) However, if a minor enjoys the benefit of a contract, the minor
is obligated either to repay the other party or to fulfill the minor's obliga
tions under the contract.
C) Sometimes, however, there is a duty on a person to act, either
because of the terms of a contractual duty, or because he is a parent
or guardian of a minor, or because he has voluntarily assumed a duty,
or through a statutory imposition of such a duty.
D) Courts will generally seek to harmonize the terms of a con¬
tract in a manner that makes those terms consistent.
E) It is important to understand that mere disproportionality of
the benefits of a contract, no matter how great, does not make the
contract void as unconscionable.
F) That is, rather than finding the contract invalid, the court will
merely correct the error.
G) However, the statute of frauds requires that in certain specific
circumstances, contracts must be in writing.
70
CONTRACTS
DEFENSES
In its most basic form, a contract exists where there is an offer, an ac¬
ceptance of the offer, and consideration to support the contract. Despite
the existence of these three elements, enforcement of a contract may be
denied if a sufficient defense to the formation of contracts is present.
In order for an individual to enter into a contract, that person must
have the legal capacity to do so. At common law, minors, individuals
who are mentally ill, persons under the influence of alcohol or drugs,
and those under a legal guardianship lack legal capacity to contract.
The rule as to minors is that a contract of a minor is voidable, not
void. That is, a minor has the option to make a contract valid or not.
[ 1 — B ] . In addition to capacity, an individual must have the le¬
gal competency to enter a contract. Competency is generally defined
as the mental ability of a party to contract. In other words, a legally
competent person is one who possesses the ability to recognize and
understand the contractual obligations that will result. Courts will as¬
sume that capacity and competency exist until it is proved otherwise.
If the parties to a contract make a mutual mistake with regard to
that contract, such as a mutual misunderstanding, there is no mutual
assent and therefore no contract. Clerical errors, known as scrivener's
errors, will generally be corrected by a court. [ 2 ].
A contract that is based on a fraudulent misrepresentation of a ma¬
terial term is unenforceable. A fraudulent misrepresentation is material
if the maker intended for the misrepresentation to induce the other
party to enter the contract and if the misrepresentation would likely
induce a reasonable person to so enter the contract.
Duress may make a contract unenforceable. Physical duress, or
forcing a person to accept an offer, invalidates the contract, while the
threat of physical harm makes the contract voidable at the election of
the victim. Courts are divided on whether economic duress is sufficient
to deny the enforceability of a contract.
A contract that is entered into under undue influence is also void¬
able at the election of the victim. [ 3 ]. Examples are the influence
that an adult child may have over an elderly parent who is dependent
on the child for care, or the reliance of an unsophisticated individual
on a sophisticated adviser, where the adviser is aware of the reliance.
As a general rule, an illegal bargain is void as a matter of law and
may not be enforced. Therefore, a contract to commit murder, to rob
a bank, or to steal a car is void as a matter of law.
A contract may be void because enforcement of the contract would
be unconscionable. [ 4 ] . Unconscionability may be found only
71
UNIT 3
where there is grossly disproportionate bargaining power to the extent

that one of the parties had virtually no choice in accepting the terms
of the contract. Contracts are rarely found to be unconscionable unless
a significant public policy issue is involved.
CONTRACT I N T E R P R E T A T I O N
An offer, acceptance, and consideration must be present to form a
contract. The defenses to contract formation, as discussed above, may
be used to show that no contract exists. However, even if it is shown
that a contract does exist, questions may arise as to the content and
meaning of that contract.
RULES OF CONSTRUCTION
In interpreting contracts, courts generally follow certain funda¬
mental rules of construction. Under the four corners rule, courts will
restrict their analyses to the written terms of the agreement itself,
wherever possible. Ambiguities will be construed against the drafter. [ 5
]. Courts will generally find that specifics in a contract will control
over generalities. Words and phrases used in a contract are given their
plain meaning absent evidence to the contrary.
PAROL E V I D E N C E R U L E
The parol evidence rule provides that if the parties to a contract in¬
tended for their contract to be a complete integration, that is, if the parties
intended that the written agreement be the full extent of the understand¬
ing between them, then evidence other than the contract itself may not
be admitted to contradict the written terms. Therefore, in interpreting a
contract, the court should generally not look beyond the contract itself for
interpretation. The parol evidence rule permits evidence intended to prove
or disprove the legitimacy of contract formation, such as evidence show¬
ing a party's capacity or showing fraud or mutual mistake, but prohibits
evidence intended to vary, contradict, or change the terms of the written
agreement. Of course, if a contract refers to another document, that other
document may be admitted to explain the terms of the contract at issue.
STATUE O F FRAUDS
A common mistake is the belief that oral contracts are not enforce¬
able. In fact, most oral contracts, if they fulfill all of the requirements
of a contract, are indeed enforceable. [ 6 ]. While the requirements
vary from state to state, generally the statute of frauds requires the fol¬
lowing contracts to be in writing: contracts by executors, administrators,
or other personal representatives; contracts in consideration of marriage;
72
CONTRACTS
contracts for the sale of real estate; contracts for the sale of goods ex¬
ceeding $500; and contracts that will not be performed within one year
of the making of the contract. The statute of frauds generally does not
require any particular written form, and generally a contract will suffice
so long as it identifies the parties, describes the subject matter, states
the essential and material terms, states that consideration exists, and is
signed by the party against whom enforcement is sought.
12. Fill in the blanks with the derivatives of the words in
brackets.
1. A contract obtained by fraud is ... on the grounds of ... misrep¬
resentation. (void, fraud)
2. Documents that are insufficiently or improperly stamped cannot
be admitted as evidence in civil proceedings and they are therefore
legally. . (enforce)
3. Where a contract is, on the whole, for the benefit of a minor, it
will not be. because one term has operated in a way which is not to
his advantage. (invalid)
4. . is a . in many legal systems. (write, require)
5. Equity can give relief against bargains' in cases where one par¬
ty is in a position to exploit the weakness of the other. (conscience)
6. Once the . of a contract has been confirmed, it is necessary to
explore the scope of the obligations which each party incur. (exist)
7. Thus, if specific . of a contract can be ordered, a party to a
contract or their personal . can ensure enforcement of the contract
for the benefit of a third party. (perform, represent)
8. . is the name given to the need for reciprocity in contracts.
(consider)
9. Warranties are . terms concerning the less important or subsid¬
iary statements of facts or promises. (contract)
10. The term should be expressed in plain English, and any .
should be interpreted in the customer's favour. (ambiguous)
in column B. Make sentences using them.
A B
1) fraudulent a) an offer
2) to accept b) ill
3) clerical c) a contract
4) mutual d) misrepresentation
73
UNIT 3
A B
5) contractual e) capacity
6) mentally f) matter
7) legal g) obligation
8) to enter into h) assent
9) subject i) evidence
10) parol j) error
14. Do the following crossword puzzle.

Across
1) an act, forbearance, or promise by one party to a contract that
constitutes the price for which he buys the promise of the other;
2) written form;
3) an act demonstrating a willingness to enter into a contract in
such a way that a reasonable person would recognize that acceptance
of the terms will conclude in a binding agreement;
4) a person or thing that suffers harm, death, etc., from another or
from some adverse act, circumstance, etc;
5) the unlawful premeditated killing of one human being by another
6) the process of interpreting a document or statute;
7) compulsion by use of force or threat; constraint; coercion;
Down
8) the act of voluntarily agreeing, expressly or by implication, to
the terms of an offer, thereby creating a contract;
9) to take away the legal force or effectiveness of; annul, as a contract;
10) a misunderstanding or erroneous belief about a matter of fact
or a matter of law;
11) a person below the age of legal majority;
12) (to give) agreement to an idea, plan or request, esp. after think¬
ing about it in detail;
13) deliberate deception, trickery, or cheating intended to gain an
advantage;
14) a suggestion that something unpleasant will happen, esp. if a
particular action or order is not followed;
15) an agreement between two people or groups in which each
promises to do something in exchange for something else.
74
CONTRACTS
1_
8 9
_ _ _ _ _ _
4
_ _ _ _ _
_ • _ _ _
3
•
13 _ 10 __
14
11
_ •
1_ __
R E M E D I E S AND DAMAGES
Generally, the victim of a breached contract is entitled to be made
whole, or put in the same position as that party would have been in
had the contract been fulfilled. Commonly, this is done by forcing the
breaching party to pay the aggrieved party compensatory damages.
Compensatory damages are intended to compensate the nonbreach-
ing party for the actual damages suffered. Normally, compensatory
damages are measured by the party's expectancy, or what the parties
should have reasonably foreseen as flowing from the breach. Expect¬
ancy damages are often described as conferring the benefit of the
bargain upon the nonbreaching party. Where expectancy damages are
difficult to determine or otherwise impractical, a party may receive
reliance damages, which are intended to compensate for the losses
incurred in relying on the breaching party's fulfillment of the contract.
A third alternative for compensation is restitution, where the breaching
party must compensate the victim for the benefit conferred upon the
breaching party.
Liquidated damages are a method used by contracting parties to es-
timate the damages that will result in the event of a breach. Liquidated
damages may not serve as a penalty against the breaching party, but so
long as they are a reasonable estimate of the damages that would be
suffered by the nonbreaching party, they will be enforced. A clause in
an apartment rental contract that requires a breaching party to pay two
months rent is a common form of liquidated damages.
75
UNIT 3
Punitive damages are those intended to punish the breaching party.

Punitive damages are available only in very rare cases; they generally
are not awarded in contract disputes.
Finally, equitable relief is available to nonbreaching parties where
none of the above remedies would be sufficient. Under the concept
of equity, a court may take corrective action other than by award-
ing money. In rare circumstances where none of the above described
compensatory damages would be sufficient, a court may order specific
performance. That is, the court will order the parties to fulfill their
obligations under the contract. This method is not favored because of
the practical difficulty of enforcement, but in some cases, such as the
purchase of real estate, art, and the like, it is the only remedy that is
sufficient. Also available is an injunction, which is a court order pre¬
venting a party from taking further action, such as a continued breach
of a contract.
16. Which of the statements are true to the above text?
1. In order for an individual to enter into a contract, that person
must have the legal capacity to do so.
2. At common law, minors, individuals who are mentally ill, per¬
sons under the influence of alcohol or drugs, and those under a legal
guardianship have legal capacity to contract.
3. The statute of frauds doesn't require that in certain specific cir¬
cumstances, contracts must be in writing.
4. Scrivener's errors are generally corrected by an offeree.
5. Competency is generally defined as the mental ability of a party
to contract.
6. The rule as to minors is that a contract of a minor is void, not
voidable.
7. In addition to capacity, an individual must have the legal com¬
petency to enter a contract.
8. A contract that is based on a fraudulent misrepresentation of a
material term is enforceable.
9. In fact, most oral contracts, i f they fulfill all of the requirements
of a contract, are unenforceable.
10. If the parties to a contract make a mutual mistake with regard
to that contract, such as a mutual misunderstanding, there is no mu¬
tual assent and therefore no contract.
11. Physical duress, or forcing a person to accept an offer, doesn't
invalidate the contract.
76
CONTRACTS
12. The threat of physical harm makes the contract void at the
election of the victim.
13. A contract that is entered into under undue influence is also
voidable at the election of the victim.
14. Punitive damages are often described as conferring the benefit
of the bargain upon the nonbreaching party.
15. Compensatory damages are intended to compensate the nonb-
reaching party for the actual damages suffered.
17. Give a brief summary of the above texts.
lined words.
T Y P E S O F CONTRACTS
PART I
CONTRACTS UNDER SEAL

Traditionally, a contract was an enforceable legal document only
if it was stamped with a seal. The seal represented that the parties in¬
tended the agreement to entail legal consequences. No legal benefit or
detriment to any party was required, as the seal was a symbol of the
solemn acceptance of the legal effect and consequences of the agree¬
ment. I n the past, all contracts were required to be under seal in order
to be valid, but the seal has lost some or all of its effect by statute in
many jurisdictions. Recognition by the courts of informal contracts,
such as implied contracts, has also diminished the importance and
employment of formal contracts under seal.
EXPRESS CONTRACTS
In an express contract, the parties state the terms, either orally or
in writing, at the time of its formation. There is a definite written or
oral offer that is accepted by the offeree in a manner that explicitly
demonstrates consent to its terms.
IMPLIED CONTRACTS
Although contracts that are implied in fact and contracts implied in
law are both called implied contracts, a true implied contract consists of
obligations arising from a mutual agreement and intent to promise, which
have not been expressed in words. It is misleading to label as an implied
contract one that is implied in law because a contract implied in law lacks
77
UNIT 3
the requisites of a true contract. The term quasi-contract is a more ac¬

curate designation of contracts implied in law. Implied contracts are as
binding as express contracts. An implied contract depends on substance
for its existence; therefore, for an implied contract to arise, there must be
some act or conduct of a party, in order for them to be bound.
A contract implied in fact is not expressed by the parties but, rather,
suggested from facts and circumstances that indicate a mutual inten¬
tion to contract. Circumstances exist that, according to the ordinary
course of dealing and common understanding, demonstrate such an
intent that is sufficient to support a finding of an implied contract.
Contracts implied in fact do not arise contrary to either the law or
the express declaration of the parties. Contracts implied in law (quasi-
contracts) are distinguishable in that they are not predicated on the
assent of the parties, but, rather, exist regardless of assent.
The implication of a mutual agreement must be a reasonable de¬
duction from all of the circumstances and relations that contemplate
parties when they enter into the contract or which are necessary to
effectuate their intention. No implied promise will exist where the re¬
lations between the parties prevent the inference of a contract.
A contract will not be implied where it would result in inequity or
harm. Where doubt and divergence exist in the minds of the parties,
the court may not infer a contractual relationship. If, after an agree¬
ment expires, the parties continue to perform according to its terms,
an implication arises that they have mutually assented to a new con¬
tract that contains the same provisions as the old agreement.
A contract implied in fact, which is inferred from the circum¬
stances, is a true contract, whereas a contract implied in law is actu¬
ally an obligation imposed by law and treated as a contract only for
the purposes of a remedy. With respect to contracts implied in fact,
the contract defines the duty; in the case of quasi-contracts, the duty
defines and imposes the agreement upon the parties.
EXECUTED AND EXECUTORY CONTRACTS
An executed contract is one in which nothing remains to be done
by either party. The phrase is, to a certain extent, a misnomer because
the completion of performances by the parties signifies that a contract
no longer exists. An executory contract is one in which some future act
or obligation remains to be performed according to its terms.
BILATERAL AND UNILATERAL CONTRACTS
The exchange of mutual, reciprocal promises between entities that
entails the performance of an act, or forbearance from the performance
78
CONTRACTS
of an act, with respect to each party, is a bilateral contract. A bilateral

contract is sometimes called a two-sided contract because of the two
promises that constitute it. The promise that one party makes consti¬
tutes sufficient consideration for the promise made by the other.
A unilateral contract involves a promise that is made by only one
party. The offeror promises to do a certain thing if the offeree performs
a requested act that he or she knows is the basis of a legally enforceable
contract. The performance constitutes an acceptance of the offer, and
the contract then becomes executed. Acceptance of the offer may be
revoked, however, until the performance has been completed. This is
a one-sided type of contract because only the offeror, who makes the
promise, will be legally bound. The offeree may act as requested, or
may refrain from acting, but may not be sued for failing to perform,
or even for abandoning performance once it has begun, because he or
she did not make any promises.
1. Article X I requires members to refrain ... applying restrictions on
international transfers and payments for current transactions relating
to their specific commitments — it also does not apply generally.
2. The member states having negotiating rights . respect . the
binding being modified or withdrawn are required to take that com¬
pensation into account.
3. According ... case law, a WTO Member making a claim/argu¬
ment carries the burden of proof to demonstrate that its claim/argu¬
ment holds.
4. . the purposes . the present discussion, National Treatment is
an obligation under the GATT to treat foreign firms and products the
same as domestic firms and products.
5. This tends to result . overproduction and displacement of for¬
eign producers in third-country markets.
6. The US has never agreed to enter . a treaty containing such a
'tax sparing' provision, but many European nations have.
7. A residence country could impose tax on foreign source in¬
come at some, probably relatively low, rate regardless . the amount
of source tax imposed.
8. One of these roles stems from the fact that . order . the agree¬
ment to be self-enforcing, there must be a common understanding of
what constitutes cooperative behavior, and what amounts to a viola¬
tion of the implicit agreement.
79
UNIT 3
9. The net effect of trade, then, depends . the ratio of a country's

global share of production to its global share of consumption of im¬
perfectly competitive goods.
10. The remaining obligations imposed . the SPS Agreement that
are discussed below relate only to measures that do not conform to
international standards.
ing words and word combinations. Then choose any five phrases
1) юридический документ; 2) правовые, юридические послед
ствия; 3) скрепленный печатью; 4) неоформленный договор; 5) под
разумеваемый договор; 6) оформленный договор; формальный до
говор; 7) положительно выраженный договор; 8) подразумеваемый
договор; 9) квазидоговор; 10) взаимное согласие; 11) обычная прак
тика ведения деловых операций; 12) подразумеваемая обязанность;
13) договорные отношения; 14) договор с исполнением в момент
заключения; 15) договор с исполнением в будущем; 16) в известной
степени; 17) двухсторонний контракт; 18) односторонняя сделка;
19) юридически обязанный; 20) адресат оферты.
21. Read the following text and explain the words and phrases in
bold.
T Y P E S O F CONTRACTS
PART II
UNCONSCIONABLE CONTRACTS
An unconscionable contract is one that is unjust or unduly one-sided
in favor of the party who has the superior bargaining power. The adjec¬
tive unconscionable implies an affront to fairness and decency. An un¬
conscionable contract is one that no mentally competent person would
accept and that no fair and honest person would enter into. Courts find
that unconscionable contracts usually result from the exploitation of
consumers who are poorly educated, impoverished, and unable to shop
around for the best price available in the competitive marketplace.
The majority of unconscionable contracts occur in consumer transac¬
tions. Contractual provisions that indicate gross one-sidedness in favor of
the seller include limiting damages or the rights of the purchaser to seek
court relief against the seller, or disclaiming a warranty (i.e., a statement
of fact concerning the nature or caliber of goods sold the seller, given in
order to induce the sale, and relied upon by the purchaser).
80
CONTRACTS
Unconscionability is ascertained by examining the circumstances

of the parties when the contract was made. This doctrine is applied
only where it would be an affront to the integrity of the judicial system
to enforce such a contract.
ADHESION CONTRACTS
Adhesion contracts are those that are drafted by the party who
has the greater bargaining advantage, providing the weaker party with
only the opportunity to adhere to (i.e., to accept) the contract or to
reject it. (These types of contract are often described by the saying
"Take it or leave it.") They are frequently employed because most
businesses could not transact business if it were necessary to negoti¬
ate all of the terms of every contract. Not all adhesion contracts are
unconscionable, as the terms of such contracts do not necessarily
exploit the party who assents to the contract. Courts, however, often
refuse to enforce contracts of adhesion on the grounds that a true
meeting of the minds never existed, or that there was no acceptance
of the offer because the purchaser actually had no choice i n the
bargain.
ALEATORY CONTRACTS
An aleatory contract is a mutual agreement the effects of which
are triggered by the occurrence of an uncertain event. In this type
of contract, one or both parties assume risk. A fire insurance policy
is a form of aleatory contract, as an insured will not receive the
proceeds of the policy unless a fire occurs, an event that is uncer¬
tain to occur.
VOID AND VOIDABLE CONTRACTS
Contracts can be either void or voidable. A void contract imposes
no legal rights or obligations upon the parties and is not enforceable
by a court. It is, in effect, no contract at all.
A voidable contract is a legally enforceable agreement, but it may
be treated as never having been binding on a party who was suffering
from some legal disability or who was a victim of fraud at the time of its
execution. The contract is not void unless or until the party chooses to
treat it as such by opposing its enforcement. A voidable contract may
be ratified either expressly or impliedly by the party who has the right
to avoid it. An express ratification occurs when that party who has be¬
come legally competent to act declares that he or she accepts the terms
and obligations of the contract. An implied ratification occurs when the
81
UNIT 3
party, by his or her conduct, manifests an intent to ratify a contract,

such as by performing according to its terms. Ratification of a contract
entails the same elements as formation of a new contract. There must be
intent and complete knowledge of all material facts and circumstances.
Oral acknowledgment of a contract and a promise to perform constitute
sufficient ratification. The party who was legally competent at the time
that a voidable contract was signed may not, however, assert its voidable
nature to escape the enforcement of its terms.
22. Give opposites for the underlined words.

to the above text.
1. Commercial law regulates commercial t .
2. Increased quantities of imports can also result from an increase
in domestic demand attributable, for example, to rising c
_ incomes.
3. In May 2004, the EU received a promise from Russia to r_ _ _ _
_ the treaty in exchange for the EU's endorsement of Russia's attempt
to join the World Trade Organization.
4. The contract of guarantee was therefore v_ _ _ for common
mistake at common law.
5. The most important restriction on a plaintiff's choice of forum
continues to be the court's ability to a personal jurisdiction
over the defendant.
6. At times, credit will be sought in order to p specific
goods; at other times, a debtor may borrow money to assist it in its
general obligations.
7. The duress simply becomes a wrongful act of a similar kind to a
misrepresentation, which, i f it has influenced the other party's deci¬
sion to make a contract, provides a basis for that contract being v_ _
8. The only provisions in any way comparable in English law, al¬

lowing courts to set a contract, or part of a contract aside because its
provisions are 'unfair' or 'u _ ' operate only in
much more limited areas or situations.
9. Moreover, d may be awarded against a party which
has refused to negotiate, or broken off negotiations, contrary to good
faith and fair dealing.
82
CONTRACTS
10. One of the reasons why the parties will put their transaction into
the form of a contract is that it provides a mechanism for e
of the way in which they have agreed to allocate the risks.
(person) (abstract)
void
compete
impoverishment
consumer
enforceable
negotiation
execute
manifest
avoidance
25. Answer the following questions.
1. What did the seal represent?
2. Has the seal lost all of its effect by statute in many jurisdictions?
3. What do the parties state in an express contract?
4. Is the term quasi-contract a more accurate designation of con¬
tracts implied in fact?
5. A contract implied in law is actually an obligation imposed by
law, isn't it?
6. What is an executory contract?
7. Do the majority of unconscionable contracts occur in consumer
transactions or financial transactions?
8. What does adjective unconscionable imply?
9. Does an unconscionable contract involve a promise that is made
by only one party?
10. Are all adhesion contracts unconscionable?
11. Why do courts often refuse to enforce contracts of adhe¬
sion?
12. Is a fire insurance policy a form of aleatory contract or adhe¬
sion contract?
13. Can contracts be only voidable?
14. Does a void contract impose legal rights or obligations upon
the parties?
15. A voidable contract is a legally enforceable agreement, isn't it?
83
UNIT 3
26. Choose the words from the group below to complete the text. It
may be necessary to change the form of the given words.
consideration, exchange, respect, promise, consist, refrain (2), essen-
tial, distinguish, deem, fulfill, accept (2), conclude, comply, circumstance,
jurisdiction, dispute, reciprocity, apply
B I L A T E R A L CONTRACT
An agreementformed by an exchange of a promise in which the promise
of one party is consideration supporting the promise of the other party.
A bilateral contract is distinguishable from a unilateral contract, a
promise made by one party in 1) . for the performance of some act by
the other party. The party to a unilateral contract whose performance is
sought is not obligated to act, but if he or she does, the party that made
the promise is bound to 2) . with the terms of the agreement. In a bi¬
lateral contract both parties are bound by their exchange of 3) . .
Both parties to a bilateral contract make promises. With 4) ... to
the promise in issue, the party making the promise is the promisor
and the other party is the promisee. The legal detriment incurred by
the promisee 5) . of a different promise by him or her to do some¬
thing or 6) . from doing something that he or she was not previously
legally obligated to do or to 7) . from doing. This legal detriment
constitutes consideration, the cause, motive, or benefit that induces
one to enter into a contract. Consideration is an 8) . component of
a contract.
Traditionally, courts have 9) . between unilateral and bilateral
contracts by determining whether one or both parties provided con¬
sideration and at what point they provided the consideration. Bilat¬
eral contracts were said to bind both parties the minute the parties
exchange promises, as each promise is 10) . sufficient consideration
in itself. Unilateral contracts are said to bind only the promisor and
do not bind the promisee unless the promise accepts by performing
the obligations specified in the promisor's offer. Until the promisee
performs, he or she has provided no 11) . under the law.
For example, i f someone offered to drive you to work on Mon¬
days and Tuesdays in exchange for your promise to return the favor
on Wednesdays and Thursdays, a bilateral contract would be formed
binding both of you once you provided consideration by 12) . those
terms. But i f that same person offered to pay you $10 each day you
drove him to work, a unilateral contract would be formed, binding
only upon the promisor until you provided consideration by driving
him to work on a particular day.
84
CONTRACTS
Modern courts have de-emphasized the distinction between unilat¬

eral and bilateral contracts. These courts have found that an offer may
be 13) ... either by a promise to perform or by actual performance. An
increasing number of courts have 14) . that the traditional distinction
between unilateral and bilateral contracts fails to significantly advance
legal analysis in a growing number of cases where performance is pro¬
vided over an extended period of time.
Suppose you promise to pay someone $500.00 to paint your house.
The promise sounds like an offer to enter a unilateral contract that
binds only you until the promisee accepts by painting your house. But
what constitutes lawful "performance" under these 15) ...? The act of
beginning to paint your house or completely finishing the job to your
satisfaction?
Most courts would rule that the act of beginning performance un¬
der these circumstances converts a unilateral contract into a bilateral
contract, requiring both parties to 16) . the obligations contemplated
by the contract. However, other courts would analyze the facts of each
case so as not to frustrate the reasonable expectations of the parties.
In neither of these cases are the legal rights of the parties ultimately
determined by the courts by applying the concepts of unilateral and
bilateral contracts.
In still other 17) . , courts have simply expressed a preference for
interpreting contracts as creating bilateral obligations in all cases where
there is no clear evidence that a unilateral contract was intended. The
rule has been stated that in case of doubt an offer will be presumed
to invite the formation of a bilateral contract by a promise to perform
what the offer requests, rather than the formation of a unilateral con¬
tract commencing at the time of actual performance. The bottom line
across most jurisdictions is that as courts have been confronted by a
growing variety of fact patterns involving complicated contract 18) . ,
courts have shifted from rigidly applying the concepts of unilateral and
bilateral contracts to a more ad hoc approach.
Mutuality of obligation must exist in an enforceable bilateral con¬
tract, and this involves the concept of 19) . . A cannot enforce B's
promise unless A's promise entails a legal detriment, and B can enforce
A's promise only i f B's promise involves a legal detriment. I f a minor
enters a bilateral contract with an adult that is unenforceable due to
the minor's age, the adult party cannot assert absence of mutuality as a
defense if the minor sues to enforce the contract. This principle 20) ...
to any situation where the law grants a particular party a privilege to
avoid a contract because of his or her status.
85
UNIT 3
INTERNATIONAL C O M M E R C I A L A G R E E M E N T S
Entering into international commercial agreements requires a broad
range of skills. Negotiation skills, honed for the international arena,
will be put to test at the outset. Questions of pre-contractual liability
need to be borne in mind at every stage of the negotiation process.
The most important aspect to be determined in any commercial agree¬
ment is the applicable law or laws. Certain other regulatory laws, such
as competition law, may also apply i f the transaction is to take place
within a relevant trading block. The agreement may be regulated by
certain specific laws, such as agency law.
The other fundamental question to be resolved when entering into
an international commercial agreement is where any dispute that may
arise will be determined. Such a discussion needs to be raised sensi¬
tively when the parties are at the beginning of a commercial relation¬
ship and everyone hopes that the deal will be a success rather than
result in a dispute. Currently, there is no global harmonisation of the
rules relating to where a party may sue or be sued (i.e. jurisdiction).
However, the proposed Hague Convention on International Jurisdic-
tion and Judgments in Civil and Commercial matters heralds the pros¬
pect of a new era when a global set of rules relating to questions of
jurisdiction will be available. This will be an exciting development for
international business people and lawyers.
The Hague Convention, in addition to determining jurisdiction,
will allow for a global system of recognition and enforcement of judg¬
ments given in one jurisdiction in another jurisdiction. The procedure
will involve the enforcement of a judgment by a second court without
usually the need for the content of the judgment of the first court to
be reviewed. I f this proposal is adopted, as it is looking likely to be,
it will result indirectly in a degree of harmonisation of the laws across
the world. This is because, for example, an English court may, pursu¬
ant to the Convention, recognise and enforce a judgment given by an
American jury in a product liability case awarding punitive damages
against a producer of a defective product. The effect of the Federal
Law of the United States will therefore be introduced 'by the back
door' into England. The practical result of such universal recognition
and enforcement must be that the diverging national laws relating to
international trade will approximate with one another. A more har¬
monious body of international trade law can be only good news for
international traders and is to be eagerly awaited.
Rebecca Attree
86
CONTRACTS
28. Match the Russian phrases in A with their English equiva¬

A B
1) заранее оцененные убытки a) counter offer
2) договорное обязательство b) monetary damages
3) оспоримый договор c) liquidated damages
4) отклонить предложение d) offer for sale
5) подразумеваемый договор e) contract of insurance
6) встречная оферта f) recover damages
7) денежные убытки g) withdraw/ revoke an offer
8) договор о продаже в рассрочку h) valuable consideration
9) договор, страхующий людей от i) pay damages
случайных событий
10) получить компенсацию за j) by way of damages
убытки
11) не имеющий юридической k) void contract
силы, ничтожный договор
12) выставлять на продажу l) repair the damages
13) нести ответственность за ущерб m) turnkey contract
14) принимать предложение n) punitive damages
15) надлежащее встречное o) amount in damages
удовлетворение
16) договор страхования p) implied contract
17) отказываться от предложения q) award payment of damages
18) возмещение убытков в тройном r) compensatory damages
размере
19) в порядке возмещения убытков s) accept an offer
20) договор на строительство "под t) fixed-period contract/

ключ" fixed-term contract
21) договор с исполнением в u) aleatory contract
момент заключения
22) уплатить денежное возмещение v) voidable contract
23) возместить убытки w) refuse/ decline an offer
24) штрафные убытки x) executed contract
25) сумма компенсации ущерба y) hire purchase contract
26) выносить решение о z) contractual commitment
возмещении
27) срочный контракт, контракт на aa) be held liable for damages
определенный срок
28) фактические убытки bb) treble damages
87
UNIT 3
29. Render the following texts into English.
ОФЕРТА
Предложение заключить договор именуется офертой и долж
но удовлетворять определенным требованиям. Оферта должна
быть адресована одному или нескольким конкретным лицам, со
держать существенные условия договора и выражать намерение
заключить договор с адресатом, если и м будет принято пред¬
ложение. Оферта связывает направившее ее лицо с момента ее
получения адресатом.
Важное практическое значение имеет срок действия оферты.
Он может быть назван в самой оферте или определен законом,
что бывает редко. В ином случае оферта действительна в тече¬
ние срока, нормально необходимого для получения ответа. Та
кой срок должен определяться с учетом всех обстоятельств, пре¬
жде всего, предмета оферты и срока прохождения почты между
контрагентами. Когда оферта сделана устно, для заключения до¬
говора должно последовать немедленное ее принятие, если де¬
лающее оферту лицо не назвало срок для ее принятия.
По общему правилу оферта является безотзывной (т.е. не мо¬
жет быть отозвана в течение срока, установленного для ее ак¬
цепта), однако иное может быть оговорено в самой оферте или
вытекать из существа предложения либо обстановки, в которой
оно было сделано. Первая ситуация будет иметь место в слу¬
чае предложения купить скоропортящиеся товары, вторая — при
резком колебании экономической конъюнктуры, что делает от
зыв оферты объяснимым и справедливым.
Гражданскому праву известно понятие публичной оферты.
Реклама и иные предложения, адресованные неопределенному
кругу лиц, оферту не создают, а считаются приглашением делать
оферты. Однако содержащее все существенные условия договора
предложение, из которого усматривается воля его автора заклю¬
чить договор на указанных условиях с любым, кто отзовется,
признается публичной офертой. Публичной офертой надо счи¬
тать опубликованное в печати приглашение на распродажу това¬
ров с указанием их наименований и цен.
АКЦЕПТ
Ответ лица, которому адресована оферта, о согласии на ее
принятие именуется акцептом. Однако для этого он, во-первых,
должен быть полным и безоговорочным согласием и, во-вторых,
88
CONTRACTS
получен в срок, установленный для акцепта. Молчание акцептом

не признается.
Акцепт с согласием заключить договор на иных условиях та
ковым не является и считается новой офертой. Акцепт может
быть отозван при условии, что его отзыв получен ранее или од¬
новременно с первоначально направленным акцептом. Если ак¬
цепт поступил после установленного для него срока, необходимо
различать две ситуации с разными правовыми последствиями.
Когда своевременно отправленный ответ получен с опозда¬
нием (например, по вине почты или оферента, неправильно
указавшего свой адрес), акцепт не считается опоздавшим, если
оферент немедленно не уведомит другую сторону о получении
акцепта с опозданием.
В случаях, когда акцепт по вине его отправителя был сделан
с опозданием, он считается состоявшимся, если оферент немед¬
ленно сообщит о принятии им опоздавшего акцепта. Эти два
правила практически оправданны и создают условия для заклю¬
чения договора при несвоевременном получении акцепта.
Садиков О.Н. «Гражданское право»
speak on Contracts.
TEST
1) . . — an insurance agreement that provides cover against loss
or damage caused by a chance event;
2) ... — taking or agreeing to take something offered;
3) . . — a contract where the people or groups involved have
done the things that they agreed to do;
4) . . — a contract which states clearly what has been agreed;
5) . — a statement that you are willing to give someone something
or do something for them;
6) . . — a contract that is not specifically stated or written
down;
7) . . — a contract in which only one of the parties has to do
something, which is therefore not legally a proper contract;
8) . — a person or organization that offers to buy something;
9) . . — a contract that can be ended because one of the people
or groups involved has done something unfair;
10) . — something of value given by one person or group signing
a contract in exchange for something given by the other;
89
UNIT 3
11) — a contract that is not recognized by a law court because

it is illegal;
12) . — a person or organization to whom something is offered
for sale;
13) . — something of value given by one person or group signing
a contract in exchange for something given by the other;
14) . — money that a court orders someone to pay to someone else
for harming them or their property, or causing them financial loss;
15) — a contract between two people or groups.
II. Fill in the correct prepositions.
1) to comply . a rule
2) to trade . exchange for smth
3) offer . sale
4) to be held liable . damages
5) to be bound . the terms
6) to refrain . doing something
7) protection . the law
8) to enter . an agreement
9) to be concerned . smth
10) to rely . smth
III. Translate the article from the Unites Nations Convention
on Contracts for the International Sale of Goods into Russian.
Article 18
1) A statement made by or other conduct of the offeree indicating
assent to an offer is an acceptance. Silence or inactivity does not in
itself amount to acceptance.
2) An acceptance of an offer becomes effective at the moment the
indication of assent reaches the offeror. An acceptance is not effective if
the indication of assent does not reach the offeror within the time he has
fixed or, if no time is fixed, within a reasonable time, due account being
taken of the circumstances of the transaction, including the rapidity of the
means of communication employed by the offeror. An oral offer must be
accepted immediately unless the circumstances indicate otherwise.
IV. Translate the article from the Unites Nations Convention
on Contracts for the International Sale of Goods into English.
Статья 14
1) Предложение о заключении договора, адресованное одному
или нескольким конкретным лицам, является офертой, если оно
90
C O M M E R C I A L PAPER
достаточно определено и выражает намерение оферента считать

себя связанным в случае акцепта. Предложение является доста¬
точно определенным, если в нем обозначен товар и прямо или
косвенно устанавливаются количество и цена либо предусматри¬
вается порядок их определения.
2) Предложение, адресованное неопределенному кругу лиц,
рассматривается лишь как приглашение делать оферты, если толь¬
ко иное прямо не указано лицом, сделавшим такое предложение.
UNIT 4 COMMERCIAL PAPER

1. What do you know about Commercial paper? Choose the
right answer.
1. The Uniform Commercial Code identifies . . basic kinds of
commercial paper.
a) four b) three c) five
2. ... — a document which contains a promise to pay a stated
amount of money to a stated person either on a fixed date or when the
money is demanded.
a) Promissory note b) Check c) Draft
3. . is not a valid defense to dishonor of a commercial paper.
a) Legal insanity b) Duress c) Intoxication
4. An individual who accepts a check that is more than . old is
assumed to be doing so with the knowledge that it is overdue.
a) 30 days b) 5 days c) 7 days
lined words.
Commercial Paper is a written instrument or document such as a
check, draft, promissory note, or a certificate of deposit, that manifests the
pledge or duty of one individual to pay money to another.
Commercial paper is ordinarily used in business transactions, since
it is a reliable and expedient means of dealing with large sums of
money and minimizes the risks inherent in using cash, such as the
increased possibility of theft.
One of the most significant aspects of commercial paper is that it is
negotiable, which means that it can be freely transferred from one party
to another, either through endorsement or delivery. The terms commer¬
cial paper and negotiable instrument can be used interchangeably.
91
UNIT 4
Since commercial paper constitutes personal property, it is trans¬

ferable by sale or gift and can be loaned, lost, stolen, and taxed. Com¬
mercial paper is a specific type of property primarily governed by
article 3 of the Uniform Commercial Code (UCC), which is in effect
in all 50 states, the District of Columbia, and the Virgin Islands. Al¬
though Louisiana has not enacted all the articles of the UCC, it has
adopted article 3.
T Y P E S O F C O M M E R C I A L PAPER
The UCC identifies four basic kinds of commercial paper: promis-
sory notes, drafts, checks, and certificates of deposit. The most fun-
damental type of commercial paper is a promissory note, a written
pledge to pay money. A promissory note is a two-party paper. The
maker is the individual who promises to pay while the payee or holder
is the person to whom payment is promised. The payee can be either
a specifically named individual or merely the bearer of the instrument
who has it in his or her physical possession when he or she seeks to
be paid according to its terms. A note payable to "bearer" can be paid
to the person who presents it for remuneration. Such an instrument is
said to be bearer paper.
A promissory note that is payable on demand can be redeemed by
the payee at any time, whereas a time note has a date for payment on
its face that establishes the date when the holder will have an enforce¬
able right to receive payment under it. There is no obligation to pay a
time note until the date designated on its face.
The ordinary purpose of a promissory note is to borrow money. Prom¬
issory notes should not be confused with credit or loan agreements, which
are separate instruments that are usually signed at the same time as prom¬
issory notes, but which merely describe the terms of the transactions.
A promissory note serves as documentary evidence of a debt. It can
be endorsed and sold at a discount to other parties, and each subse¬
quent endorser becomes secondarily liable for the amount specified on
the face of the instrument. A number of consumer credit dealings are
funded through the use of promissory notes.
Certain types of promissory notes are sold at a discount, such as U.S.
savings bonds and corporation bonds. Such an instrument is sold for an
amount below its face value and can subsequently be redeemed on the
due date or date of maturity for the entire face amount. The interest
obtained by the holder of the instrument is the difference between the
purchase price and the redemption price. In certain instances, bonds
that are not redeemed immediately upon maturity accumulate interest
following the due date and are ultimately worth more than their face
92
COMMERCIAL PAPER
value when redeemed at a later time. I f such bonds are cashed in before
maturity, the holder receives less than the face value.
A draft, also known as a bill of exchange, is a three-party paper
ordering the payment of money. The drawer is the individual issuing
the order to pay, while the drawee is the party to whom the order to
pay is given. As in the case of a promissory note, the payee is either
a specified individual or the bearer of the draft who is to receive pay¬
ment according to its terms. The draft is made payable on demand or
on a certain date. A common example of a draft is a cashier's check.
A draft is often used in business to obtain payment for items that must
be shipped over long distances. Drafts are often the preferred method of
payment for purchasers who want to examine goods prior to payment or
who do not have the necessary funds available at the time of sale. The
vendor might have reservations concerning the buyer's credit and desire
payment as soon as possible. The procedure ordinarily followed in such
instances is that upon shipment of the goods, the seller receives a bill of
lading from the carrier. The bill of lading also serves as a certificate of
title to the goods, which is ordinarily in the seller's name.
Upon shipment, the seller draws a draft against the buyer-drawee,
who is required to pay the draft. The seller's bank is named as the
payee. The seller endorses the bill of lading to the payee and attaches
the bill to the draft. The seller can either negotiate these instruments
to the payee at a discount or use them as security for a loan. Subse-
quently, the papers are endorsed by the seller's bank and delivered to a
correspondent bank in the community where the buyer is located. The
correspondent bank seeks payment of the draft from the buyer and when
payment is made, the bank transfers ownership of the goods from seller
to buyer by endorsing the bill of lading to the buyer. The buyer can then
obtain the goods from the carrier upon presentation of the bill of lading,
which demonstrates his or her title to the shipped goods.
A check is a specific kind of draft, which is drawn on a bank and
payable on demand to a particular individual or to the bearer, in which
case it can be written payable to "cash."
An individual who opens a checking account is engaged in a con¬
tractual relationship with a bank. The individual agrees to deposit
money therein, while the bank agrees that it is indebted to the deposi¬
tor for the amount in the account, in addition to promising to honor
checks written for payment against the account when there are suf¬
ficient funds on hand to do so.
A certificate of deposit, frequently referred to as a CD, is a writ¬
ten recognition by a bank of the acquisition of a sum of money from
a depositor for a designated period of time at a specified interest rate,
93
UNIT 4
coupled with a promise of repayment. The bank is both the maker and
the drawee, and the individual making the deposit is the payee.
Ordinarily, certificates of deposit come in specific denominations
that vary according to the length of the term that the bank will hold the
funds and are available only for large sums of money. They are used
mainly by corporations and individuals as savings devices since they
generally bear higher interest rates than ordinary savings accounts. They
must, however, be left on deposit for the designated time period.
Ordinarily, a CD can be cashed in prior to the date of maturity,
but some interest will be forfeited. Depending upon the provisions of
the CD, however, a bank may have the legal right to refuse to close an
account before the expiration of the designated date of maturity.
3. In this exercise, the first part of each word is already in the sen¬
tence. Complete it with the second part, which you will find in the box.
• mercial -sited -able •missory *ods -ficates -ing -an *ck

•ment -ange *yee *rer -row
1. The staff of Lloyds Bank refused to return the pro... notes and
advised the police of their existence and uncertain origin.
2. The judgment of the Hoge Raad in The Alnati concerned a con-
tract for carriage of potatoes by a Dutch carrier from Antwerp to Rio
de Janeiro, under a bill of lad... stipulating that Dutch law was to be
applicable to the contract.
3. He charged the property as security for a lo... without the re¬
quisite consent.
4. It was agreed that the first two payments would be made in Ster-
ling and depo... in Mark's bank account in London, and the third in
US dollars, to be entered into Mark's account in Essexia.
5. Philippine National Bank said it would issue $125 million worth
of floating rate certi. of deposit with a maturity of three years.
6. After a minute, she wrote out the die... and placed it on the table.
7. The company recently refinanced from intermediate bonds to
short-term com... paper.
8. The Eurocheque is free of charge to its pa... .
9. The firm became suspicious about the bonds and asked the bea...
for confirmation.
10. Sanders' donation was $450,000, pay... over three years.
11. Nowhere else in Europe can home-buyers bor... 100% of the
purchase price.
94
12. The exporter's bank sends the bill of exch... to its overseas
branch in the importer's country.
13. Manaus became a free-trade zone where companies could freely
import go... and components.
14. A ship...of 1700 cars left for Italy.
1) the sum of money that a bank makes available to a client in
excess of any deposit
2) pay; recompense
3) something that is transacted, esp a business deal or negotiation
4) the dishonest taking of property belonging to another person with
the intention of depriving the owner permanently of its possession
5) a person who writes a cheque and so gives an instruction to his
or her bank to pay a sum of money to someone
6) a reduction in the cost of goods or services in relation to the
normal cost
7) a sum of money paid
8) a specific kind of draft, which is drawn on a bank and payable
on demand to a particular individual or to the bearer, in which case it
can be written payable to "cash."
9) a sum of money which is borrowed, often from a bank, and has
to be paid back, esp. together with an additional amount of money
that you have to pay as a charge for borrowing
10) an amount paid by a borrower to a lender, for example to a
bank by someone borrowing money for a loan or by a bank to a de¬
positor
1
2
3
4
5
6
7
8
9
10
95
UNIT 4
5. In the above text find the English equivalents for the following
words and word combinations and make your own sentences using
them.
1) коносамент; 2) простой вексель, соло-вексель; 3) письмен
ный документ; 4) текущий (чековый) счет; 5) тратта; 6) выкуп
ная цена; 7) депозитный сертификат; 8) законное право; 9) ком
мерческая бумага; 10) вознаграждение; 11) трассант; 12) деловая
операция; 13) индоссамент; 14) оборотный документ; 15) Единый
торговый кодекс; 16) чек; 17) векселедатель; 18) предъявитель
(лицо, предъявляющее к оплате вексель или иной долговой до¬
кумент; владелец ценной бумаги на предъявителя); 19) движимое
имущество; 20) срочный вексель; 21) получить платеж; 22) до¬
говор о ссуде; 23) индоссант, жирант; 24) вкладчик, депозитор,
депонент; 25) сберегательная облигация; 26) потребительский
кредит; 27) срок, число, когда наступает срок; 28) номинальная
стоимость; 29) получать деньги (по чеку, по векселю); 30) индос¬
сировать; 31) процентная ставка; 32) трассат (лицо, на которое
выставлена тратта); 33) документ на предъявителя; 34) банков¬
ский чек; 35) сертификат собственности; 36) поручительство по
займу; 37) банк-корреспондент; 38) отгруженный товар; 39) до¬
говорные отношения; 40) класть деньги на депозит.
6. Translate the sentences into English.

1. Облигации были выпущены в предъявительской форме.
2. Для того чтобы растаможить товары, импортер должен за¬
полнить предписанную форму и представить коносамент от ино¬
странного экспортера.
3. Произвести оплату можно в любой кассе приема платежей
наличными или чеком.
4. Если обращающийся документ предъявлен к оплате, но не
оплачен, говорят, что по нему отказали в платеже.
5. Тратта вначале должна быть предъявлена к акцепту — пла
тельщик становится "акцептантом", а на лицевой стороне трат¬
ты должны быть проставлены дата и место платежа.
6. Налоги на личное имущество становятся очень обремени¬
тельными.
7. Текущий контроль и управление гарантиями осуществля¬
ется вместе с кредитованием или инвестированием, проводимых
ассоциированным банком.
8. Платежи задержаны более чем на 24 месяца.
96
7. Complete the sentences using the required information from

the above texts.
1. Commercial Paper is a written instrument or document such as ... .
2. The ordinary purpose of a promissory note is ... .
3. A draft, also known as a bill of exchange, is a three-party . .
4. A check is a specific kind of draft, which is drawn on a bank
and payable . .
5. A promissory note serves as documentary . .
6. The drawer is the individual issuing . , while the drawee is the
party to whom the order . .
7. A certificate of deposit is a written recognition by a bank of the
acquisition of a sum of money . .
8. A draft is often used in business to obtain payment for items
that . .
9. The most fundamental type of commercial paper is a promissory
note, a written . .
10. An individual who opens a checking account is engaged in . .
LIABILITY OF PARTIES
An individual who signs an instrument is either primarily or second¬
arily liable for payment. Primary liability is extended to the person who
is expected to pay first, and the individual who is legally responsible to
pay upon the failure of the first party to do so is secondarily liable.
The maker of a promissory note is primarily liable, since that per¬
son is the individual who has originally promised to pay. He or she
must meet this obligation when payment becomes due unless he or she
has a valid defense or has been discharged of the debt.
The drawer of a check or draft is secondarily liable, since that indi¬
vidual does not make an unconditional promise to pay the instrument.
He or she expects the bank to pay and promises to pay the amount
of the instrument only upon notification of dishonor, a refusal by the
drawee to accept the paper when properly presented for payment. This
might occur, for example, i f the bank refuses to pay a check due to
insufficient funds in the drawer's checking account or because he or
she has notified the drawee to stop payment.
The drawee of a draft or check has primary liability to the holder,
an individual who has lawfully acquired possession and is entitled to
97
UNIT 4
payment, upon acceptance of the instrument by the drawee. A draft is

accepted for payment when the acceptance is indicated by the drawee
on the face of the document. Certification of an instrument, such as
a check, is its acceptance by a bank guaranteeing that payment will
be forthcoming. A drawee is liable to the drawer i f the drawee refuses
to pay a draft or check that is properly drawn and presented because
such action constitutes a noncompliance of the drawee's contractual
obligation to the drawer.
Any person who places his or her unqualified endorsement on a
commercial paper incurs secondary liability for its payment. Such l i -
ability occurs when the individual who has the primary duty to pay
defaults on his or her obligation.
A maker or drawer is not relieved from payment of an instrument
endorsed with the payee's name when an imposter manages to have
a paper issued to himself or herself by the maker or drawer; when an
individual signing on the behalf of the maker or drawer plans that
the payee shall have no interest in the paper, for example, the case
of a check being made out to a fictitious payee; and when the agent
or employee of the maker or drawer designates the name of a payee
with the intent that the named party will actually have no interest in
the instrument. In the last two instances, the failure of the employer
to use reasonable care in choosing and supervising employees makes
the employer personally responsible for all losses that arise from his
or her negligence. Many employers guard against such risks by taking
out fidelity insurance policies to cover losses that might occur through
employee misconduct.
1) dishonor g a) to write something, esp. your signature, on the
back of (esp. a cheque), in order to make it payable
to someone else
2) accept b) a moral or legal requirement; duty
3) funds c) to agree to pay (a bill, draft, shipping document,
etc.), esp by signing
4) endorse d) the act, system, or business of providing financial
protection for property, life, health, etc., against
specified contingencies, such as death, loss, or
damage, and involving payment of regular premiums
in return for a policy guaranteeing such protection
98
5) obligation e) money that is readily available

6) insurance f) something that is owed, such as money, goods, or
services
7) debt g) refusal or failure to accept or pay a commercial paper
1. A drawee is liable to the drawer i f the drawee refuses to pay a
draft or check that is properly drawn and presented because such ac¬
tion constitutes a noncompliance of the drawee's contractual obliga¬
tion to the drawer.
2. Any person who places his or her unqualified endorsement on a
commercial paper incurs primary liability for its payment.
3. A draft is accepted for payment when the acceptance is indicated
by the drawer on the face of the document.
4. The drawee of a draft or check has secondary liability to the
holder.
5. The drawer of a check or draft is secondarily liable, since that
individual makes an unconditional promise to pay the instrument.
6. The maker of a promissory note is primarily liable, since that
person is the individual who has originally promised to pay.
7. An individual who signs an instrument is either primarily or sec¬
ondarily liable for payment.
dishonor, to notify, to escape, eligible, liable, to send, to occur, oral,
negotiable, to give, primary, liability, to hold, endorser, commerce, rea¬
sonable, payment
SECONDARY L I A B I L I T Y
Individuals who are secondarily 1) . on a 2) . instrument are not
obliged to pay unless it has been presented for payment and dishon¬
ored. The 3) . paper must first be 4) . to the person who is primarily
liable for payment. In the event that the instrument clearly notes the
date of 5) . , the instrument must be presented on the date indicated.
If payment is unjustifiably refused by the individual who has 6) ... li¬
ability, the secondary party must be given notice of the 7) . and the
presentation of the instrument for payment must be made within a
8) ... period of time. What constitutes a reasonable time is contingent
upon what type of instrument is involved. I f the paper is a check,
the drawer has primary 9) . for thirty days following the date on the
check or the day it was given or 10) . to the payee, with the later date
99
UNIT 4
prevailing. An 11) . is secondarily liable for seven days following his

or her endorsement. When presentation does not 12) . within these
time periods, either the drawer or the endorser may 13) . liability.
Individuals who are secondarily liable must receive notice of the
dishonor of a commercial paper in order to be 14) . liable for its
payment. Such notice must be given by a bank prior to midnight on
the date following the dishonor. Notice can be 15) ... or in writing, as
long as the language identifies the paper and indicates that it has been
dishonored. I f more than one person is 16) ... to obtain payment, only
one of them need 17) .those parties who are secondarily liable.
in bold.
HOLDERS
A holder is an individual who is in possession of an instrument that
is either payable to him or her as the payee, endorsed to him or her, or
payable to the bearer. Those who obtain instruments after the payee are
holders i f such instrument is either payable to the bearer or endorsed
properly to their order. The party in possession is not considered to be
the holder in a case in which a necessary endorsement has been forged.
According to law, a holder may either be an ordinary holder or a
holder in due course, who has preemptive rights to payment. An ordi¬
nary holder becomes a holder in due course upon taking an instrument
subject to the reasonable belief that it will be paid and that there are
no legal reasons why payment will not occur.
In more technical terms, to be a holder in due course, the party
must take the paper for value, in good faith, and absent the notice that
it is overdue, has been dishonored, or is subject to an adverse claim.
Such notice of problems affecting the validity of the instrument exists
if the party either is specifically informed about something or other¬
wise has reason to believe in the existence of a problem.
A holder takes a paper for value when the holder has imparted
something of value, such as property or services, in exchange for the
value of the paper, as evidenced by its terms. In such a case, the indi¬
vidual becomes the holder for value.
If a paper is used in satisfaction of or as security for the repayment
of a debt, even though the debt might not be due when the paper is
taken, the instrument is taken for value. In addition, value is given
when one commercial paper is traded for another.
A person who receives a check or other type of negotiable instru¬
ment as a gift is an ordinary holder as opposed to a holder in due
100
course, since no consideration that is bargained for value has been ex¬
changed by the parties. A holder in due course has greater legal rights
concerning protection for enforcement of the provisions for payment
of a negotiable instrument than does an ordinary holder.
For an individual to be a holder in due course, the negotiable in¬
strument must be taken in good faith that it represents a valuable legal
right. There must be honesty in the transaction, but the determination
of whether or not good faith is present is totally subjective.
Frequently, a due date is clearly specified on the face of the docu¬
ment. A holder is presumed to have knowledge of the terms appearing
on the paper. I f an individual is presented with a note on May 15 that
is payable on May 1, he or she is regarded as having knowledge that it
is overdue. A person is legally considered to have knowledge that a de¬
mand instrument is overdue if he or she accepts it after being informed
that a demand for payment has previously been made and refused or if
a reasonable period of time has elapsed since its issuance. Ordinarily,
30 days after the date on which a check was issued is a reasonable time
period within which its presentation to a bank for payment should oc¬
cur. An individual who accepts a check that is more than 30 days old
is assumed to be doing so with the knowledge that it is overdue.
An instrument that has been dishonored ordinarily has that fact
indicated on its face. For example, a check might be stamped "insuf-
ficient funds," "account closed," or "payment stopped." An individual
who accepts such a document possessing knowledge of its dishonor
cannot be a holder in due course. A person cannot be a holder in due
course if he or she takes an instrument subject to his or her knowledge
that a claim exists against it, such as when it has been stolen or trans¬
ferred as a result of fraud.
A B
1) preemptive d a) funds
2) negotiable b) course
3) insufficient c) faith
4) holder in due d) right
5) in good e) date
6) due f) instrument
7) holder for g) value
101
UNIT 4

to the above text.
1. A bill of exchange is not only transferable but also negotiable,
since if a person without an enforceable right to the money transfers a
bill to a h in due course, the latter obtains a good title to it.
2. If the bill is p at a future time the drawee signifies his
acceptance, which makes him the party primarily liable upon the bill;
the drawer and endorsers may also be liable upon a bill.
3. For example, i f a contract is made in England but is to be ful¬
filled abroad, it will be necessary to decide which law governs the v _
of the contract.
4. An endorsement in blank is the bare signature of the holder and
makes the bill payable to b .
5. An e , by endorsing a bill, takes on certain obliga¬
tions to the holder or a subsequent endorser.
6. When value (which includes a past debt or liability) has at any
time been given for a bill, the holder is a holder for v _ _ _ _, as
regards the acceptor and all who were parties to the bill before value
was given.
7. If the bill is d , the holder has no recourse to
the drawer or endorser who has made such a stipulation.
8. A holder in due course is one who has taken a bill of exchange
in good f _ _ _ _ and for value, before it was overdue, and without
notice of previous dishonour or of any defect in the title of the person
who negotiated or transferred the bill.
9. Promissory notes are n instruments and many
of the provisions in the Bills of Exchange Act 1882 apply with neces¬
sary modifications to promissory notes.
10. The relationship between a solicitor and his client is a fiduciary
one and any other t between them may be af¬
fected by undue influence.
16. Make a report covering the information acquired.
17. Read the text and choose the most suitable sentence from
the list (A-G) for each gap. There is one extra sentence which you
do not need to use. There is an example in the beginning.
A) None of the parties responsible for payment can use the al¬
teration as a defense against a holder in due course, but it may be used
against an ordinary holder.
102
1 — B) The law affords protection to infants by permitting them

to evade their contractual obligations, even when, in some instances,
they have reaped the benefits.
C) It is a defense that is valid against both an ordinary holder and
a holder in due course.
D) An individual can legally avoid payment to the holder in due
course of such an instrument based on the illegal nature of the debt it
was meant to pay.
E) A defendant may avoid liability for payment of a commercial
paper i f its terms have been materially altered.
F) If the defendant signed the instrument subject to a threat of im¬
mediate physical violence or death, he or she is not legally bound to honor
its terms since he or she had not freely entered into the transaction.
G) In the case of bills of exchange drawn at sight or at a fixed
period after sight, the time-limit of thirty days shall run from the date
on which the holder has given notice of vis major to his endorser.
DEFENSES
A holder of a negotiable instrument who has been refused payment
when payment was due has a cause of action against the party or par¬
ties liable for payment. Ordinarily, when an individual is sued on a
negotiable paper, he or she will try to defend his or her right to refuse
payment. Certain defenses, known as real defenses, are valid against
ordinary holders as well as holders in due course, whereas personal
defenses are only valid against ordinary holders.
Normally, any defense that can be asserted in an action concerning
a contract may also be used in an action brought to enforce payment
of a negotiable instrument. The legal incapacity of the maker, drawer,
or endorser, a signature effected by duress, illegality, or fraud, and
alteration of the instrument qualify as real defenses.
One of the most prevalent legal incapacity defenses asserted is in¬
fancy. [1 — B]. A holder is usually excluded from receiving payment
on a note from a minor.
Another incapacity defense is legal insanity or incompetency. A
party who has been legally declared insane or incompetent is not liable
for any contractual obligations entered during that time so that i f such
a person signs or endorses a negotiable instrument, the transaction
is nullified. Intoxication is not a valid defense to dishonor of a com¬
mercial paper.
Duress may be used as a defense in the event that the individual
against whom a suit is brought can prove that he or she was subject
to extreme pressure caused by another at the time of the execution of
103
UNIT 4
the paper. [2 ] . Certain types of duress, such as a threat to report

a wrongdoing to the police or to bring a civil lawsuit, are not valid
against a holder in due course, although they can be used as valid per¬
sonal defenses against an ordinary holder.
Certain jurisdictions deem a paper that has been negotiated to pay
a usurious loan or gambling debt null and void. [3 ] .
Two basic types of fraud exist: fraud in the essence and fraud in the
inducement. Fraud in the essence occurs when an individual is intention¬
ally lied to about the nature of the instrument or its terms. [4 ]. Fraud
in the inducement takes place when the party signing the paper is cogni¬
zant of its nature and terms but is misled into believing that the reasons
for its creation have been satisfied when in actuality they have not. For
example, an individual might be induced to issue a check for a certain
amount to a mechanic who claims to have repaired a car. If the individual
subsequently discovers that the car was not repaired, fraud may be used
as a personal defense against the mechanic who has not performed his or
her part of the contract to repair the car. Fraud in the inducement is only
valid against an ordinary holder, not a holder in due course.
A material alteration is an addition or deletion of the language
of an instrument, which changes the obligations of any party to it.
[5 ] . Examples of such alterations are a change in the date of pay¬
ment or amount to be paid. When an individual's own negligence is
a contributing factor to a material alteration, that negligence may not
be asserted by him or her as a defense against someone who pays the
instrument in good faith or against a holder in due course.
An alteration made by a holder that is both material and fraudulent
can be used as a defense against enforcing the payment of the document
by all those people whose agreements were changed. If these two condi¬
tions of materiality and fraud are not met, the instrument is ordinarily
enforceable according to the way it was initially written, and none of
those involved can use the alteration as a defense against payment.
When a holder in due course takes a paper following its fraudu¬
lent alteration by the previous holder, he or she is entitled to receive
payment according to the original terms of the instrument prior to its
alteration. [6 ] .
lowing words and word combinations and make your own sen¬
tences using them.
1) отказываться от уплаты; 2) незаконность; 3) оформле
ние (документов); 4) выставлять чек на банк; 5) небрежность;
104
6) договорное обязательство; 7) держатель оборотного доку

мента; 8) добросовестно; 9) интоксикация (наркотическая);
опьянение; 10) несовершеннолетие; 11) аннулировать; 12) за
конный держатель; 13) индоссант, жирант; 14) принуждение;
15) ограничение дееспособности, ограничение правоспособ¬
ности; 16) мошенничество; 17) преступление; правонаруше¬
ние; 18) угроза; 19) сделка; 20) срок платежа; 21) исправление;
22) невменяемость; 23) душевнобольной; 24) отказывать в ак¬
цепте (векселя); 25) юридически обязанный.
1. Historically within contract law, a claim thata) FRAUD
a contract was voidable for duress could only be
successful if a threat to the person (i.e. physical
duress) had induced the contract. e)
2. A contract obtained by is voidable on the b) INTOXICATION
grounds of fraudulent misrepresentation.
3. have a limited capacity to contract. c) ALTERATION
4. is not a defence i f a person deliberately e) DURESS
drinks or takes drugs in order to give himself
Dutch courage to commit a crime.
5. A person who is at the time of his trial, f) NEGLIGENCE
in the sense that he does not understand the
charge and cannot properly instruct his lawyers,
may be found unfit to plead.
6. If, however, a material is made to a g) INFANTS
deed after execution without the consent of the
parties, the deed may become void i n part.
7. in the sense of carelessness does not give h) INSANE
rise to civil liability unless the defendant's failure
to conform to the standards of the reasonable
man was a breach of a duty of care owed to the
claimant, which has caused damage to him.

noun verb noun verb
defence UK
defend dishono(u)r
defense US
suit threaten
payment issue
105
UNIT 4
noun verb noun verb

validity induce
alteration delete
exclusion change
endorsement enforce
transaction entitle
nullification avoid
intoxication protect
21. Translate the text into Russian.
DISCHARGE FROM LIABILITY

The most common way to be discharged from liability on a com¬
mercial paper is through payment. The intentional cancellation of an
instrument by the holder by either marking the instrument paid or by
destroying it discharges all liability.
The holder may also discharge an individual from liability for pay¬
ment through renunciation. This can be accomplished when a document
is signed and delivered by the holder or when a paper is relinquished
to the party who is being discharged. A stop-payment order put on a
check by its drawer has the effect of discharging the bank from liability
for refusing to honor the check when presented for payment. It cannot,
however, discharge the drawer from liability in cases where the drawer
was contractually or otherwise obligated to pay the payee.
1. Are real defenses valid against ordinary holders as well as holders
in due course?
2. Are personal defenses valid against holders in due course?
3. The most common way to be discharged from liability on a com¬
mercial paper is through payment, isn't it?
4. May the holder also discharge an individual from liability for
payment through renunciation?
5. Is intoxication a valid defense?
6. What are the basic types of fraud?
7. What is a material alteration?
8. Is fraud in the inducement only valid against a holder in due
course?
23. Match the English words and phrases in A with their Rus¬
sian equivalents in B. Learn them.
106
COMMERCIAL PAPER
A B
1) by negligence a) индоссамент
2) defense of insanity b) владелец банковского счета
3) endorsement c) сберегательная облигация
4) promissory note d) коносамент
5) defense of minority e) существенное изменение
6) drawee f) простой векселедержатель
7) holder of a bank account g) защита ссылкой на
несовершеннолетие
8) valid defense h) иметь индоссамент
(о векселе и т. д.)
9) savings bond i) оплата опротестованного векселя
10) holder for value j) трассат
11) error facti defense k) законный держатель
12) bill of lading l) первоначальный [основной]
должник
13) endorser/ endorsee m) защита ссылкой на
невменяемость
14) material alteration n) трассант
15) holder in due course o) предъявитель
16) to bear an endorsement p) по небрежности
17) primary debtor q) простой вексель
18) payment for honour r) защита ссылкой на фактическую
ошибку
19) mere holder/ ordinary s) юридически обоснованное
holder возражение
20) bill of exchange/ draft t) индоссант, жирант
21) drawer u) держатель на возмездных началах
22) bearer v) переводной вексель/тратта
ENDORSEMENTS
An endorsement is the process of signing the back of a paper,
thereby imparting the rights that the signer had in the paper to another
person. The number of times an instrument may be endorsed is unlim¬
ited. There is no requirement that the word "order" be embodied in
the endorsement. Four principal kinds of endorsements exist: special,
blank, restrictive, and qualified.
An endorsement that clearly indicates the individual to whom the
instrument is payable is a special endorsement.
107
UNIT 4
A paper containing a blank endorsement is one that has the signa¬

ture of the payee but no specific endorsee is designated. A check that
is made payable to the order of X is endorsed in the blank when X
signs it. Once endorsed, it becomes bearer paper and is negotiable by
anyone who physically holds it. A blank endorsement is changed into
a special endorsement if certain words are written above the endorsee's
signature, such as "pay to the order of Y."
A qualified endorsement is one wherein liability is disclaimed by
the endorser through inclusion of a phrase preceding his or her sig¬
nature. Ordinarily, an unqualified endorser's liability may be either
secondary, whereby the endorser is bound to pay i f the individual
expected to pay defaults and certain conditions are met or by war¬
ranty, by which the endorser incurs liability upon alteration of the
instrument. To disclaim secondary liability, the endorser can include
the words "without recourse," thereby relieving himself or herself of
any responsibility to pay it.
Attorneys who are the recipients of checks drawn in settlement of the
claims of their clients commonly sign their clients' checks with quali¬
fied endorsements. This type of check is ordinarily made payable to the
lawyer and client jointly. It is generally endorsed by the lawyer without
recourse and given to the client. The attorney then is not liable i f the
client does not receive the money promised by the terms of the check.
A restrictive endorsement is conditional and attempts to prevent
subsequent transfer of the document. The language of the endorse¬
ment indicates that the instrument is intended for limited use, such as
"for deposit only," or specifies that the paper is meant for the benefit
of the endorser or another individual, as in "Pay X in trust for Y."
The condition imposed by a restrictive endorsement must be satisfied
before payment can be properly made.
However, an endorsement that tries to prohibit further transfer of
an instrument will not succeed. I f a check says "Pay X only," it is still
completely negotiable upon its endorsement by X.
ВЕКСЕЛЬ И ЧЕК В СОВРЕМЕННОМ

МЕЖДУНАРОДНОМ ЧАСТНОМ ПРАВЕ
В современных условиях международного хозяйственного
оборота возрастает роль таких оборотных документов, позволяю
щих оперативно осуществлять платеж, как вексель и чек.
108
COMMERCIAL PAPER
Вексель является одним из наиболее универсальных инстру¬

ментов в сфере международных расчетных и кредитных отноше¬
ний в силу исторического развития товарно-денежных отноше¬
ний. Взаимоотношения участников вексельного оборота носят
характер специальных правоотношений и регулируются не общи¬
ми нормами гражданского права, а нормами особого вексельно¬
го права. В связи с тем что вексель издавна широко используется
во внешнеторговых и международных расчетах, национальное
вексельное законодательство до настоящего времени отличается
большим разнообразием. Поэтому особое значение имеет про
шедшая в 1930 г. Женевская конференция, с участием более 30
стран, выработавшая три вексельные конвенции: Конвенцию о
единообразном законе о переводном и простом векселе; Конвен¬
цию, имеющую целью разрешение некоторых коллизий законов
о переводных и простых векселях; Конвенцию о гербовом сборе
в отношении переводного и простого векселей.
Страны, подписавшие или присоединившиеся к первой из
указанных конвенций, приняли на себя обязательство ввести в
действие на своих территориях Женевский вексельный закон,
или Едшюобразньгй вексельный закон (ЕВЗ), являющийся при¬
ложением к указанному международному договору.
Кратко останавливаясь на юридической природе векселя, сле¬
дует отметить, что он является ценной бумагой, оформленной в
строгом соответствии с требованиями закона и содержащей без¬
условное абстрактное денежное обязательство. Различают пере¬
водный вексель и простой вексель. Переводный вексель (тратта)
представляет собой документ, составленный по установленной за¬
коном форме, в котором содержится ничем не обусловленное пред¬
ложение (приказ) одного лица (векселедателя — трассанта) друго¬
му лицу (плательщику — трассату) уплатить по требованию или
в определенное время в будущем обозначенную в векселе сумму
денег третьему лицу (первому держателю векселя — ремитенту).
Простой вексель — это документ, отвечающий по форме тре¬
бованиям закона и содержащий ничем не обусловленное обяза¬
тельство векселедателя уплатить по требованию или в опреде¬
ленное время в будущем обозначенную в векселе сумму денег
другому лицу (векселедержателю).
speak on Commercial paper.
109
UNIT 4
27. Choose any question (topic, problem) relating to this unit

and make a 5 — 7 minute report in class.
TEST
1. A draft may involve three parties: the who writes or creates it,
the who has custody of the funds to be paid (for example, a bank),
and the . , who will receive the funds.
2. The use of commercial . is generally governed by the Uniform
Commercial Code.
3. A promissory note differs from a bill . . in that the maker
stands in the place of both the drawer and the acceptor.
4. However, where a bill has been materially altered but the altera¬
tion is not apparent and the bill is in the hands of a holder . . . ,
such a holder may treat the bill as i f it had not been altered and may
enforce payment of it according to its original tenor.
5. Promissory note are one species of . . .
6. If, however, a material . is made to a deed after execution with¬
out the consent of the parties, the deed may become void in part.
7. A bill of . is also issued by a shipowner to a charterer who is
using the ship for the carriage of his own goods.
8. When value (which includes a past debt or liability) has at any
time been given for a bill, the holder is a . for value, as regards the
acceptor and all who were parties to the bill before value was given.
9. For example, under English conflict rules, i f a person dies in¬
testate, the succession to his personal . is governed by the law of the
country in which he is domiciled.
10. Since 1925, a trustee may delegate any business of the trust to
an agent provided that he does so in good . .
11. Fill in the prepositions.
1. The mortgagor has a right to redeem the goods on repayment of
the debt and usually remains . possession . them.
2. Compensation orders may be made . addition . other sen¬
tences.
3. Since a cheque is payable . demand it need not be presented to
the drawee bank . acceptance.
4. A factory outlet sells goods . a discount.
5. An occupier of land or buildings is not liable . a fire that begins
there accidentally.
6. They must take their own decision according . their own legal
advice.
110
COMMERCIAL PAPER
7. . the face . the document the transaction appears to be an

outright gift, and the existence of a trust is not apparent.
8. An interest in property created as a form of security ... a loan or
payment . a debt and terminated on payment of the loan or debt.
9. A holder may sue . the bill in his own name.
10. Ignorance of the law is no excuse, i.e. no defence . criminal
or other proceedings arising from its breach.
III. Translate the following sentences into Russian
If an endorsement is made by an agent without authority or power
to bind his principal in the matter, the principal, or a party who signed
the instrument before such endorsement, has the right to recover com¬
pensation for any damage that he may have suffered because of such
endorsement against:
(a) The agent;
(b) The person to whom the instrument was directly transferred by
the agent;
(c) A party or the drawee who paid the instrument to the agent
directly or through one or more endorsees for collection.
Convention on International Bills of Exchange and International
Promissory Notes, 1988, Article 26
IV. Translate the following sentences into English
1. Если в вексель были внесены существенные изменения,
то:
a) сторона, подписавшая вексель после внесения в него су¬
щественных изменений, несет ответственность в соответствии с
содержанием измененного текста;
b) сторона, подписавшая вексель до внесения в него суще¬
ственных изменений, несет ответственность в соответствии с
содержанием первоначального текста. Однако сторона, которая
сама внесла существенное изменение, уполномочила внести его
или согласилась с ним, несет ответственность в соответствии с
содержанием измененного текста.
2. Предполагается, что подпись поставлена на векселе после
внесения существенного изменения, если не доказано обратное.
3. Любое изменение является существеннъгм, если оно в
каком-либо отношении изменяет содержащееся в векселе пись¬
менное обязательство любой стороны.
Конвенция "О международных переводных векселях и
международных простых векселях" 1988, Статья 35
111
UNIT 5
UNIT 5 INTELLECTUAL PROPERTY

1. What do you know about intellectual property? Choose the
right answer.
1) The . . . is a sign or symbol that distinguishes the goods or serv¬
ices of one enterprise from another in commerce.
a) patent b) pattern c) trademark
2) The minimum term of a patent under the . . . Agreement is 20
years from the filing of the applica—tion
a) TRIPS b) GATT c) UNCTAD
3) is granted to authors and artists to protect expressive works
against unauthorized reproduction or distribution by third parties.
a) Patent b) Defense c) Copyright
4) The Paris Convention was concluded in . . . .
a) 1947 b) 1883 c) 1886
5) In a number of places, including the United States and Euro¬
pean Union, the duration of copyright has been extended to the life of
the author plus . . . years.
a) 70 b) 65 c) 50
fortune, auspices, discipline, utilitarian, precept, patent, perspec¬
tive, rationale, spurring
words.
INTRODUCTION
Technology has always played a significant role in economic
development and the shifting fortunes of nations. Yet when the GATT
was established in 1947, very limited attention was paid to 'intellectual
property'. This is largely explained by the evolution of an international
system for the regulation of intellectual property (IP) under the auspices
of what today is known as the World Intellectual Property Organization
(WIPO). As a subject of international regulation, intellectual property
had not been overlooked. In fact, it was perhaps the first element
of world trade subject to truly multilateral discipline with the Paris
Convention for the Protection of Industrial Property of 1883 and the
Berne Convention for the Protection of Literary and Artistic Work of
1886. IP is regulated at the multilateral, regional, bilateral, national
and sub-national levels.
112
INTELLECTUAL PROPERTY
Intellectual property comprises an interrelated set of legal regimes

protecting economic and in some contexts personal interests in
inventions, information, works of authorship, images, symbols, and
sound recordings. Intellectual property law principally embodies
utilitarian precepts — such as promoting technological innovation
(patents, trade secrets), spurring creative expression (copyright), and
preventing confusion in the marketplace (trademark) — although strands
of intellectual property law also reflect natural rights, personhood, and
other philosophical perspectives. Economists and policy analysts have
substantially enriched our understanding of the relationship between
intellectual property protection and innovation and diffusion of new
works, but the complexity of this relationship leaves many questions
unanswered. The advent of various new technologies and means of
distributing intellectual works during the latter half of the twentieth
century, most notably digital technology and the decoding of genetic
structure, have raised fundamental questions about the rationale,
implications, and appropriate scope of intellectual property protection.
As a result, the premises, doctrines, and contours of intellectual prop¬
erty law have increasingly come into question and have sparked growing
social, economic, political, and philosophical interest.
PATENT
The 'patent' is a set of rights granted to the inventor of a product
or process which is 'new' (or 'novel'), involves an 'inventive step' (or
1
is 'nonobvious') and is 'capable of industrial application' (or 'useful').
The inventor must disclose the invention in the patent application
in a way that enables others to make the invention without undue
experimentation. The minimum term of a patent under the TRIPS
Agreement is 20 years from the filing of the application. The holder
of a patent may prevent others from making, using, offering for sale,
selling or importing the invention during the patent term. As with
other intellectual patent rights (IPRs), the rights of the patent holder
are qualified by certain important exceptions. The patent is typically
referred to as a 'hard' form of intellectual property because it excludes
another person from using the invention without the consent of the
patent holder even i f the other person independently found the same
invention.
1
The criteria of patentability are referred to by different words in Euro-
pean and American law. European law refers to new, involving an inventive
step and capable of industrial application, while American law refers to novel,
nonobvious and useful.
113
UNIT 5
The patent is intended to perform three functions: (1) to stimulate

inventive activity; (2) to encourage investment in the products of
inventive activity, and (3) to disseminate technical information to
the public. The extent to which the patent effectively performs these
functions has been the subject of long debate. The principal alternative
to using patents to stimulate inventive activity is government subsidy.
Economists generally believe that patents are a more efficient policy
instrument than government subsidies for promoting investment in
innovation, while allowing that in certain circumstances subsidies can
be more effective. There is recent concern that an over-proliferation
of patents may impede inventive activity, at least in certain fields, as a
'patent thicket' grows.
Patents have a cost to society in terms of allowing higher than
competitive prices to be charged to consumers, and this cost must be
weighed against their positive invention-encouraging effects. In some
areas, the social cost of allowing market exclusivity may be quite high.
By way of illustration, allowing the inventor of a new cancer drug
to prevent others from making it may significantly increase its price
and reduce patient access to it. Policy-makers have justified the social
cost as necessary to provide an incentive and reward for the innovator.
However, the patent term is limited. After some years, generic producers
are allowed to copy the drug and enter the market providing enhanced
access to patients. The social benefits and costs of patenting inven¬
tions in different fields of technology differ. High-definition television
and cancer treatment serve different social functions, and limiting
consumer access to these products has different social effects.
Frederick M. Abbott "Intellectualproperty rights in world trade"
4. Read the texts again and match the words in column A with
the words in column B. Make your own sentences using them.
A B
1) patent d) a) activity
2) policy b) investment
3) industrial c) prices
4) inventive d) term
5) competitive e) expression
6) technological f) subsidy
7) creative g) instrument
8) government h) functions
9) encourage i) application
10) social j) innovation
114
5. In the above text find the English equivalents for the following
words and word combinations and make your own sentences using
them.
1) срок действия патента; 2) конкурентная цена; 3) товарный
знак; 4) общественные затраты; 5) Бернская конвенция по охра
не литературных и художественных произведений; 6) патентные
права; 7) государственная дотация; 8) промышленное примене
ние; 9) Генеральное соглашение по тарифам и торговле; 10) под
покровительством (при содействии); 11) Всемирная организа
ция интеллектуальной собственности (ВОИС); 12) изобретатель;
13) Парижская конвенция по охране промышленной собствен¬
ности; 14) новая технология; 15) копирайт, авторское право;
16) интеллектуальное произведение; 17) цифровые технические
средства; 18) патентообладатель; 19) изобретательская деятель¬
ность; 20) повышать цену.
the above texts.
1. After some years, generic producers are allowed to copy the drug
and enter the market providing . . . .
2. Intellectual property comprises an interrelated set of legal regimes
protecting economic and in some contexts personal interests in . . .
3. The patent is intended to perform three functions:
4. The minimum term of a patent under the TRIPS Agreement is . . .
5. The 'patent' is a set of rights granted to the inventor of a product
or process which is . . . .
7. Read the texts and explain the words and phrases in bold.
C O P Y R I G H T LAW
Copyright law promotes creativity in literature and the arts by af¬
fording authors and artists lengthy terms of protection (life of the au¬
thor plus 70 years) against copying. Copyright law protects the expres¬
sive elements of a broad range of works — including books, graphical
works, dramatic works, choreography, musical compositions, sound
recordings, films, sculpture, architectural works, and computer pro¬
grams — but does not extend to facts, ideas, or utilitarian aspects of
such works. Copyright protection inheres upon the creation of origi¬
nal works of authorship fixed in a tangible medium of expression. By
contrast with patent protection, copyright law employs a relatively
low threshold for protection and substantially longer duration, but the
115
UNIT 5
scope of copyright protection is narrower and less absolute. For most

categories of works, copyright owners have the exclusive right to make
copies, prepare derivative works, and distribute, perform, and display
their works during the term of protection. Most continental European
nations, and to a lesser extent the USA and other nations, protect at¬
tribution and the artistic integrity of expressive works through inalien¬
able moral rights. In response to the increased vulnerability of digital
works to widespread piracy, the World Intellectual Property Organiza¬
tion (WIPO) Copyright Treaty requires signatory nations to provide
adequate legal protection against the circumvention of copy protection
systems and the removal or alteration of copyright management infor¬
mation conveyed along with a copyrighted work.
Unlike patent rights, which are essentially absolute (apart from anti¬
trust limitations), the rights of copyright owners are constrained by the
fair use doctrine, which permits limited use of protected works for crit¬
icism, news reporting, teaching, scholarship, and research. Copyright
law also provides for compulsory licensing of musical compositions
and television signals for cable distribution under particular circum¬
stances. Under international conventions, works qualifying for copyright
in member nations are protected in other member nations.
TRADEMARK LAW
Trademark law facilitates and enhances consumer decisions and
encourages firms to supply quality products and services by protecting
names, logos, words, phrases, symbols, sounds, trade dress, product
configuration and other means of designating the source of commer¬
cial products or services. A supplier acquires trademark protection by
being the first to use a distinctive mark to identify its goods in com¬
merce. Inherently distinctive marks, such as Kodak for photographic
supplies, and suggestive marks, such as Coppertone to designate sun
tanning products, receive protection immediately, whereas descriptive
(or geographic) marks acquire protection only after they have acquired
secondary meaning for the consuming public. Trademark protection is
perpetual unless a mark is abandoned or becomes associated in the pub¬
lic's mind with a general category of products rather than the source of
the product. For example, the terms 'escalator,' and 'thermos,' which
initially referred to the products of particular manufacturers, have be¬
come generic and hence unprotectable.
Trademark owners have the right to prevent others from using their
marks or otherwise confusing consumers as to the source of a product.
In some jurisdictions, and now under federal law in the USA, the
116
owner of a famous mark can enjoin and obtain damages for the dilu¬
tion, blurring, or tarnishment of the owner's mark. Trademark law does
not protect functional aspects of a product and allows others to use
a mark fairly, such as for comparative advertising or other descriptive
purposes, so long as such use does not confuse consumers.
Trademarks are territorial in nature. Unless registered, trademarks are
protected only in those geographic regions in which the marked products
are sold or advertised. National registration affords nationwide protection
of trademarks and the opportunity to obtain foreign registration. Because
the USA has not joined the Madrid Agreement Concerning the Preven-
tion of False or Deceptive Indications of Source, the main international
trademark convention, US trademark owners must prosecute trademark
applications in each country where they seek protection.
Menell P.S. "Intellectual Property: Legal Aspects"
8. Do the following crossword puzzle.
Across
1) the origin or originator of a written work, plan, etc.;
2) items for sale, or movable possessions;
3) a government grant to an inventor assuring him the sole right to
make, use, and sell his invention for a limited period;
4) chiefly regulating or opposing trusts, monopolies, cartels, or
similar organizations, esp. in order to prevent unfair competition;
5) the name or other symbol used to identify the goods produced
by a particular manufacturer or distributed by a particular dealer and
to distinguish them from products associated with competing manu¬
facturers or dealers;
6) the unauthorized use or appropriation of patented or copyright¬
ed material, ideas, etc.
Down
7) the length of time that something lasts or continues;
8) the activity embracing all forms of the purchase and sale of
goods and services;
9) an official document which gives you permission to own, do or
use something, usually after you have paid money and/or taken a test;
10) to require (a person) to do or refrain from doing (some act),
esp. by issuing an injunction;
11) an imitation or reproduction of an original.
117
UNIT 5
5t 10e 11c
_
4a _ _ _
7d 9l
1a 8c
_ _ _ _ _
2g
_ _ _
9. Give the word families of the following words, as an example.

e.g. to promote (v); promotion (n); promotional (adj).
to license to distribute
to pirate to alter
to copy to dilute
to confuse to perpetuate
to circumvent to own
1) What does Copyright law protect?
2) Do copyright owners have the exclusive right to make copies,
prepare derivative works?
3) What and why does the WIPO Copyright Treaty require signa¬
tory nations to provide?
4) Does copyright law provide for compulsory licensing of musical
compositions and television signals for cable distribution under par¬
ticular circumstances?
5) What does trademark law facilitate and enhance?
6) Why do US trademark owners prosecute trademark applications
in each country where they seek protection?
7) Do trademark owners have the right to prevent others from us¬
ing their marks?
8) Can the owner of a famous mark enjoin and obtain damages for
the dilution, blurring, or tarnishment of the owner's mark?
118
9) What does national registration afford?

10) Trademark law protects functional aspects of a product, doesn't it?
national, novel, information, injunction, last, secrecy, patent,
competitor.
TRADE S E C R E T LAW
A trade secret is 1) that derives independent economic value
from not being generally known or readily ascertainable and is the
subject of reasonable efforts to maintain 2) Unlike 3) law,
information need not be 4) in order to qualify for trade secret
protection. Most nations protect trade secrets through 5) or
regional regimes. Trade secret protection 6) until the informa¬
tion becomes publicly known. By contrast with patent protection,
trade secret law does not protect against independent discovery or
reverse engineering by 7) Those who violate trade secret law are
liable for damages and in some cases 8) against use or further
disclosure.
12. Study the text below and give the English equivalents for
the words and phrases in bold.
OTHER FORMS
OF INTELLECTUAL PROPERTY PROTECTION
Many jurisdictions recognize some form of 1) недобросовестная
конкуренция or misappropriation law prohibiting the 2) присво
ение of some forms of information not protected by traditional
modes of 3) закон об интеллектуальной собственности. The 4)
право на публичность, which is recognized i n about half of the
USA, protects individuals against the use of their name, image, or
likeness for commercial gain.
With the advent of 5) современные технологии, some new
specialized intellectual property regimes have emerged in recent
years. Many industrialized nations, at the urging of the USA, have
6) принимать regimes for the protection of semiconductor chip
designs. In 1996, the European Union adopted a directive on the
legal protection of 7) база данных.
119
UNIT 5
13. Translate the text from English into Russian.
GEOGRAPHICAL INDICATION
Geographical indications (or GIs) are identifiers that associate a
product with a place based on the quality or characteristics of the
product or goodwill associated with the place. The classic illustra¬
tive G I is 'Champagne', i.e. the name of a region in France known
for producing quality sparkling wines by a specific method. GIs are
protected in a variety of ways in different national jurisdictions. The
United States protects them by collective and certification trademarks,
as well as by a special labeling system for wines and spirits admin¬
istered by the Treasury Department. The European Union protects
them by special registration systems, which typically include elaborate
monitoring of production methods. Many Latin American countries
protect 'appellations of origin' separately from trademarks. In addi¬
tion, geographical indications are also protected by common and civil
law unfair competition regimes.
GIs are controversial. The EU has been pressing at the WTO to
increase the level of G I protection for agricultural products other than
wines and spirits (which already enjoy high protection), but is resisted
by the United States, among others. The EU is a high-cost producer of
specialized agricultural products and is seeking higher prices for those
products based on G I protection. The United States is a low-cost pro¬
ducer of bulk agricultural products and is concerned about potential
market access restrictions from stronger G I protection.
Whether other countries support one or the other 'camp' in this
GIs debate largely depends on whether they are efficient large-scale
agricultural producers, on one hand, or are producers of specialized
niche products, on the other.
the list (A — E) for each gap. There is one extra sentence which
A) The Paris Convention does not define a patent or what criteria
are used for granting it.
1 — B) During negotiation of the Paris Convention, proposals
were made to create harmonized international patent law.
C) The TRIPS Agreement expands upon the compulsory licens¬
ing rules found in the Paris Convention, prescribing substantive and
procedural conditions for the granting of such licenses.
120
D) In addition, it provides that copyright is established automati¬

cally on the creation of an expressive work, and precludes countries
from making registration or notice a condition to copyright protection.
E) So, for example, i f a court in one Paris country determines
that a patent is invalid and orders it canceled, this does not affect the
validity of patents on the same invention in other Paris countries.
MULTILATERAL REGULATION
OF I N T E L L E C T U A L P R O P E R T Y
The Early Multilateral Regulatory System
Some of the earliest efforts toward the multilateral regulation of
economic activity were directed at intellectual property. The Paris
Convention was concluded in 1883 and the Berne Convention was
concluded in 1886. The Paris Convention established rules with re¬
spect to patents, trademarks and unfair competition. [1 — B]. Howev¬
er, these efforts were unsuccessful owing, among other things, to wide
variations in the way patents were regulated in different countries. The
Berne Convention addressed copyright.
The Paris Convention establishes three basic principles. These are
national treatment, right of priority and independence of patents. 'Na¬
tional treatment' is a principle well-known to trade lawyers. In the
patent and trademark context, it means that foreign patent and trade¬
mark applicants must be treated equivalently with national applicants,
and foreign holders of patent or trademark rights within the national
territory should not be discriminated against on the basis of national¬
ity. 'Right of priority' allows patent and trademark applicants a period
in which they can file abroad without fear of pre-emption. A patent
applicant in any Paris Convention country has a period of one year
following its first filing to file within all other Paris Convention coun¬
tries. During this 'priority period', acts which might otherwise defeat
patentability (such as the publication of new 'art', or the third-party
filing of an application for the same invention) will not have adverse
effect. For trademarks the priority period is six months. The principle
of 'independence of patents' means that acts taken by authorities with
respect to a patent or trademark in one Paris Convention country will
not affect the status of equivalent patents or trademarks in other Paris
Convention countries. [2 ] . This rule reflects the fact that govern¬
ments are distrustful of the possible motives of other governments in
acting against their inventors.
By the late 1970s, from the standpoint of industrialized country
patent holders, the Paris Convention was most notable for what it
121
UNIT 5
does not do. [3 ] . It does not prescribe subject matter coverage,

it does not set a minimum (or maximum) term of a patent, it does
not define the rights of patent holders, and it was perceived as having
a weak dispute settlement mechanism (which provides for recourse to
the International Court of Justice). In addition, the Paris Convention
includes liberal rules on compulsory licensing of patents.
The Berne Convention is a more complete legal instrument. It
very broadly defines the subject matter scope of copyright protection,
it sets a minimum term of copyright (generally, the life of the author
plus 50 years) and it prescribes rights that are accorded to copyright
holders. [4 ].
From the standpoint of the expressive industries, the major draw¬
backs of the Berne Convention are that it does not cover so-called
'neighboring rights' such as performances (which are addressed by
other international agreements) and it employs the same arguably
weak enforcement mechanism (the ICJ) as the Paris Convention.
Perceived weaknesses in the Paris and Berne Conventions, com¬
bined with the increasing importance of the intellectual property
component of goods and services, generated demands for substantial
changes to the international intellectual property system.
15. Explain the words and phrases in bold.
16. Speak on the early multilateral regulatory system.
1) financial aid supplied by a government, as to industry, for rea¬
sons of public welfare, the balance of payments, etc;
2) a requirement to deal with sth., or help or take care of sb., be¬
cause of your job or position;
3) something useful and intended to be sold that comes from na¬
ture or is made in a factory;
4) a state in which two or more things are not equally or fairly bal¬
anced or spread;
5) something newly introduced, such as a new method or device
6) a discussion set up or intended to produce a settlement or agreement
7) a fixed amount or number that is officially allowed, esp. of goods
that can be brought into a country
8) the name given to a product by a company so that the product
can easily be recognized by its name or design;
122
9) the possibility of using something or someone as a way of ob¬

taining help, esp. in a difficult or dangerous situation
10) a product or service that is sold to another country;
11) to put to rights (a fault, error, etc.); correct
12) official orders or laws stopping trade, communication etc with
another country as a way of forcing political changes.
F R O M WIPO T O T H E GATT AND WTO
By the late 1970s, industrialists in the United States had grown con¬
cerned with what they considered an inadequate attention to the pro¬
tection of their intellectual property assets, particularly in developing
and newly industrializing countries. These concerns were spread across
various industry sectors. Makers of 'brand name' goods were concerned
over trademark counterfeiting. Recording companies and film studios
were increasingly anxious about copyright piracy. Pharmaceutical and
agricultural chemical producers were dissatisfied with the protection
given to their innovations.
The concern of industry coincided with a movement among de¬
veloping countries in favor of a 'New International Economic Order'
(NIEO). That movement was centered in the Group of 77 and in
multilateral bodies such as the United Nations Conference on Trade
and Development (UNCTAD), and emphasized the imbalance in eco¬
nomic welfare between developed and developing countries. It advo¬
cated control by developing countries over their own resources, and
demanded transfer of technology from North to South to remedy im¬
balances in development. The NIEO sought at WIPO to relax protec¬
tion of IP, such as by providing more flexible rules for the compulsory
licensing of patents.
In the mid-1980s WIPO was affected by a fundamental clash of in¬
terests and values. In negotiations for revision to the Paris Convention,
the United States and other developed countries, including those of the
European Community and Japan, demanded stronger protection of in¬
tellectual property rights (IPRs). Developing countries demanded more
flexible rules. The negotiations failed, and as a consequence the United
States, EC and Japan shifted focus to the GATT. Developing countries
depended on GATT rules for exports to developed country markets for,
among others, their agriculture and textile products. Developed coun¬
tries had much greater leverage at the GATT as compared to WIPO.
Thus was born the GATT Uruguay Round negotiations on the subject
of 'Trade-Related Aspects of Intellectual Property Rights' or 'TRIPS'.
The TRIPS negotiations were among the most controversial as¬
pects of the Uruguay Round. Developing countries, led by Argentina,
123
UNIT 5
Brazil and India, believed that agreeing to higher standards of IPRs

protection at the GATT would have negative consequences, at least in
the short term, by increasing their 'rent payments' to the developed
countries for technology and expression. They were not persuaded that
such protection would provide them with 'dynamic' innovation ben¬
efits that would offset increased rent outflows. Developing countries
with an interest in adopting higher standards of IP protection could,
of course, choose to do this outside the GATT.
The United States used a 'carrot and stick' approach to accom¬
plishing its objectives on TRIPS. On the carrot side, it offered to re¬
duce textile quotas and to help obtain concessions from the EC on
agricultural export subsidies, each of which was of considerable interest
to developing countries. On the stick side, it used its domestic Special
Section 301 authority to threaten and impose trade sanctions on coun¬
tries that failed to meet US standards of IPRs protection, making clear
that it would not be satisfied to continue with the status quo at the
GATT. Developing countries reluctantly agreed to the Agreement on
Trade-Related Aspects of Intellectual Property Rights or TRIPS Agree¬
ment as one of the three pillars of the Uruguay Round (along with the
GATT 1994 and the General Agreement on Trade in Services).
The entry into force of the TRIPS Agreement on January 1, 1995
as part of the new WTO created a situation in which two multilateral
institutions share responsibility for regulation of the international IPRs
system. While the TRIPS Agreement, as discussed below, incorporates
the provisions of various WIPO-administered agreements, there is no
well-defined hierarchy or relationship between the rules and author¬
ity of the WTO and WIPO. A major distinction between the two,
however, is that the TRIPS Agreement incorporates the WTO dispute
settlement system, allowing for trade-based enforcement of its rules.
Several of the WIPO Conventions permit recourse to the International
Court of Justice (ICJ), but no case has been brought before the ICJ
on the basis of such a convention.
18. Translate the following abbreviations into Russian.
1) GATT; 2) ICJ; 3) WTO; 4) WIPO; 5) TRIPS; 6) IPR;
7) UNCTAD; 8) NIEO
1. The limits of the legal categories adopted in a conflicts case do not
necessarily coincide the domestic classifications of English law.
124
2. Workers have rejected a pay offer of 8% favour a 4%

increase linked with a shorter working week.
3. Although neither side was satisfied the treaty, both sides rec¬
ognised that some respite from two years of conflict was necessary.
4. The party leadership is determined to keep a tight control
the publicity machine.
5. The US Commerce Department threatened to impose a 15%
fee subsidized lumber flooding US markets.
6. Decisions were often made the basis incorrect informa¬
tion.
lowing words and word combinations and make your own sen¬
tences using them.
1) по сравнению с; 2) урегулирование разногласий; 3) много
сторонний; 4) активы в виде интеллектуальной собственности;
5) применять санкции (к, против); 6) Уругвайский раунд; 7) за
висеть от; 8) предоставление принудительной лицензии, выда
ча принудительной лицензии; 9) развитые страны; 10) столкно
вение/противоречие интересов; 11) подход "кнута и пряника";
12) развивающиеся страны; 13) в пользу; 14) иерархия; 15) бес¬
покоиться о чем-л., из-за чего-л.
21. Which of the statements are true to the above text?
1. GATT was affected by a fundamental clash of interests and va¬
lues in the mid-1980s.
2. By the late 1970s, manufacturers in the United States had grown
concerned with the protection of their intellectual property assets, par¬
ticularly in developed countries.
3. The WIPO Conventions permit recourse to the International
Court of Justice.
4. Recording companies and film studios were increasingly anxious
about trademark counterfeiting.
5. The concern of industry coincided with a movement among de¬
veloping countries in favor of a 'New International Economic Order'.
6. The NIEO sought at WTO to relax protection of IP, such as
by providing more flexible rules for the compulsory licensing of pa¬
tents.
7. In negotiations for revision to the Paris Convention, Argentina,
Brazil and India demanded stronger protection of intellectual property
rights (IPRs).
125
UNIT 5
OTHER MULTILATERAL
ORGANIZATIONS AND NGOS
While the TRIPS Agreement was negotiated with minimal pub¬
lic attention, the period since its adoption has seen a strong public
focus on the role IPRs play in society. A substantial number of mul¬
tilateral organizations, including the Food and Agricultural Organiza
tion (FAO), United Nations Conference on Trade and Development
(UNCTAD), World Bank and World Health Organization (WHO),
among others, have taken a much more active interest in IPRs-related
matters in recent years.
From the standpoint of other multilateral organizations the control
over IPRs issues exercised by the WTO raises concern. Do the FAO and
WHO have the authority to regulate patents and trademarks in the areas
of food products and public health, respectively? How does that authority
relate to the authority of the WTO and the rules of the TRIPS Agree¬
ment? This is sometimes referred to as the problem of 'coherence'. At the
moment, there is limited practical attention being given to this problem.
In addition to the governmental side, civil society through non¬
governmental organizations (NGOs), including Mйdecins Sans Fron-
tieres (Doctors without Borders), Oxfam, and others recognize that
IPRs may directly affect their capacity to pursue their missions and
have become powerful advocates on IPRs issues that affect their work,
including work in combating hunger, disease and economic inequity.
Should only national governments have a voice at the WTO and other
multilateral organizations because those governments are representa¬
tive of their people? Or, is national representation at the WTO and
other multilateral fora skewed in favor of industrial interests so that
NGO representation is necessary to provide a counterweight? This is
a contentious issue. In recent years NGOs have made it more difficult
to conclude trade and IPRs negotiations on terms sought by industry,
and industry has sought ways to limit the influence of NGOs, includ¬
ing by shifting negotiations to less transparent forums.
23. Match the Russian word combinations in A with their Eng¬
lish equivalents in B. Learn the following collocations.
A B
1) лицензионное a) void patent
вознаграждение
126
2) владелец авторского b) to renew a licence

права
3) подавать заявку на c) patent infringement
патент
4) патентовладелец d) under licence
5) патент на e) licencing fee
промышленный образец
6) получать лицензию f) to issue (sb) a licence / to grant a
licence
7) нарушение патента, g) copyright work
нарушение патентного
права
8) лицензиат, получатель h) patentee
лицензии, владелец
лицензии
9) патентная заявка i) patent application
10) по лицензии j) patent assignment
11) лицензиар k) copyright offence
12) предоставить l) patent for a design
лицензию
13) произведение, n) to disclose an invention
охраняемое авторским
правом
14) передача патента o) licensee
15) нарушение авторского p) to apply for a patent, to file a patent
права application
16) обновлять лицензию q) patent in force
17) действующий патент r) to get/obtain a licence
18) раскрывать s) copyright holder
изобретение
19) утративший силу t) licensor
патент
20) подтвержденный u) confirmation patent
патент
ИНТЕЛЛЕКТУАЛЬНАЯ СОБСТВЕННОСТЬ
Понятие "интеллектуальная собственность" было впервые
введено в международные правовые документы в 1967г. Сток
гольмской конвенцией, учредившей ВОИС — Всемирную орга-
127
UNIT 5
низацию интеллектуальной собственности (однако уже в Берн¬

ской конвенции об охране литературных и художественных
произведений от 9 сентября 1886г. в аналогичном значении упо¬
треблялся термин "результаты интеллектуального творчества").
В соответствии со ст. 2 этой Конвенции понятие интеллек¬
туальной собственности включает в себя все права, относящие¬
ся к интеллектуальной деятельности в производственной, науч¬
ной, литературной и художественной областях. Таким образом,
основу интеллектуальной собственности составляют авторское и
патентное право, однако они не исчерпывают это понятие, по¬
скольку сюда же относится право на промышленные образцы,
товарные знаки, фирменные наименования, ноу-хау, знаки об¬
служивания.
Интеллектуальная собственность представляет собой не толь¬
ко один из наиболее значимых правовых институтов, но и явля¬
ется достаточно острой проблемой современного общественного
развития в связи с высоким уровнем незаконного использования
охраняемых правом результатов интеллектуальной деятельно¬
сти и других нарушений прав интеллектуальной собственности.
Наличие эффективной правовой охраны интеллектуальной соб¬
ственности признано важным условием динамичного развития
экономики любой страны, поскольку правильная государствен¬
ная политика в этой области является стимулирующим фактором
подъема творческой деятельности.
В отличие от обычных товаров результаты творческой дея¬
тельности, если они не обеспечиваются специальной правовой
охраной со стороны государства, не в состоянии приносить их
владельцам сколько-нибудь гарантируемые прибыли. После того
как они становятся известными обществу, они перестают быть
объектами обладания одного или нескольких лиц. При отсутствии
специальной правовой охраны каждый член общества, имеющий
необходимые экономические ресурсы, смог бы использовать их
для извлечения прибыли, поэтому средством предотвращения
такой ситуации служит институт исключительного права на про¬
дукты творческой деятельности.
25. Summarize the information of the unit and speak on Intel
lectual property.
TEST
1. Some regions, like Europe, with a long history of specialized
agricultural production may have stronger interest in protecting geo-
128
graphical than countries whose agricultural producing regions are

less well identified with products.
2. The factory's operating will not be granted until after the
inspection.
3. Intellectual property perform a variety of functions.
4 an international body concerned with promoting
and regulating trade between its member states.
5. A creates an image for a product and can be a powerful
marketing device.
6. The company, insisted its president, was about technological ,
not gimmicks.
7. The company was given a substantial by the government.
8. Jacques Cousteau was the of the Aqua-Lung.
9. A trademark allows its to prevent others from using an iden¬
tical or confusingly similar sign to identify its goods or services in
commerce where such use would result in a likelihood of confusion.
10. After the expires, the innovation becomes part of the public
domain, free to all.
11 is granted to authors and artists to protect expressive works
against unauthorized reproduction or distribution by third parties.
12. Under the the minimum term of copyright protection
is the life of the author plus 50 years.
13. The includes rules governing trademarks, but it does
not define what a trademark is.
14. The Treaty on Intellectual Property in Respect of Integrated
Circuits (IPIC) was negotiated and signed under the of WIPO.
15. The Panel determined that Canada's stockpiling exception was
not sufficiently 'limited' because it potentially allowed an unlimited
quantity of patented products to be made during the patent
1) The concern of industry coincided ... a movement among de¬
veloping countries.
2) The holder . a patent may prevent others . making, using, offer¬
ing . sale, selling or importing the invention during the patent term.
3) Copyright law also provides . compulsory licensing.
4) Trademarks are territorial . nature.
5) The minimum term . a patent . the TRIPS Agreement is
20 years.
6) The Berne Convention . the Protection of Literary and Artistic
Work.
7) Trademark protection is perpetual . a mark is abandoned.
129
UNIT 6
8) The USA has not joined . the Madrid Agreement Concerning

the Prevention of False or Deceptive Indications . Source.
9) United Nations Conference . Trade and Development.
10) . the standpoint . other multilateral organizations the con¬
trol . IPRs issues exercised by the WTO raises concern.
Rights Conferred
The owner of a registered trademark shall have the exclusive right to
prevent all third parties not having the owner's consent from using in
the course of trade identical or similar signs for goods or services which
are identical or similar to those in respect of which the trademark is reg¬
istered where such use would result in a likelihood of confusion. In case
of the use of an identical sign for identical goods or services, a likelihood
of confusion shall be presumed. The rights described above shall not
prejudice any existing prior rights, nor shall they affect the possibility of
Members making rights available on the basis of use.
(TRIPS Agreement Article 16)
Требования, предъявляемые к заявителям на выдачу патента

1. Члены предъявляют к заявителю на выдачу патента требо¬
вание достаточно ясного и полного раскрытия изобретения, что¬
бы оно могло быть реализовано специалистом в данной области,
и могут требовать, чтобы заявитель указывал лучший способ реа¬
лизации изобретения, известный изобретателю на дату подачи
заявки, или, если испрашивается приоритет, — на дату приори¬
тета заявки.
2. Члены могут требовать от заявителя на выдачу патента пре¬
доставить информацию о поданных за границей заявках и по¬
лученных им в других странах патентах.
(ТРИПС Статья 29)
UNIT 6 TORT LAW

1. What do you know about Tort Law? Choose the right an¬
swer.
1) The word tort comes from the . term torquere, which means
"twisted or wrong".
a) Arabic b) Greek c) Latin
130
T O R T LAW
2) . — the law of the place where a wrong was committed.

a) Lex fori b) Lex loci contractus c) Lex loci delicti (commissi)
3) . elements must be established in every tort action.
a) Two b) Three c) Five
4) . — in tort law, a financial responsibility to compensate a
harm in the absence of any negligence; an absolute responsibility to
ensure the safe functioning of a dangerous instrumentality.
a) Vicarious liability b) Joint liability c) Strict liability
5) . — testimony given by an individual with special qualifications
or credentials that enable him to provide information to the fact-finder
to assist with resolving the ultimate facts in issue.
a) Deposition testimony b) Expert testimony c) Original testimony
Proceeding, pecuniary, incur, tortious, tortfeasor, legislative, in¬
carceration, nuisance, intimate, pecuniary, array, injurious, vindi¬
cate, compromise, ultra-hazardous, tranquility, seclusion, scrutiny,
confinement, assault, consequence, pursue, repel, imminent.
3. Read the following text and give opposites for the words in
bold.
T O R T LAW
A body of rights, obligations, and remedies that is applied by courts
in civil proceedings to provide relief for persons who have suffered harm
from the wrongful acts of others. The person who sustains injury or suffers
pecuniary damage as the result of tortious conduct is known as the plain¬
tiff, and the person who is responsible for inflicting the injury and incurs
liability for the damage is known as the defendant or tortfeasor.
Three elements must be established in every tort action. First, the
plaintiff must establish that the defendant was under a legal duty to act
in a particular fashion. Second, the plaintiff must demonstrate that the
defendant breached this duty by failing to conform his or her behavior
accordingly. Third, the plaintiff must prove that he suffered injury or
loss as a direct result of the defendant's breach.
The law of torts is derived from a combination of common-law
principles and legislative enactments. Unlike actions for breach of con¬
tract, tort actions are not dependent upon an agreement between the
parties to a lawsuit. Unlike criminal prosecutions, which are brought
by the government, tort actions are brought by private citizens. Rem¬
edies for tortious acts include money damages and injunctions (court
131
UNIT 6
orders compelling or forbidding particular conduct). Tortfeasors are

subject to neither fine nor incarceration in civil court.
The word tort comes from the Latin term torquere, which means
"twisted or wrong." The English common law recognized no separate
legal action in tort. Instead, the British legal system afforded litigants
two central avenues of redress: trespass for direct injuries, and actions
"on the case" for indirect injuries. Gradually, the common law rec¬
ognized other civil actions, including defamation, libel and slander.
Most of the American colonies adopted the English common law in
the eighteenth century. During the nineteenth century, the first U.S.
legal treatises were published in which a portion of the common law
was synthesized under the heading of torts. Over the last century, tort
law has touched on nearly every aspect of life in the United States.
In economic affairs, tort law provides remedies for businesses that are
harmed by the unfair and deceptive trade practices of a competitor.
In the workplace, tort law protects employees from the intentional
or negligent infliction of emotional distress. Tort law also helps regu¬
late the environment, providing remedies against both individuals and
businesses that pollute the air, land, and water to such an extent that
it amounts to a nuisance.
Sometimes tort law governs life's most intimate relations, as when indi¬
viduals are held liable for knowingly transmitting communicable diseases to
their sexual partners. When a loved one is killed by a tortious act, surviving
family members may bring a wrongful death action to recover pecuniary
loss. Tort law also governs a wide array of behavior in less intimate settings,
including the operation of motor vehicles on public roadways.
The law of torts serves four objectives. First, it seeks to compen¬
sate victims for injuries suffered by the culpable action or inaction of
others. Second, it seeks to shift the cost of such injuries to the person
or persons who are legally responsible for inflicting them. Third, it
seeks to discourage injurious, careless, and risky behavior in the future.
Fourth, it seeks to vindicate legal rights and interests that have been
compromised, diminished, or emasculated. In theory these objectives
are served when tort liability is imposed on tortfeasors for intentional
wrongdoing, negligence, and ultra-hazardous activities.
INTENTIONAL T O R T S
An intentional tort is any deliberate interference with a legally rec¬
ognized interest, such as the rights to bodily integrity, emotional tran-
quility, dominion over property, seclusion from public scrutiny, and
freedom from confinement or deception. These interests are violated
by the intentional torts of assault, battery, trespass, false imprisonment,
132
T O R T LAW
invasion of privacy, conversion, misrepresentation, and fraud. The in¬

tent element of these torts is satisfied when the tortfeasor acts with the
desire to bring about harmful consequences and is substantially certain
that such consequences will follow. Mere reckless behavior, sometimes
called willful and wanton behavior, does not rise to the level of an in¬
tentional tort.
Under certain circumstances the law permits individuals to inten¬
tionally pursue a course of conduct that will necessarily result in harm
to others. The harm that results from such conduct is said to be out¬
weighed by more important interests. Self-preservation is one such
interest and is embodied in the right of self-defense.
Individuals may exert sufficient force in self-defense to repel an
imminent threat of bodily harm. Deadly force may only be used by
persons who reasonably believe that their lives are endangered and for
whom there are no reasonable means of escape. Reasonable force, but
not deadly force, may be employed in defense of property.
Consent is a defense to virtually every intentional tort. The law will
not compensate persons who knowingly allow someone to injure them.
However, consent must be given freely and voluntarily to be effective.
Consent induced by coercion, duress, undue influence, or chicanery
is not legally effective. Nor is consent legally effective when given by
an incompetent person. Consent to intentional torts involving grievous
bodily harm is also deemed ineffective in a number of jurisdictions.
4. Find in the text above English equivalents to the following
words and phrases. Make sentences using them.
1) неосторожное поведение; 2) нести ответственность; 3) де-
ликвент; 4) сторона в гражданском процессе; 5) неправомерное
лишение свободы; 6) кляузничество, сутяжничество; 7) убытки
в деньгах, денежная компенсация ущерба; 8) нанесение побо¬
ев; 9) тяжкие телесные повреждения; 10) экономические связи/
отношения; 11) деликтный иск; 12) штрафовать; 13) деликтное
поведение; 14) диффамация; 15) законное право; 16) принуж¬
дение; 17) общее право; 18) истец; 19) законодательный акт;
20) материальный ущерб; 21) клеветать в устной форме; 22) при¬
чинение (вреда) по небрежности; 23) уголовное преследование;
24) мошенничество; 25) загрязнять атмосферу; 26) инфекцион¬
ная болезнь; 27) нападение; 28) вредное последствие; 29) иск о
взыскании убытков; 30) вмешательство в чью-л. личную жизнь;
31) ответчик; 32) злоупотребление влиянием; 33) средство су¬
дебной защиты; 34) небрежность; 35) смертоносное насилие;
133
UNIT 6
36) гражданский суд; 37) смерть в результате противоправных

действий; 38) пасквиль (клевета письменно или через печать);
39) самооборона; 40) присвоение движимого имущества.
A B
1) pecuniary a) wrongdoing
2) offence b) culpable
3) negligent c) accused
4) reprehensible d) law
5) defamation e) fraud
6) defendant f) monetary
7) enactment g) slander
8) deception h) careless
6. Complete the tables.
noun verb noun verb
injury trespass
assault prosecute
imprison fine
fraud kill
vindication defamation
7. Fill in the missing words.
1. She was charged with credit card f _ _.
2. T_ _ _ to the person means that any unwanted or un
justified interference with a person's body, liberty or a creation of fear
of such interference is actionable at law.
3. The company admitted the liability but disputed the amount of
d .
4. It also covered cases where the defendant had acquired money
from the p by a tortious act.
5. It is easy to decide where a tort is committed if all the elements
necessary to constitute l occur in one country.
6. The law of torts defines rights and obligations when an individual
commits a wrong or i against another.
7. N is a tort which determines legal liability for
careless actions or inactions which cause injury.
8. The t act must have been performed during the 'course
of employment' in order for the employer to be vicariously liable.
9. There are three types of tort which make up the tort of trespass
to the person: a , battery and false imprisonment.
134
T O R T LAW
10. The voluntary act of the d _ _ must be either in-

tentional, reckless or negligent.
1) an ongoing act or a condition that interferes with another's use
or inhabitation of real property;
2) a wrongdoer; an individual who commits a wrongful act that
injures another and for which the law provides a legal right to seek
relief; a defendant in a civil tort action;
3) the failure to use reasonable care, resulting in harm to another;
4) in criminal and tort law, an act, usually consisting of a threat or
attempt to inflict bodily injury upon another person, coupled with the
apparent present ability to succeed in carrying out the threat or the
attempt i f not prevented, that causes the person to have a reasonable
fear or apprehension of immediate harmful or offensive contact;
5) an intentional misrepresentation uttered to cause another to
rely on it to his detriment;
6) a false and defamatory statement expressed in writing or in an
electronic medium;
7) wrongful; conduct of such character as to subject the actor to
civil liability under tort law;
8) in a criminal trial, the accused; in a civil proceeding, the person
or entity against whom a claim is made;
9) the party in a civil law case who brings the action in a court of law;
10) falsely spoken words that tend to damage another person's
reputation.
8 1 10
2 7
9
4
3
•
5
•
135
UNIT 6

1) to be responsible ... the legal education of solicitors; 2) to suf-
fer physical abuse ... another person; 3) to breach ... a contract; 4) to
be ... a legal duty; 5) liability ... negligence; 6) to be derived ... Latin;
7) to protect smb. . prosecution; 8) interference . private rights;
9) seclusion . the world; 10) freedom . taxation.
1. Deadly force may only be used by persons who ... .
2. Consent induced by coercion, duress, undue influence, or chi¬
canery is not .
3. In economic affairs, tort law provides remedies for ... .
4. Unlike criminal prosecutions, which are brought by the govern¬
ment, tort actions are brought by . .
5. Remedies for tortious acts include ... .
6. The word tort comes from . .
7. An intentional tort is any deliberate ... .
8. In the workplace, tort law protects employees from . .
9. Tort law also helps regulate the environment, providing remedies
against . .
10. The law of torts serves four objectives. First, it seeks to...; sec¬
ond, it seeks to . . . ; third, it seeks to . ; fourth, it seeks to . .
11. The law of torts is derived from . .
12. Individuals may exert sufficient force in self-defense to . .
13. The person who sustains injury or suffers pecuniary damage as
the result of tortious conduct is known as . .
14. Reasonable force may be employed in defense of . .
15. The person who is responsible for inflicting the injury and in¬
curs liability for the damage is known as . .
1) ... — the legal obligation of a manufacturer to pay financial
compensation for any harm caused by a product brought to market
to a consumer who had the right to expect that the product was
safe to use as bought; a similar obligation of one who sells such a
product.
2) . — a financial responsibility to compensate a harm in the ab¬
sence of any negligence.
136
T O R T LAW
3) . — an overwhelming natural event, often unpredictable or

difficult to anticipate, that is uncontrolled and uninfluenced by the
power of man and that could not be prevented or avoided by foresight
or prudence.
4) . — a negligent or intentional failure to act reasonably or ac¬
cording to law or duty; an act or omission giving rise to a criminal
indictment or a civil tort lawsuit.
5) . — the failure to use reasonable care, resulting in harm to another.
NEGLIGENCE
Most injuries that result from tortious behavior are the product of
negligence, not intentional wrongdoing. Negligence is the term used
by tort law to characterize behavior that creates unreasonable risks
of harm to persons and property. A person acts negligently when his
behavior departs from the conduct ordinarily expected of a reasonably
prudent person under the circumstances. I n general, the law requires
jurors to use their common sense and life experience in determining
the proper degree of care and vigilance with which people must lead
their lives to avoid imperiling the safety of others.
Not every accident producing injury gives rise to liability for neg¬
ligence. Some accidents cannot be avoided even with the exercise of
reasonable care. An accident that results from a defendant's sudden
and unexpected physical ailment, such as a seizure or a blackout,
generally relieves the defendant of liability for harm caused during his
period of unconsciousness. However, defendants who have reason to
know of such medical problems are expected to take reasonable pre¬
cautions against the risks the problems create. I n some jurisdictions
unavoidable accidents are called acts of God.
Assumption of risk is another defense to negligence actions. This
defense prevents plaintiffs from recovering for injuries sustained as a
result of a relationship or transaction they entered with full knowledge
and acceptance of the risks commonly associated with such undertak¬
ings. Assumed risks include most of those encountered by spectators
attending sporting events. However, the law will not assume that indi¬
viduals accept the risk of intentionally inflicted harm or damage, such
as injuries resulting from assault and battery.
STRICT LIABILITY
In some cases tort law imposes liability on defendants who are nei¬
ther negligent nor guilty of intentional wrongdoing. Known as strict
137
UNIT 6
liability, or liability without fault, this branch of torts seeks to regulate

those activities that are useful and necessary but that create abnormally
dangerous risks to society. These activities include blasting, transport¬
ing hazardous materials, storing dangerous substances, and keeping
certain wild animals in captivity.
A distinction is sometimes drawn between moral fault and legal
fault. Persons who negligently or intentionally cause injury to others
are often considered morally blameworthy for having failed to live up
to a minimal threshold of human conduct. On the other hand, legal
fault is more of an artificial standard of conduct that is created by
government for the protection of society.
Persons who engage in ultrahazardous activities may be morally
blameless because no amount of care or diligence can make their ac¬
tivities safe for society. However, such persons will nonetheless be held
legally responsible for harm that results from their activities as a means
of shifting the costs of injury from potential victims to tortfeasors. As
a matter of social policy, then, individuals and entities that engage in
abnormally dangerous activities for profit must be willing to ensure the
safety of others as a price of doing business.
Consumers who have been injured by defectively manufactured
products also rely on strict liability. Under the doctrine of strict prod¬
uct liability, a manufacturer must guarantee that its goods are suitable
for their intended use when they are placed on the market for public
consumption. The law of torts will hold manufacturers strictly liable
for any injuries that result from placing unreasonably dangerous prod¬
ucts into the stream of commerce, without regard to the amount of
care exercised in preparing the product for sale and distribution and
without regard to whether the consumer purchased the product from,
or entered into a contractual relationship with, the manufacturer.
1) hazardous m) a) fault
2) legal b) relationship
3) common c) risk
4) human d) injury
5) to inflict e) conduct
6) strict f) actions
7) act of g) substances
138
T O R T LAW
8) to assume h) harm
9) public i) wrongdoing
10) contractual j) God
11) dangerous k) consumption
12) to cause l) care
13) degree of m) material
14) intentional n) liability
15) negligence o) sense
14. Fill in the blanks with the derivatives of the words in

brackets.
1. The rule that a plaintiff cannot claim damages for . infliction
of . distress unless there has been some physical impact, such as an
assault. (negligence, emotion)
2. A ... system can look at ... conduct in different ways. (legality,
harm)
3. Poverty arises from . distribution and not for want of goods
to . . (fault, distribution)
4. Courts have power to allocate . among the joint tortfeasors, but
each is wholly and severally . to the victim. (responsible, liability)
5. "Beyond a reasonable doubt" is the amount of ... that a juror
must have in order to find a . defendant . as charged. (certain,
crime, guilt)
15. Which of the statements are true to the above texts?
1. Negligence is the term used by tort law to characterize behavior
that creates reasonable risks of harm to persons and property.
2. Not every accident producing injury gives rise to liability for
negligence.
3. In some cases tort law imposes liability on plaintiffs who are
neither negligent nor guilty of intentional wrongdoing.
4. Consumers who have been injured by defectively manufactured
products rely on strict liability.
5. Under the doctrine of ultra vires, a manufacturer must guarantee
that its goods are suitable for their intended use when they are placed
on the market for public consumption.
loss, impose, intention, act, recover, limit, plaintiff, establish, prop¬
erty, conduct, punitive, strict, damage, omission, tortious, substantial,
evidence, causation, tort, defendant.
139
UNIT 6
CAUSATION
Causation is an element common to all three branches of torts:
1) . liability, negligence, and 2) . wrongs. Causation has two
prongs. First, a tort must be the cause in fact of a particular injury,
which means that a specific 3) . must actually have resulted in injury
to another. I n its simplest form, cause in fact is established by 4) .
that shows that a tortfeasor's act or 5) ... was a necessary antecedent to
the plaintiff 's injury. Courts analyze this issue by determining whether
the plaintiff 's injury would have occurred "but for" the defendant's
6) . If an injury would have occurred independent of the defendant's
conduct, cause in fact has not been established, and no 7) . has been
committed. When multiple factors have led to a particular injury, the
8) ... must demonstrate that the tortfeasor's action played a 9) ... role
in causing the injury.
Second, plaintiffs must 10) . that a particular tort was the proxi¬
mate cause of an injury before liability will be imposed. The term
proximate cause is somewhat misleading because it has little to do with
proximity or 11) . . Proximate cause 12) . the scope of liability to
those injuries that bear some reasonable relationship to the risk created
by the 13) ... . Proximate cause is evaluated in terms of foreseeability.
If the defendant should have foreseen the 14) . injury, he or she will
be held liable for the resulting 15) . . I f a given risk could not have
been reasonably anticipated, proximate cause has not been established,
and liability will not be 16) . .
When duty, breach, and proximate cause have been established in a
tort action, the plaintiff may 17) . damages for the pecuniary losses
sustained. The measure of 18) . is determined by the nature of the
tort committed and the type of injury suffered. Damages for tortious
acts generally fall into one of four categories: damages for injury to
person, damages for injury to personal 19) . , damages for injury to
real property, and 20) . damages.
17. Make a report covering the information acquired.
the list (A-G) for each gap. There is one extra sentence which you
A) In tort law, operations that produce recurring injuries like
these are called nuisances.
B) Charities and other philanthropic organizations have been
given qualified immunity from tort liability as well.
C) Advocates no longer enjoy immunity from law suits for negli¬
gence in relation to civil or criminal litigation.
140
T O R T LAW
D) Historically, immunity from tort litigation has been granted to

government units, public officials, charities, educational institutions,
spouses, parents, and children.
E — 1) Specifically, these injuries may include permanent disabil¬
ity, pain and suffering, disfigurement, humiliation, embarrassment,
distress, impairment of earning capacity, lost wages or profits, medical
costs, and out-of-pocket expenses.
F) Several jurisdictions have abolished tort immunity for entire
groups and entities.
G) In either case plaintiffs may also recover the rental value of
their property if its use and enjoyment has been interrupted by tortious
behavior.
DAMAGES
Personal injury tort victims must normally recover all their dam¬
ages — past, present, and future — during a single lawsuit. Damages
may be recovered for physical, psychological, and emotional injury.
[ 1 - E ]. Courts typically rely on expert testimony to translate such
losses into dollar figures.
Plaintiffs suffering damage to personal property must elect between
two methods of recovery. First, plaintiffs may elect to recover the dif¬
ference between the value of the property before the tort and the value
of the property after it. Second, plaintiffs may elect to recover the
reasonable costs of repair for damaged personal property. However, i f
the property is destroyed, irreparable, or economically infeasible to re¬
pair, damages are measured by the replacement value of the property.
Persons who are temporarily deprived of personalty may sue to recover
the rental value of the property for the period of deprivation.
Damages for injury to real property may be measured by the dif¬
ference in the realty's value before and after the tort. Alternatively,
plaintiffs may elect to recover the reasonable costs of restoring the
property to its original condition. [ 2 ] . Mental, emotional, and
physical harm that is sustained in the process of a tortious injury to
real property is compensable as well.
Punitive damages, called exemplary damages in some jurisdictions,
are recoverable against tortfeasors whose injurious conduct is suffi¬
ciently egregious. Although punitive damages are typically awarded
for injuries suffered from intentional torts, they can also be awarded
against tortfeasors who act with reckless indifference to the safety of
others. Because one purpose of punitive damages is to punish the
defendant, plaintiffs may introduce evidence regarding a tortfeasor's
wealth to allow the jury to better assess the amount of damages neces-
141
UNIT 6
sary for punishment. Such evidence is normally deemed irrelevant or

prejudicial in almost every other type of damage claim.
In addition to damages for past tortious conduct, plaintiffs may
seek injunctive relief to prevent future harm. Manufacturing plants that
billow smoke that pollutes the air, companies that discharge chemicals
that poison the water, and factories that store chemicals that migrate
through the soil create risks of injury that are likely to recur over time.
[ 3 ] . I f the harmfulness of such operations outweighs their use¬
fulness, plaintiffs may successfully obtain a court order enjoining or
restraining them.
IMMUNITY
Certain individuals and entities are granted immunity from both
damage awards and assessments of liability in tort. An immunity is a
defense to a legal action where public policy demands special protec-
tion for an entity or a class of persons participating in a particular field
or activity. [ 4 ].
Government immunity, also known as sovereign immunity, insu¬
lates federal, state, and local governments from liability for torts that
an employee commits within the scope of his or her official duties.
Public policy, as reflected by legislation, common-law precedent, and
popular opinion, has required courts to protect the government from
unnecessary disruptions that invariably result from civil litigation. Sim¬
ilarly, educational institutions generally have been immunized from
tort actions to protect students and faculty from distraction.
In a number of states, tortfeasors have been given immunity from
liability if they are related to the victim as husband or wife, or parent
or child. These states concluded that family harmony should not be
traumatized by the adversarial nature of tort litigation. [ 5 ] . This
immunity is based on the fear that donors would stop giving money to
charities if the funds were used to pay tort claims.
Over the last quarter century, nearly every jurisdiction has curtailed
tort immunity in some fashion. [ 6 ] . The movement to restrict tort
immunity has been based in part on the rule of law, which requires all
persons, organizations, and government officials to be treated equally
under the law. Despite the efforts of this movement, tort immunity
persists in various forms at the federal, state, and local levels.
142
T O R T LAW
20. In the above texts find the English equivalents for the following
words and word combinations and make your own sentences using them.
1) постоянная [стойкая] нетрудоспособность; 2) в соответ
ствии с законом; 3) иск о возмещении убытков; 4) судебный за
прет, средство правовой защиты в виде судебного запрещения;
5) судебный процесс по гражданскому делу; 6) виндикация;
взыскание в судебном порядке; 7) государственная политика;
8) распоряжение суда; 9) служебные обязанности; 10) расчетная
(условная) арендная плата; 11) личная собственность; движимое
имущество; 12) защищать от; 13) должностное лицо; 14) штраф¬
ные убытки, убытки, присуждаемые в порядке наказания;
15) понести ущерб, получить повреждение; 16) образователь¬
ное учреждение; 17) расходы на лечение; 18) обезображивание;
19) трудоспособность; 20) движимое имущество, движимость.
noun verb adjective
evidence evidence evident
recover
disruption
damaging , damaged
immunity
harm
deprive
litigation
1) Damages may be recovered for injury.
2) Persons who are temporarily deprived of personality may sue to
recover
3) I f the property is , damages are measured by the
replacement value of the property.
4) Damages for injury to real property may be measured by the dif¬
ference in the realty's value
5) Mental, emotional, and physical harm that is sustained in the
process of a tortious injury to real property
6) are recoverable against tortfeasors whose injurious
conduct is sufficiently egregious.
7) Although punitive damages are typically awarded for injuries
suffered from intentional torts, they can also be awarded against
143
UNIT 6
8) In addition to damages for past tortious conduct, plaintiffs may

seek
9) Certain individuals and entities both damage
awards and assessments of liability in tort.
10) Charities and philanthropic organizations have been given
qualified immunity from
11) Historically, immunity from tort litigation has been granted to
12) Several jurisdictions entire groups and entities.

13) An immunity is where public policy demands
special protection for an entity or a class of persons participating in a
particular field or activity.
14) Government immunity, also known as , insulates
federal, state, and local governments from liability for torts that an
employee
15) Educational institutions generally have been immunized from
tort actions to protect
16) In a number of states, tortfeasors have been given immunity
from liability i f they are related to the victim as
17) The movement to restrict tort immunity has been based in part
on the rule of law, which requires all persons, organizations, and gov¬
ernment officials to be treated
18) Tort immunity persists in various forms at the levels.
A B
1) affirmative a) временный, предварительный судебный
defence запрет
2) provisional b) основная ответственность, первичное
remedy обязательство
3) mandatory c) заявление о фактах, опровергающих иск
injunction или обвинение
4) permanent d) устранимый вред или источник вреда
injunction =
perpetual injunction
5) preliminary e) предварительное средство судебной
injunction защиты (в порядке обеспечения иска)
6) joint and several f) предполагаемые убытки
liability
7) joint liability g) источник опасности или неудобства для
всех окружающих
144
T O R T LAW
A B
8) secondary liability h) обязывающее решение суда, обязываю
щий судебный приказ
9) primary liability i) виндикация по нормам общего права
10) strict liability j) бессрочный судебный запрет
11) vicarious liability k) закон места совершения преступления
(лат.)
12) lex loci delicti l) нападение при отягчающих обстоятель
commissi ствах
13) lex fori m) взыскание убытков
14) abatable n) солидарная [совместная и индивидуаль
nuisance ная] ответственность
15) attractive nuisance o) нападение с нанесением удара (побоев)
16) private nuisance p) заранее оцененные убытки; оценочная
неустойка; ликвидные убытки (определяе¬
мые посредством арифметического подсчета)
17) public nuisance q) совместная ответственность
18) actual damages r) обязанность граждан возмещать ущерб,
причиненный в результате какого-либо не¬
доразумения другим лицам
19) consequential s) взыскание убытков, превышающих раз
damages мер ущерба
20) liquidated t) закон места рассмотрения дела, закон
damages суда (лат.)
21) nominal u) штрафные убытки, убытки, присуждае
damages мые в порядке наказания
22) punitive damages v) номинальные убытки, номинальное воз
= punitory damages мещение, имеющее символическое значе¬
exemplary damages ние
23) speculative w) акцессорная ответственность; субсидиар
damages ная ответственность
24) treble damages x) ответственность за действия других лиц;
субсидиарная ответственность
25) aggravated y) мошенническое присвоение имущества,
assault обманное присвоение имущества
26) assault and z) привлекающий (напр. детей) источник
battery опасности
27) fraudulent aa) возмещение убытков в тройном размере
conversion
28) common bb) реальные, фактические убытки
recovery
145
UNIT 6
A B
29) double recovery cc) источник опасности или неудобства для
какого-л. лица или группы лиц
30) recovery of dd) косвенные убытки
(civil) damages
S E L E C T I O N O F T H E G O V E R N I N G LAW
The selection of the law which is to govern tort liability is concep¬
tually one of the most difficult problems in the conflict of laws, at any
rate if the vast amount of learned discussion given to it by the writers is
anything to go by. Much of the modern academic discussion and most
of the case law emanates from the United States, and it is on this topic
that American methodologies and methodologists chiefly concentrate.
There has been little English case law on the question (though much
more in Australia and Canada). This may suggest either that there is
little litigation about torts committed abroad, or that litigants here do
not trouble to prove any relevant rules of foreign law, perhaps because
these rules are little different in effect from English rules of tort law
in many cases.
Also, the relative profuseness of the case law from the United States
and the Commonwealth as compared with our own meagre collection
is easily explained. In those countries there are several different juris
dictions; in North America about sixty. Of course, there are several
in the British Isles. But a very great number of modern cases in all
countries have arisen out of road traffic accidents; it is easier to drive
a car across a land frontier than to cross the sea with it, and England's
only land boundary is with Scotland.
Several different choice of law rules have been proposed from time
to time as being the most appropriate, but some which have been
adopted abroad have ceased to be applied there. One is the law of the
place where the tort was committed (lex loci delicti commissi). This
has found favour on the Continent of Europe and was the prevailing
rule in the United States until its disadvantages, which had already led
to its being outflanked, caused it to be abandoned in most states after
1962 in favour of a more flexible but more amorphous rule.
The lex fori has also been suggested as the governing law. This is
easy to apply and is superficially attractive. Its earliest advocates had
in mind that tort is akin to crime, and that domestic courts apply
only their own law to determine criminal liability. The idea that the
146
T O R T LAW
lex fori should be applied reflects a feeling that domestic courts can¬
not be expected to give a remedy when this is not available in wholly
domestic cases. This is not thought to be the case, however, in other
areas of the law such as contract, and it is not in itself an insuperable
obstacle to the application of the lex loci. Moreover, except for some
family law matters, the lex fori does not govern substantive issues in
the conflict of laws.
In revulsion from the unfortunate decision of the Scottish Court
of Session in McElroy v. McAllister, J. H. C. Morris put forward a
third choice of law rule as the most appropriate. This is the 'proper
law' of the tort, adopted by way of analogy with the proper law of the
contract. The proper law is that with which the event has its closest
and most real connection. Something like this or variants of it have
been taken up in the United States by courts and writers since 1962.
However, this doctrine need not detain us further at this point, since
one of the few things which are clear from the leading English case,
Chaplin v. Boys, is that it is not the common law choice of law rule.
Discussion of theory is now somewhat redundant. The English com¬
mon law rule still applies, but only to defamation actions. Otherwise,
legislation in the form of the Private International Law (Miscellaneous
Provisions) Act 1995, Part I I I governs all other actions in tort.
ЗАКОНОДАТЕЛЬСТВО, РЕГУЛИРУЮЩЕЕ
ОБЯЗАТЕЛЬСТВА ВСЛЕДСТВИЕ П Р И Ч И Н Е Н И Я
ВРЕДА ЗА РУБЕЖОМ
Во многих странах обязательства из причинения вреда пред
ставляют собой один из важнейших институтов гражданского
права.
По общему правилу необходимьгми условиями возникнове
ния обязательств из причинения вреда являются:
а) противоправное действие (бездействие);
б) наличие вреда;
в) причинная связь между противоправным действием
(бездействием) и наступившим вредом;
г) вина причинителя вреда.
Рассмотрим действующую систему возмещения вреда по пра¬
ву отдельных стран.
Согласно Гражданскому кодексу Франции, какое бы то ни
было действие, причиняющее ущерб другому лицу, обязывает
147
UNIT 6
того, по чьей вине ущерб произошел, к его возмещению. При

этом деликтная ответственность может наступить за действия
других лиц. Так, родители несут ответственность за вред, при¬
чиненный несовершеннолетними детьми.
Гражданское законодательство Германии формулирует ряд
отдельных составов правонарушений, влекущих деликтную от¬
ветственность. К ним относятся: посягательство на жизнь, теле¬
сную неприкосновенность, здоровье, свободу, собственность или
какое-либо другое нарушение норм закона, охраняющего лич¬
ную безопасность других лиц, и т. п.
В англо-американском праве нет общего понятия граждан¬
ского правонарушения, влекущего деликтную ответственность.
Правовая система возмещения вреда представляет собой сово¬
купность отдельных составов правонарушений, выработанных
судебной практикой. Это законы об ответственности за вред,
причиненный воздушным судном, об ответственности государ¬
ства за действия должностных лиц и некоторые другие.
Гражданское законодательство многих стран предусматривает
возмещение как имущественного, так и морального вреда.
Действующая в некоторых странах система возмещения вреда
возлагает на потерпевшего бремя доказывания вины причините-
ля вреда.
При рассмотрении в судах дел данной категории применя¬
ется, как правило, закон места совершения деликта. Способы
определения места, где деликт следует считать совершенным,
различны. Например, в Австрии это место совершения действия,
повлекшего за собой вред; в США — место наступления резуль
тата вредоносного действия; в Чехии, Швейцарии допускается
альтернативное применение обоих способов определения места
совершения деликта.
Тихиня В. Г. «Международное частное право»
26. Sum up the information from the unit. pick out a problem
you consider important and make a 5-8 minute report on your
problem.
TEST

1) There are a number of defences available to a defendant who
is being sued for the intentional of trespass to the person, land or
goods.
148
T O R T LAW
2) The plaintiff suffered a fractured skull and was left with a minor
permanent
3) Any person who infringes the above in relation to this publica¬
tion may be liable to criminal and civil claims for damages.
4) includes compensating loss of earning capacity and
expenses such as medical treatment.
5) At law, public nuisance is a crime.
6) The current trend in Australia is not to replace tort with
legislative schemes, but rather to supplement the common law.
7) Battery and are crimes as well as torts, thus, victims may
receive compensation under legislative criminal injuries compensation
schemes.
8) There are three types of tort which make up the tort of trespass
to the person: assault, battery and false
9) A child is personally for the consequences of his wrongful
acts.
10) A claimant may claim for damages alone or for damages to¬
gether with relief.
11) An example of economic loss is where a claimant is injured in
a car accident and thereby suffers a loss of capacity.
12) Courts will generally be far less willing to give a injunction
than a prohibitory injunction.
13) Joint participation means for the resulting harm, re¬
gardless of who actually did the tort.
14) are awarded where a claimant may establish their ac¬
tion but, in the opinion of the jury, the action should never have been
brought.
15) Comprehensive principles to regulate the of damages for
economic loss have not yet been formulated by the courts.
II. Fill in the prepositions.
1) courts typically rely ... expert testimony;
2) to recover damages ... false imprisonment;
3) . addition . damages for past tortious conduct;
4) immunity . punishment or recrimination;
5) to proceed . difficulties;
6) to be responsible . an offence or misdeed;
7) liability . negligence;
8) to protect . accidents;
9) gratuitous interference . private rights;
10) freedom . taxation
149
UNIT 7
III. Translate the article from the Convention on the Law Ap
plicable to Traffic Accidents into Russian.
Article 5
1) The law applicable under Articles 3 and 4 to liability towards a
passenger who is a victim governs liability for damage to goods carried
in the vehicle and which either belong to the passenger or have been
entrusted to his care.
2) The law applicable under Articles 3 and 4 to liability towards the
owner of the vehicle governs liability for damage to goods carried in
the vehicle other than goods covered in the preceding paragraph.
3) Liability for damage to goods outside the vehicle or vehicles is
governed by the internal law of the State where the accident occurred.
4) However the liability for damage to the personal belongings of
the victim outside the vehicle or vehicles is governed by the internal
law of the State of registration when that law would be applicable to
the liability towards the victim according to Article 4.
IV. Translate the article from the Convention on the Law Ap¬
plicable to Traffic Accidents into English.
Статья 7
1) В отношении транспортных средств, которые не зарегистри¬
рованы или зарегистрированы в нескольких государствах, наци¬
ональное право государства, в котором они обычно пребывают,
заменяет право государства регистрации. Такое же правило при¬
меняется, если ни собственник, ни владелец, ни водитель транс¬
портного средства постоянно не проживают в государстве реги¬
страции на момент происшествия.
2) Какое бы право не применялось, при определении от¬
ветственности во внимание принимаются нормы, касающиеся
контроля и безопасности дорожного движения, находившиеся в
силе в месте происшествия и на его момент.
UNIT 7 FAMILY LAW

1. What do you know about Family Law? Choose the right
answer.
1) During a marriage, all custodial rights are exercised by . .
a) mother b) both parents c) father
2) In . , parties mutually agree to enroll in premarital or post-
wedding counseling, and also agree to divorce only under certain,
150
F A M I L Y LAW
more limiting conditions, such as domestic violence, abandonment,

adultery, imprisonment of a spouse, or lengthy separation.
a) open marriages b) trial marriages c) covenant marriages
3) The . Hague Convention on the Civil Aspects of International
Child Abduction was designed to facilitate the return of abducted chil¬
dren and the exercise of visitation rights across international bounda¬
ries.
a) 1980 b) 1984 c) 1991
4) By 1987, all fifty states in the USA had adopted ... , exclusively
or as an option to traditional fault-grounded divorce.
a) mail-order divorce b) migratory divorce c) no-fault divorce
5) The "tender years" doctrine arose after the Civil War in the
USA, giving . a presumptive right to their young children.
a) mothers b) grandmothers c) fathers
2. Read the text and give opposites for the words in bold.
HISTORICAL BACKGROUND
The law relating to family disputes and obligations has grown dra¬
matically since the 1970s, as legislators and judges have reexamined
and redefined legal relationships surrounding divorce, child custody,
and child support. Family law has become entwined with national
debates over the structure of the family, gender bias, and morality.
Despite many changes made by state and federal legislators, family law
remains a contentious area of U.S. law, generating strong emotions
from those who have had to enter the legal process.
Most of the changes made in family law in the late twentieth century
have been based on overturning concepts of marriage, family, and gen¬
der that go back to European feudalism, canon (church) law, and cus¬
tom. During Anglo-Saxon times in England, marriage and divorce were
private matters. Following the Norman conquest in 1066, however, the
legal status of a married woman was fixed by common law, and canon
law prescribed various rights and duties. The result was that the identity
of the wife was merged into that of the husband; he was a legal person
but she was not. Upon marriage, the husband received all the wife's per-
sonal property and managed all the property owned by her. In return,
the husband was obliged to support the wife and their children.
This legal definition of marriage continued in the United States
until the middle of the nineteenth century, when states enacted mar¬
ried women's property acts. These acts conferred legal status upon
wives and permitted them to own and transfer property in their own
right, to sue and be sued, and to enter into contracts. Although these
151
UNIT 7
acts were significant advances, they dealt only with property a woman
inherited. The husband, by placing title in his name, could control
most of the assets acquired during marriage, thus forcing the wife to
rely on his bounty.
Divorce law has also changed over time. In colonial America, di¬
vorce was extremely rare. This was partly because obtaining a divorce
decree required legislative action, a process that was time-consuming
and costly. Massachusetts in 1780 was the first state to allow judicial
divorce. By 1900, every state except South Carolina provided for ju¬
dicial divorce.
Even with availability, divorce remained a highly conflicted area
of law. The Catholic Church labeled divorce a sin, and Protestant
denominations saw it as a mark of moral degeneration. The adversar¬
ial process presented another roadblock to divorce. In the nineteenth
century, consensual divorce was not known. For a couple to obtain
a divorce, one party to the marriage had to prove that the other had
committed a wrong of such weight that the marriage must be ended.
The need to find fault was a legacy of family law that was not changed
until the 1970s.
Finally, the issue of divorce raised the topic of child custody. Tra¬
ditionally, fathers retained custody of their children. This tradition
weakened in the nineteenth century, as judges fashioned two doctrines
governing child custody. The "best-interests-of-the-child" doctrine
balanced a new right of the mother to custody of the child against
the assessment of the needs of the child. The "tender years" doctrine
arose after the Civil War, giving mothers a presumptive right to their
young children.

provided . by collective agreement; despite . the fact; rely .
God; based ... principles; enter ... a treaty; obtain ... a divorce;
noun verb adjective
1) legislation, legislator legislate legislative
2) divorced
3) marriage
4) support
5) inherit
152
F A M I L Y LAW
noun verb adjective

6) judicial, judicatory
7) prove
8) presumptive
9) fault
10) dispute
1. What did the "best-interests-of-the-child" doctrine balance?
2. Were marriage and divorce private matters during Anglo-Saxon
times in England or in the United States?
3. Texas in 1780 was the first state to allow judicial divorce, wasn't
it?
4. How did the Catholic Church label divorce?
5. Why was divorce extremely rare in colonial America?
6. Traditionally, fathers retained custody of their children, didn't
they?
7. Has the law relating to family disputes and obligations grown
dramatically since the 1970s?
8. When did the "tender years" doctrine arise?
antenuptial, commencement, prior, status, annulment, bigamy,
criteria, retarded, prohibit, issuance, abandonment, adultery
words.
MARRIAGE
Marriage is a legally sanctioned contract between a man and a
woman. Entering into a marriage contract changes the legal status of
both parties, giving husband and wife new rights and obligations.
Individuals who seek to alter marital rights and duties are permitted
to do so only within legally prescribed limits. Antenuptial agreements
are entered into before marriage, in contemplation of the marriage
relationship. Typically these agreements involve property rights and
the terms that will be in force i f a couple's marriage ends in divorce.
Separation agreements are entered into during the marriage prior to
the commencement of an action for a separation or divorce. These
agreements are concerned with child support, visitation, and tempo¬
rary maintenance of a spouse. The laws governing these agreements
153
UNIT 7
are generally concerned with protecting every marriage for social rea¬
sons, whether the parties desire it or not.
The U.S. Supreme Court has held that states are permitted to
reasonably regulate marriage by prescribing who can marry and the
manner in which marriage can be dissolved. States may grant an an¬
nulment or divorce on terms that they conclude are proper, because
no one has the constitutional right to remain married. There is a
right to marry, however, that cannot be casually denied. States are
proscribed from absolutely prohibiting marriage in the absence of a
valid reason.
All states limit people to one living husband or wife at a time and
will not issue marriage licenses to anyone who has a living spouse. Once
someone is married, the person must be legally released from his or her
spouse by death, divorce, or annulment before he or she may legally
remarry. Persons who enter into a second marriage without legally dis¬
solving a first marriage may be charged with the crime of bigamy.
Each state has its own individual requirements concerning the peo¬
ple who may marry. Before a state will issue a marriage license, a man
and a woman must meet certain criteria. Some states prohibit marriage
for those judged to be mentally i l l or mentally retarded. In other states,
however, a judge may grant permission to mentally retarded persons
to marry.
Every state proscribes marriage between close relatives. The pro¬
hibited degree of relationship is fixed by state law. Every state forbids
marriage to a child or grandchild, parent or grandparent, uncle or
aunt, and niece or nephew, including illegitimate relatives and rela¬
tives of half blood, such as a half brother who has the same father
but a different mother. A number of states also prohibit marriage to
a first cousin, and some forbid marriage to a more distant relative,
in-law, stepparent, or stepchild.
Age is an additional requirement. Modern statutes ordinarily pro¬
vide that females may marry at age 16 and males at age 18. Some¬
times a lower age is permitted with the written consent of the par¬
ents. A number of states allow for marriage below the minimum age
if the female is pregnant and a judge grants permission.
Every couple who wishes to marry must comply with a state's
formal requirements. Many states require a blood test or a blood
test and physical examination before marriage, to show whether one
party is infected with a venereal disease. In some states, for example,
the clerk is forbidden to issue a marriage license until the parties
present the results of the blood test.
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F A M I L Y LAW
Most states impose a waiting period between the filing of an ap¬

plication for a license and its issuance. The period is usually three
days, but in some states the period may reach five days. Other states
mandate a waiting period between the time when the license is issued
and the date when the marriage ceremony may take place. Many
states provide that the marriage license is valid only for a certain pe¬
riod of time. I f the ceremony does not take place during this period,
a new license must be obtained.
It has been customary to give notice of an impending marriage
to the general public. The old form of notice was called "publica¬
tion of the banns," and the upcoming marriage was announced i n
each party's church three Sundays in a row before the marriage. This
informed the community of the intended marriage and gave every¬
one the opportunity to object i f any knew of a reason why the two
persons could not be married. Today, the names of applicants for
marriage licenses are published in local newspapers.
Once a license is issued, the states require that the marriage com¬
mence with a wedding ceremony. The ceremony may either be civil
or religious because states may not require religious observances. Cer¬
emonial requirements are very simple and basic, in order to accom¬
modate everyone. I n some states, nothing more is required than a
declaration by each party in the presence of an authorized person and
one additional witness that he or she takes the other in marriage.
A minority of states have sought to curb growing divorce rates by
enacting legislation designed to encourage couples to remain married.
Statutes in states such as Arkansas, Arizona, and Louisiana provide for
covenant marriages, where couples agree to impose upon themselves
limitations on their ability to divorce one another. Twenty other states
have considered, but ultimately rejected, the adoption of similar bills.
In covenant marriages, parties mutually agree to reject "no-fault di¬
vorce," agree to enroll in premarital or post-wedding counseling, and
also agree to divorce only under certain, more limiting conditions,
such as domestic violence, abandonment, adultery, imprisonment of
a spouse, or lengthy separation. States that pass bills recognizing cov¬
enant marriages do not actually require such marriages, but rather for¬
mally acknowledge them as legally viable, thus creating legal recourse
under the law for breaches of such covenants.
155
UNIT 7

A B
1) antenuptial a) a formal invalidation, as of a marriage,
marriage contract e judicial proceeding, etc;
2) spouse b) a written agreement between husband and
wife in contemplation of divorce detailing
how their property is to divided, how alimony
or child support is to be paid and in what
amount by whom to the other, and custodial
arrangements for children;
3) annulment c) voluntary sexual intercourse during the
subsistence of a marriage between one spouse
and a person of the opposite sex who is not the
other spouse;
4) bigamy d) the termination of a marriage by court order;
the state of having terminated a marriage;
5) visitation rights e) a contract made between a man and a woman
before they marry, agreeing on the distribution of
their assets in the event of divorce;
6) separation f) the crime of marrying a person while one is
agreement still legally married to someone else;
7) divorce g) a person's husband or wife;
8) adultery h) the right of the non-custodial parent, granted
by the divorce or family court, to visit with the
child on some sort of scheduled or regular basis.
10. Make sentences of your own with the following phrases.

1) lengthy separation
2) no-fault divorce
3) marriage ceremony
4) additional requirement
5) marriage license
6) temporary maintenance
7) child support
8) separation agreements
9) antenuptial agreements
10) domestic violence
11. Fill in the missing words in the sentences below according
to the above text.
1. He was given life i for the crime.
156
F A M I L Y LAW
2. The obligor is the parent that is required to pay the child s

_ _ _ _ to the other parent.
3. In most legal systems, m is accepted and treated as
a contract, but it is one the incidents of which the parties cannot vary.
4. I f a spouse reasonably believes that the other is committing a _ _
, the former is entitled to withdraw from cohabitation.
5. She symbolically removed her w _ _ ring and, from that
time, their family life together ended.
6. It was intended that the civil ceremony would be followed by a
r_ _ ceremony.
7. Following b _ _ tests, a report was made, stating that there
was an 88% probability that H was the father.
8. Following a s agreement, H and W had sepa¬
rated, but H had no wish for the separation to be permanent.
9. M was given p _ _ to visit England.
10. The j _ _ _ _ awarded the wife alimony.
1. Separation agreements are concerned with ... .
2. Antenuptial agreements involve property rights and the terms
that will be . .
3. In covenant marriages, parties mutually agree to reject . .
4. Today, the names of applicants for marriage licenses are pub¬
lished . .
5. Many states require a blood test or a blood test and physical
examination before marriage, to show . .
6. The U.S. Supreme Court has held that states are permitted to
reasonably regulate marriage by prescribing who can . .
7. Once someone is married, the person must be legally released
from . .
8. Every state proscribes marriage between . .
9. Persons who enter into a second marriage without legally dis¬
solving a first marriage may be charged with . .
10. Modern statutes ordinarily provide that females may marry at
age . .
pass; sex; extend(2); revive; scrutiny; settle; level; license; county;
legal; prohibit
157
UNIT 7
S A M E - S E X MARRIAGE
Despite court challenges, marriage can occur only between persons
of the opposite 1) ... . In Baker v. Nelson the Minnesota Supreme Court
sustained a clerk's denial of a marriage 2) ... to a homosexual couple.
The possibility of homosexual marriage was 3) . by the 1993 de¬
cision of the Hawaii Supreme Court in Baehr v. Lewin. In Baehr,
the court held that a state law restricting 4) . marriage to parties of
the opposite sex establishes a sex-based classification, which is sub¬
ject to strict constitutional 5) . when challenged on equal protection
grounds. Although the court did not recognize a constitutional right to
same-sex marriage, it indicated that i f the state 6) . such marriages, it
would have a difficult time proving that gay and lesbian couples were
not being denied equal protection of the laws. The debate over homo¬
sexual marriage continues at both the federal and state 7) . .
Although gay and lesbian partners have been unable to persuade
states to recognize their unions as "marriage" in the traditional sense,
an increasing number of states have 8) . laws allowing unmarried
couples, including homosexual and heterosexual couples, to register
as "domestic partners." A registry identifying these partners has been
established in dozens of American cities, and other cities and states
now 9) ... certain benefits to domestic partners even i f the city or state
does not provide a registry. The ordinances and statutes also provide
certain procedures for property 10) . and resolution of other issues i f
the partners separate.
The movement has been most popular in cities in the state of
California, where many municipalities and 11) . provide benefits to
domestic partners, domestic partner registries, or both. Although sev¬
eral of the cities across the United States that have 12) . these rights
to same-sex couples are larger, urban areas, some smaller counties and
cities have also extended such rights.
15. Read the text and give synonyms for the underlined words.
DIVORCE
Beginning in the 1960s, advocates of divorce reform called for the
legal recognition of no fault divorce. Under this concept, a divorce
may be granted on grounds such as incompatibility, irreconcilable dif¬
ferences, or an irretrievable breakdown of the marriage relationship.
The court examines the condition of the marriage rather than the
158
F A M I L Y LAW
question of whether either party is at fault. This type of proceeding

eliminates the need for one party to accuse the other of a traditional
ground for divorce, such as adultery, cruelty, alcoholism, or drug ad¬
diction.
By 1987, all fifty states had adopted no-fault divorce, exclusively
or as an option to traditional fault-grounded divorce. No-fault divorce
has become a quick and inexpensive means of ending a marriage, es¬
pecially when a couple has no children and moderate property assets.
In fact, the ability to end a marriage using no-fault procedures has
led to criticism that divorce has become too easy to obtain, allowing
couples to abandon a marriage at the first sign of marital discord.
The division of marital property has also undergone significant
change since the 1970s. Courts now consider the monetary and non-
monetary contributions of a spouse as a homemaker, parent, and helper
in advancing the career or career potential of the other party — as, for
example, when one spouse works so that the other may go to school.
Alimony, or spousal maintenance, can be either temporary or perma¬
nent. Its use originally arose from the common-law right of a wife to
receive support from her husband. Under contemporary law, men and
women are eligible for spousal maintenance. Factors that are relevant
to an order of maintenance include the age and marketable skills of
the intended recipient, the length of the marriage, and the income of
both spouses.
Maintenance is most often used to provide temporary support to
a spouse who was financially dependent on the other during the mar¬
riage. Temporary maintenance is designed to provide the necessary
support for a spouse until he or she either remarries or becomes self-
supporting. Many states allow courts to consider marital fault in deter¬
mining whether, and how much, maintenance should be granted.
Property distribution is frequently contested in modern divorce
proceedings. Commonly disputed property includes real estate, per¬
sonal property, cash savings, stocks, bonds, savings plans, and retire¬
ment benefits. The statutes that govern property division vary by state,
but they generally can be grouped into two types: equitable distribution
and community property. Most states follow the equitable-distribution
method. Generally, this method provides that courts divide a divorc-
ing couple's assets in a fair and equitable manner, given the particular
circumstances of the case.
Some equitable-distribution states look to the conduct of the parties
and permit findings of marital fault to affect property distribution.
Equitable-distribution states generally give the court considerable
discretion as to the division of property between the parties. The courts
159
UNIT 7
consider not only the joint assets held by the parties, but also separate
assets that the parties either brought with them into the marriage or
that they inherited or received as gifts during the marriage. Generally,
if the separate property is kept separate during the marriage, and not
commingled with joint assets like a joint bank account, then the court
will recognize that it belongs separately to the individual spouse, and
they will not divide it along with the marital assets. A minority of
states, however, support the idea that all separate property of the par¬
ties becomes joint marital property upon marriage.
As for the division of marital assets, equitable-distribution states
look to the monetary and nonmonetary contributions that each spouse
made to the marriage. I f one party made a greater contribution, the
court may grant that party a greater share of the joint assets. Some
states do not consider a professional degree earned by one spouse dur¬
ing the marriage to be a joint asset, but do acknowledge any financial
support contributed by the other spouse, and they let that be reflected
in the property distribution. Other states do consider a professional de¬
gree or license to be a joint marital asset and have devised various ways
to distribute it or its benefits. States that follow community-property
laws provide that nearly all of the property that has been acquired dur-
ing the marriage belongs to the marital "community," such that the
husband and wife each have a one-half interest in it upon death or
divorce. It is presumed that all property that has been acquired during
the marriage by either spouse, including earned income, belongs to the
community unless proved otherwise.
Exceptions are made for property received as a gift or through
inheritance, and for the property that each party brought into the
marriage. Those types of property are considered separate and not part
of the community. Upon divorce, each party keeps his or her own
separate property, as well as half of the community property.
in column.
A B
1) property e) a) addiction
2) spousal b) maintenance
3) monetary c) distribution
4) drug d) divorce
5) community e) assets
6) divorce f) skills
160
F A M I L Y LAW
7) equitable g) recognition
8) no-fault h) proceedings
9) legal i) contribution
10) marketable j) property
1) adultery — voluntary sexual intercourse between a married man
or woman and a partner other than the legal spouse;
2) the dissolution of a marriage by judgment of a court or by ac¬
cepted custom;
3) deliberate infliction of pain or suffering;
4) a condition in which dependence on alcohol harms a person's
health, social functioning, or family life;
5) the condition of being abnormally dependent on some habit,
esp. compulsive dependency on narcotic drugs;
6) a provision ordered to be made by way of periodical payments
or a lump sum, as after a divorce for a spouse;
7) an allowance paid under a court order by one spouse to another
when they are separated but not divorced;
8) any property owned by a person or firm.
d m a i n t e n a n c e p
u t l u h n o r d a t e m
r g c t e r s n u h w a o
n o o a c r u e l t y l u
h z h b t e n a t a r i n
g p o k a a s s e t s m h
n a l m j a s r r o g o r
u d i v o r c e y e f n e
a k s d i c t e l p a y o
h p m f h u n a o t f a n
k h a a d d i c t i o n g
l a r u o p z d r i m l o

1. By 1887, all fifty states had adopted no-fault divorce, exclusively
or as an option to traditional fault-grounded divorce.
161
UNIT 7
2. Upon divorce, each party keeps his or her own permanent prop¬
erty, as well as half of the community property.
3. The statutes that govern property division vary by state, but they
generally can be grouped into two types: equitable distribution and
community property.
4. No-fault divorce has become an expensive means of ending a
marriage, especially when a couple has no children and moderate
property assets.
5. Alimony, or spousal maintenance, can be only permanent.
6. I f one party made a greater contribution, the court may grant
that party a greater share of the joint assets.
7. Some equitable-distribution states look to the conduct of the par¬
ties and permit findings of marital fault to affect property distribution.
8. Maintenance is most often used to provide permanent support to a
spouse who was financially dependent on the other during the marriage.
19. Study the text below and give the English equivalents for
the words and phrases in bold.
PREMARITAL AGREEMENT
A premarital agreement, also known as a prenuptial or antenuptial
agreement, is a 1) договор between two persons who intend to marry,
concerning 2) прав собственности upon divorce. A 3) договор между
мужем и женой, заключенный после бракосочетания is a contract
entered into by divorcing parties before they reach court. Tradition¬
ally, antenuptial agreements were discouraged by state legislatures and
courts as being contrary to the 4) государственная политика in favor
of lifetime marriage. An antenuptial agreement is made 5) исходя из
предположения that the 6) брак may not last forever, which suggests
that it facilitates divorce. No state expressly 7) запрещать antenuptial
agreements, but, as in any contract case, courts reserve the right to 8)
аннулировать any that it finds unconscionable or to have been made
9) под принуждением. State statutes that authorize antenuptial and
postnuptial agreements usually require that the 10) стороны fulfill
certain conditions. In Delaware, for example, a man and a woman
may execute an antenuptial agreement in the presence of two 11)
свидетелей at least ten days before their marriage. Such an agreement,
if notarized, may be filed as a deed with the office of the recorder in
any county of the state. Both antenuptial and postnuptial contracts
concerning 12) недвижимого имущества must be recorded in the reg¬
istry of deeds where the land is situated.
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F A M I L Y LAW
JURISDICTION
Jurisdiction over a divorce case is usually determined by residency.
That is, a divorcing spouse is required to bring the divorce action in the
state where he or she maintains a permanent home. States are obligated
to acknowledge a divorce that was obtained in another state. This rule
derives from the full faith and credit clause of the U.S. Constitution,
which requires states to recognize the valid laws and court orders of
other states. However, i f the divorce was originally granted by a court
with no jurisdictional authority, a state is free to disregard it.
In a divorce proceeding where one spouse is not present (an ex
parte proceeding), the divorce is given full recognition if the spouse re¬
ceived proper notice and the original divorce forum was the bona fide
domicile of the divorcing spouse. However, a second state may reject
the divorce decree i f it finds that the divorce forum was improper.
State courts are not constitutionally required to recognize divorce
judgments granted in foreign countries. A U.S. citizen who leaves the
country to evade divorce laws will not be protected i f the foreign di¬
vorce is subsequently challenged. However, where the foreign divorce
court had valid jurisdiction over both parties, most U.S. courts will
recognize the foreign court's decree.
The only way that an individual may obtain a divorce is through
the state. Therefore, under the due process clause of the fourteenth
amendment to the U.S. Constitution, a state must make divorce avail¬
able to everyone. I f a party seeking divorce cannot afford the court
expenses, filing fees, and costs associated with the serving or publica¬
tion of legal papers, the party may file for divorce free of charge. Most
states offer mediation as an alternative to court appearance. Mediation
is less expensive and less adversarial than appearing in public court.
In the United States, divorce law consists of 51 different sets of
conditions — one for each state and the District of Columbia. Each
state holds dear its power to regulate domestic relations, and pecu¬
liar divorce laws abound. Nevertheless, divorce law in most states has
evolved to recognize the difference between regulating the actual de¬
cision to divorce and regulating the practical ramifications of such a
decision, such as property distribution, support obligations, and child
custody. Most courts ignore marital fault in determining whether to
grant a divorce, but many still consider it in setting future obligations
between the parties. To determine the exact nature of the rights and
duties relating to a divorce, one must consult the relevant statutes for
the state in which the divorce is filed.
163
UNIT 7
1) the act of keeping safe or guarding, esp the right of guardian¬
ship of a minor;
2) maltreatment of a person; injury;
3) a formal application in writing made to a court asking for some
specific judicial action;
4) law (formerly) an allowance paid under a court order by one
spouse to another when they are separated but not divorced;
5) a right to retain possession of another's property pending dis¬
charge of a debt;
6) the way in which someone is treated and educated when they are
young, esp. by their parents, particularly in relation to the effect which
this has on how they behave and make moral decisions;
7) a person, usually young, who behaves in a way that is illegal or
unacceptable to most people;
CHILD CUSTODY
During a marriage, all custodial rights are exercised by both parents.
These include decision making power over all aspects of upbringing,
religion, and education, as long as the parental decisions and conduct
stay clear of the neglect, abuse, and dependency laws. Upon divorce,
that power traditionally went solely to one parent who obtained custo¬
dy. Traditionally, the visitation rights given to the noncustodial parent
constituted little more than a possessory interest. This made the custody
decision upon divorce a significant one: the relationship between the
noncustodial parent and her or his children would change, as the parent
would lose the ability to shape decisions affecting the children.
In the United States, since the nineteenth century, mothers tra¬
ditionally gained custody of children. In the late twentieth century,
changes in marital and social roles have led to fathers assuming duties
once thought to be the exclusive province of mothers. This in turn has
led to fathers showing more interest in claiming custody and to courts
granting fathers custody. Yet the vast majority of custody dispositions
still go to the mother.
From a dissatisfaction with custody decisions has emerged the con-
cept of joint custody. Under joint custody, legal custody (the decision-
making power over the child's conduct of life) remains with both
parents, and physical custody goes to one or the other or is shared.
The concept has met with mixed reactions. I f both parents are reason-
164
F A M I L Y LAW
able, both may be able to participate fully in decisions that would have
been denied one of them. On the other hand, joint custody is likely to
be harmful i f the parents play out any lingering animosity, or confuse
the child with conflicting directions, or are simply unwilling to agree
on basic issues involving the child's welfare.
Beginning in 1980, the laws governing custody disputes have been
guided by federal statutes. A 1980 amendment to the Judiciary Act
authorized federal rules that control the enforcement and modifica¬
tion of custody decrees. When in conflict, these rules supersede state
statutes, including the Uniform Child Custody Jurisdiction Act (UC-
CJA), which all states have enacted in some version. The UCCJA was
created to deal with interstate custody disputes. Before it was passed,
a divorced parent who was unhappy with one state's custody decision
could sometimes obtain a more favorable ruling from another state.
This led to divorced parents' kidnapping their children and moving to
another state in order to petition for custody.
Despite the enactment of the original UCCJA, the problem per¬
sisted. In 1980, Congress passed the Parental Kidnapping Prevention
Act, which aids enforcement and promotes finality in child custody
decisions, by providing that a valid custody decree must be given full
legal effect in other states. In an international context, in 1986, the
United States adopted the 1980 Hague Convention on the Civil As¬
pects of International Child Abduction. The convention was designed
to facilitate the return of abducted children and the exercise of visita¬
tion rights across international boundaries.
With the growing number of disputes among parents regarding cus¬
tody and visitation of children to the marriage, states have recognized
that grandparents often play an important role in the lives of their
grandchildren. Surveys by the American Association of Retired Persons
(AARP) suggest that more than 80 percent of grandparents responding
said that they had seen their grandchildren within the previous month.
Each of the 50 states has adopted provisions in their family laws allow¬
ing visitation for grandparents under certain circumstances.
CHILD SUPPORT
In most cases, a divorce decree will require the noncustodial par¬
ent, usually the father, to pay child support. The failure of parents to
pay child support has significant consequences. Lack of support may
force the custodial parent to apply for welfare, which in turn affects
government budgets and ultimately taxes. This problem has resulted in
increasingly more aggressive collection efforts by the government.
165
UNIT 7
The Uniform Reciprocal Enforcement of Support Act (URESA)

exists in all states in some form. URESA allows an individual who is
due alimony or child support from someone who lives in a different
state to bring action for receipt of the payments in the home state. This
measure circumvents such problems as expense and inconvenience
inherent in traveling from one state to another in pursuit of support.
In response to federal legislation that mandates a more aggressive
approach, states have become more creative in extracting money from
those who fail to pay child support — who, because they are usually
fathers, have come to be labeled deadbeat dads. In 1975, Congress
enacted a provision that created the Office of Child Support Enforce¬
ment in the Department of Health and Human Services. The office
was charged with developing ways of collecting child support.
In 1984, the law was amended to strengthen enforcement powers.
State laws now must require employers to withhold child support from
the paychecks of parents who are delinquent for one month. Employers
are to be held responsible if they do not comply fully. State laws must
provide for the imposition of liens against the property of those who
owe support. Unpaid support must be deducted from federal and state
income tax refunds. Expedited hearings are required in support cases.
1. The dispute over ... custody of the children is likelya) support

to make it a complicated divorce case. e
2. The new ... would force companies to adopt b) joint
energy-saving measures.
3. The court ordered that she only be allowed c) deadbeat
supervised ... .
4. Under an affiliation order, a man who is not e) custody
married to the mother of his child is ordered by a law
court to pay money to the mother to ... his child.
5. These organizations have fought very hard for the f) animosity
rights and ... of immigrants.
6. In court, the parents were awarded ... custody of g) survey
their son.
7. Many countries have now ratified the U N ... on h) tax
the rights of the child.
8. The ... between the rival candidates was obvious to i) convention
the voters.
166
F A M I L Y LAW
9. Such a step only reinforces Argentina's reputation j) welfare

as the ultimate ... country.
10. A ... of modern marriage carried out by a k) visitation
magazine found that over 50% of marriages end in
divorce.

1. What does the Uniform Reciprocal Enforcement of Support Act
allow?
2. What do all custodial rights include?
3. Do usually mothers or fathers pay child support?
4. Does legal custody remain with both parents?
5. How many states have adopted provisions in their family laws
allowing visitation for grandparents under certain circumstances?
6. When did Congress pass the Parental Kidnapping Prevention
Act?
7. When did the USA adopt the Hague Convention on the Civil
Aspects of International Child Abduction?
8. Why was the Hague Convention on the Civil Aspects of Inter¬
national Child Abduction designed?
9. Why was the UCCJA created?
10. The failure of parents to pay child support has significant con¬
sequences, doesn't it?
11. Are all custodial rights exercised by both parents during a mar¬
riage?
12. In 1986, Congress enacted a provision that created the Office of
Child Support Enforcement in the Department of Health and Human
Services, didn't it?
13. Must state laws require employers to withhold child support
from the paychecks of parents who are delinquent for one month or
for three months?
14. State laws must provide for the imposition of liens against the
property of those who owe support, mustn't they?
15. Who gained custody of children since the nineteenth century?
ПРАВООТНОШЕНИЯ МЕЖДУ СУПРУГАМИ

При рассмотрении споров между супругами, в том числе граж
данами иностранньгх государств, по поводу имущества, нажитого
в период брака, а также определении других имущественных и
личных неимущественных прав и обязанностей важно установить
167
UNIT 7
законодательство страны, подлежащее применению к правоотно

шениям. Согласно ст. 161 Семейного кодекса РФ личные неи¬
мущественные и имущественные права и обязанности супругов
определяются законодательством государства, на территории ко¬
торого они имеют совместное место жительства, а при его отсут¬
ствии — законодательством государства, на территории которого
они имели последнее совместное место жительства. Если супруги
не имеют и не имели совместного места жительства, то правоотно¬
шения регулируются законодательством Российской Федерации.
Семейным кодексом особо регулируются вопросы заключения
брачного договора и соглашения об уплате алиментов. Супруги,
не имеющие общего гражданства или совместного места житель¬
ства, могут избрать законодательство, подлежащее применению
к договору. Это должно быть предусмотрено в договоре. Супруги
могут избрать законодательство любой страны, а не только тех
стран, гражданами которых они являются или в которых они
проживают. Требования к форме договора подчиняются законо¬
дательству той страны, где он совершается.
Рузакова О.А. "Международное частное право"
A B
1) separation agreement a. решение суда об установлении ста
туса раздельного жительства супругов
2) divorce decree b. несовместимость
3) defending spouse c. бракоразводный процесс
4) divorce a mensa et thoro d. наркомания
5) alimony pendente lite e. соглашение по имущественным во
просам брака, брачный договор (ре
гулирующий будущие имущественные
отношения супругов)
6) divorce suit f. общая сумма (присужденных) али
ментов
7) parental custody g. судопроизводство при наличии
одной стороны (а не по спору между
сторонами)
8) no-fault divorce h. соглашение между супругами о раз
дельном проживании
9) incompatibility i. брак по доверенности, заключение
брака по доверенности
10) alimony in gross j . временное содержание
168
F A M I L Y LAW
11) adultery k. бигамия, двоебрачие

12) drug addiction l. (присужденная) сумма алиментов,
подлежащих регулярной выплате
13) bigamous marriage m. адюльтер, прелюбодеяние
14) marriage articles n. супруг-истец
15) ad interim alimony o. супруг-ответчик
16) alimony in general p. родительское попечение
17) ex parte proceeding q. предбрачный договор (об имуще
ственных отношениях будущих супру
гов)
18) claiming spouse = r. развод "без чьей-либо вины"
complaining spouse
19) marriage by proxy s. судебное решение о разводе
20) antenuptial agreement t. содержание (мужем жены) на пери
од судебного процесса о разводе
26. a. Summarize the information of the unit and be ready to
speak on Family Law.
b. Choose any question (topic, problem) relating to Family
Law and make a 5-7 minute report in class.
TEST
1. ... divorce legislation with its gender-neutral assumptions has had
benefits for women, particularly in overturning the stereotypic view of
women as dependents of their husbands and substituting a view of men
and women as equal.
2. She appealed against the judge's refusal to order . tests to de¬
termine paternity.
3. Intermarriage between . relatives is prohibited in most societies.
4. Following a separation H and W had separated, but H had
no wish for the separation to be permanent.
5. The dispute over . of the children is likely to make it a compli¬
cated divorce case.
6. In California, the Family Code, for example, establishes a pre¬
sumption that . custody is in the child's best interest, thus placing .
custody as a preferred option when courts make custody determina¬
tions in that state.
7. Premarital property remains the individual property of each par¬
ty, but property acquired during the marriage is . property.
8. Polygamous . cannot be validly contracted in the UK.
9. Usually, the custodial parent shares joint legal custody with the .
169
UNIT 7
parent, meaning that the custodial parent must inform and consult with
the noncustodial parent about the child's education, health care, and
other concerns.
10. In such situations, courts may order . , sometimes called tem¬
porary custody, between the child and the noncustodial parent.
1) Once someone is married, the person must be legally released .
his or her spouse . death, divorce, or annulment . he or she may
legally remarry.
2) Every state proscribes marriage . close relatives
3) Sometimes a lower age is permitted . the written consent .
the parents.
4) The names . applicants for marriage licenses are published .
local newspapers.
5) State laws must provide . the imposition . liens . the prop¬
erty . those who owe support.
6) Every state forbids marriage . a child or grandchild
7) The UCCJA was created ... deal ... interstate custody disputes.
8) Despite . court challenges, marriage can occur only . per¬
sons . the opposite sex.
9) Persons who enter . a second marriage without legally dissolv¬
ing a first marriage may be charged . the crime . bigamy.
10) State laws now must require employers to withhold child sup¬
port . the paychecks . parents who are delinquent . one month.
Article 3. The removal or the retention of a child is to be consid¬
ered wrongful where —
a) it is in breach of rights of custody attributed to a person, an
institution or any other body, either jointly or alone, under the law of
the State in which the child was habitually resident immediately before
the removal or retention; and
b) at the time of removal or retention those rights were actually
exercised, either jointly or alone, or would have been so exercised but
for the removal or retention.
The rights of custody mentioned in sub-paragraph a) above, may
arise in particular by operation of law or by reason of a judicial or ad¬
ministrative decision, or by reason of an agreement having legal effect
under the law of that State.
Convention on the Civil Aspects of International Child Abduction
170
ARBITRATION
Статья 1
1. Не допускается заключение брака без полного и свободно
го согласия обеих сторон, которое должно быть изъявлено ими
лично, в соответствии с законом, после надлежащего оглашения,
в присутствии представителя власти, имеющего право на оформ¬
ление брака, и в присутствии свидетелей.
Статья 2
Участвующими в настоящей Конвенции государствами издают¬
ся законодательные акты, устанавливающие минимальный брачный
возраст. Не допускается заключение брака с лицом, не достигшим
установленного возраста, кроме тех случаев, когда компетентный
орган власти в интересах сторон, вступающих в брак, разрешает
сделать из этого правила исключение по серьезным причинам.
Конвенция о согласии на вступление в брак,
брачном возрасте и регистрации браков
UNIT 8 ARBITRATION
1. What do you know about Arbitration? Choose the right answer.
1. The UNCITRAL Model Law on International Commercial Ar¬
bitration was adopted in . .
a) 1985; b) 1981; c) 1963
2. . was adopted in 1958.
a) European Convention on International Commercial Arbitration
b) Inter-American Convention on International Commercial Ar¬
bitration
c) United Nations Convention on Recognition and Enforcement
of Foreign Arbitral Awards
3. In an effort to overcome the uncertainty arising from the differ¬
ent standards employed in the various legal systems, the International
Bar Association adopted in ... the IBA Guidelines on Conflicts of
Interest in International Arbitration.
a) 2004; b) 2009; c) 1998
4. . is characterized by the fact that the parties have submitted
their dispute to the rules of a particular arbitration institution which
provides the necessary administrative support, in particular concerning
the constitution of the tribunal.
a) Institutional arbitration b) Ad hoc arbitration
171
UNIT 8
5. In an effort to harmonize the different approaches found in the

various legal systems, the . prepared in 1999 Rules on the Taking
of Evidence in International Commercial Arbitration, which may be
used by tribunals as a guideline or may be expressly agreed upon by
the parties.
a) International Bank for Reconstruction and Development; b) In¬
ternational Bar Association; c) International Chamber of Commerce
lieu, hybrid, origin, statutory, autonomy, scrutinize, hostile, culmi¬
nate, tribunal, arbitral, bolster
in bold.
D E F I N I T I O N AND T Y P E S O F ARBITRATION
Arbitration is a process in which the parties agree to refer their dis¬
putes to one or more neutral persons (arbitrators) in lieu of the court
system for judicial determination with a binding effect. This definition
shows the hybrid nature of arbitration: it is contractual in origin, since
it requires an agreement between the parties to submit their disputes to
arbitration, but has judicial effects, as it results in a binding determina¬
tion of a dispute having the same effect as a court decision. The bind¬
ing and judgment-like nature of the final arbitral award distinguishes
arbitration from other forms of alternative dispute resolution, such as
mediation and all types of expert determination.
Depending on the parties and the nature of the dispute, one can dis
tinguish different types of arbitration, each of which have particular fea¬
tures despite their common basic structure: state arbitration, investment
arbitration between a host state and an investor, consumer arbitration
involving at least one party which is a consumer, and statutory arbitra¬
tion, where the jurisdiction of the tribunal is not based on an agreement
between the parties but on statute. Since the most frequent use of arbi
tration is in the field of commercial disputes, this exposй concentrates
on commercial arbitration unless explicitly stated otherwise.
In commercial arbitration a distinction must be made between
national or domestic cases and international cases. Many countries,
such as France, Switzerland or Hong Kong, provide different regimes
for each type of arbitration. Moreover, the relevant international in¬
struments — such as the United Nations Convention on Recognition
and Enforcement of Foreign Arbitral Awards of 10 June 1958 or the
172
ARBITRATION
UNCITRAL Model Law on International Commercial Arbitration of

21 June 1985 — are generally intended to apply only to cases with an
international element. In general, the provisions regulating interna¬
tional arbitration give greater room for party autonomy and allow for
less court intervention during the arbitration proceedings and the post
award stage than is found in the domestic context.
A further distinction to be made is between institutional arbitration
and ad hoc arbitration. Institutional arbitration is characterized by the
fact that the parties have submitted their dispute to the rules of a par¬
ticular arbitration institution which provides the necessary administra¬
tive support, in particular concerning the constitution of the tribunal.
Some institutions, such as the International Chamber of Commerce
(ICC), go even further and scrutinize draft awards in order to ensure
a minimum standard of quality. In ad hoc arbitrations, by contrast, it
is generally left to the parties to draft their own arbitration rules or to
provide for application of one of the existing sets of arbitration rules
for ad hoc arbitration, such as the UNCITRAL Arbitration Rules.
Where the parties have not done so the proceedings will be conducted
on the basis of the arbitration law at the place of arbitration. Modern
national arbitration laws usually leave it to the local courts to provide
any necessary procedural support in these cases.
D E V E L O P M E N T AND HARMONIZATION
O F NATIONAL ARBITRATION LAWS
In the early 1970s, the national arbitration laws in various countries
differed considerably as to the extent of court intervention and supervi¬
sion. While some countries such as Germany had a very liberal arbitra¬
tion law allowing for oral arbitration agreements and very limited court
intervention, the law of other countries was based on a much more
sceptical view of arbitration. The latter approach was not limited to
countries which were traditionally hostile to arbitration such as those
in Latin America. Also in countries with a long tradition in arbitra¬
tion, such as England, the law allowed considerable court intervention
culminating in the 'case stated procedure' by which a party could ask
the tribunal to refer any question of law to the English courts.
Since the 1970s, many countries have enacted new arbitration laws,
and the trend is for such new laws to take a very favourable approach
towards arbitration. Party autonomy has been strengthened and the
extent of court intervention has been cut down considerably. An im¬
portant role in this process has been played by the UNCITRAL Model
Law which is based on the principle of party autonomy. Adopted in
173
UNIT 8
1985 by UNCITRAL after years of intensive discussion on a global

level, the Model Law was meant to provide 'a sound and promis¬
ing basis for the desired harmonization and improvement of national
laws'. The Model Law is written in a user-friendly way and covers all
stages of the arbitral process. It was supposed to serve as a model for
national legislation and, up to 2005, almost 50 countries have either
enacted the Model Law itself as their national arbitration law or have
based their new legislation largely on the Model Law. The harmoniz¬
ing effect of the Model Law is bolstered by UNCITRAL's freely ac¬
cessible CLOUT database, which collects case law from the various
countries which have adopted the Model Law. Even in countries such
as England, where the drafters of the new English Arbitration Act
1996 decided not to adopt the Model Law as the national arbitration
law, the Model Law's provisions have influenced the courts in their
interpretation of the national law. Taken together, these various de¬
velopments have resulted in a considerable harmonization of national
arbitration laws.
Stefan M. Kroll"Arbitration"
noun verb noun verb
arbitration arbitrate determine
requirement invest
dispute scrutinize
mediation submit
award intervene
application legislate
ing words and word combinations and make your own sentences
using them.
1) арбитражный процесс; 2) коммерческий, торговый арби¬
траж; 3) торговый спор; 4) государство пребывания; 5) государ¬
ственный арбитраж; 6) посредничество; 7) альтернативное уре¬
гулирование споров; 8) Международная торговая палата (МТП);
9) ситуационный арбитраж; 10) Конвенция о признании и при¬
ведении в исполнение иностранных арбитражных решений;
11) Типовой закон ЮНСИТРАЛ о международном коммерче
ском арбитраже; 12) Комиссия ООН по праву международной
торговли (ЮНСИТРАЛ); 13) Прецедентное право по текстам
ЮНСИТРАЛ (ППТЮ); 14) вместо чего-либо.
174
ARBITRATION
6. Choose the words from the group below to complete the text.
It may be necessary to change the form of the given words.
award, expertise, language, resolution, transaction (2), enforce,
arbitrator, home, bind, judicial, oblige
U S E AND ADVANTAGES O F ARBITRATION

Arbitration is frequently the chosen mechanism for dispute 1) . . in
situations where there is either no court that has 2)... jurisdiction over
the parties, as is often the case in arbitrations between sovereign states,
or the parties want to avoid actual or perceived disadvantages of the
relevant 3) . system. In particular for international commercial 4) .
today dispute resolution by arbitration is the rule and not the excep¬
tion. The main advantage of arbitration in these international 5) . is
that it provides a level playing field for the parties involved. Neither
party must submit to the courts in the other party's 6) . country, and
the arbitral tribunal may be composed of 7) . reflecting the parties'
different cultural and legal backgrounds. Furthermore the arbitrators
may be chosen for their 8) . in the particular areas of business and
law involved in the dispute. The proceedings may be shaped in such
away as to take account of the international character of a dispute, for
example by allowing submissions in different 9) . , letting witnesses
testify in their mother tongue, or facilitating service of documents.
Another major advantage of arbitration in international cases is that
arbitration awards can be 10) . worldwide. More than 130 countries
are party to the New York Convention, Art. I I I of which 11)... the
courts of these Contracting States to enforce foreign awards unless one
of a very few bases to resist enforcement enumerated in Art. V exists.
Additional factors which may induce parties to submit a domestic or
international dispute to arbitration are the finality of 12) . and the
reductions in time and costs that flow from the lack of a second (ap¬
peals) instance, the perceived greater potential for settlement, and the
confidentiality of the proceedings.

the above texts.
1. Depending on the parties and the nature of the dispute, one can
distinguish different types of arbitration, each of which have particular
features despite their common basic structure: . .
2. In commercial arbitration a distinction must be made between . .
3. Arbitration is a process in which the parties agree to refer their
disputes to . .
175
UNIT 8
4. The binding and judgment-like nature of the final arbitral award

distinguishes arbitration from . .
5. Institutional arbitration is characterized by the fact that the par¬
ties . .
6. In general, the provisions regulating international arbitration
give greater room for . .
7. In ad hoc arbitrations, by contrast, it is generally left to the par¬
ties to . .
8. Modern national arbitration laws usually leave it to the local
courts to . .
9. In the early 1970s, the national arbitration laws in various coun¬
tries differed considerably as to . .
10. In countries with a long tradition in arbitration, such as Eng¬
land, the law allowed . .
11. Since the 1970s, many countries have enacted . .
12. Adopted in 1985 by UNCITRAL after years of intensive discus¬
sion on a global level, the Model Law was meant to provide . .
13. The Model Law is written in a user-friendly way and covers
14. Arbitration is frequently the chosen mechanism for dispute

resolution in situations where . .
15. More than 130 countries are party to the New York Conven¬
tion, Art. I I I of which obliges . .
9. Read the text and explain the words and phrases in bold.
T H E STATUTORY ( P U B L I C ) AND CONTRACTUAL

(PRIVATE) S O U R C E S O F ARBITRATION
Owing to its hybrid nature, arbitration is regulated by a complex
interplay of different legal sources of statutory or contractual origin.
In domestic arbitrations, these comprise the national arbitration law
including the arbitration practice, on the one hand, and the arbitra¬
tion agreement and the chosen arbitration rules, on the other hand. In
cases with an international element, these sources are supplemented by
international instruments such as the New York Convention, the Pan-
ama Convention (Inter-American Convention on International Com-
mercial Arbitration of 13 January 1975) or the European Convention
(European Convention on International Commercial Arbitration).
From a purely legal perspective, the statutory (public) sources are of pri¬
mary importance, since they determine how much room is left for party au-
176
ARBITRATION
tonomy. In practice, however, the contractual sources are of greater impor¬

tance, since most modern arbitration laws now clearly embrace the principle
of party autonomy. The role of party autonomy receives further protection
by the international and regional conventions, where they apply.
In arbitration the applicable national arbitration law has a double
function, which is reflected by the separation into mandatory and non-
mandatory provisions. On the one hand the mandatory provisions of
the arbitration law define and limit the scope of party autonomy . They
determine inter alia what disputes can be referred to arbitration, what
minimum requirements must be met in relation to due process and fair
trial for the award to be recognized, and what extent of court control
over the arbitration will be exercised. On the other hand the arbitration
laws in their non-mandatory provisions contain fall-back or gap-filling
provisions that apply only if the parties have not regulated issues which
require regulation. For example, i f the parties have neither explicitly
nor implicitly agreed upon how the tribunal should be constituted, the
relevant provision in the national arbitration will become applicable
and provide for a mechanism for appointment.
The parties are free, within the wide scope left by the mandatory
provisions of the applicable arbitration law, to agree in their arbi¬
tration agreement whether (and what) disputes should be referred to
arbitration, how the tribunal should be composed, how the proceed¬
ings should be conducted, and on the basis of which substantive law
the dispute should be decided. The parties may either regulate these
issues explicitly in the arbitration agreement or indirectly by submit¬
ting the arbitration to a set of arbitration rules, institutional or ad hoc,
which provide the necessary regulatory framework. Arbitration prac¬
tice comes into play at all stages, not only as a separate legal source
but also to interpret the provisions of the applicable arbitration laws
and the arbitration agreement as well as the chosen rules.
The international conventions form part of the applicable law and
aim to ensure that arbitration agreements and awards are enforced. In
so doing, they uphold party autonomy as the backbone of the regula¬
tory web, irrespective of more restrictive provisions in the relevant
national arbitration laws. For example, courts in member states to the
New York Convention are bound to deny jurisdiction i f a written ar¬
bitration agreement exists, even i f the arbitration agreement itself falls
short of stricter form requirements imposed by national law.
The governing national arbitration law in international cases gener¬
ally depends on the place of arbitration. In line with Art. 1 (2) Model
Law, most modern arbitration laws determine their general scope of
application on the basis of this strictly territorial criterion. The place of
177
UNIT 8
arbitration is a legal concept which is independent of the place of the

hearings or the domicile of the parties or the arbitrators. Under most
modern arbitration laws the parties may freely determine the place of
arbitration. Some provisions, however, by their nature apply irrespec¬
tive of the place of arbitration, such as provisions concerning the en¬
forcement and recognition of arbitration agreements and awards.
Stefan M. KrolV'Arbitration"
1. Since self-help was regarded at international law as a) M A N D A -

a ... remedy, the results secured by it were recognized TORY
by the international community as a final settlement
of the case. e
2. I n exceptional circumstances the judge may choose b) ENFORCE-
not to impose the ... sentence on such an offender MENT
but must provide a full explanation as to why this has
not been done.
3. Strictly, any ... action can only be justified under c) D O M I C I L E
Article 42 of the Charter, which requires agreement
by member states to place their armed forces at the
disposal of the U N .
4. The conduct of elections is ... by the Representation e) LEGAL
of the People Acts 1983 and 1985.
5. A ... of choice is acquired by making a home f) BOUND
in a country with the intention that it should be a
permanent base.
6. Regulations are of general application, binding in g) APPLICA-
their entirety, and directly . i n all member states BLE
without the need for individual member states to
enact these domestically.
7. The Cabinet is ... by the convention of collective h) REGU-
responsibility. LATED

1. The country is dominated by a power struggle . the communists
. the one hand and the nationalists . the other.
2. Advocates no longer enjoy immunity . law suits for negligence
. relation . civil or criminal litigation.
3. Mensrea, . the sense of knowledge of the facts that make the
action criminal, is required by . least two of the conspirators, even if
the crime agreed . is one of strict liability.
178
ARBITRATION
4. I n debt collecting, someone other than the creditor takes steps

to procure the payment . debts owing . him.
5. Usually the protected state allows the protector full control . its
external affairs but retains control . its internal affairs.
6. A fixed-term contract cannot be terminated . notice unless the
contract expressly provides . this.
7. Decisions were often made . the basis . incorrect informa¬
tion.
8. The company's results are . line . stock market expectations.
S U B J E C T I V E AND O B J E C T I V E A R B I T R A B I L I T Y
Despite the now generally favourable approach to arbitration in most
countries, certain types of disputes are still excluded from arbitration
and reserved for the jurisdiction of state courts. I f this exclusion is based
on the nature of the parties involved or their special need for protec¬
tion, one speaks of subjective arbitrability. For example, state entities or
certain types of consumers are precluded from entering into arbitration
agreements without special governmental consent or before a dispute
has arisen. Much more important in practice, however, are exclusions
based on the nature of the dispute, or so called 'objective arbitrability'.
Certain disputes involve such sensitive public policy issues that it is felt
that they should only be dealt with by state courts. Obvious examples
are criminal law and proceedings relating to the civil status of persons.
What disputes are finally reserved for domestic courts is left for every
country to determine and often reflects the general approach to arbitra¬
tion. Consequently neither the New York Convention nor the Model
Law contains any provisions as to what disputes are arbitrable. These
international legal sources only stipulate that arbitration agreements and
awards relating to non-arbitrable matters do not have to be recognized
and enforced but eventually may be set aside.
Areas with a public interest involved where arbitrability has tradi¬
tionally been an issue include antitrust and competition law, securities
transaction, the validity of intellectual property rights, illegality and
fraud, bribery, corruption and state contracts. At least in commercial
arbitration the trend in recent decades has been to enlarge the scope
of arbitration and diminish the number of disputes which are not ar¬
bitrable.
Stefan M. Kroll"Arbitration"
179
UNIT 8

1. Arbitration is regulated by a complex interplay of different legal
sources of statutory or contractual origin.
2. Arbitration practice comes into play only as a separate legal
source.
3. The place of arbitration is a legal concept which is independ¬
ent of the place of the hearings or the domicile of the parties or the
arbitrators.
4. In practice the contractual sources are of greater importance,
since most modern arbitration laws now clearly embrace the principle
of party autonomy.
5. In commercial arbitration the trend in recent decades has been
to diminish the scope of arbitration and enlarge the number of disputes
which are not arbitrable.
6. The role of party autonomy receives protection only by domestic
law.
7. Under most modern arbitration laws the parties don't freely de¬
termine the place of arbitration.
8. Contracts form part of the applicable law and aim to ensure that
arbitration agreements and awards are enforced.
9. In arbitration the applicable national arbitration law has a dou¬
ble function, which is reflected by the separation into mandatory and
nonmandatory provisions.
10. The governing national arbitration law in international cases
generally depends on the New York Convention.
prerequisite, statutory, consensual, tribunal, dispute, tantamount,
compromissoire, compromise, seize, via
the list (A—G) for each gap. There is one extra sentence which you
T H E ARBITRATION A G R E E M E N T
A) The writing requirement imposed by such provisions is meant
to ensure that the arbitration agreement does not become part of the
contract unnoticed, given that it entails a loss of the right to a day in
court.
1—B) There can be no arbitration between parties which have not
agreed to arbitrate their disputes.
180
ARBITRATION
C) A comparable definition can be found in the more recent

Model Law, which explicitly allows for an exchange via all forms of
telecommunication.
D) Thus, when an arbitration decision is issued, the case is end¬
ed.
E) In particular its validity is not dependent on that of the main
contract and it may even be submitted to a different law.
F) The New York Convention as well as the Model Law and
most national laws nowadays recognize the validity of pre-dispute
agreements and enforce them.
G) To be valid and enforceable most arbitration laws as well as
the New York Convention require that the arbitration agreement be in
writing.
The existence of a valid arbitration agreement is normally a nec¬
essary prerequisite for any arbitration. Only in the very rare cases of
statutory arbitration can arbitral tribunals, like state courts, base their
jurisdiction on statutory provisions. In all other cases, the consensual
nature of arbitration requires that the parties involved have agreed to
submit their dispute to arbitration and thereby conferred jurisdiction
on the tribunal. [ 1 — B ]. Even in investment arbitration, where
the host country and the investor are often not linked by a contract,
the arbitration is premised on an arbitration agreement. In most such
cases, the host state submits to arbitration either in its investment leg¬
islation or in a bi- or multilateral investment protection treaty. This
is viewed as tantamount to an offer by the host state to all investors,
which offer is deemed accepted by the investor when instituting arbi¬
tration proceedings.
Traditionally a distinction is made between arbitration agreements
made before the dispute has arisen, the so-called 'clause compromis-
soire', and those made after the dispute has arisen, the so-called 'com-
promis'. While in some jurisdictions only the latter type of agreements
were historically enforceable, at least in commercial cases, the distinc¬
tion has lost most of its importance. [ 2 ] . In consumer arbitration,
however, the distinction still plays a role, since often only post-dispute
agreements are enforceable. In commercial cases, such post-dispute
agreements are rare, since it is often difficult for the parties to agree
on anything after a dispute has arisen. Consequently parties generally
include a clause providing that all disputes are referred to arbitration
from the outset when concluding their main contract. Though the arbi¬
tration clause forms part of another contract, it is generally considered
to be a separate contract. According to the doctrine of separability,
181
UNIT 8
which is recognized in Art. 17 Model Law and other national laws,

the arbitration clause has a legal fate of its own. [ 3 ] . However in
most cases, unless special facts are involved, the law chosen to govern
the main contract also governs the validity of the arbitration agree¬
ment and, thus, the latter may also be affected by the same flaws as
the main contract.
[4 ] . The reason for this form requirement is that the effect of
the arbitration agreement is not limited to conferring jurisdiction on the
arbitral tribunal, but at the same time ousts the jurisdiction of the state
courts or at least prevents them from assuming jurisdiction. The New
York Convention provides in Article I I (3) that a court in a 'Contract-
ing State, when seized of an action in a matter in respect of which the
parties have made an agreement within the meaning of this article, shall,
at the request of one of the parties, refer the parties to arbitration, unless
it finds that the said agreement is null and void, inoperative or incapable
of being performed.' Comparable provisions can be found in Art. 8 of
the Model Law and other national arbitration laws. [ 5 ] . Only a
very few laws also allow for oral arbitration agreements.
The various national arbitration laws and conventions differ as
to what constitutes a 'written arbitration agreement'. The New York
Convention stipulates that the writing requirement is fulfilled i f the
agreement is contained either in a document signed by both parties
or in an exchange of letters or telefaxes by the parties. [ 6 ].
The arbitration legislation of some countries has also abolished the
controversial 'exchange requirements' with the result that arbitration
agreements contained or referred to in confirmation letters may fulfill
the writing requirements.
In some countries, the arbitration agreement entails further con¬
tractual obligations for the parties that extend beyond the jurisdictional
effects of conferring and ousting jurisdiction over a particular dispute.
In France and Germany, for example, parties have been ordered to
pay their share of an advance on costs requested by the tribunal as part
of their general duty to participate in the arbitration, while in England
and the US a violation of an assumed obligation to go to arbitration
has given rise to damage claims.
in column B. Make sentences using them.
A B
1) arbitration c) a) country
2) statutory b) compromissoire
182
ARBITRATION
3) host c) agreement
4) investment d) tribunal
5) national e) law
6) commercial f) claim
7) clause g) provision
8) arbitral h) letters
9) damage i) case
10) exchange of letters j) arbitration
1. legally acceptable
2. to grant or bestow
3. to refer (something to someone) for judgment or consideration
4. the right or power to administer justice and to apply laws
5. a contract or document containing such a settlement
6. to keep from happening, esp by taking precautionary action
7. a rule or set of rules, enforceable by the courts, regulating the
government of a state, the relationship between the organs of govern¬
ment and the subjects of the state, and the relationship or conduct of
subjects towards each other
8. to insist (on) as a term of an agreement
9. to take part, be or become actively involved, or share (in)
10. to break, disregard, or infringe (a law, agreement, etc.)
11. something demanded or imposed as an obligation
1
_ _ _
_ _
3
4
_ _
_
6
_ _ _ _
7
______ _ _
10
183
UNIT 8
18. Read the following text and give synonyms for the under-
lined words.
T H E ARBITRAL TRIBUNAL
Unlike domestic courts, arbitral tribunals are not standing adjudi-
cative bodies, but are normally constituted for every single case. Ex-
ceptions are special purpose arbitration tribunals installed to determine
a series of disputes arising out of a war or other historical events, such
as the Iran — US Claims Tribunal or the United Nations Compen-
sation Commission. In the various national arbitration laws and the
Model Law the composition of the arbitral tribunal is submitted to
party autonomy. The parties are generally free to agree on the number
of arbitrators, the requirements to be met by them and the appoint-
ment process. In most cases the tribunals will consist either of a sole
arbitrator or of a three-member tribunal. Other numbers are rare and
the arbitration laws of some countries, such as Egypt, prohibit an even
number of arbitrators. One peculiarity of arbitration in common law
countries is the so-called 'umpire system'. The umpire only steps in
if the party-appointed arbitrators cannot agree on an award, and then
decides the dispute as a kind of sole arbitrator.
If the parties have not settled the composition of the tribunal either
directly in their arbitration agreement or by reference to a set of arbitra¬
tion rules, the national arbitration laws contain fall-back provisions. These
rules vary as to the number of arbitrators, with common law countries
generally favouring a sole arbitrator while civil law countries and the
Model Law prefer to appoint a three-member tribunal. Under the fall-
back provisions contained in the national arbitration laws, the appoint¬
ment of a sole arbitrator usually requires an agreement by the parties,
while each party appoints one arbitrator to a three-member tribunal, and
those two arbitrators then select the chairman. In the case where no
appointment can be made under the agreed procedure, the parties can
generally ask the courts to make the necessary appointment.
Most modern arbitration laws require arbitrators to be impartial
and independent from the parties and provide procedures for chal¬
lenging and removing arbitrators who do not fulfill these requirements.
Under the Model Law, the right to challenge an arbitrator before a
court is one of the few mandatory provisions from which the parties
cannot derogate. To ensure the impartiality and independence of the
tribunal, national arbitration laws as well as the arbitration rules gener¬
ally require arbitrators to disclose all circumstances which might give
184
ARBITRATION
rise to justifiable doubts as to their impartiality or independence. In an

effort to overcome the uncertainty arising from the different standards
employed in the various legal systems, the International Bar Associa
tion adopted in 2004 the IBA Guidelines on Conflicts of Interest in
International Arbitration. While in international arbitration the re¬
quirement of independence and impartiality also extends to the party-
appointed arbitrators, this has not always been the case for domestic
arbitration in some countries such as the US.
Stefan M. Kr6ll"Arbitration"
1) claim a) freedom to determine one's own actions, behaviour, etc
2) autonomy b) free from control in action, judgment, etc.; autonomous
3) appointment c) which must be done, or which is demanded by law
4) provision d) not prejudiced towards or against any particular side or
party; fair; unbiased
5) impartial e) to make formal objection to (a juror or jury)
6) independent f) a demand, condition, or stipulation formally incorporated
in a document
7) challenge g) to demand as being due or as one's property; assert one's
title or right to
8) mandatory h) the act of placing in a job or position
20. In the above texts find the English equivalents for the
following words and word combinations and make your own sen¬
tences using them.
1) единоличный арбитр; 2) четное число; 3) третейский судья;
4) императивная норма; 5) Международная ассоциация юристов;
6) арбитражное соглашение; 7) необходимое условие; 8) законо
положение, предписание закона, статута; 9) арбитражная ого
ворка; 10) предоставлять юрисдикцию; 11) иск о возмещении
убытков; 12) государство пребывания; 13) отнести к своей юрис¬
дикции; 14) обмен письмами; 15) договорное обязательство.
1. The existence of a valid arbitration agreement is normally a nec¬
essary prerequisite for
2. The New York Convention as well as the Model Law and most
national laws nowadays recognize the validity of ....
3. To be valid and enforceable most arbitration laws as well as the
New York Convention require that the arbitration agreement be
185
UNIT 8
4. Only in the very rare cases of statutory arbitration can arbitral

tribunals, like state courts, base their jurisdiction on
5. The New York Convention provides in Article I I (3) that a court
in a 'Contracting State, when seized of an action in a matter in respect
of which the parties have made an agreement within
6. The New York Convention stipulates that the writing require¬
ment is fulfilled if the agreement is contained either in
7. Unlike domestic courts, arbitral tribunals are not standing adju-
dicative bodies, but are normally constituted for
8. In the various national arbitration laws and the Model Law the
composition of the arbitral tribunal is submitted to
9. The umpire only steps in if the party-appointed arbitrators can¬
not agree on an award, and then decides
10. I f the parties have not settled the composition of the tribunal
either directly in their arbitration agreement or by reference to a set of
arbitration rules, the national arbitration laws contain
11. Under the fall-back provisions contained in the national arbi¬
tration laws, the appointment of a sole arbitrator usually
12. Under the Model Law, the right to challenge an arbitrator be¬
fore a court is
1) ... — a start; beginning
2) ... — a principle put forward to set standards or determine a
course of action
3) . — matter produced before a court of law in an attempt to
prove or disprove a point in issue, such as the statements of witnesses,
documents, material objects, etc.
4) . — a favourable, appropriate, or advantageous combination of
circumstances
5) . — an official or legal right to do something
6) . — the authority of an official organization to make and deal
with (esp. legal) decisions
7) . — to keep out or omit (something or someone)
8) . — the condition or right of being able or allowed to do, say,
think, etc. whatever you want to, without being controlled or limited
T H E J U R I S D I C T I O N AND P O W E R S O F T H E ARBITRAL
TRIBUNAL AND T H E ARBITRATION P R O C E E D I N G S
The jurisdiction of the arbitral tribunal is a crucial issue in any ar¬
bitration. The assertion of jurisdiction is a prerequisite for any activity
186
ARBITRATION
by the tribunal and awards rendered without jurisdiction are open to

challenge. The Model Law as well as most other new arbitration laws
recognize the power of the arbitral tribunal to decide on its own juris¬
diction, which doctrine is known as Kompetenz-Kompetenz. Though
this may lead to the odd situation that a tribunal renders a decision
denying that it ever had jurisdiction in the first place, tribunals are not
required to refer challenges of their jurisdiction to the courts. Quite to
the contrary, some national laws give the tribunal the right to take the
first decision on its jurisdiction, even if the issue is raised in proceed¬
ings before domestic courts where one party relies on the existence of
an arbitration agreement.
Frequently tribunals will render their decisions to assume juris¬
diction in the form of a separate award or decision on jurisdiction.
These may then be challenged before the state courts, either in special
procedures provided for in the applicable arbitration law or under the
general rules for challenging awards. Some laws appear to go so far as
to allow the parties to exclude any review of the tribunal's decision to
assume jurisdiction.
In addition to the power to decide on its own jurisdiction, it is gen¬
erally assumed that the parties have also transferred to the tribunal all
powers necessary to fulfill its task of rendering an enforceable award. In
particular, the tribunal is free under most arbitration laws and rules to
conduct the proceedings in a manner it considers appropriate, unless the
parties have explicitly provided that a particular type of procedure will
be followed. This freedom is only limited by the need for the tribunal
to ensure that both parties are treated with equality and are given a full
opportunity to present their cases. According to Art. 24 Model Law, this
might include holding an oral hearing upon the request by one party,
unless the parties have agreed on a 'documents only' arbitration.
In international arbitrations involving parties from different legal
systems who are likely to have different expectations as to the conduct
of the proceedings, it is common practice for tribunals to agree on a
certain procedure with the parties at the outset of an arbitration. Such
an agreement covers in particular questions pertaining to the taking of
evidence, which is not covered by detailed provisions in most arbitra¬
tion laws and rules. In an effort to harmonize the different approaches
found in the various legal systems, the International Bar Association
prepared in 1999 Rules on the Taking of Evidence in International
Commercial Arbitration, which may be used by tribunals as a guideline
or may be expressly agreed upon by the parties.
I f one of the parties does not participate in the proceedings without
good cause and after having been duly notified, the tribunal can in
187
UNIT 8
most countries continue the proceedings without the defaulting party.

Under the Model Law and most modern arbitration laws, the arbitral
tribunal has the power to order interim relief necessary to ensure the
preservation of evidence or to protect the parties' position during the
arbitration proceedings. However, national legal systems differ widely
on the type of interim relief available.
to the above text.
1. Arbitrators are appointed by the parties in accordance with the
terms of the a _ agreement or in default by a court.
2. This doctrine is thus part and parcel of the notion of the su¬
premacy of Community law over n law.
3. The lawful authorities now have this power in many legal s _ _
4. In civil matters the judge hears cases without a jury and can a _
compensation of up to J30,000 and deal with issues relating to
land where the rateable value of the land does not exceed J200.
5. An unenforceable contract made with a minor can become e _
if the minor ratifies the contract when he comes
of age.
6. This method then takes effect as a legally binding agreement
between the p .
A B
1) default a) tenet
2) doctrine b) accept
3) award c) authority
4) domestic d) opposite
5) power e) neglect
6) recognize f) internal
7) fulfil g) principle
8) contrary h) transient
9) interim i) carry out
10) rule j) decision
T H E AWARD
The majority of arbitrations settle long before the parties have made
their final submissions. Under many modern arbitration laws these
188
ARBITRATION
settlements can be turned into an 'award on agreed terms'. Where no

settlement can be reached the tribunal will determine the dispute in
an award based on the evidence presented to it and the applicable law.
This will either be the law chosen by the parties or — in the absence of
such a choice — the law to be determined on the basis of the relevant
conflict of laws rule. Many modern arbitration laws (and rules) contain
special provisions to guide the tribunal in its choice of law, the most
permissive of which leave the determination of the applicable law to
the discretion of the tribunal. Others provide that the tribunal should
apply the law with the closest connection to the dispute, while still
others take an indirect approach and allow the tribunal to determine
the choice of law rules it considers appropriate to determine the appli¬
cable law. Where the tribunal is composed of three or more arbitrators,
awards can be rendered by a majority of the tribunal. According to the
Model Law and various other arbitration laws, the award must give
reasons for the decision, unless the parties have agreed otherwise.
Once an award has been rendered, it is final and binding and its
determinations have res judicata effect between the parties. I n general
no review on the merits is possible, unless the parties have agreed upon
a second instance. Under the majority of arbitration laws, proceedings
to challenge the award may only be based on procedural irregularities
or a violation of public policy. A limited review on the merits may,
however, be possible in some common law countries. The bases for
challenging an award are virtually identical to the grounds to resist
enforcement. National arbitration laws usually impose an obligation
on the courts to declare awards enforceable and thus turn them into a
title upon which execution can be based. In relation to foreign awards
rendered in another contracting state, such an obligation arises from
Art. I I I New York Convention, unless one of the grounds to resist
enforcement enumerated in Art. V exists. The grounds for resisting
enforcement under the New York Convention, which are mirrored in
the Model Law and other national arbitration laws, include the lack
of the tribunal's jurisdiction, the violation of a party's right to a fair
trial or its right to be heard, an incorrectly constituted arbitral tribunal
or proceedings which were not in line with what the parties agreed,
and where enforcement of the award would be contrary to the forum's
public policy.
lowing words and phrases and make up sentences using them.
1) выбор правовой нормы; 2) процессуальное нарушение;
3) принцип недопустимости повторного рассмотрения, однажды
189
UNIT 8
решенного дела; 4) общее право; 5) решение (судьи, арбитра);

6) за отсутствием чего-либо, кого-либо 7) применяемое право; 8)
договаривающееся государство.
T H E R O L E O F T H E C O U R T S IN ARBITRATION
SUPPORT COMPLY
PROCEDURE ADMISSIBILITY
ENFORCE DETERMINE
ARBITRATE
Courts perform important 1) . and supervisory functions in arbitra¬
tion. The general prohibition against assuming jurisdiction when the
parties have concluded a valid arbitration agreement only pertains to ac¬
tions on the merits, but does not preclude courts from getting involved
with a wide variety of 2). issues that arise in the course of arbitration.
The Model Law, for example, provides that parties may apply to the
courts for the appointment, challenge, and substitution of arbitrators,
for interim relief, assistance in the taking of evidence, and to have an
award declared 3) . . Furthermore courts are empowered to control
the correctness of the arbitration proceedings and the 4 ) . o f the award
with public policy in setting aside proceedings. In addition to these
competences, which can be found in most national arbitration laws,
some countries provide for further types of court intervention. Under
German law, for example, a party may apply to the court for a declara¬
tion that arbitration is or is not 5). , until tribunal has been constituted.
The English Arbitration Act 1996 contains a comparable procedure, and
also allows the parties to submit a question of law to the courts for 6).
or to apply for an extension of time limits. Article 5 of the Model Law
illustrates the modern trend to enumerate explicitly the powers of the
courts in relation to 7). and to prohibit any further intervention.
1. What is a crucial issue in any arbitration?
2. Are courts empowered to control the correctness of the arbitra¬
tion proceedings and the compliance of the award with public policy
in setting aside proceedings?
3. Does the Model Law provide that parties may apply to the courts
for the appointment, challenge, and substitution of arbitrators, for in¬
terim relief, assistance in the taking of evidence, and to have an award
declared enforceable?
190
ARBITRATION
4. What important functions do the courts perform in arbitration?

5. Do many ancient arbitration laws contain special provisions to
guide the tribunal in its choice of law?
6. Must the award give reasons for the decision?
7. What are the grounds for resisting enforcement under the New
York Convention?
8. Explain the term "res judicata".
9. May proceedings challenge the award only be based on proce¬
dural irregularities or a violation of public policy?
10. Are the bases for challenging an award virtually identical to the
grounds to resist enforcement?
12. Do national arbitration laws usually impose an obligation on
the courts to declare awards enforceable and thus turn them into a title
upon which execution can be based?
13. What does the English Arbitration Act 1996 contain?
14. Does the arbitral tribunal have the power to order interim relief?
15. Explain the doctrine "Kompetenz-Kompetenz".
16. What and why did the International Bar Association prepare
in 1999?
17. Is the tribunal free to conduct the proceedings in a manner it
considers appropriate?
18. Is it common practice for tribunals to agree on a certain proce¬
dure with the parties at the outset of an arbitration?
29. Match the English phrases in A with their English equiva¬
A B
1) arbitrable a) арбитражный орган
2) arbitral authority / body b) арбитражный процесс
3) arbitrament c) разрешать спор третейским судом
4) cost of arbitration d) заявить отвод арбитру
5) arbitral procedure e) арбитражная оговорка
6) request for arbitration f) заявить о неправоспособности
арбитра
7) treaty of arbitration g) арбитражное соглашение
8) through arbitration h) многосторонний валютный
арбитраж
9) to recourse/ to resort i) подсудность (дела, спора) арбитражу
to arbitration
10) to settle by arbitration j) арбитражные издержки
191
UNIT 8
11) to submit a dispute to k) подлежащий арбитражу

arbitration
12) arbitration agreement l) арбитражное решение
13) arbitration award/ m) подчиниться решению арбитров/
arbitral award третейских судей
14) arbitration clause n) назначить арбитров / третейских
судей
15) international commer o) в арбитражном порядке, через
cial arbitration третейский суд
16) compound arbitration p) отвод арбитра
of exchange
17) disqualification of an q) передать спор на арбитраж
arbitrator
18) to challenge an r) государственный арбитраж
arbitrator
19) to propose the s) просьба об арбитраже
disqualification of an
arbitrator
20) challenge of an t) арбитраж
arbitrator
21) arbitrability u) обратиться в арбитраж/ к
третейскому суду
22) res judicata v) международный коммерческий
арбитраж
23) to submit to the w) решение третейского суда,
decision of the arbiters арбитража
24) arbitral tribunal x) договор об арбитраже
25) to appoint arbiters y) неправоспособность арбитра
26) state arbitration z) принцип недопустимости
повторного рассмотрения, однажды
решенного дела
АРБИТРАЖНЫЙ РЕГЛАМЕНТ ЮНСИТРАЛ

Aрбитражньш регламент ЮНСИТРАЛ был принят Комиссией
ООН по праву международной торговли в 1976 г. после широких
консультаций с арбитражными учреждениями и экспертами по
арбитражу. В том же году Генеральная Ассамблея ООН рекомен¬
довала использовать этот регламент при урегулировании споров,
возникающих в контексте международных торговых отношений.
192
ARBITRATION
AрбитражньIЙ регламент ЮНСИТРАЛ стал хорошо известен и

широко используется во всем мире. Договаривающиеся стороны
все чаще ссылаются на этот регламент в арбитражных оговорках
и соглашениях, и значительное число арбитражных учреждений
в той или иной форме признали или приняли этот регламент.
Один из путей признания Арбитражного регламента ЮНСИ-
ТРАЛ заключается в том, что арбитражные учреждения опира¬
ются на него при подготовке своих собственных арбитражных
регламентов. При этом использовались два различных метода.
Первый состоит в том, что Aрбитражный регламент ЮНСИ
ТРАЛ берут за образец — либо целиком, либо частично.
Второй метод заключается в том, чтобы принимать
AрбитражньIЙ регламент ЮНСИТРАЛ в том виде, в каком он
есть, сохранив его название, и включать в статуты и администра¬
тивные правила того или иного учреждения положения о том,
что споры, передаваемые в данное учреждение, будут рассматри¬
ваться в соответствии с Aрбитражным регламентом ЮНСИТРАЛ
с учетом изменений, установленных в этих статутах или админи¬
стративных правилах.
Большое число учреждений, у которых имеются свои устоявши¬
еся арбитражные регламенты, согласились в той или иной форме
использовать Aрбитражньгй регламент ЮНСИТРАЛ, если того же¬
лают стороны. Некоторые учреждения, например, предусмотрели
эту возможность в своих собственных устоявшихся регламентах.
Американская арбитражная ассоциация приняла специаль¬
ный комплекс административных "Процедур для рассмотрения
дел в соответствии с Aрбитражным регламентом ЮНСИТРАЛ",
в которых подробно излагается, как Американская арбитраж¬
ная ассоциация будет выполнять функции компетентного ор¬
гана и оказывать административные услуги в соответствии с
Aрбитражным регламентом ЮНСИТРАЛ.
Большая юридическая энциклопедия
31. Summarize the information of the unit and speak on Cor¬
porate Law.
32. Choose any questions (topic, problem) relating to Corpo¬

rate Law and make a 5-7 minute report in class.
TEST

1. ... is a well-established and widely used means to end disputes.
193
UNIT 8
2. The agreement endorses, inter . , the right to free and fair elec¬
tions.
3. Arbitrators are appointed by the parties in accordance with the
terms of the arbitration . or in default by a court.
4. The ... Law is written in a user-friendly way and covers all stages
of the arbitral process.
5. An . is bound to apply the law accurately.
6. Consent to arbitration by a state can be given by inclusion of a
special arbitration . in a treaty.
7. The group met . hoc, whenever the need arose.
8. The governing . arbitration law in international cases generally
depends on the place of arbitration.
9. The place of arbitration is a legal concept which is independent
of the place of the hearings or the . of the parties or the arbitrators.
10. In commercial arbitration a distinction must be made between
national or . cases and international cases.
1. Decisions were often made . the basis . incorrect informa¬
tion.
2. The basic reason . obeying conventions is to ensure that the
machinery . government should function smoothly
3. The government is to impose stringent restrictions . the number
.immigrants to be allowed . the country.
4. There is an enforceable right . compensation . unlawful deten¬
tion.
5. The company's results are ... line ... stock market expectations.
6. The Sex Discrimination Act 1972 provides a range of control ...
discrimination based . sex.
7. It is important . relation . what the company can and cannot
do both as regard . the world and . relation . its shareholders.
8. Judges in Florida, ... example, possess authority to submit most
types . cases to mediation or arbitration . lieu . litigation.
III. Translate the article from The UNCITRAL Model Law on
International Commercial Arbitration into Russian.
Article 7 Definition and form of arbitration agreement

(1) "Arbitration agreement" is an agreement by the parties to sub¬
mit to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship,
whether contractual or not. An arbitration agreement may be in the
194
ARBITRATION
form of an arbitration clause in a contract or in the form of a separate

agreement.
(2) The arbitration agreement shall be in writing. An agreement is
in writing if it is contained in a document signed by the parties or in
an exchange of letters, telex, telegrams or other means of telecommu¬
nication which provide a record of the agreement, or in an exchange
of statements of claim and defence in which the existence of an agree¬
ment is alleged by one party and not denied by another. The reference
in a contract to a document containing an arbitration clause consti¬
tutes an arbitration agreement provided that the contract is in writing
and the reference is such as to make that clause part of the contract.
IV. Translate the articles from The UNCITRAL Model Law on
International Commercial Arbitration into English.
Статья 30 Мировое соглашение

Если в ходе арбитражного разбирательства стороны урегу¬
лируют спор, арбитражный суд прекращает разбирательство, и
по просьбе сторон и при отсутствии возражений с его стороны
фиксирует это урегулирование в виде арбитражного решения
на согласованных условиях.
Статья 31 Форма и содержание арбитражного решения
Арбитражное решение должно быть вынесено в письменной
форме и подписано арбитром или арбитрами. При арбитражном
разбирательстве более чем одним арбитром достаточно наличия
подписей большинства всех членов арбитражного суда при
условии указания причины отсутствия других подписей.
Статья 35 Признание и приведение в исполнение
Арбитражное решение, независимо от того, в какой стране
оно было вынесено, признается обязательным и при подаче
в компетентный суд письменного ходатайства приводится в ис¬
полнение с учетом положений настоящей статьи.
195
PART I I ADDITIONAL TEXTS
UNIT 1 CORPORATE LAW
PIERCING THE CORPORATE V E I L

When a corporation is a sham, engages i n fraud or other wrongful
acts, or is used solely for the personal benefit of its directors, of¬
ficers, or shareholders, courts may disregard the separate corporate
existence and impose personal liability on the directors, officers, or
shareholders. I n other words, courts may pierce the "veil" that the
law uses to divide the corporation (and its liabilities and assets) from
the people behind the corporation. The veil creates a separate, legally
recognized corporate entity and shields the people behind the corpo¬
ration from personal liability.
In these cases, courts look beyond the form to the substance of the
corporation's actions. The facts of a particular case must show some
misuse of the corporate privilege or show a reason to cut back or limit
the corporate privilege to prevent fraud, misrepresentation, or illegality
or to achieve equity or fairness.
Courts traditionally require fraud, illegality, or misrepresentation
before they will pierce the corporate veil. Courts also may ignore the
corporate existence where the controlling shareholder or shareholders
use the corporation as merely their instrumentality or alter ego, where
the corporation is undercapitalized, and where the corporation ignores
the formalities required by law or commingles its assets with those of a
controlling shareholder or shareholders. In addition, courts may refuse
to recognize a separate corporate existence when doing so would vio¬
late a clearly defined statutory policy.
Courts may pierce the corporate veil in taxation or bankruptcy
cases, in addition to cases involving plaintiffs with contract or tort
claims. Federal law in this area is usually similar to state law.
The instrumentality and alter ego doctrines used by courts are prac¬
tically indistinguishable. Courts following the instrumentality doctrine
concentrate on finding three factors: (1) the people behind the cor¬
poration dominate the corporation's finances and business practices
so much that the corporate entity has no separate will or existence;
(2) the control has resulted in a fraud or wrong, or a dishonest or un-
196
ADDITIONAL TEXTS
just act; and (3) the control and harm directly caused the plaintiff 's
injury or unjust loss.
The alter ego doctrine allows courts to pierce the corporate veil
when two factors exist: (1) the shareholder or shareholders disregard
the separate corporate entity and use the corporation as a tool for per¬
sonal business, merging their separate entities with that of the corpora¬
tion and making the corporation merely their alter ego; and (2) recog¬
nizing the corporation and shareholders as separate entities would give
court approval to fraud or cause an unfair result.
PARTNERSHIP
The formation of a partnership requires a voluntary "association"
of persons who "coown" the business and intend to conduct the busi¬
ness for profit. Persons can form a partnership by written or oral
agreement, and a partnership agreement often governs the partners'
relations to each other and to the partnership. The term person gen¬
erally includes individuals, corporations, and other partnerships and
business associations. Accordingly, some partnerships may contain in¬
dividuals as well as large corporations. Family members may also form
and operate a partnership, but courts generally look closely at the
structure of a family business before recognizing it as a partnership for
the benefit of the firm's creditors.
Certain conduct may lead to the creation of an implied partner¬
ship. Generally, i f a person receives a portion of the profits from a
business enterprise, the receipt of the profits is evidence of a partner¬
ship. If, however, a person receives a share of profits as repayment of
a debt, wages, rent, or an annuity, such transactions are considered
"protected relationships" and do not lead to a legal inference that a
partnership exists.
Each partner has a right to share in the profits of the partnership.
Unless the partnership agreement states otherwise, partners share prof¬
its equally. Moreover, partners must contribute equally to partnership
losses unless a partnership agreement provides for another arrange¬
ment. In some jurisdictions a partner is entitled to the return of her or
his capital contributions.
In addition to sharing in the profits, each partner also has a right to
participate equally in the management of the partnership. In many part¬
nerships a majority vote resolves disputes relating to management of the
partnership. Nevertheless, some decisions, such as admitting a new part¬
ner or expelling a partner, require the partners' unanimous consent.
197
ADDITIONAL TEXTS
Each partner owes a fiduciary duty to the partnership and to co¬

partners. This duty requires that a partner deal with copartners in good
faith, and it also requires a partner to account to copartners for any
benefit that he or she receives while engaged in partnership business.
If a partner generates profits for the partnership, for example, that
partner must hold the profits as a trustee for the partnership. Each
partner also has a duty of loyalty to the partnership. Unless copartners
consent, a partner's duty of loyalty restricts the partner from using
partnership property for personal benefit and restricts the partner from
competing with the partnership, engaging in self-dealing, or usurping
partnership opportunities.
L I M I T E D PARTNERSHIPS
A limited partnership is similar in many respects to a general part¬
nership, with one essential difference. Unlike a general partnership, a
limited partnership has one or more partners who cannot participate in
the management and control of the partnership's business. A partner
who has such limited participation is considered a "limited partner"
and does not generally incur personal liability for the partnership's
obligations. Generally, the extent of liability for a limited partner is
the limited partner's capital contributions to the partnership. For this
reason, limited partnerships are often used to provide capital to a
partnership through the capital contributions of its limited partners.
Limited partnerships are frequently used in real estate and entertain¬
ment-related transactions.
The limited partnership did not exist at common law. Like a gen¬
eral partnership, however, a limited partnership may govern its affairs
according to a limited partnership agreement. Such an agreement,
however, will be subject to applicable state law. States have for the
most part relied on the Uniform Limited Partnership Act in adopting
their limited partnership legislation. The Uniform Limited Partner¬
ship Act was revised in 1976 and 1985. Accordingly, a few states have
retained the old uniform act, and other states have relied on either
revision to the uniform act or on both revisions to the uniform act.
A limited partnership must have one or more general partners who
manage the business and who are personally liable for partnership
debts. Although one partner may be both a limited and a general
partner, at all times there must be at least two different partners in
a limited partnership. A limited partner may lose protection against
personal liability if she or he participates in the management and con-
198
ADDITIONAL TEXTS
trol of the partnership, contributes services to the partnership, acts as

a general partner, or knowingly allows her or his name to be used in
partnership business. However, "safe harbors" exist in which a limited
partner will not be found to have participated in the "control" of the
partnership business. Safe harbors include consulting with the general
partner with respect to partnership business, being a contractor or
employee of a general partner, or winding up the limited partnership.
I f a limited partner is engaged solely in one of the activities defined as
a safe harbor, then he or she is not considered a general partner with
the accompanying potential liability.
Except where a conflict exists, the law of general partnerships ap¬
plies equally to limited partnerships. Unlike general partnerships, how¬
ever, limited partnerships must file a certificate with the appropriate
state authority to form and carry on as a limited partnership. Gener¬
ally, a certificate of limited partnership includes the limited partner¬
ship's name, the character of the limited partnership's business, and
the names and addresses of general partners and limited partners. I n
addition, and because the limited partnership has a set term of dura¬
tion, the certificate must state the date on which the limited partner¬
ship will dissolve. The contents of the certificate, however, will vary
from state to state, depending on which uniform limited partnership
act the state has adopted.
J O I N T S T O C K COMPANY
An association engaged in a business for profit with ownership in¬
terests represented by shares of stock.
A joint stock company is financed with capital invested by the
members or stockholders who receive transferable shares, or stock. It
is under the control of certain selected managers called directors. A
joint stock company is a form of partnership, possessing the element of
personal liability where each member remains financially responsible
for the acts of the company. It is not a legal entity separate from its
stockholders.
A joint stock company differs from a partnership in that the latter is
composed of a few persons brought together by shared confidence.
Partners are not free to retire from the firm or to substitute other
persons in their place without prior assent of all the partners. A part¬
ner's death causes the dissolution of the firm.
In contrast, a joint stock company consists of a large number of
stockholders who are unacquainted with each other. A change in
199
ADDITIONAL TEXTS
membership or a transfer of stock has no effect on the continued ex¬

istence of the company and the death of a stockholder does not result
in its dissolution. Unlike partners in a partnership, a stockholder in
a joint stock company has no agency relationship to the company or
any of its members.
A joint stock company is similar to a corporation in that both are
characterized by perpetual succession where a member is allowed to
freely transfer stock and introduce a stranger in the membership. The
transfer has no effect on the continuation of the organization since
both a joint stock company and a corporation act through a cen¬
tral management, board of directors, trustees, or governors. Individual
stockholders have no authority to act on behalf of the company or its
members.
A joint stock company differs from a corporation in certain re¬
spects. A corporation exists under a state charter, while a joint stock
company is formed by an agreement among the members. The exist¬
ence of a joint stock company is based upon the right of individuals to
contract with each other and, unlike a corporation, does not require a
grant of authority from the state before it can organize.
While members of a corporation are generally not held liable for
debts of a corporation, the members of a joint stock company are held
liable as partners.
In a legal action, a corporation sues and is sued in its corporate
name, but a joint stock company sues and defends in the name of a
designated officer.
ПОНЯТИЕ И ПРИЗНАКИ АКЦИОНЕРНОГО

ОБЩЕСТВА
Акционерным обществом признается коммерческая органи
зация, уставный капитал которой разделен на определенное чис
ло акций, удостоверяющих обязательственные права участников
общества (акционеров) по отношению к самому обществу.
Можно выделить следующие признаки, характерные для ак¬
ционерного общества.
Во-первых, участники акционерного общества — акционеры —
не отвечают по обязательствам общества, а несут риск убытков,
связанных с деятельностью общества, в пределах стоимости при¬
надлежащих им акций.
В том случае, когда акционер не полностью оплатил акции, он
несет солидарную ответственность по обязательствам общества в
200
ADDITIONAL TEXTS
пределах неоплаченной части стоимости принадлежащих ему ак¬

ций.
Особо стоит обратить внимание на то, что акционеры могут
не только не получить дивидендов, но и потерять то, что было
вложено в оплату акций. Поэтому они должны быть готовы к
тому, чтобы нести такие убытки, которые никто им не возме¬
стит.
Во-вторых, акционеры свободно отчуждают принадлежащие
им акции.
Некоторые особенности установлены для отчуждения акций
закрытых акционерных обществ. Для отчуждения акций тако¬
го АО не требуется согласие ни других акционеров, ни самого
общества. Однако акционеры такого общества имеют преиму¬
щественное право приобретения акций, продаваемых другими
акционерами общества, по цене предложения третьему лицу
пропорционально количеству акций, принадлежащих каждому
из них, если уставом общества не предусмотрен иной порядок
осуществления данного права.
В-третьих, признаком акционерного общества является отде¬
ление собственности от управления, что означает наличие орга¬
нов управления, обособленных, как правило, от самих акционе¬
ров.
Наконец, в-четвертых, акционерное общество существует не¬
зависимо от состава участников, что в зарубежной литературе
называется признаком «вечного существования корпорации».
Отличительная особенность акционерного общества состоит
в том, что его уставный капитал составляется из номинальной
стоимости акций общества, приобретенных акционерами. При
этом номинальная стоимость всех акций общества должна быть
одинаковой. Таким образом, акционерное общество — един
ственная форма предпринимательского объединения, которому
разрешено выпускать ценные бумаги — акции. Никакое иное
хозяйственное общество, ни тем более товарищество или произ¬
водственный кооператив акции выпускать не могут.
ВИДЫ КОРПОРАТИВНЫХ ЦЕННЫХ БУМАГ

ПО ЗАКОНОДАТЕЛЬСТВУ США И ВЕЛИКОБРИТАНИИ
В соответствии с английским законодательством о компаниях
по своему содержанию акция выражает интерес акционера по
отношению к компании. В соответствии с Законом о компаниях
201
ADDITIONAL TEXTS
1985 г. акции компании рассматриваются в качестве объектов

персональной собственности, но не объектов реальной собствен¬
ности. Они считаются «вещами в требованиях».
Компании с акционерным капиталом имеют право выпу¬
скать один или несколько видов акций. В случае выпуска акций
одного вида по своей правовой природе они считаются обык¬
новенными акциями. Такие акции являются основным видом
акций в компаниях с акционерным капиталом. Если компания
выпускает несколько видов акций, то в меморандуме она должна
указать правомочия, преимущества и ограничения по каждому
виду акций.
По Закону о компаниях 1985 г. компания вправе выпускать
только акции с номинальной стоимостью, определенной в учре¬
дительных документах компании. Акции являются только имен¬
ными, и выпуск акций на предъявителя не предусмотрен.
Среди обыкновенных акций следует выделить акции отло¬
женные (или учредительные акции), которые выпускаются учре¬
дителями компании, дивиденд по таким акциям выплачивается
после выплаты дивидендов по обыкновенным акциям. Обыкно¬
венные акции могут быть неголосующими.
Наряду с обыкновенными акциями компании могут выпу¬
скать различные виды привилегированных акций: кумулятивные
или некумулятивные, с дополнительным дивидендом и др.
В отличие от Великобритании, где компании могут быть и
акционерными, и паевыми, предпринимательские корпорации в
США являются только акционерными. Акции определяются как
«единицы, на которые разбиты имущественные права в корпо¬
рации».
Принятые в 1980 г. дополнения к Примерному закону о пред¬
принимательских корпорациях исключили применение концеп¬
ции номинального капитала: выпуск акций разрешен без номи¬
нальной стоимости.
Новая редакция Примерного закона 1984 г. отказалась от раз¬
деления акций на простые (обыкновенные) и привилегирован¬
ные и установила другую, более гибкую систему разбивки акций
по категориям. Если устав корпорации предусматривает выпуск
акций только одного вида, предполагается, что такие акции пре¬
доставляют традиционный набор прав акционера: на получение
дивидендов, на участие в управлении обществом; на получение
ликвидационной квоты. Если уставом корпорации предусмотрен
выпуск акций разных категорий, то необходимо описать все пре¬
доставляемые такими акциями права. Примерный закон уста-
202
ADDITIONAL TEXTS
навливает требование о том, что корпорация должна выпустить

один класс акций, предоставляющих неограниченное право го¬
лоса, и один класс акций, предоставляющих право на получение
ликвидационной квоты.
В США разрешено только обращение именных акций.
МОДЕЛЬ КОРПОРАТИВНОГО УПРАВЛЕНИЯ

ПО ЗАКОНОДАТЕЛЬСТВУ США
Действующая в США структура управления предприниматель¬
скими корпорациями является двухзвенной. Органами управле¬
ния корпорации являются: совет директоров и общее собрание
акционеров.
Совет директоров руководит всей деятельностью корпорации.
Законы всех штатов содержат примерно следующее положение:
«Все полномочия корпорации осуществляются советом директо¬
ров либо под его руководством, и вся деятельность корпорации
осуществляется под руководством совета директоров, компетен¬
ция которого может быть ограничена в уставе».
Число директоров не может быть меньше трех, но если акции
еще не выпущены, то директоров может быть два или один. Если
в корпорации один акционер, то возможно назначение одного
или двух директоров, а если два акционера — то трех директоров.
Директор может и не быть акционером корпорации. Обычно
директора избираются на один год с правом переизбрания. При
этом должна обеспечиваться преемственность в совете директо¬
ров. Директора могут быть отстранены от должности общим со¬
бранием по определенным основаниям (обман, злоупотребление
служебным положением, совершение преступления), и, если за¬
кон позволяет, то без всяких оснований.
Совет директоров образует различные комитеты. В функции
комитетов входят анализ функционирования систем внутрен¬
него контроля и управления рисками, анализ предварительных
результатов отчетного года, годовой финансовой отчетности,
контроль над соблюдением законодательства, кодекса корпора¬
тивного управления.
Одним из основным комитетов является аудиторский комитет.
Членами комитета по аудиту могут быть только независимые чле¬
ны совета директоров. Им запрещается принимать любого рода
вознаграждения за консультации или советы и быть каким-либо
образом связанными с компанией или дочерними структурами,
203
ADDITIONAL TEXTS
кроме участия в советах директоров или сформированных совета¬

ми директоров комитетах.
В основе отношений между советом директоров и акционе¬
рами корпорации лежит концепция агентских отношений: ди¬
ректора являются доверенными лицами (агентами) акционеров
и корпорации в целом. Поэтому на них лежат "обязанности до¬
веренных лиц", которые традиционно разделяются на две ка¬
тегории — "обязанность лояльности" и "обязанность должной
степени заботливости".
За общим собранием акционеров законодательство США
оставляет в основном проведение выборов директоров, решение
вопроса о реорганизации корпорации и другие наиболее важные
и общие вопросы.
UNIT 2 INTERNATIONAL INVESTMENT

FOREIGN DIRECT INVESTMENT
Foreign direct investment (FDI) — which means investment in
manufacturing and service facilities in a foreign country — is another
facet of the increasing integration of national economies. Since the
1980s, the overall world inflow of F D I increased twenty-five-fold and
in 2000 the inflow of F D I reached a record high of $1.39 trillion.
In 2000, developed countries represented more than three quarters
of world F D I inflow, while developing countriesreached only $249
billion in the same year. In 2003, however, global inflows of F D I
declined for the third year in a row, which was prompted again by a
fall in F D I inflows to developed countries. In particular, the F D I in¬
flows to the United States fell by 53 percent to $30 billion from 2000
to 2003, which is the lowest level since 1993. It was only developing
countries, most of which are from Asia, Africa, and the Pacific Rim,
that witnessed an increase. The United States — once the world's larg
est F D I recipient country in the world — was outperformed by China,
whose F D I inflow reached $53 billion in 2003.
In the past, F D I was considered to be an alternative to exports in
order to avoid tariff barriers. Today, however, F D I and international
trade have become complementary. For example, Dell Computer uses
a factory in Ireland to supply personal computers in Europe instead of
exporting from Austin, Texas. Similarly, Honda, a Japanese automak
er with a major factory in Marysville, Ohio, is the largest exporter of
204
ADDITIONAL TEXTS
automobiles from the United States. As firms invest in manufacturing

and distribution facilities outside their home countries to expand into
new markets around the world, they have added to the stock of FDI.
The increase in F D I is also promoted by the efforts of many na¬
tional governments to attract multinationals and by the leverage that
the governments of large potential markets, such as China and India,
have in granting access to multinationals. Sometimes trade friction can
also promote FDI. Investment in the United States by Japanese com¬
panies is, to some extent, a function of the trade imbalances between
the two nations and of the U.S. government's consequent pressure
on Japan to do something to reduce the bilateral trade deficit. Since
most of the U.S. trade deficit with Japan is attributed to Japanese cars
exported from Japan, Japanese automakers, such as Honda, Toyota,
Nissan, and Mitsubishi, have expanded their local production by set¬
ting up production facilities in the United States. This localization
strategy reduces Japanese automakers' vulnerability to retaliation by
the United States under the Super 301 laws of the Omnibus Trade and
Competitiveness Act of 1988.
Masaaki Kotabe "Encyclopedia of Business And Finance"
PORTFOLIO INVESTMENT
The increasing integration of economies also derives from portfo¬
lio investment (or indirect investment) in foreign countries and from
money flows in the international financial markets. Portfolio invest¬
ment refers to investments in foreign countries that are withdrawable
at short notice, such as investment in foreign stocks and bonds.
In the international financial markets, the borders between nations
have, for all practical purposes, disappeared. The enormous quantities
of money that are traded on a daily basis have assumed a life of their
own. When trading in foreign currencies began, it was as an adjunct
to the international trade transaction in goods and services — banks
and firms bought and sold currencies to complete the export or import
transaction or to hedge the exposure to fluctuations in the exchange
rates in the currencies of interest in the trade transaction.
In today's international financial markets, however, traders usually
trade currencies without an underlying trade transaction. They trade
on the accounts of the banks and financial institutions they work for,
mostly on the basis of daily news on inflation rates, interest rates, po¬
litical events, stock and bond market movements, commodity supplies
and demand, and so on. The weekly volume of international trade in
currencies exceeds the annual value of the trade in goods and services.
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The effect of this trend is that all nations with even partially con¬
vertible currencies are exposed to the fluctuations in the currency mar¬
kets. A rise in the value of the local currency due to these daily flows
vis^-vis other currencies makes exports more expensive (at least in the
short run) and can add to the trade deficit or reduce the trade surplus.
A rising currency value will also deter foreign investment in the coun¬
try and encourage outflow of investment.
It may also encourage a decrease in the interest rates in the country
if the central bank of that country wants to maintain the currency ex¬
change rate and a decrease in the interest rate would spur local invest¬
ment. An interesting example is the Mexican meltdown in early 1995
and the massive devaluation of the peso, which was exacerbated by the
withdrawal of money by foreign investors. The massive depreciation of
many Asian currencies in the 1997 to 1999 period, known as the Asian
financial crisis, is also an instance of the influence of these short-term
movements of money. Today, the influence of these short-term money
flows is a far more powerful determinant of exchange rates than an
investment by a Japanese or German automaker.
Despite its economic size, the United States continues to be rela¬
tively more insulated from the global economy than other nations.
Most of what Americans consume is produced in the United States —
which implies that, in the absence of a chain reaction from abroad, the
United States is relatively more insulated from external shocks than,
say, Germany and China.
INTERNATIONAL I N V E S T M E N T
International business is not a new phenomenon; it extends back
into history beyond the Phoenicians around 1200 B.C.E.. Products
have been traded across borders throughout recorded civilization, ex¬
tending back beyond the Silk Road that once connected East with
West from Xian to Rome. The Silk Road was probably the most in¬
fluential international trade route of the last two millennia, literally
shaping the world as it is known today. For example, pasta, cheese,
and ice cream, as well as the compass and explosives, were brought to
the Western world from China via the Silk Road.
What is relatively new — beginning first with large U.S. compa¬
nies in the 1950s and 1960s, second with European and Japanese
companies in the 1970s and 1980s, and third with companies from
emerging economies in Asia and Latin America in particular — is the
large number of companies engaged in international investment with
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ADDITIONAL TEXTS
interrelated production and sales operations located around the world.

At no other time in economic history have countries been more eco¬
nomically interdependent than they are today.
Although the second half of the twentieth century saw the highest
sustained growth rates of gross domestic product (GDP) in history,
the growth in the international flow of goods and services has consist¬
ently surpassed the growth rate of the world economy. Simultaneously,
the growth in international financial flow — including foreign direct
investment, portfolio investment, and trading in currencies — has
achieved a life of its own. Daily international financial flows exceed
well over $1 trillion in the early twenty-first century.
Thanks to trade liberalization, heralded by the General Agreement
on Tariffs and Trade and its successor, the World Trade Organization,
the barriers to international trade and financial flows keep getting lower
in an era of globalization. The emergence of competitive European
and Japanese multinational companies, followed by emerging-economy
multinational companies, has given the notion of global competition a
touch of extra urgency and significance that is seen almost daily in print
media such as the New York Times, Financial Times, and Nikkei Shim-
bun, as well as television media such as the BBC, NBC, and CNN.
The drive for globalization is being promoted through more free
trade; more international investment; more Internet commerce; more
networking of business, schools and communities; and more advanced
technologies than ever before. The Asian financial crisis in 1997, fol¬
lowed by the terrorist attacks on the United States in 2001 and Argen¬
tina's financial crisis that worsened in 2002, sent the world economy
into a global slowdown. On the other hand, the consistent demand in
the United States and Europe as well as in many emerging economies,
and some recovery in Asia have somewhat attenuated the forces of
those crises. Since 2003 the world economy has been on the road to
recovery, thanks primarily to increased investment in many parts of
the world, particularly led by a surge of investment in China.
INVESTMENTS
There was a time when many individuals thought that investing
was for the rich and that very few people could afford to take on the
risk that investments appeared to require. But, of course, times have
changed; many Americans do invest. They realize that their long-term
financial security does not look promising if it is based only on Social
Security and company-provided pension plans. Both the numbers of
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people investing and the types of investments available have increased,

especially since the early 1980s. The possibilities for investing funds are
far more extensive than just stocks or bonds. In this text, two of the
most popular investment instruments will be discussed.
Annuities
An annuity provides a means of reducing the risk of outliving one's
investment income after retirement from fulltime employment. Pur¬
chasing an annuity may be a possible solution to reducing this risk. An
annuity may be considered the opposite of a traditional life insurance
policy. An individual who buys insurance agrees to pay annual premi¬
ums to an insurance company. In return, the company will pay, accord¬
ing to instructions agreed upon at the time of purchase, the face value of
the policy in a lump sum to beneficiaries when the purchaser dies.
By contrast, an individual who buys an annuity pays the insurance
company a sum of money and, in return, will receive a monthly in¬
come for as long as the purchaser lives. Naturally, the longer one lives,
the more money is received. The holder of an annuity never outlives
the return, regardless of how long-lived the individual is. Life insur¬
ance protects one's beneficiaries against financial loss as a result of the
purchaser's dying too soon, while annuities protect purchasers against
financial loss as a result of living longer than their funds do.
Annuity income depends on life expectancy and is thus classified as
life insurance. Understanding this is important because the classifica¬
tion allows the annuity's investment earnings to be treated as tax-de¬
ferred, with no tax on its accumulation until payments are received.
Certificate of Deposit
The concept of the certificate of deposit (CD) is simple. It is a sav¬
ings instrument issued by a financial institution that pays the purchaser
interest at a guaranteed rate for a specific term. When the CD reaches
maturity, the investor receives the principal and interest earned. Un¬
like bond interest (paid periodically), the interest from a CD usually
compounds, which means interest is earned on prior interest earned
also. An investment in CDs, up to $100,000, is insured by the federal
government.
CDs are appealing for safety, liquidity, and convenience. Less ap¬
pealing is the lower yield when compared with other investments. CDs
make sense as emergency funds, savings for short-term goals, a way
to complete a long-term goal, and a place to "park" money while an
investor seeks more profitable investments.
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ИНВЕСТИЦИОННАЯ ДЕЯТЕЛЬНОСТЬ
Инвестиционная деятельность — вложение инвестиций
(денежных средств, целевых банковских вкладов, пая, акций,
технологий, машин, оборудования, кредитов, имущественных
прав, интеллектуальных ценностей) или инвестирование, а так¬
же совокупность практических действий по реализации инве¬
стиций.
Субъекты И. Д.: 1) инвесторы; 2) заказчики; 3) исполнители
работ; 4) пользователи объектов инвестиционной деятельности;
5) поставщики; 6) банковские, страховые и посреднические ор¬
ганизации, инвестиционные биржи; 7) физические и юридиче¬
ские лица, в том числе иностранные; 8) государства и междуна¬
родные организации.
Инвесторы могут выступать в роли вкладчиков, заказчиков, кре¬
диторов, покупателей, а также выполнять функции любого другого
участника инвестиционной деятельности на равных правах.
Субъекты инвестиционной деятельности обязаны: 1) соблю¬
дать нормы и стандарты; 2) выполнять требования государствен¬
ных органов и должностных лиц, которые предъявляются в пре¬
делах их компетенции.
Инвестиционная деятельность осуществляется за счет: 1) соб¬
ственных финансовых ресурсов; 2) заемных финансовых средств
инвесторов; 3) привлеченных финансовых средств инвестора; 4) де¬
нежных средств, которые централизуются объединениями пред¬
приятий в установленном порядке; 5) инвестиционных ассигнова¬
ний из государственных бюджетов; 6) иностранных инвестиций.
Объектами И. Д. являются: 1) основные фонды и оборот¬
ные средства; 2) ценные бумаги, целевые денежные вклады;
3) научно-техническая продукция и другие объекты собствен¬
ности; 4) имущественные права; 5) права на интеллектуальную
собственность.
Инвестор самостоятельно определяет объемы, направления,
размеры и эффективность инвестиций, привлекает на договор¬
ной основе физических и юридических лиц, необходимых для
реализации инвестиций. Инвестор имеет право владеть, поль¬
зоваться, распоряжаться объектами и результатами инвестиций,
осуществлять торговые операции.
Прекращение или приостановление инвестиционной деятель¬
ности производится в установленном законодательством поряд¬
ке. При этом инвесторы возмещают другим участникам инве¬
стиционной деятельности убытки, упущенную выгоду, которые
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возникли в результате прекращения выполнения своих обяза¬

тельств по договорам с ними.
Инвестиционная деятельность прекращается в случае: 1) при¬
знания инвестора банкротом; 2) стихийных и иных бедствий,
катастроф; 3) введения чрезвычайного положения; 4) если про¬
должение инвестиционной деятельности может привести к на¬
рушению установленных законом норм, правил, а также охра¬
няемых законом прав и интересов граждан, юридических лиц и
государства.
ИНОСТРАННЫЕ ИНВЕСТИЦИИ В РОССИИ

В Российской Федерации инвестиции могут осуществляться пу¬
тем: создания предприятий с долевым участим иностранного капи¬
тала (совместных предприятий); создания предприятий, полностью
принадлежащих иностранным инвесторам, их филиалов и предста¬
вительств; приобретения иностранным инвестором в собственность
предприятий, имущественных комплексов, зданий, сооружений,
долей участий в предприятиях, акций, облигаций и других ценных
бумаг; приобретение прав пользования землей и иными природны¬
ми ресурсами, а также иных имущественных прав и т.р.; предостав
ления займов, кредитов, имущества и имущественный прав и т.п.
Прямые зарубежные инвестиции, это нечто большее, чем
простое финансирование капиталовложений в экономику, хотя
само по себе это крайне необходимо России. Прямые зарубеж¬
ные инвестиции представляют также способ повышения произ¬
водительности и технического уровня российских предприятий.
Размещая свой капитал в России, иностранная компания при¬
носит с собой новые технологии, новые способы организации
производства и прямой выход на мировой рынок.
Портфельными инвестициями принято называть капиталов¬
ложения в акции зарубежных предприятий, которые не дают пра¬
ва контроля над ними, в облигации и другие ценные бумаги ино¬
странного государства и международных валютно-финансовых
организаций.
Существуют и реальные инвестиции. Это капитальные вложе¬
ния в землю, недвижимость, машины и оборудование, запасные
части и т.д. Реальные инвестиции включают в себя и затраты
оборотного капитала.
Два вида инвестиций (прямые и портфельные) движимы
аналогичными, но не одинаковыми мотивами. В обоих случаях
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инвестор желает получить прибыль за счет владения акциями

доходной компании. Однако, при осуществлении портфельных
инвестиций инвестор заинтересован не в том, чтобы руководить
компанией, а в том, чтобы получать доход за счет будущих ди¬
видендов. Предпринимая прямые капиталовложения, иностран¬
ный инвестор (как правило, крупная компания) стремится взять
в свои руки руководство предприятием. Вкладывая капитал, он
считает, что Россия самое подходящее место для выпуска его
продукции, которая будет реализовываться либо на российском
потребительском рынке (пример ресторанов Макдоналдс), либо
на мировом рынке (как в случае с некоторыми зарубежными ин¬
вестициями в российскую авиационно-космическую промыш¬
ленность). России необходимо прилагать все усилия к привле¬
чению обоих видов инвестиций, ибо каждая из них способствует
будущему увеличению производительной мощи экономики.
http://articles.excelion.ru/science/em/57683770.html
ПУТИ И М Е Р Ы ПО ПРИВЛЕЧЕНИЮ ИНВЕСТИЦИЙ

Привлечение инвестиций (как иностранных, так и нацио¬
нальных) в российскую экономику является жизненно важным
средством устранения инвестиционного "голода" в стране. Осо¬
бую роль в активизации инвестиционной деятельности долж¬
но сыграть страхование инвестиций от некоммерческих рисков.
Важным шагом в этой области стало присоединение России к
Многостороннему агентству по гарантиям инвестиций (МИГА),
осуществляющему их страхование от политических и других не¬
коммерческих рисков. Важное условие, необходимое для частных
капиталовложений (как отечественных, так и иностранных), по¬
стоянный и общеизвестный набор догм и правил, сформулиро¬
ванных таким образом, чтобы потенциальные инвесторы могли
понимать и предвидеть, что эти правила будут применяться к их
деятельности. В России же, находящейся в стадии непрерывно¬
го реформирования, правовой режим непостоянен. Потребность
страны в иностранных инвестициях составляет 10 12 млрд. долл.
в год. Однако для того, чтобы иностранные инвесторы пошли на
такие вложения, необходимы очень серьезные изменения в инве¬
стиционном климате. В ближайшей перспективе законодательная
база функционирования иностранных инвестиций будет усовер¬
шенствована принятием новой редакцией Закона об инвестициях,
Закона о концессиях и Закона о свободных экономических зонах.
Большую роль сыграет также законодательное определение прав
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собственности на землю. Для облегчения доступа иностранных

инвесторов к информации о положении на российском рынке
инвестиций был образован Государственный информационный
центр содействия инвестициям, формирующий банк предложе¬
ний российской стороны по объектам инвестирования.
Для стабилизации экономики и улучшения инвестиционного
климата требуется принятия ряда кардинальных мер, направлен¬
ных на формирование в стране, как общих условий развития
цивилизованных рыночных отношений, так и специфических,
относящихся непосредственно к решению задачи привлечения
иностранных инвестиций.
Среди мер общего характера в качестве первоочередных следует
назвать: достижение национального согласия между различными
властными структурами, социальными группами, политическими
партиями и прочими общественными организациями; радикали¬
зация борьбы с преступностью; пересмотр налогового законода¬
тельства в сторону его упрощения и стимулирования производ¬
ства; мобилизация свободных средств предприятий и населения на
инвестиционные нужды путем повышения процентных ставок по
депозитам и вкладам; внедрение в строительство системы оплаты
объектов за конечную строительную продукцию; запуск предусмо¬
тренного законодательством механизма банкротства; предостав¬
ление налоговых льгот банкам, отечественным и иностранным
инвесторам, идущим на долгосрочные инвестиции с тем, чтобы
полностью компенсировать им убытки от замедленного оборота
капитала по сравнению с другими направлениями их деятельно¬
сти; формирование общего рынка республик бывшего СССР со
свободным перемещением товаров, капитала и рабочей силы.
http://articles.excelion.ru/science/em/57683770.html
UNIT 3 CONTRACTS
INTERNATIONAL C O M M E R C I A L A G R E E M E N T S
Entering into international commercial agreements requires a broad
range of skills. Negotiation skills, honed for the international arena,
will be put to test at the outset. Questions of pre-contractual liability
need to be borne in mind at every stage of the negotiation process.
The most important aspect to be determined in any commercial agree¬
ment is the applicable law or laws. Certain other regulatory laws, such
as competition law, may also apply if the transaction is to take place
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within a relevant trading block. The agreement may be regulated by

certain specific laws, such as agency law.
The other fundamental question to be resolved when entering into
an international commercial agreement is where any dispute that may
arise will be determined. Such a discussion needs to be raised sensi¬
tively when the parties are at the beginning of a commercial relation¬
ship and everyone hopes that the deal will be a success rather than
result in a dispute. Currently, there is no global harmonisation of the
rules relating to where a party may sue or be sued (i.e. jurisdiction).
However, the proposed Hague Convention on International Jurisdic¬
tion and Judgments in Civil and Commercial matters heralds the pros¬
pect of a new era when a global set of rules relating to questions of
jurisdiction will be available. This will be an exciting development for
international business people and lawyers.
The Hague Convention, in addition to determining jurisdiction,
will allow for a global system of recognition and enforcement of judg¬
ments given in one jurisdiction in another jurisdiction. The procedure
will involve the enforcement of a judgment by a second court without
usually the need for the content of the judgment of the first court to
be reviewed. I f this proposal is adopted, as it is looking likely to be,
it will result indirectly in a degree of harmonisation of the laws across
the world. This is because, for example, an English court may, pursu¬
ant to the Convention, recognise and enforce a judgment given by an
American jury in a product liability case awarding punitive damages
against a producer of a defective product. The effect of the Federal
Law of the United States will therefore be introduced 'by the back
door' into England. The practical result of such universal recognition
and enforcement must be that the diverging national laws relating to
international trade will approximate with one another. A more har¬
monious body of international trade law can be only good news for
international traders and is to be eagerly awaited.
A Specially Commissioned Report
International Commercial Agreements
NATURE AND CONTRACTUAL O B L I G A T I O N

The purpose of a contract is to establish the agreement that the
parties have made and to fix their rights and duties in accordance with
that agreement. The courts must enforce a valid contract as it is made,
unless there are grounds that bar its enforcement.
Statutes prescribe and restrict the terms of a contract where the gen¬
eral public is affected. The terms of an insurance contract that protect
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ADDITIONAL TEXTS
a common carrier are controlled by statute in order to safeguard the

public by guaranteeing that there will be financial resources available in
the event of an accident.
The courts may not create a contract for the parties. When the par¬
ties have no express or implied agreement on the essential terms of a
contract, there is no contract. Courts are only empowered to enforce
contracts, not to write them, for the parties. A contract, in order to be
enforceable, must be a valid. The function of the court is to enforce
agreements only if they exist and not to create them through the im¬
position of such terms as the court considers reasonable.
It is the policy of the law to encourage the formation of contracts
between competent parties for lawful objectives. As a general rule, con¬
tracts by competent persons, equitably made, are valid and enforceable.
Parties to a contract are bound by the terms to which they have agreed,
usually even if the contract appears to be improvident or a bad bargain,
as long as it did not result from fraud, duress, or undue influence.
The binding force of a contract is based on the fact that it evinces a
meeting of minds of two parties in good faith. A contract, once formed,
does not contemplate a right of a party to reject it. Contracts that were
mutually entered into between parties with the capacity to contract are
binding obligations and may not be set aside due to the caprice of one
party or the other unless a statute provides to the contrary.
THIRD-PARTY BENEFICIARIES
There are only two principal parties, the offeror and the offeree,
to an ordinary contract. The terms of the contract bind one or both
parties to render performance to the other in consideration of receiv¬
ing, or having received, the other's performance. Contracts sometimes
specify that the benefits accruing to one party will be conferred upon a
third party. The effect of a third-party contract is to provide, to a party
who has not assented to it, a legal right to enforce the contract.
A creditor beneficiary is a nonparty to a contract who receives the
benefit when a promise is made to satisfy a legal duty. For example,
suppose that a debtor owed a creditor $500. The debtor lends $500
to a third person, who promises to use the money to pay the debtor's
debt. The third person is the promisor, who makes the promise to be
enforced. The debtor is the promisee, to whom the promise is made.
The contract is between the debtor and the third person, the promisor,
and the consideration for the promise is the $500 loan that the promisor
received from the debtor. The creditor is the third-party beneficiary. I f
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ADDITIONAL TEXTS
the promisor refuses to pay the creditor $500, then the creditor may
sue the promisor and prevail. Although the creditor is not a party
to their contract, both the debtor and the promisor intend that the
creditor should be the beneficiary of the contract and have enforceable
rights against the promisor, since he or she is to pay the creditor. The
debtor or the creditor may sue to enforce the promisor's promise to
pay. The creditor's right to enforce the contract between the debtor
and the promisor is effective only when he or she learns of, and assents
to, the contract. The creditor may also sue the debtor for the $500, as
the debtor had a legal duty to pay this loan. The debtor then may sue
the promisor for breach of contract for refusing to pay the creditor.
A donee beneficiary of the contract is a nonparty who benefits
from a promise that is made for the purpose of making a gift to him
or her. A donor wishes to give a donee $200 as an anniversary present.
The donor plans to sell a television set for $200 to a purchaser, who
promises to pay the donee the $200 directly. The donee is a donee
beneficiary of the purchaser's promise to pay the money and may en¬
force this claim against the purchaser. The donee has no claim against
the donor, the promisee, as the donor has no legal duty to the donee
but is merely giving the donee a gift. However, the donor will be able
to sue the purchaser for refusal to pay the donee, because it would be
a breach of the terms of their contract of sale.
The difference between a creditor beneficiary and a donee benefici¬
ary becomes significant when the parties to a contract attempt to alter
the rights of the third-party beneficiary. The promisor and the prom¬
isee have no right or power to alter the accrued rights of the done ben¬
eficiary without consent unless this power was expressly reserved in the
contract, regardless of whether the donee knows about the contract. A
donee beneficiary's rights become effective when the contract is made
for his or her benefit, regardless of whether he or she knows about the
contract. In contrast, a creditor beneficiary's rights vest only when the
creditor beneficiary learns of, and assents to, the contract.
M I N O R S ' CONTRACTS
Those who have not reached the age of 18 are regarded in English
law as 'minors' and as such have limited capacity to enter into contracts.
The choice of age for this purpose is inevitably somewhat arbitrary, but
follows the general law as to the age at which a person attains 'major¬
ity' for many purposes of the law. It indicates that the object of the
rules is largely paternalistic — that is, it is intended to protect minors
215
ADDITIONAL TEXTS
from the consequences of their own actions. I f they were concerned

with the question of whether the minor had genuinely consented to the
agreement, and understood its consequences, there would be an argu¬
ment for an approach based on an inquiry into the individual minor's
capacity, rather than having a general rule. Even within the paternalistic
approach, the result is somewhat unsophisticated, since different age
groups might be thought to need different types of protection. Children
under the age of ten, for example, are unlikely to appreciate what is in¬
volved in undertaking legal obligations, and might at first sight appear to
be in need of the greatest protection. In practice, however, they are less
likely to be the target of unscrupulous adult contractors that teenagers,
who may well have money combined with an over-estimation of their
understanding of the way the world works. A simple age 'cut-off' for
contractual capacity is therefore probably the best compromise.
One result of the current approach is that the law can sometimes
appear to operate harshly against those who contract with minors. In
particular, the adult party who is unaware that the other contracting
party is a minor may still find the contract unenforceable.
The law starts from the presumption that all minors' contracts are
either void or voidable. There are two main exceptions to this, namely
contracts for 'necessaries', and 'beneficial contracts of service'. Such
contracts may be fully enforceable. In addition, certain contracts
which involve a minor obtaining an interest in property which involves
continuous or recurring obligations may be voidable. The scope of
these various categories will be considered next, before moving on to
the consequences of entering into a contract with a minor.
Professor Richard Stone "The Modern Law of Contract"
АГЕНТСКИЙ ДОГОВОР
Агентский договор — договор, в силу которого одна сторона
(агент) обязуется за вознаграждение совершать по поручению
другой стороны (принципала) юридические и иные действия от
своего имени, но за счет принципала либо от имени и за счет
принципала.
Агентский договор является разновидностью договора услуг.
В большинстве случаев агентский договор используется в сфе¬
ре предпринимательской деятельности. Однако он допустим и
в иных гражданско-правовых отношениях, например в сфере
творческой деятельности агентский договор может быть связан с
приобретением, передачей или использованием исключительных
прав (авторов или патентообладателей).
216
ADDITIONAL TEXTS
Агентский договор является консенсуальным, возмездным и

взаимным. Сторонами в агентском договоре являются агент и
принципал, в качестве которых могут выступать любые субъекты
гражданского права, обладающие дееспособностью.
Предмет агентского договора — оказание посреднических услуг.
Агентским договором может быть ограничена свобода как
агента, так и принципала в части заключения аналогичных
агентских договоров.
Агент обязан выполнять поручения в соответствии с усло¬
виями и заключенного договора, и указаниями принципала. В
ходе выполнения агентского договора агент обязан представлять
принципалу отчеты в порядке и сроки, предусмотренные дого¬
вором. К отчету должны быть приложены доказательства произ¬
веденных агентом расходов.
Агент вправе привлекать к исполнению поручения третьих лиц
путем заключения субагентского договора. При этом агент оста¬
ется полностью ответственным перед своим принципалом за дей¬
ствия субагентов. Совершение юридических действий субагентом
для принципала, хотя бы и от собственного имени, допускается
лишь как исключение в ситуациях, когда возможно передоверие.
Принципал обязан уплатить агенту вознаграждение. Размер
обязательного вознаграждения агенту определяется условиями
договора, а при отсутствии такого условия в договоре — раз¬
мером вознаграждения, которое при сравнимых обстоятельствах
обычно выплачивается за аналогичные услуги.
ДОГОВОР
Договор — соглашение двух или нескольких лиц об установ¬
лении, изменении или прекращении гражданских прав и обязан¬
ностей.
Договор — наиболее распространенный вид сделок. К до¬
говору применяют правила о двусторонних и многосторонних
сделках. В Гражданском Кодексе закреплен принцип свободы
договора, который выражается в предоставлении гражданам и
юридическим лицам возможности самостоятельно по своему
усмотрению решать вопросы о необходимости заключения до¬
говора при наличии в этом интереса.
Содержание договора — совокупность условий, на которых
он заключен. Все условия подразделяются на: существенные;
обычные; случайные.
217
ADDITIONAL TEXTS
Существенными признаются условия, которые необходимы

и достаточны для заключения договора. При отсутствии хотя бы
одного из них договор не признается заключенным. Круг суще¬
ственных условий зависит от специфики каждого конкретного
обязательства и определяется в специальных нормативных актах,
которые посвящены обязательству данного вида. В случае от¬
сутствия в законе указаний существенными считаются условия,
необходимые для договора данного вида. Существенными счита¬
ются все те условия, относительно которых по заявлению одной
из сторон должно быть достигнуто соглашение. Это означает,
что по желанию одной из сторон в договоре существенным ста¬
новится и такое условие, которое не признано таковым законом
или иным правовым актом.
Обычные условия предусмотрены в соответствующих нор¬
мативных актах и автоматически вступают в действие в момент
заключения договора. От существенных условий они отличаются
тем, что не требуют особого соглашения, их не обязательно ого¬
варивать в договоре. Включение их или отсутствие в договоре не
влияет на его заключение или содержание.
Случайные условия изменяют либо дополняют обычные усло¬
вия. Они включаются в текст Д. по усмотрению сторон. Их от¬
сутствие не влияет на действительность Д.
Все договоры подлежат классификации. В зависимости от харак¬
тера распределения прав и обязанностей: односторонние (у одной
стороны Д. порождает права, а у другой — обязанности) и двусто¬
ронние (права и обязанности приобретает каждая из сторон).
По характеру возникшего правоотношения: возмездные (иму¬
щественное предъявление одной стороны обусловливает встреч¬
ное имущественное предъявление от другой стороны) и безвоз¬
мездные (имущественное представление производится только
одной стороной без получения встречного имущественного пред¬
ставления).
ДОГОВОР КУПЛИ-ПРОДАЖИ
Договор купли-продажи — договор, по которому одна сто¬
рона (продавец) обязуется передать вещь (товар) в собственность
другой стороне (покупателю), а покупатель обязуется принять
этот товар и уплатить за него определенную денежную сумму.
Форма договора в общих положениях не предусмотрена, поэ¬
тому применяются общие правила о сделках.
218
ADDITIONAL TEXTS
Виды договоров купли-продажи: 1) розничная купля-продажа;

2) поставка товаров; 3) поставка товаров для государственных
нужд; 4) энергоснабжение; 5) продажа недвижимости; 6) прода¬
жа предприятий.
Содержание договора — его условия. Они считаются согла¬
сованными, если договор позволяет определить наименование
и количество товара. Для отдельных видов купли-продажи уста¬
новлены требования о необходимости согласования более широ¬
кого круга условий.
1. Условие о товаре. Считается согласованным, если содержание
договора позволяет определить наименование и количество товара.
2. Количество товара. Оно предусматривается в определенных
единицах измерения либо в денежном выражении. Это условие
может быть согласовано путем установления в договоре лишь
порядка определения количества товара. Условие о количестве
является существенным. Если договор не позволяет определить
количество товара, он считается незаключенным.
3. Ассортимент товара. Ассортимент — соотношение товара
по размерам, видам, моделям и другим признакам. Он согласо¬
вывается сторонами. Если ассортимент не определен и не уста¬
новлен порядок его определения, а из обязательства вытекает,
что товар должен быть в ассортименте, продавец вправе передать
покупателю товар в ассортименте исходя из потребностей поку¬
пателя, которые были известны продавцу на момент заключения
договора, или отказаться от исполнения договора.
Цена на несоответствующие товары должна быть согласована.
4. Качество товара. Оно должно соответствовать договору
купли-продажи и может быть определено образцом и (или) опи¬
санием. Обязательные требования к качеству могут быть преду¬
смотрены законом. Соглашением сторон могут быть установле¬
ны повышенные требования к качеству.
Гарантии качества: законная и договорная. По законной товар
должен быть в пределах разумного срока пригоден для целей, для
которых такие товары обычно используются. Качество определя¬
ется на момент передачи товара, если договором не определено
иное. При договорной продавец предоставляет гарантию каче¬
ства в течение определенного договором времени.
Гарантийный срок — срок, в течение которого продавец гаран¬
тирует пригодность использования товара для целей, установлен¬
ных договором. Он начинает течь с момента передачи товара. Срок
продлевают, если товар не может быть использован из-за обнару¬
женных недостатков при условии оповещения об этом продавца.
219
ADDITIONAL TEXTS
5. Комплектность товара — определенный набор товаров.

Обязательство считается исполненным с момента передачи всех
товаров одновременно, если иное не вытекает из договора или из
существа обязательства.
Продавец обязан передать товар в таре и упаковке, если иное
не предусмотрено в договоре или если товар по своему характеру
не требует упаковки.
ДОГОВОР ПОСТАВКИ
Договор поставки — договор, по которому поставщик, осущест¬
вляющий предпринимательскую деятельность, обязуется передать
в обусловленный срок или сроки производимые или закупаемые
им товары покупателю для использования в предпринимательской
деятельности или в иных целях, не связанных с личным, семей¬
ным, домашним и иным подобным использованием.
Сторонами в договоре являются поставщик и покупатель.
В качестве поставщика может быть гражданин или коммер¬
ческая организация. Поставщик либо сам производит постав¬
ляемую продукцию, либо приобретает ее. Покупателем могут
быть любые лица, кроме граждан, которые приобретают товар
для нужд, направленных на удовлетворение личных потребно¬
стей.
Предмет договора поставки — это любые вещи и предметы,
находящиеся в гражданском обороте и не изъятые из него. Пред¬
метом поставки должен быть именно тот товар, который постав¬
щик либо производит, либо продает. Цель покупки товара — ис¬
пользование в предпринимательской или иной деятельности, не
связанной с личным использованием. Существенным условием
поставки является срок передачи товаров, так как заключение и
передача, как правило, не совпадают. Цена договора не относит¬
ся к существенным условиям договора, и она определяется по
соглашению сторон.
Форма договора поставки — письменная.
Обязанности поставщика: 1) передать покупателю товар,
предусмотренный договором поставки; 2) одновременно с пере¬
дачей вещи передать покупателю ее принадлежности; 3) пере¬
дать относящиеся к товару документы; 4) передать покупателю
товар свободным от любых прав третьих лиц; 5) продавец обя¬
зан передать товар в количестве, предусмотренном по договору;
6) передать товар в ассортименте, т.е. по видам, цветам; 7) пере-
220
ADDITIONAL TEXTS
дать покупателю товар, качество которого соответствует догово¬

ру; 8) передать покупателю товар, соответствующий условиям
договора о комплектности; 9) передать покупателю товар в таре
и упаковке; 10) передать товар в соответствующие сроки, если
установлены периоды поставки или график; 11) доставить товар
транспортом, предусмотренным в договоре.
Обязанности покупателя: 1) совершить все необходимые
действия по приемке товара; 2) осмотреть принимаемый товар
в установленный срок; 3) в этот же срок проверить количество
и качество принимаемого товара; 4) при получении товара от
транспортной организации проверить соответствие товара сведе¬
ниям, указанным в сопроводительных документах; 5) если поку¬
патель отказался от поставленного товара, то он должен взять то¬
вар на ответственное хранение; 6) оплатить поставленный товар
с соблюдением порядков и формы, установленных соглашением;
7) возвратить поставщику многооборотную тару и средство па¬
кетирования.
Односторонний отказ от договора поставки (или его изме¬
нение) допускается в случаях существенного нарушения его
условий одной из сторон. Такими нарушениями для поставщика
считаются: 1) поставка товаров ненадлежащего качества с недо¬
статками, которые нельзя устранить в приемлемый для покупа¬
теля срок; 2) неоднократная просрочка товаров.

PROMISSORY NOTES
Quite simply, a promissory note is a promise to pay or an IOU. It
is a formal commitment (also known as a loan agreement or contract)
between two parties that is usually necessary when money is borrowed
and lent between them. A l l business loans secured from a bank or
other lending institution have some sort of promissory note, but they
are also recommended for loans between two individuals (even if the
loan is between family member or close friends) to avoid any misun¬
derstandings or possible legal troubles.
A promissory note should have several essential elements, including
the amount of the loan, the date by which it is to be paid back, the
interest rate, and a record of any collateral that is being used to secure
the loan. Other interest rate options, like discounting or compensat¬
ing balance requirements, can also be included. When the promissory
221
ADDITIONAL TEXTS
note is discounted, the interest is taken off the principal amount at the
beginning of the loan. The borrower pays back the entire amount, even
though he only received the principal minus the interest. This practice is
not very common because it is a higher effective rate of interest than the
stated rate for the borrower. A compensating balance is usually required
for large loans or lines of credit. It requires that the borrower maintain
an account with a specified minimum level account balance at the lend¬
ing institution (usually a bank). This account balance earns little or no
interest and also raises the effective interest rate of the loan. Default
terms (what happens i f a payment is missed or the loan is note paid off
by its due date) should also be spelled out in the promissory note.
When signing a promissory note, both the lender and the person
receiving the loan should be fully aware of the note's language. One
obvious way to do this is to read the promissory note carefully and in
its entirety before committing a signature to it. I f there are any ques¬
tions or confusion regarding the contents of the promissory note, a
certified public accountant (CPA) or lawyer should be called on to
make sure everything is understandable. When a casual promissory
note is drawn up between two individuals, the IRS has a required in¬
terest rate. A CPA can help determine if the interest rate stated in the
promissory note is too low and if it will result in penalties or automati¬
cally be raised. I f the loan is interest free, the IRS may consider it a
gift and require that a gift tax be paid on it.
Another point that businesses may want to consider when drafting a
promissory note is what to do in case the business does not succeed. I f
the business is a corporation or limited liability company, it should be
determined if the corporate shareholders or limited liability members
will personally guarantee the loan. I f this is not the case, they have no
personal legal obligation to repay the loan in a worst case scenario.
Kevin Hillstrom, Laurie Collier Hillstrom
UNIFORM COMMERCIAL CODE

A general and inclusive group of laws adopted, at least partially,
by all the states to further uniformity and fair dealing in business and
commercial transactions.
The Uniform Commercial Code (UCC) is a set of suggested laws
relating to commercial transactions. The UCC was one of many uniform
codes that grew out of a late nineteenth century movement toward
uniformity among state laws. In 1890 the American Bar Association,
an association of lawyers, proposed that states identify areas of law that
could be made uniform throughout the nation, prepare lists of such
222
ADDITIONAL TEXTS
areas, and suggest appropriate legislative changes. In 1892 the National

Conference of Commissioners on Uniform State Laws (NCCUSL)
met for the first time in Saratoga, New York. Only seven states sent
representatives to the meeting.
In 1986 the NCCUSL offered up its first act, the Uniform Negoti¬
able Instruments Act. The NCCUSL drafted a variety of other uni¬
form acts. Some of these dealt with commerce, including the Uniform
Conditional Sales Act and the Uniform Trust Receipts Act.
In September 1951 a final draft of the UCC was completed and
approved by the American Law Institute (ALI) and the NCCUSL, and
then by the House of Delegates of the American Bar Association. After
some additional amendments and changes, the official edition, with
explanatory comments, was published in 1952.
The UCC is divided into nine articles, each containing provisions
that relate to a specific area of commercial law. Article 1, General
Provisions, provides definitions and general principles that apply to the
entire code. Article 2 covers the sale of goods. Article 3, commercial
paper, addresses negotiable instruments, such as promissory notes and
checks. Article 4 deals with banks and their handling of checks and
other financial documents. Article 5 provides model laws on letters of
credit, which are promises by a bank or some other party to pay the
purchases of a buyer without delay and without reference to the buy¬
er's financial solvency. Article 6, on bulk transfers, imposes an obliga¬
tion on buyers who order the major part of the inventory for certain
types of businesses. Most notably, article 6 provisions require that such
buyers notify creditors of the seller of the inventory so that creditors
can take steps to see that the seller pays her debts when she receives
payments from the buyer. Article 7 offers rules on the relationships
between buyers and sellers and any transporters of goods, called carri¬
ers. These rules primarily cover the issuance and transfer of warehouse
receipts and bills of lading. A bill of lading is a document showing that
the carrier has delivered an item to a buyer. Article 8 contains rules
on the issuance and transfer of stocks, bonds, and other investment
securities. Article 9, secured transactions, covers security interests in
real property. A security interest is a partial or total claim to a piece
of property to secure the performance of some obligation, usually the
payment of a debt. This article identifies when and how a secured
interest may be created and the rights of the creditor to foreclose on
the property if the debtor defaults on his obligation. The article also
establishes which creditors can collect first from a defaulting debtor.
223
ADDITIONAL TEXTS
ВЕКСЕЛЬ
Вексель — один из видов ценных бумаг, является объектом
гражданского правоотношения. Он используется как средство
платежа и кредитования. Предметом вексельного обязательства
являются только деньги.
Вексель бывает простым и переводным. В правоотношении,
которое порождается простым векселем, участвуют два лица:
векселедатель и векселедержатель (кредитор). Обязательства,
которые вытекают из переводного векселя, связывают как ми¬
нимум трех лиц, а именно: векселедателя, плательщика и вексе¬
ледержателя. Переводной вексель — ценная бумага, содержащая
ничем не обусловленное предложение векселедателя (трассанта)
плательщику (трассату) уплатить в определенный срок векселе¬
держателю (ремитенту) или его приказу установленную в векселе
денежную сумму.
Вексель может быть передан посредством индоссамента (пе¬
редаточной надписи), который бывает полным (переносящим
все права по векселю); инкассовым (не переносящим всех прав);
залоговым (служит целям обеспечения тех имущественных тре¬
бований, которые может иметь векселедержатель к своему пред¬
шественнику).
Сроки платежа по векселю могут быть такими: на определенный
день; по предъявлении; во столько-то времени от предъявления; во
столько-то времени от составления. Другие способы обозначения
срока платежа по векселю влекут его недействительность.
Место платежа — место жительства трассата либо место жи¬
тельства векселедателя, если иное не установлено в самом век¬
селе (например, место жительства третьего лица, оплачивающего
вексель за плательщика).
Дата составления в векселе обычно обозначается рядом с
местом его составления. Подпись векселедателя завершает до¬
кумент и придает ему вексельную силу.
Способом обеспечения платежа по векселю выступает аваль,
который может быть дан третьим лицом или всяким подписав¬
шим вексель.
Ответственность всех обязанных по векселю лиц перед вексе¬
ледержателем является солидарной. Вексельному кредитору при¬
надлежит право предъявить иск ко всем обязанным лицам или к
каждому в отдельности. Лицо, оплатившее вексель, приобретает
право требования к оставшимся вексельным должникам, заме¬
щая собой векселедержателя.
224
ADDITIONAL TEXTS
Срок давности по иску векселедержателя к плательщику, ак¬

цептовавшему вексель, составляет 3 года со дня срока платежа.
Иски векселедержателя против индоссантов и против векселеда¬
теля погашаются истечением 1 года со дня протеста или со дня
срока платежа. Исковая давность по требованиям индоссантов
друг к другу и к векселедателю равна 6 месяцам со дня, когда
индоссантом был оплачен вексель, или со дня предъявления к
нему иска.
ИНДОССАМЕНТ
Индоссамент — передаточная надпись на ордерной ценной
бумаге, с помощью которой осуществляется передача прав по
этой ценной бумаге. Индоссамент ставится на обратной стороне
ценной бумаги или на дополнительном листе (алонже).
По индоссаменту все права по ценной бумаге переносятся на
индоссата (лицо, которому передаются права по ней).
Виды индоссамента: 1) на предъявителя — не указывается
конкретное лицо, которому передаются права; 2) именной — с
указанием лица, которому передаются права по векселю; 3) ор¬
дерный — указывается определенное лицо (индоссат), по при¬
казу которого вексель подлежит оплате; 4) безоборотный — со¬
держит надпись «без оборота на меня» и подпись надписавшего,
освобождающие его от ответственности за поступление платежа
по векселю; 5) «дружеский» — производится для гарантии плате
жа по векселю; 6) необязательный — особая форма И. на пере¬
водном векселе, которая снимает определенные обязательства с
индоссанта; 7) полный — содержит указание на лицо, в пользу
которого переводится документ.
Индоссамент может быть как полным, так и бланковым (со¬
стоит из одной лишь подписки индоссанта). Лицо, которое вла¬
деет по бланковому индоссаменту, имеет право: 1) заполнить
бланк от своего имени или имени другого лица; 2) индоссиро¬
вать документ посредством полного или бланкового индоссамен¬
та; 3) передать новому держателю простым вручением.
Индоссант несет солидарную ответственность с векселедате¬
лем, авалистом, но может снять с себя эту ответственность по¬
средством индоссамента с оговоркой «без оборота».
Частичный индоссамент на векселе недействителен, так как
должен быть простым и ничем не обусловленным. Разрешает¬
ся проставлять препоручительный индоссамент с оговорками:
225
ADDITIONAL TEXTS
1) «валюта на инкассо» или «как доверенному» — собственни¬

ком является индоссант, а держатель выступает в роли его по¬
веренного и может совершать любые действия, необходимые для
получения платежа; 2) «валюта в залог» — передача векселя дер¬
жателю не в собственность, а в залог.
ЧЕК
Чек — ценная бумага, содержащая ничем не обусловленное
письменное распоряжение чекодателя банку уплатить держателю
чека определенную сумму. Чек должен быть предъявлен к оплате
в указанные в нем сроки.
Безусловный характер платежа по чеку означает независи¬
мость данного обязательства от условий и действительности
сделки, во исполнение которой он выдан. Недействительность
сделки не является основанием для отказа произвести платеж
по чеку.
Указанную в чеке сумму банк-плательщик выдает чекодер¬
жателю за счет средств, находящихся на счете чекодателя, либо
за счет средств, депонированных им на отдельном счете, но не
свыше той суммы, которую банк гарантировал по согласованию
с чекодателем.
Если чек несет на себе подписи лиц, не способных связывать
себя обязательствами по нему, либо подделанные подписи, либо
подписи фиктивных лиц, либо подписи, которые по любой дру¬
гой причине не могут обязывать лиц, подписавших чек, или тех,
по чьему поручению он был подписан, обязательства остальных
лиц, подписавших чек, тем не менее остаются в силе.
Чек подлежит оплате по предъявлении. Чек, предъявленный
к оплате ранее даты, указанной в качестве даты выписки, под¬
лежит оплате в день предъявления.
Чек может быть передан его владельцем другому лицу в опреде¬
ленном порядке. Передача прав по чеку производится в общем по¬
рядке, предусмотренном для передачи прав по ценным бумагам.
Вместе с тем законом предусмотрены некоторые особенности пере¬
дачи прав по чеку. Так, не могут быть переданы права по именному
чеку, в отличие от общего правила ГК, предусматривающего, что
права, удостоверенные именной ценной бумагой, передаются в по¬
рядке, установленном для уступки требований (цессии).
Индоссамент передает все права по ордерному чеку. Индос¬
самент должен быть написан на чеке или на скрепленном с ним
226
ADDITIONAL TEXTS
листе (аллонже). Он должен быть подписан индоссантом. Индос¬

самент может указывать лицо, которому передается чек (имен¬
ной индоссамент), или такое лицо не указывать, или может со¬
стоять только из подписи индоссанта (бланковый индоссамент).
В последнем случае он, чтобы иметь юридическую силу, должен
быть написан на оборотной стороне чека или на скрепленном с
ним листе (аллонже).
Оплата чека может быть гарантирована любым третьим ли¬
цом (кроме плательщика) в полной сумме или частично путем
соответствующей надписи на чеке или аллонже (аваль). Лицо,
гарантирующее оплату чека — авалист — несет ответственность
в том же объеме, что и лицо, за которое дано поручительство.
ВЕКСЕЛЬ В АНГЛО-АМЕРИКАНСКОМ ПРАВЕ

Одним из самых главных расхождений англо-американского
вексельного права и континентального регулирования являются
различия формального порядка — например, отсутствие в англий¬
ском вексельном законе 1882 г. требования об обязательности
вексельной метки на самом документе, т.е. слова «вексель». Если
по Женевской конвенции отсутствие указания имени (наименова¬
ния) лица, которому или по чьему приказу должен производиться
платеж по векселю, делает этот документ ничтожным, в англо¬
американском праве вексель может быть выдан без указания по¬
лучателя платежа. Таким образом, может быть выдан вексель на
предъявителя, а чек будет рассматриваться как вид переводного
векселя. По английскому закону допускаются любые формулы
указания сроков платежа, лишь бы только достигалась определи¬
мость такого срока, в то время как Женевская конвенция содержит
перечень способов точного их указания. Отступление от одного из
них, если иное не установлено конвенционными положениями,
ведет к недействительности векселя. В качестве еще одного харак¬
терного различия служит институт аваля, который присутствует
в Женевской конвенции, но не известен англо-американскому
праву. Согласно Женевской конвенции вексель, выданный на
условиях оплаты «в определенный срок от предъявления», должен
быть предъявлен к акцепту в течение одного года с даты выдачи, а
по английскому праву — в течение разумного срока и т.д.
Представляет также интерес коллизионное регулирование, от¬
носящееся к вексельным отношениям. В большинстве ситуаций
коллизии вексельных и иных отношений, касающихся оборотных
227
ADDITIONAL TEXTS
платежных документов, разрешаются в Великобритании согласно

принципу loci actus (loci contractus), т.е. применения закона места,
где действие было совершено либо должно быть совершено или
где обязательство было принято (места заключения сделки), но
не на основе формулы «собственного права договора». Статья 72
английского Закона 1882 г. не касается непосредственно разреше¬
ния коллизионного вопроса о дееспособности лица, а поскольку
все остальные существенные атрибуты, связанные с вексельным
обязательством, подчинены закону места его заключения — lex
loci contractus, — и данный основополагающий вопрос также ре¬
шен на его основе. В ст. 72 говорится, в частности, о том, что если
вексель, выданный в одной стране, учитывается, акцептуется или
оплачивается в другой, права и обязанности сторон, в той мере,
в какой их действительность определяется формальными требова¬
ниями, подчиняются закону места возникновения обязательства.
Это применяется как к выдаче векселя, так и к вытекающим от
сюда действиям: акцепту и индоссаменту.
C O R P O R A T E BONDS
Corporate bonds promise specified payments at specified dates. In
general, the interest received by the bondholder is taxed as ordinary
income. An issue of corporate bonds is generally covered by a trust in¬
denture, which promises a trustee (typically a bank or trust company)
that it will comply with the indenture's provisions (or covenants).
These include a promise of payment of principal and interest at stated
dates, and other provisions such as limitations of the firm's right to sell
pledged property, limitations on future financing activities, and limita¬
tions on dividend payments.
Potential lenders forecast the likelihood of default on a bond and
require higher promised interest rates for higher forecasted default
rates. One way that corporate borrowers can influence the forecasted
default rate is to agree to restrictive provisions or covenants that limit
the firm's future financing, dividend, and investment activities — mak¬
ing it more certain that cash will be available to pay interest and prin¬
cipal. With a lower anticipated probability of default, buyers are willing
to offer higher prices for the bonds. Corporate officers must weigh the
costs of the reduced flexibility from including the covenants against
the benefits of lower interest rates.
Describing all the types of corporate bonds that have been issued
would be difficult. Sometimes different names are employed to describe
228
ADDITIONAL TEXTS
the same type of bond and, infrequently, the same name will be applied
to two quite different bonds. Standard types include the following:
• Mortgage bonds are secured by the pledge of specific property. I f
default occurs, the bondholders are entitled to sell the pledged prop¬
erty to satisfy their claims. I f the sale proceeds are insufficient to cover
their claims, they have an unsecured claim on the corporation's other
assets.
• Debentures are unsecured general obligations of the issuing cor¬
poration. The indenture will regularly limit issuance of additional se¬
cured and unsecured debt.
• Collateral trust bonds are backed by other securities (typically
held by a trustee). Such bonds are frequently issued by a parent cor¬
poration pledging securities owned by a subsidiary.
• Equipment obligations (or equipment trust certificates) are
backed by specific pieces of equipment (for example, railroad rolling
stock or aircraft).
• Subordinated debentures have a lower priority in bankruptcy
than unsubordinated debentures; junior claims are generally paid only
after senior claims have been satisfied.
• Convertible bonds give the owner the option either to be repaid
in cash or to exchange the bonds for a specified number of shares in
the corporation.
Corporate bonds have differing degrees of risk. Bond rating agen¬
cies (for example, Moody's) provide an indication of the relative de¬
fault risk of bonds with ratings that range from Aaa (the best quality)
to C (the lowest). Bonds rated Baa and above are typically referred to
as "investment grade". Below-investment-grade bonds are sometimes
referred to as "junk bonds". Junk bonds can carry promised yields that
are 3 to 6 percent (300 to 600 basis points) higher than Aaa bonds
Clifford W. Smith «Bonds»

DESIGN PROTECTION
Designs are covered by various forms of IPR, including design pat¬
ent, copyright, trademark and trade dress, and sui generis registration
systems. The protection of non-utilitarian designs has long been a prob¬
lematic area for intellectual property law. The traditional 'utility patent'
is granted with respect to a useful or functional invention. It is not suited
to nonfunctional aesthetic design. In a number of jurisdictions, this led
229
ADDITIONAL TEXTS
to the creation of a separate 'design patent' specifically granted to non¬

functional product elements.
However, design patenting has a number of drawbacks, includ¬
ing that securing protection is time-consuming and costly. Copyright
protection covers expressive works and in principle is suitable for de¬
sign protection, but many designs include potentially functional ele¬
ments, resulting in uncertainty at the enforcement stage. Trademark
and trade dress also protect design. The design or shape of a product
or its packaging may be distinctive and associated with a particular en¬
terprise. However, as with copyright, trademark and trade dress offer
protection only for nonfunctional design, and this aspect also creates
enforcement uncertainty. To overcome problems with design protec¬
tion by traditional forms of intellectual property, jurisdictions such as
the European Union have established design registration systems with
somewhat more flexible standards than those associated with the tra¬
ditional intellectual property rights.
One of the industries most concerned with design protection is the
textile or clothing industry. In this sector consumer preferences change
very rapidly and an expensive time-consuming process for securing
protection would not be particularly helpful to the industry. The TRIPS
Agreement acknowledges this and obligates Members not to impede
the grant of protection by costly, examination or publication require¬
ments. The major economic issues associated with design protection
arise when industries blur the line between form and function. For
example, the most controversial issue in European design protection
is the treatment of automobile spare parts, including body panels and
motor parts. In its 2001 Design Regulation, the EC excluded engine
components from design protection and put off for future negotiation
a decision on whether automobile body parts were covered.
T H E R O L E O F WIPO
WIPO also continues to play a major role in regulating IP in world
trade. First, WIPO administers treaties pursuant to which persons may
secure registration of patents and trademarks in many countries, in¬
cluding the Patent Cooperation Treaty (PCT) and Madrid Agreement
and Protocol. Administration of the PCT is highly technical work and
employs a large staff. Second, WIPO continues to serve as a forum
for negotiations on intellectual property rights. Shortly following entry
into force of the TRIPS Agreement, the WIPO Copyright Treaty and
WIPO Performances and Phonograms Treaty (WPPT) were concluded
230
ADDITIONAL TEXTS
at WIPO, and have entered into force. Among other things, negotiations
on substantive patent law harmonization continue at WIPO, although
the pace of these negotiations is slow due to continuing differences in
national perceptions concerning the appropriate standards of protec¬
tion. WIPO is cooperating with the governing body of the Convention
on Biological Diversity in the development of rules on the relationship
between intellectual property rights and genetic resources, as well as
traditional knowledge. Third, WIPO is increasingly assuming a role as
forum for alternative dispute resolution with respect to intellectual prop¬
erty rights, including those that protect domain names on the Internet.
The most controversial of the ongoing WIPO negotiations con¬
cerns substantive patent law harmonization. Recall that the earliest
efforts to negotiate the Paris Convention included proposals to create
harmonized international patent law. Why is this subject matter so
controversial? First, there is a substantial disparity in the capacity of
countries to develop new technologies and commercialize them. The
vast preponderance of patents is owned by enterprises in the industri¬
alized countries. Developing countries are, on the whole, substantial
'net payers' for technology. While it may seem like a good idea from
the standpoint of someone in the United States or Germany to have
harmonized worldwide patent standards which would be based on the
rules established in the highly industrialized countries, which rules
would pave the way for a system in which multinational companies
ultimately could apply for a single patent and obtain worldwide mo¬
nopolies for their new products, this idea is looked at differently from
the standpoint of people in countries who mainly pay higher prices for
patented products, that is, the net payers. Under the TRIPS Agree¬
ment, countries currently have substantial discretion in the way they
define the criteria of patentability. This gives them the ability to con¬
trol how easy or difficult it is to obtain patents. A country which is a
net payer for technology may wish to make it more difficult to obtain
patents, for example, by imposing a strict standard for inventive step.
Also, there is concern among some developing countries that issues of
importance to them, such as the protection of biodiverse resources, will
not be given enough attention in these negotiations. Finally, but not
exhaustively, even among the most highly developed countries like the
United States and the EU there remain some significant differences in
the way that the patent systems function and on which there is yet to
be agreement on harmonization. For all these reasons, the substantive
patent law harmonization negotiations at WIPO are contentious.
231
ADDITIONAL TEXTS
T Y P E S O F TRADEMARKS
The term trademark is commonly used to describe many different
types of devices that label, identify and distinguish products or services
in the marketplace. The basic purpose of all these devices is to inform
potential customers of the origin and quality of the underlying prod¬
ucts or services.
A trademark is a distinctive word, phrase, logo, graphic symbol,
slogan or other device that is used to identify the source of a prod¬
uct and to distinguish a manufacturer's or merchant's products from
others. Some examples are Nike sports apparel, Gatorade beverages
and Microsoft software. In the trademark context, "distinctive" means
unique enough to help customers recognize a particular product in the
marketplace. A mark may either be inherently distinctive (the mark is
unusual in and of itself, such as Milky Way candy bars) or may become
distinctive over time because customers come to associate the mark
with the product or service (for example, Beef & Brew restaurants).
Consumers often make their purchasing choices on the basis of
recognizable trademarks. For this reason, the main thrust of trademark
law is to make sure that trademarks don't overlap in a manner that
causes customers to become confused about the source of a product.
However, in the case of trademarks that have become famous — for
example, McDonald's — the courts are willing to prohibit a wider
range of uses of the trademark (or anything close to it) by anyone
other than the famous mark's owner. For instance, McDonald's was
able to prevent the use of the mark McSleep by a motel chain because
McSleep traded on the McDonald's mark reputation for a particular
type of service (quick, inexpensive, standardized). This type of sweep¬
ing protection is authorized by federal and state statutes (referred to
as antidilution laws) designed to prevent the weakening of a famous
mark's reputation for quality.
Nolo's Encyclopedia of Everyday Law
COPYRIGHTS
It has long been recognized that everyone benefits when creative
people are encouraged to develop new intellectual and artistic works.
When the United States Constitution was written in 1787, the framers
took care to include a copyright clause (Article I , Section 8) giving
Congress the power to "promote the Progress of Science and useful
Arts" by passing laws that give creative people exclusive rights in their
own artistic works for a limited period of time.
232
ADDITIONAL TEXTS
Copyright laws are not designed to enrich creative artists, but to

promote human knowledge and development. These laws encourage
artists in their creative efforts by giving them a mini-monopoly over
their works — called a copyright. But this monopoly is limited when it
conflicts with the overriding purpose of encouraging people to create
new works of scholarship or art.
Copyright is a legal device that gives the creator of a work of art
or literature, or a work that conveys information or ideas, the right to
control how that work is used. The Copyright Act of 1976 — the fed¬
eral law providing for copyright protection — grants authors a bundle
of exclusive rights over their works, including the right to reproduce,
distribute, adapt or perform them.
An author's copyright rights may be exercised only by the author
— or by a person or entity to whom the author has transferred all or
part of her rights. I f someone wrongfully uses the material covered by
a copyright, the copyright owner can sue and obtain compensation for
any losses suffered.
Copyright protects works such as poetry, movies, video games, vid¬
eos, DVDs, plays, paintings, sheet music, recorded music perform¬
ances, novels, software code, sculptures, photographs, choreography
and architectural designs.
To qualify for copyright protection, a work must be "fixed in a
tangible medium of expression." This means that the work must ex¬
ist in some physical form for at least some period of time, no matter
how brief. Virtually any form of expression will qualify as a tangible
medium, including a computer's random access memory (RAM), the
recording media that capture all radio and television broadcasts and
the scribbled notes on the back of an envelope that contain the basis
for an impromptu speech.
In addition, the work must be original — that is, independently
created by the author. It doesn't matter i f an author's creation is simi-
lar to existing works, or even if it is arguably lacking in quality, ingenu¬
ity or aesthetic merit. So long as the author toils without copying from
someone else, the results are protected by copyright.
Finally, to receive copyright protection, a work must be the result
of at least some creative effort on the part of its author. There is no
hard and fast rule as to how much creativity is enough. As one ex¬
ample, a work must be more creative than a telephone book's white
pages, which involve a straightforward alphabetical listing of telephone
numbers rather than a creative selection of listings.
Nolo's Encyclopediaof Everyday Law
233
ADDITIONAL TEXTS
МЕЖДУНАРОДНАЯ ОХРАНА АВТОРСКИХ ПРАВ

Одним из первых международных договоров в сфере интел¬
лектуальной собственности стала конвенция по защите автор¬
ских прав 1886 г. — Бернская конвенция по охране литературной
и художественной собственности. Основными принципами кон¬
венции являются:
1) принцип национального режима охраны авторских прав на
литературные и художественные произведения, в соответствии
с которым любому произведению, созданному в одной из стран-
участниц Конвенции, в любой другой стране-участнице предостав
ляется такая же охрана, как и созданным в ней произведениям;
2) принцип возникновения авторских прав независимо от вы¬
полнения каких-либо формальностей: регистрации, депонирова¬
ния и т.п.;
3) принцип предоставления охраны во всех странах-участницах
Конвенции независимо от наличия охраны или срока ее дей¬
ствия в стране происхождения произведения.
Конвенция не содержит исчерпывающего перечня охраняемых
произведений. Каждая из стран самостоятельно решает вопрос о
правовой охране официальных текстов, нормативных, администра¬
тивных, судебных документов, произведений народного творчества.
Бернская конвенция предоставляет правовую охрану не толь¬
ко авторам, но и его правопреемникам в течение 50 лет после
смерти автора. Для кинематографических произведений этот
срок составляет 50 лет после первой публичной демонстрации
фильма, а для фотографий и произведений прикладного искус¬
ства — 25 лет после создания произведения.
Конвенция предусматривает исключительное право автора на
перевод, на воспроизведение в любой форме или любым спосо¬
бом, право на публичное исполнение, трансляцию произведения
и др. Кроме имущественных прав за автором признаются личные
(моральные) права, а именно право требовать признания автор¬
ства, право на неприкосновенность произведения.
Бернская конвенция действует с обратной силой и распростра¬
няет свое действие на те произведения, 50-летний срок охраны на
которые не истек. Российская Федерация, присоединяясь к Берн¬
ской конвенции, сделала оговорку о том, что «действие Бернской
конвенции об охране литературных и художественных произведе¬
ний не распространяется на произведения, которые на дату всту¬
пления этой Конвенции в силу для Российской Федерации уже
являются на ее территории общественным достоянием».
234
ADDITIONAL TEXTS
В Конвенции предусмотрены пределы осуществления исклю¬

чительных прав, в частности, в интересах обучения, информа¬
ционных и других целях. В этих случаях произведения может
использоваться без согласия правообладателя.
Рузакова О.А. «Право интеллектуальной собственности»
АВТОРСКИЙ ДОГОВОР
Имущественные права автора, за исключением случаев сво¬
бодного использования, могут передаваться только по авторско¬
му договору (п. 1 ст. 30 Закона об авторском праве). Авторские
договоры являются двусторонними, как правило, консенсуаль-
ными и возмездными. Они заключаются в простой письменной
форме (устная форма допустима для использования произведе¬
ний в периодической печати).
Закон об авторском праве упоминает о двух видах авторских
договоров: о передаче исключительных прав и о передаче неис¬
ключительных прав. Оба они являются авторскими лицензион¬
ными договорами.
Авторский договор должен содержать следующие условия:
способы использования произведения (права, передаваемые по
данному договору); срок и территорию, на которые передается
право; размер вознаграждения за каждый способ использова¬
ния произведения, порядок и сроки его выплаты, а также другие
условия, которые стороны сочтут существенными для данного
договора. В случае недостижения согласия между сторонами по
этим вопросам договор будет считаться незаключенным на осно¬
вании ст. 432 ГК.
Большинство условий авторского договора направлено на за¬
щиту интересов автора как более слабой экономически стороны,
поскольку его контрагентом, как правило, выступает юридиче¬
ское лицо или предприниматель. Поэтому ряд норм ст. 31 Закона
об авторском праве позволяет восполнить возможные пробелы в
содержании авторского договора с тем, чтобы избежать его при¬
знания незаключенным. Так, при отсутствии в договоре условия
о территории, на которую передается право, предполагается, что
это территория Российской Федерации. При отсутствии условия
о сроке, на который передается право, договор может быть рас¬
торгнут автором по истечении 5 лет с даты его заключения.
Все права на использование произведения, прямо не передан¬
ные по авторскому договору, остаются у автора. Требование пря¬
мого указания в договоре перечня правомочий, предоставляемых
235
ADDITIONAL TEXTS
по лицензионному договору, не только защищает автора от про¬

извольного толкования договора его контрагентом, но и указыва¬
ет на возможность дробления передаваемых прав. Автор может,
например, одному контрагенту предоставить право на издание
и распространение, а другому — право на экранизацию. Права,
предоставленные по лицензионному договору, могут передаваться
полностью или частично другим лицам (сублицензия) лишь в слу¬
чае, если это прямо предусмотрено договором (п. 4 ст. 31 Закона
об авторском праве).
О.Н. Садикова «Гражданское право»
НАСЛЕДОВАНИЕ АВТОРСКИХ И СМЕЖНЫХ ПРАВ

Наследники автора вправе заключить договор на использова¬
ние созданного автором произведения. К ним переходят права
и обязанности, касающиеся использования и распространения
произведения по договору, заключенному при жизни автора. На¬
следникам автора принадлежит право охраны неприкосновенно¬
сти произведений после смерти автора.
Также автор вправе указать лицо, на которое он возлагает охра¬
ну неприкосновенности своих произведений после смерти. Это
лицо осуществляет свои полномочия пожизненно. При отсутствии
таких указаний сохранение произведения в том виде, в каком оно
было создано автором, осуществляется его наследниками.
Охрана неприкосновенности произведений является также обя¬
занностью специальных организаций по охране авторских прав.
Не переходят по наследству право авторства, право на имя и
право на защиту репутации автора произведения. Наследники
вправе осуществлять защиту таких прав. Эти правомочия наслед¬
ников сроком не ограничиваются.
Смежные права. Наследникам исполнителя, производителя
фонограммы, организации эфирного или кабельного вещания
переходит право разрешать использование исполнения, поста¬
новки, фонограммы, передачи в эфир или по кабелю и на полу¬
чение вознаграждения в пределах оставшейся части сроков.
Смежные права действуют в течение пятидесяти лет.
К наследникам переходят права на оформление научных от¬
крытий, изобретений и рационализаторских предложений.
В состав наследства входят и исключительные права на объ¬
екты промышленной собственности.
К наследникам переходит исключительное право использова¬
ния изобретения. Они могут получить как патент на изобретение,
236
ADDITIONAL TEXTS
полезную модель, промышленный образец, так и право на их по¬

лучение. Право авторства является неотчуждаемым личным пра¬
вом и охраняется бессрочно. Патент на изобретение действует в
течение двадцати лет, свидетельство на полезную модель — пяти
лет и патент на промышленный образец действует в течение де¬
сяти лет.
Все переходящие по наследству авторские правомочия неза¬
висимо от того, принадлежат ли они самому автору пожизненно
или нет, переходят к наследникам на определенный срок. Про¬
должительность срока и порядок его исчисления различны. Так,
авторское право переходит к наследникам, как правило, на 50 лет,
исчисляемых с 1 января года, следующего за годом смерти автора.
ЖЕНЕВСКАЯ КОНВЕНЦИЯ ОБ ОХРАНЕ ИНТЕРЕСОВ

ПРОИЗВОДИТЕЛЕЙ ФОНОГРАММ ОТ НЕЗАКОННО
ГО ВОСПРОИЗВОДСТВА ИХ ФОНОГРАММ
Конвенция принята 29 октября 1971 г. в Женеве.
Производителями фонограмм, руководствуясь ст. 1 Кон¬
венции, являются физические или юридические лица, которые
первыми сделали запись звуков на фонограмме. Следовательно,
самой фонограммой является любая исключительно звуковая за¬
пись звуков.
Государства-участники Конвенции обязуются охранять инте¬
ресы производителей фонограмм, являющихся гражданами дру¬
гих государств-участников, от производства копий фонограмм
без согласия производителя и от ввоза таких копий, если эти
действия осуществляются с целью их распространения среди пу¬
блики, а также от распространения этих копий среди публики.
Распространением среди публики признается любой акт, посред¬
ством которого копии непосредственно или косвенно предлага¬
ются публике (в целом или в виде любой ее части).
За национальным законодательством государства-участника
сохраняется право определения мер охраны интересов произво¬
дителей фонограмм от незаконного воспроизводства их фоно¬
грамм. Такими мерами могут являться: 1) охрана посредством
предоставления авторского права или другого особого права;
2) охрана посредством законодательства, относящегося к недо¬
бросовестной конкуренции; 3) охрана посредством установления
уголовной ответственности.
Государства — участники Конвенции вправе устанавливать срок
действия охраны интересов производителей фонограмм. Однако
237
ADDITIONAL TEXTS
этот срок не должен быть меньше 20 лет, начиная с конца года,

в котором первая запись фонограммы была сделана или с конца
года, когда она была впервые опубликована (ст. 4 Конвенции).
Конвенцией предоставлено право каждому государству-
участнику определять сферу действия охраны интересов артистов-
исполнителей, выступления которых записаны на фонограмму, а
также определены условия, при которых они могут пользоваться
такой охраной.
Конвенция закрепляет компетенцию Международного бюро
Всемирной организации интеллектуальной собственности
(ВОИС). Так, Международное бюро ВОИС собирает и публику¬
ет информацию, касающуюся охраны фонограмм, предоставляет
любому государству-участнику информацию по вопросам, каса¬
ющимся Конвенции, а также проводит исследования и обеспе¬
чивает обслуживание в целях облегчения осуществления охраны.
Все изложенные функции Международное бюро выполняет в со¬
трудничестве с ООН по вопросам образования, науки и культу¬
ры и Международной организации труда в отношении вопросов,
касающихся их соответствующей компетенции.
UNIT 6 TORT LAW

NUISANCE
A legal action to redress harm arising from the use of one's proper¬
ty. The two types of nuisance are private nuisance and public nuisance.
A private nuisance is a civil wrong; it is the unreasonable, unwar¬
ranted, or unlawful use of one's property in a manner that substantially
interferes with the enjoyment or use of another individual's property,
without an actual trespass or physical invasion to the land. A public
nuisance is a criminal wrong; it is an act or omission that obstructs,
damages, or inconveniences the rights of the community.
Public Nuisance
The term public nuisance covers a wide variety of minor crimes
that threaten the health, morals, safety, comfort, convenience, or wel¬
fare of a community. Violators may be punished by a criminal sen¬
tence, a fine, or both. A defendant may also be required to remove a
nuisance or to pay the costs of removal. For example, a manufacturer
who has polluted a stream might be fined and might also be ordered
to pay the cost of cleanup. Public nuisances may interfere with public
238
ADDITIONAL TEXTS
health, such as in the keeping of diseased animals or a malarial pond.

Public safety nuisances include shooting fireworks in the streets, stor¬
ing explosives, practicing medicine without a license, or harboring
a vicious dog. Houses of prostitution, illegal liquor establishments,
gaming houses, and unlicensed prizefights are examples of nuisances
that interfere with public morals. Obstructing a highway or creating a
condition to make travel unsafe or highly disagreeable are examples of
nuisances threatening the public convenience.
Some nuisances can be both public and private in certain circum¬
stances where the public nuisance substantially interferes with the use
of an individual's adjoining land. For example, pollution of a river
might constitute both a public and a private nuisance. This is known
as a mixed nuisance.
Private Nuisance
A private nuisance is an interference with a person's enjoyment
and use of his land. The law recognizes that landowners, or those in
rightful possession of land, have the right to the unimpaired condition
of the property and to reasonable comfort and convenience in its oc¬
cupation.
Examples of private nuisances abound. Nuisances that interfere
with the physical condition of the land include vibration or blasting
that damages a house; destruction of crops; raising of a water table;
or the pollution of soil, a stream, or an underground water supply.
Examples of nuisances interfering with the comfort, convenience, or
health of an occupant are foul odors, noxious gases, smoke, dust, loud
noises, excessive light, or high temperatures. Moreover, a nuisance
may also disturb an occupant's mental tranquility, such as a neighbor
who keeps a vicious dog, even though an injury is only threatened and
has not actually occurred.
West's Encyclopedia of American Law
NEGLIGENCE
Conduct that falls below the standards of behavior established by
law for the protection of others against unreasonable risk of harm. A
person has acted negligently if he or she has departed from the con¬
duct expected of a reasonably prudent person acting under similar
circumstances.
In order to establish negligence as a cause of action under the law
of torts, a plaintiff must prove that the defendant had a duty to the
plaintiff, the defendant breached that duty by failing to conform to the
239
ADDITIONAL TEXTS
required standard of conduct, the defendant's negligent conduct was

the cause of the harm to the plaintiff, and the plaintiff was, in fact,
harmed or damaged.
The concept of negligence developed under English Law. Although
English common law had long imposed liability for the wrongful acts
of others, negligence did not emerge as an independent cause of ac¬
tion until the eighteenth century. Another important concept emerged
at that time: legal liability for a failure to act. Originally liability for
failing to act was imposed on those who undertook to perform some
service and breached a promise to exercise care or skill in performing
that service. Gradually the law began to imply a promise to exercise
care or skill in the performance of certain services. This promise to
exercise care, whether express or implied, formed the origins of the
modern concept of "duty." For example, innkeepers were said to have
a duty to protect the safety and security of their guests.
The concept of negligence passed from Great Britain to the United
States as each state (except Louisiana) adopted the common law of
Great Britain (Louisiana adopted the civil law of France). Although
there have been important developments in negligence law, the basic
concepts have remained the same since the eighteenth century. Today
negligence is by far the widest-ranging tort, encompassing virtually
all unintentional, wrongful conduct that injures others. One of the
most important concepts in negligence law is the "reasonable person,"
which provides the standard by which a person's conduct is judged.
DEFAMATION
Any intentional false communication, either written or spoken,
that harms a person's reputation; decreases the respect, regard, or
confidence in which a person is held; or induces disparaging, hostile,
or disagreeable opinions or feelings against a person.
Defamation may be a criminal or civil charge. It encompasses both
written statements, known as libel, and spoken statements, called slander.
The probability that a plaintiff will recover damages in a defama¬
tion suit depends largely on whether the plaintiff is a public or private
figure in the eyes of the law. The public figure law of defamation was
first delineated in New York Times v. Sullivan. I n Sullivan, the plain¬
tiff, a police official, claimed that false allegations about him appeared
in the New York Times, and sued the newspaper for libel. The Su¬
preme Court balanced the plaintifPs interest in preserving his reputa-
tion against the public's interest in freedom of expression in the area of
240
ADDITIONAL TEXTS
political debate. It held that a public official alleging libel must prove
actual malice in order to recover damages. The Court declared that the
first amendment protects open and robust debate on public issues even
when such debate includes "vehement, caustic, unpleasantly sharp at¬
tacks on government and public officials." A public official or other
plaintiff who has voluntarily assumed a position in the public eye must
prove that defamatory statements were made with knowledge that they
were false or with reckless disregard of whether they were false.
Where the plaintiff in a defamation action is a private citizen who
is not in the public eye, the law extends a lesser degree of constitu¬
tional protection to defamatory statements. Public figures voluntarily
place themselves in a position that invites close scrutiny, whereas pri¬
vate citizens who have not entered public life do not relinquish their
interest in protecting their reputation. In addition, public figures have
greater access to the means to publicly counteract false statements
about them. For these reasons, a private citizen's reputation and pri¬
vacy interests tend to outweigh free speech considerations and deserve
greater protection from the courts.
Distinguishing between public and private figures for the purposes
of defamation law is sometimes difficult. For an individual to be con¬
sidered a public figure in all situations, the person's name must be so
familiar as to be a household word — for example, Michael Jordan.
Because most people do not fit into that category of notoriety, the
Court recognized the limited- purpose public figure, who is voluntar¬
ily injected into a public controversy and becomes a public figure for
a limited range of issues. Limited- purpose public figures, like public
figures, have at least temporary access to the means to counteract false
statements about them. They also voluntarily place themselves in the
public eye and consequently relinquish some of their privacy rights.
For these reasons, false statements about limited-purpose public fig¬
ures that relate to the public controversies in which those figures are
involved are not considered defamatory unless they meet the actual-
malice test set forth in Sullivan.
Determining who is a limited-purpose public figure can also be prob¬
lematic. In Time, Inc. v. Firestone, the Court held that the plaintiff, a
prominent socialite involved in a scandalous divorce, was not a public
figure because her divorce was not a public controversy and because she
had not voluntarily involved herself in a public controversy. The Court
recognized that the divorce was newsworthy, but drew a distinction
between matters of public interest and matters of public controversy. In
Hutchinson v. Proxmire, the Court determined that a scientist whose
federally supported research was ridiculed as wasteful by Senator
241
ADDITIONAL TEXTS
William Proxmire was not a limited-purpose public figure because he

had not sought public scrutiny in order to influence others on a matter
of public controversy, and was not otherwise well-known.
THEORIES OF LIABILITY
In most jurisdictions, a plaintiff 's cause of action may be based on
one or more of four different theories: negligence, breach of warranty,
misreprsentation, and strict tort liability.
Negligence refers to the absence of, or failure to exercise, proper or
ordinary care. It means that an individual who had a legal obligation
either omitted to do what should have been done or did something
that should not have been done.
A manufacturer can be held liable for negligence if lack of reason¬
able care in the production, design, or assembly of the manufacturer's
product caused harm. For example, a manufacturing company might
be found negligent if its employees did not perform their work prop¬
erly or if management sanctioned improper procedures and an unsafe
product was made.
Breach of warranty refers to the failure of a seller to fulfill the terms
of a promise, claim, or representation made concerning the quality or
type of the product. The law assumes that a seller gives certain war¬
ranties concerning goods that are sold and that he or she must stand
behind these assertions. Misrepresentation in the advertising and sales
promotion of a product refers to the process of giving consumers false
security about the safety of a particular product, ordinarily by draw¬
ing attention away from the hazards of its use. An action lies in the
intentional concealment of potential hazards or in negligent misrep¬
resentation.
The key to recovery on the basis of misrepresentation is the plain¬
tiff 's ability to prove that he relied upon the representations that
were made. Misrepresentation can be argued under a theory of breach
of express warranty or a theory of strict tort liability. Strict liability
involves extending the responsibility of the vendor or manufacturer
to all individuals who might be injured by the product, even in the
absence of fault. Injured guests, bystanders, or others with no direct
relationship to the product may sue for damages caused by the prod¬
uct. An injured party must prove that the item was defective, the defect
proximately caused the injury, and the defect rendered the product
unreasonably dangerous.
242
ADDITIONAL TEXTS
ОСНОВАНИЕ И УСЛОВИЯ ВОЗНИКНОВЕНИЯ

ОБЯЗАТЕЛЬСТВ И З П Р И Ч И Н Е Н И Я ВРЕДА
Общим и обязательным основанием возникновения любого
обязательства из причинения вреда является факт причинения
вреда имуществу гражданина или юридического лица либо неи¬
мущественным благам гражданина.
Возникновение вреда называют также основанием ответ
ственности за его причинение; при этом указывают, что сама от
ветственность применяется при наличии определенных условий,
образующих состав гражданского правонарушения.
Вред представляет собой неблагоприятные последствия, воз¬
никающие в имущественной или неимущественной сфере по¬
терпевшего. Вред может быть выражен в утрате, уничтожении
или повреждении имущества, неполучении прибыли, дохода, на¬
рушении (ограничении) личных неимущественных прав, умале¬
нии нематериальных благ, в том числе вследствие перенесенных
нравственных или физических страданий.
Вред может быть причинен имуществу (имущественный вред)
или личности. В случае причинения вреда личности, в том числе
таким нематериальным благам, как жизнь и здоровье, возмеще¬
нию подлежит имущественный вред в виде расходов на восста¬
новление здоровья и имущественной сферы потерпевшего, со¬
кратившейся в результате утраты здоровья. Иначе обстоит дело,
если возмещается моральный вред, вызванный нравственными,
физическими страданиями, не имеющими материального эк¬
вивалента. Его компенсация способна лишь помочь загладить
перенесенные страдания, создать у потерпевшего ощущение вос¬
становленной справедливости.
Помимо вреда, являющегося основанием возникновения де-
ликтного обязательства, существуют и иные условия применения
ответственности за возмещение вреда: это противоправность по¬
ведения причинителя, причинно-следственная связь между его
поведением и возникшим вредом, а также вина причинителя.
Перечисленные условия признаются общими, поскольку их на¬
личие требуется во всех случаях, если иное не установлено зако¬
ном. Если же иное установлено, говорят о специальных условиях
ответственности. К таковым, например, относятся случаи при¬
чинения вреда источником повышенной опасности, владелец
которого отвечает независимо от вины.
Садиков О.Н. «Гражданское право»
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ADDITIONAL TEXTS
НЕОСТОРОЖНОСТЬ
Неосторожность — самостоятельная форма вины. Преступле¬
нием, совершенным по неосторожности, признается деяние, со¬
вершенное по легкомыслию или небрежности.
Неосторожная вина возможна при совершении преступлений
с материальным составом.
Преступление признается совершенным по легкомыслию,
если лицо предвидело возможность наступления обществен¬
но опасных последствий своих действий (бездействия), но без
достаточных к тому оснований самонадеянно рассчитывало на
предотвращение этих последствий.
Преступление признается совершенным по небрежности,
если лицо не предвидело возможности наступления обществен¬
но опасных последствий своих действий (бездействия), хотя при
необходимой внимательности и предусмотрительности должно
было и могло предвидеть эти последствия.
При совершении преступления по легкомыслию субъект,
как и при косвенном умысле, предвидит возможность наступле¬
ния общественно опасных последствий. Однако при косвенном
умысле он, не желая их наступления, допускает их или относится
к их наступлению с безразличием, а при легкомысленной вине
лицо рассчитывает самонадеянно на их предотвращение.
В волевом моменте небрежности выделяются два критерия:
объективный и субъективный.
К объективному критерию небрежности относится то, что
лицо при внимательности и предусмотрительности должно было
предвидеть возможность наступления последствий. Данная обя¬
занность может основываться на законе, должностном статусе,
профессиональных функциях. Необходимо также установить,
имело ли лицо в данном случае реальную возможность предви¬
деть наступление последствий, что определяется особенностями
ситуации, в которой совершается преступление, индивидуаль¬
ными качествами данного лица. Объективный критерий может
обусловливаться родом деятельности человека, его опытом, зна¬
ниями.
Субъективный критерий выражается в том, что лицо при
необходимой внимательности может предвидеть общественно
опасное последствие и предотвратить его. Способность предви¬
деть последствия у людей неодинакова и определяется уровнем
образования, особенностями психики, наличием жизненного
опыта, состоянием здоровья.
244
ADDITIONAL TEXTS
Единство объективного и субъективного критерия свидетель¬

ствует о наличии небрежности. Если отсутствует хотя бы один из
критериев, то исключается сама небрежность как форма вины.
В О З М Е Щ Е Н И Е УЩЕРБА
Возмещение ущерба — компенсация в денежной форме за
утрату или повреждение, нарушение контракта, гражданское
правонарушение или нарушение прав. Решение о выплате ком¬
пенсации является попыткой возврата пострадавшей стороне в
то положение, которое она занимала до того, как произошло
нанесшее ей ущерб событие.
В целом компенсацию ущерба, которую можно подсчитать в
денежном выражении, называют заранее оцененными убытками.
К ним относятся и случаи, когда можно дать оценку ущерба,
который понесет одна из сторон, если другая сторона нарушит
контракт. Если предполагаемое нарушение контракта произой¬
дет, за нарушение должна будет выплачиваться определенная
сумма денег, но не больше и не меньше. Другой формой оценен¬
ных убытков являются законодательно оцененные убытки (ком¬
пенсация, положенная по закону).
Общее возмещение ущерба — это компенсация за обычный
ущерб, т.е. ущерб, который может возникнуть в какой-либо опре¬
деленной ситуации. Этот ущерб подлежит возмещению по реше¬
нию о компенсации, вынесенному на основании подачи жалобы на
неправильные действия, которые имели или, вероятно, будут иметь
негативные последствия даже без подачи специального иска.
Предусматривается также особое возмещение ущерба — воз¬
мещение пострадавшей стороне упущенных доходов на основа¬
нии отдельного иска с доказательством упущенной выгоды.
Номинальное и ничтожное возмещение ущерба — незначитель¬
ная компенсация, назначаемая в тех случаях, когда у суда скла¬
дывается мнение, что хотя права истца и были нарушены, он не
понес каких-либо реальных убытков или, хотя фактические убытки
имеют место, они возникли в результате действий самого истца.
Решение о компенсации сопровождается распоряжением о
возмещении каждой из сторон судебных издержек. Существуют
возмещение ущерба в виде наказания ответчика, которые являют¬
ся не только компенсацией за ущерб, но одновременно и наказа¬
нием стороны, действия которой нанесли ущерб. Это возмещение
ущерба выносится в тех случаях, когда сторона, нанесшая ущерб,
245
ADDITIONAL TEXTS
сделала это преднамеренно или в результате своих неправильных

действий получила финансовый доход. Сумма возмещения ущер¬
ба в этом случае больше той суммы, которая была бы выплачена в
виде чистой компенсации ущерба.
Иногда судом признается, что такой ущерб или убытки ожидают¬
ся в далеком будущем и, следовательно, не подлежат возмещению.
В О З М Е Щ Е Н И Е ВРЕДА
Возмещение вреда — форма внедоговорной ответственности,
которая предусматривает возмещение причиненного вреда по¬
терпевшему.
Возмещение вреда осуществляется гражданами, достигшими
возраста 18 лет, а также несовершеннолетними в возрасте от 14
до 18 лет, действия которых нанесли ущерб. В некоторых случаях
В. В. возлагается на лица, которые не являются причинителями
этого вреда.
Обязательства по возмещению вреда возникают при:
1) наличии вреда (имущественного или морального), который
причинен имуществу гражданина, юридического лица или лич¬
ности гражданина;
2) противоправном характере действий нарушителя;
3) наличии связи между действиями нарушителя и причинен¬
ным вредом;
4) налицо вина причинителя вреда, выраженная в форме
умысла или неосторожности.
От ответственности по возмещению вреда лицо освобождает¬
ся, если им будет доказано причинение вреда не по своей вине.
Вред, причиненный несколькими лицами, подлежит солидар¬
ному возмещению вреда. Если один из причинителей возместит
весь вред, то он имеет право регрессного требования в размере,
соответствующем степени вины каждого из оставшихся причи-
нителей.
Возмещение вреда причинителем не предусматривается, если
вред возник в результате действия непреодолимой силы.
Возмещение вреда должно привести в восстановленное поло¬
жение потерпевшего. Если это сделать невозможно, то он возме¬
щается в денежном выражении, при этом учитываются реальный
ущерб и упущенная выгода.
Размер возмещения вреда может быть судом уменьшен, учи¬
тывая:
246
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1) вину потерпевшего;
2) имущественное положение причинителя;
3) что действия причинителя не носили умышленного характера.
Увеличение размера возмещение вреда жизни или здоровью
предусматривается законом или договором.
ДЕЛИКТ
Деликт (правонарушение) — антиобщественное деяние, при¬
чиняющее вред обществу и караемое по закону, за него законом
предусматривается гражданская, административная, дисципли¬
нарная и уголовная ответственность.
Подразделяются деликты на:
1) гражданские. Установленные нормами гражданского права
юридические последствия неисполнения или ненадлежащего ис¬
полнения лицом своих обязанностей, связанных с нарушением
субъективных гражданских прав другого лица. Ответственность
заключается в применении к правонарушителю в интересах дру¬
гого лица установленных законом или договором мер воздей¬
ствия, влекущих для должника экономически невыгодные по¬
следствия имущественного характера (возмещение вреда, уплату
неустойки), или может выражаться и в применении к наруши¬
телю неимущественных санкций (например, требования опро¬
вергнуть распространявшиеся им сведения, порочащие честь и
достоинство граждан и организаций);
2) административные. К административной ответственности
виновные привлекаются на основании законодательства, дей¬
ствующего во время и по месту совершения правонарушения;
3) дисциплинарные проступки (прогул и т.п.). Ответствен¬
ность заключается в наложении дисциплинарного взыскания.
При наложении взыскания учитываются объяснения нарушите¬
ля, тяжесть совершенного проступка, обстоятельства, при кото¬
рых он совершен, предшествующая работа и поведение.
Дисциплинарные взыскания: а) замечание; б) выговор;
в) строгий выговор; г) увольнение с работы; 4) уголовные.
Наиболее опасный вид — преступление. Правовое последствие
совершения преступления заключается в применении к виновно¬
му государственного принуждения в форме наказания. Привле¬
чение к ответственности означает возбуждение уголовного дела,
последующее расследование и судебное разбирательство. У совер¬
шившего преступление возникает, с одной стороны, обязанность
247
ADDITIONAL TEXTS
нести ответственность, а с другой — право на ограничение этой

ответственности только пределами, установленными законом для
данного вида деяний. Ответственность наступает также за при¬
готовление к преступлению, за покушение на преступление, за
соучастие в преступлении.
UNIT 7 FAMILY LAW

H I S T O R I C A L BACKGROUND
Most of the changes made in family law in the late twentieth century
have been based on overturning concepts of marriage, family, and gen
der that go back to European feudalism, canon (church) law, and cus
tom. During Anglo- Saxon times in England, marriage and divorce were
private matters. Following the Norman conquest in 1066, however, the
legal status of a married woman was fixed by common law, and canon
law prescribed various rights and duties. The result was that the identity
of the wife was merged into that of the husband; he was a legal person
but she was not. Upon marriage, the husband received all the wife's per¬
sonal property and managed all the property owned by her. In return,
the husband was obliged to support the wife and their children.
This legal definition of marriage continued in the United States un¬
til the middle of the nineteenth century, when states enacted married
women's property acts. These acts conferred legal status upon wives and
permitted them to own and transfer property in their own right, to sue
and be sued, and to enter into contracts. Although these acts were sig¬
nificant advances, they dealt only with property a woman inherited. The
husband, by placing title in his name, could control most of the assets
acquired during marriage, thus forcing the wife to rely on his bounty.
Divorce law has also changed over time. In colonial America, divorce
was extremely rare. This was partly because obtaining a divorce decree
required legislative action, a process that was time-consuming and costly.
Massachusetts in 1780 was the first state to allow judicial divorce. By
1900, every state except South Carolina provided for judicial divorce.
Even with availability, divorce remained a highly conflicted area of
law. The Catholic Church labeled divorce a sin, and Protestant denomi¬
nations saw it as a mark of moral degeneration. The adversarial proc¬
ess presented another roadblock to divorce. In the nineteenth century,
consensual divorce was not known. For a couple to obtain a divorce,
one party to the marriage had to prove that the other had committed a
248
ADDITIONAL TEXTS
wrong of such weight that the marriage must be ended. The need to find
fault was a legacy of family law that was not changed until the 1970s.
Finally, the issue of divorce raised the topic of child custody. Tra¬
ditionally, fathers retained custody of their children. This tradition
weakened in the nineteenth century, as judges fashioned two doctrines
governing child custody. The "best-interests-of-the-child" doctrine
balanced a new right of the mother to custody of the child against
the assessment of the needs of the child. The "tender years" doctrine
arose after the Civil War, giving mothers a presumptive right to their
young children.
James J. Ponzetti, Jr. International Encyclopedia of Marriage and Family
REQUIREMENTS OF GETTING MARRIED

The requirements of getting married are simple, although they vary
from state to state. In general, a man and woman wishing to marry must
obtain a license in the state in which they wish to be married, usually
from a county clerk or a clerk of court. The fee usually is low.
Many states require the man and woman to have blood tests for
venereal disease-but generally not for AIDS-before the license is is-
sued. Some states do not require this test if the two already have been
living together. I f the test shows that a would-be spouse has a venereal
disease, certain states will not issue a license. Other states will allow
the marriage as long as the couple knows the disease is present.
In some states, the couple must show proof of immunity or vac¬
cination for certain diseases. A few states demand a general physical
examination.
I f one or both of the parties have been married before, the earlier
marriage must have been ended by death, divorce, or annulment (al¬
though in some states, if a marriage was never valid, a legal action for
annulment may not be necessary).
Parties who wish to marry must have the capacity to do so. That
means the man and woman must understand that they are being mar¬
ried and what it means to be married. I f because of drunkenness, men¬
tal illness, or some other problem, one of the parties lacks capacity,
the marriage will not be valid.
Close blood relatives cannot marry, although in some states, first cous¬
ins can marry. Of the states that allow first cousins to marry, a few also
require that one of the cousins no longer be able to conceive children.
Most, but not all, states require a waiting period, generally one to
five days, between the time the license is issued and the time of the
marriage ceremony. The purpose of the waiting period is to give a
249
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short time to cool off during which the parties can change their minds
if they wish. The waiting period can be waived for good reason. For
example, if the groom is arriving in the bride's town only one day
before the wedding, but the state has a three-day waiting period, the
waiting period probably can be waived by a judge or clerk of court.
In almost all states, a man or woman may marry at age eighteen
without parental consent. Most states also allow persons age sixteen
and seventeen to marry with consent of their parents or a judge.
A marriage that is valid in the state or country where it was per¬
formed generally will be considered valid in a state or country to which
the couple later moves, unless the marriage is considered to violate a
fundamental policy of the state to which the couple has moved.
http://public.findlaw.com/bookshelf-mdf/mdf-2-2.html
REASONS F O R P R E M A R I T A L A G R E E M E N T S
People intending to marry use premarital agreements for several rea¬
sons, some of which may be interrelated. Premarital agreements help
clarify the parties' expectations and rights for the future. The agreements
may avoid uncertainties and fears about how a divorce court might di¬
vide property and decide spousal support if the marriage fails.
A man or woman who wants a future spouse to sign a premarital
agreement often has something he or she wants to protect, usually
money. One or both partners may want to avoid the risk of a major
loss of assets, income, or a family business in the event of a divorce.
People marrying for a second or third time also might desire to make
sure that certain assets or personal belongings are passed on to the chil¬
dren or grandchildren of prior marriages rather than to a current spouse.
The less wealthy spouse generally is giving something up by signing
a premarital agreement. That spouse (as well as the other spouse) is
agreeing to have his or her property rights determined by the agree¬
ment rather than by the usual rules of law that a court would apply
on divorce or death. As will be discussed later (see chapter 10), courts
have rules for dividing property when a couple divorces. In some states
(such as California), courts automatically divide equally the property
acquired by the husband and wife during the marriage. In most states,
courts divide property as the court considers fair, and the result is less
predictable. The split could be fifty-fifty or something else.
If one spouse dies, courts normally follow the instructions of that
person's will, but under state laws the surviving spouse usually is en¬
titled to one-third to one-half of the estate regardless of what the
deceased spouse's will says. I f the husband and wife have signed a
250
ADDITIONAL TEXTS
valid premarital agreement, however, that agreement will supersede the

usual laws for dividing property and income upon death. In many cases,
the less wealthy spouse will receive less under the premarital agreement
than he or she would receive under the usual laws of divorce or wills.
I f the less wealthy spouse will receive less under the agreement
than under the general laws of divorce and death, why does he or she
choose to sign the agreement? The answer to that question depends
on the individual.
Some people prefer to control their fiscal relationship rather than to
leave it to state regulation. They may want to avoid uncertainty about
what a court might decide if the marriage ends in divorce. For some, the
answer may be "love conquers all" — the less wealthy person may just
want to marry the other person and not care much about the financial
details. For others, the agreement may provide ample security, even if
it is not as generous as a judge might be. Still others may not like the
agreement, but they are willing to take their chances and hope the rela¬
tionship and the financial arrangements work out for the best.
http://public.findlaw.com/bookshelf-mdf/mdf-2
ADOPTION
Two standard models of adoption exist. In one model, found in
Anglo-American jurisprudence and other legal systems, the effect of
adoption is that the biological parent's rights and duties end with
respect to the adoptee. These rights and duties are acquired by the
adoptive parents. Thus, the biological parents cease to owe the adoptee
a duty of support, and this duty is imposed on the adoptive parents.
Similarly, normally the adoptee loses the right to inherit from a bio¬
logical parent who dies leaving no will, but acquires such a right to
inherit from the adoptive parent. In the second model, a complete
severance of the legal relationship between the adoptee and his or her
biological parent does not occur. Instead, as in Turkey, the adoptee
acquires some rights and duties with respect to the adoptive parent,
but retains others with respect to a biological parent.
In some countries, both models may co-exist. This occurs notably
in Europe, as in Bosnia and Herzegovina and Portugal, and in those
countries whose legal traditions flow from Europe, as in Argentina, Co¬
lombia, and other countries in Central and South America. The model
used in any given adoption may depend on the purpose behind the
adoption or the circumstances of the adoptive and biological parents
and the adoptee. For example, in Scotland, when a biological parent
remarries and the adoption is by the stepparent, the legal relationship
251
ADDITIONAL TEXTS
with the other biological parent may not terminate completely even
though a legal relationship with the adoptive parent is established. This
approach is often followed in the United States. Thus, the adoptee
may be entitled to support from both the biological parents and the
adoptive parent. Similarly, the adoptee may be entitled to inherit from
both the adoptive parent and perhaps his or her relatives, as well as
from the biological parents and their relatives.
Islamic jurisprudence generally does not permit formal adoption.
However, some Islamic countries such as Somalia and Tunisia per¬
mit adoption. Adoption is also possible in some circumstances among
Muslims in South Asia.
In some countries, the applicable family law rules may be deter¬
mined by factors such as the individual's citizenship, clan member¬
ship, or religion. Accordingly, in a given country, adoption rules may
vary with the individuals involved, and indeed, may not be available
to some individuals at all. Thus, in India, the availability of adop¬
tion is controlled by an individual's religion. Statute permits adop¬
tion among a broadly defined group of Hindus. The law, however,
does not apply to those who are Muslim, Christian, Parsi, or Jew by
religion. Ordinarily, these individuals cannot formally adopt a child,
although some of the objectives of adoption can be achieved using
the laws of guardianship or the rules regulating the distribution of
property by will.
James J. Ponzetti, Jr. "International Encyclopedia
of Marriage and Family"
БРАЧНЫЙ ДОГОВОР
Брачный договор — соглашение лиц, вступающих в брак, или
соглашение супругов, определяющее имущественные права и обя¬
занности супругов в браке и (или) в случае его расторжения.
Появление в семейном законодательстве брачного договора
не означает, что все лица при вступлении в брак или в период
брака обязаны заключать такой договор. Закон лишь предостав¬
ляет будущим супругам и супругам право самостоятельно опреде¬
лять в брачном договоре свои имущественные взаимоотношения
в браке, но не обязывает их к этому.
Заключение брачного договора позволит супругам избежать
споров, которые часто возникают после прекращения брака.
Брачный договор может быть заключен как до государствен¬
ной регистрации заключения брака, так и в любое время в пе¬
риод брака.
252
ADDITIONAL TEXTS
Субъектами брачного договора могут быть только лица, вступа

ющие в брак, и супруги. В случаях, когда брачный договор заклю¬
чается лицами перед вступлением в брак, он вступает в силу только
с момента заключения брака. Если брак не будет заключен, договор
аннулируется. Таким образом, заключение Б. Д. до вступления в
брак можно рассматривать как договор с отлагательным условием.
Брачный договор может быть заключен на определенный срок
или бессрочно. Он может поставить возникновение некоторых
правоотношений в зависимость от определенных обстоятельств,
например рождения детей.
Брачный договор заключается в письменной форме и подле¬
жит нотариальному удостоверению.
Круг вопросов по поводу имущества супругов, которые мож¬
но урегулировать в брачном договоре, не ограничивается зако¬
нодательством.
В брачном договоре супруги вправе изменить установлен¬
ный законом режим совместной собственности, установить ре¬
жим совместной, долевой или раздельной собственности на все
имущество супругов, на его отдельные виды или на имущество
каждого из супругов.
Право изменить установленный законом режим собственно¬
сти как в отношении добрачного имущества, так и в отношении
имущества, нажитого в браке, и определить, что на добрачное
имущество супругов или на отдельные его объекты будет распро¬
страняться режим общей — совместной или долевой — собствен¬
ности, принадлежит самим супругам. Имущество, нажитое ими
в браке, может по брачному договору считаться находящимся в
долевой или раздельной собственности супругов. Эти положения
могут применяться не ко всему нажитому в браке имуществу, а
лишь к отдельным его видам. Они могут относиться как к иму¬
ществу, находящемуся в собственности супругов, так и к дохо¬
дам и предметам, которые будут приобретены в будущем.
РАСТОРЖЕНИЕ БРАКА
Согласно российскому законодательству расторжение брака
производится либо в судебном порядке, либо в органах загса. В ор¬
ганах загса можно расторгнуть брак по взаимному согласию супру¬
гов, не имеющих общих несовершеннолетних детей, а также в не¬
которых других случаях, предусмотренных законом. При наличии
несовершеннолетних детей или при отсутствии согласия одного из
супругов на расторжение брака необходимо обращаться в суд.
253
ADDITIONAL TEXTS
Расторжение брака между российскими и иностранными

гражданами или лицами без гражданства, а также между ино¬
странными гражданами на территории РФ происходит в со¬
ответствии с законодательством России. В этих случаях при¬
менение права страны гражданства супругов-иностранцев не
предусмотрено.
Согласно п. 2 ст. 160 СК РФ российский гражданин, про¬
живающий за пределами территории России, вправе расторгнуть
брак с проживающим за пределами территории России супругом
независимо от его гражданства в суде РФ. Таким образом, воз¬
можно расторжение в российском суде брака российского граж¬
данина с иностранцем, проживающим за границей. Введение
этого правила в российское законодательство объясняется рядом
причин, в частности тем, что в некоторых странах иностранцы
лишены права обращаться в суд с иском о расторжении брака.
Российский суд рассматривает дела о расторжении брака
гражданина РФ с иностранцем и в тех случаях, когда оба супруга
проживают за границей. Кроме того, в российском суде возмож¬
но рассмотрение дела о разводе супругов — российских граждан
и в тех случаях, когда они оба проживают за границей.
Суды рассматривают дела о расторжении брака при наличии
иностранного элемента по тем же правилам, что и при расторже¬
нии браков между гражданами, проживающими в России. Обыч¬
но такие дела рассматриваются в присутствии обоих супругов.
В исключительных случаях суды могут рассматривать дела
и в отсутствие в судебном заседании одного из супругов. Так,
суд может по иску проживающего в России лица рассматривать
дело о расторжении брака с иностранцем, проживающим за гра¬
ницей. Дело может быть рассмотрено в отсутствие ответчика-
иностранца при условии, что будут обеспечены его процессуаль¬
ные права. Ответчику направляются извещение о слушании дела
и другие судебные документы. Это служит гарантией соблюде¬
ния прав иностранца, который может принять меры для защиты
своих интересов.
Богуславский М.М. «Международное частное право»
ФОРМА И ПОРЯДОК ЗАКЛЮЧЕНИЯ БРАКА

Государства можно разделить на группы в зависимости от требо
ваний, которые предъявляются к форме брака в этих государствах:
1) страны, где официально признается только брак, зареги¬
стрированный в государственных органах (например, Франция,
254
ADDITIONAL TEXTS
Бельгия, Швейцария, Голландия);

2) страны, в которых признаются и гражданские, и церковные
браки: право выбора между ними принадлежит вступающим в брак
(Англия, Бразилия, Швеция, Норвегия, Дания, Австралия и др.);
3) страны, где заключение брака возможно лишь в церковной
форме (к примеру, Андорра, Лихтенштейн, Кипр, Греция);
4) страны, где возможны «браки по общему праву» (некото¬
рые штаты США, ряд провинций Канады). Для заключения та¬
кого брака не требуется каких-либо формальностей. Достаточ¬
но лишь, чтобы стороны добровольно изъявили желание стать
мужем и женой и в действительности вступили в фактические
супружеские отношения.
В то время как, скажем, в Англии брачный обряд может быть
совершен через 48 часов после подачи заявления, во многих дру
гих странах браку предшествует процедура «оглашения», обеспе¬
чивающая гласность брака и представляющая возможность всем
заинтересованным лицам заявить свои возражения. Эта процеду¬
ра состоит в оглашении имен вступающих в брак, которое произ¬
водится в церкви, если брак церковный, или в государственных
органах, осуществляющих государственную регистрацию, если
брак заключается в гражданской форме. В Италии такое «оглаше¬
ние» производится за восемь дней до церемонии, во Франции —
за десять. Законодательство Франции предусматривает не только
десятидневный срок, но и опубликование фамилий, профессии,
места жительства и места пребывания будущих супругов, а также
места, где должен быть совершен брак. Если в течение года с
момента окончания срока оглашения брак не был заключен, то
он может быть совершен только после новой публикации.
В США в каждом штате действуют собственные правила о
процедуре вступления в брак. Единым для всех штатов являет¬
ся требование о получении разрешения на брак (лицензии) чи¬
новника муниципалитета. При выдаче лицензии проверяется
достижение лицами, вступающими в брак, брачной дееспособ¬
ности (брачного возраста), наличие согласия третьих лиц, если
оно требуется по закону штата (например, в Техасе такое со¬
гласие требуется для женщин с 14 до 18 лет, для мужчин с 16 до
21 года). В большинстве штатов бракосочетание совершается на
основании лицензии, выданной судьей, чиновником муниципа¬
литета, священником — по выбору вступающих в брак. Однако
есть штаты, где браки совершаются только духовными лицами
(Делавэр, Мэриленд, Виргиния).
255
ADDITIONAL TEXTS
ОТВЕТСТВЕННОСТЬ СУПРУГОВ
ПО ОБЯЗАТЕЛЬСТВАМ
Ответственность по своим личным обязательствам супруги не¬
сут как имуществом каждого из них, так и общим имуществом.
Законодательством, регулирующим семейные правоотношения,
установлено, что по обязательствам одного из супругов взыскание
может быть наложено лишь на имущество этого супруга, однако
в случае недостаточности этого имущества кредитор может тре¬
бовать выдела доли супруга-должника, которая причиталась бы
супругу-должнику при разделе общего имущества супругов, для
обращения на нее взыскания. Если же обязательство супруга воз¬
никло или связано с его долгом до вступления в брак или принято
им на себя хоть и во время брака, но в целях удовлетворения толь¬
ко своих интересов или имеет целью покрыть расходы, необходи¬
мые для сохранения или улучшения лишь ему принадлежащего
имущества — по таким обязательствам супруг отвечает только
принадлежащим ему имуществом. В случае, если будет установ¬
лено, что полученное по обязательствам имущество было исполь¬
зовано на нужды семьи, взыскание обращается на имущество,
находящееся в общей собственности супругов. Обязательствами
лишь одного, а не обоих супругов являются и те, которые непо¬
средственно связаны с его личностью. По таким обязательствам
другой супруг не несет никакой ответственности.
Супруг обязан уведомлять своих кредиторов о заключении,
изменении или расторжении брачного договора, в свою очередь
кредиторы супруга-должника могут требовать изменения усло¬
вий или расторжения заключенного между ними договора в свя¬
зи с существенно изменившимися обстоятельствами.
Взыскание может быть обращено на общее имущество супру¬
гов или его часть в случаях, когда установлено судом, что общее
имущество супругов было приобретено или увеличено за счет
средств, полученных одним из супругов преступным путем. Раз¬
личают два случая:
1) взыскание имущества в возмещение ущерба, причиненного
преступлением одного супруга, за счет их имущества, находяще¬
гося в их общей собственности;
2) конфискацию имущества супруга в виде наказания за со¬
вершенное преступление. Конфискация может распространяться
на долю супруга в общем имуществе, однако она не распростра¬
няется на долю другого супруга в общей собственности.
256
ADDITIONAL TEXTS
UNIT 8 ARBITRATION
INTERNATIONAL ARBITRATION
International arbitration can refer to practices involving either com¬
mercial disputes or disputes between states. The practice for states,
exemplified by disputes about borders, are ad hoc and infrequently
invoked. Of much more practical relevance at the beginning of the
twenty-first century is the system of private justice created to resolve
international business disputes, which has become the standard system
for international transactions. When two businesses with headquarters
in different countries enter into a contractual arrangement, the contract
will generally provide that any disputes relating to the contract will be
resolved through private arbitration. It is the default arrangement. In¬
ternational commercial arbitration involves hundreds of international
commercial arbitration centers competing to have the most prominent
rosters of arbitrators and the largest number of high stakes international
cases. However, the number of international commercial arbitrations
is impossible to determine precisely since many of the arbitrations are
not administered by any formal organization, and there is no clear line
between domestic and international. International commercial arbitra¬
tion may be institutional, under the auspices of one of the institutions
competing for the business of international commercial arbitration, or
it may be ad hoc, handled solely by the parties and their counsel. It is
especially difficult to count the ad hoc arbitrations.
International commercial arbitration — as arbitration generally —
involves a process whereby a third party issues an opinion that is
formally binding on the parties. Unlike domestic arbitration as it has
traditionally been practiced in the USA, international commercial ar¬
bitrators typically write formal opinions. These formal opinions are
typically not published nor even made public informally. They belong
to the parties, who must therefore consent to any publication. The
awards made by the arbitrators are binding and very difficult to chal¬
lenge or appeal. The New York Convention of 1958, which has been
adopted by well over 100 states, make an arbitral award in practice
more easily enforced within a contracting state than would be a judg¬
ment obtained through litigation. In addition the procedures of inter¬
national commercial arbitration have been converging around a set
of rules that tend to detach arbitration from its site and to emphasize
party autonomy. The UNCITRAL (United Nations Commission on
International Trade Law) model law has been the major model for this
convergence.
257
ADDITIONAL TEXTS
The most prominent feature of international arbitration is that the

arbitrators are private individuals without any formal connection to the
state or a state judicial system. In theory almost anyone could be se¬
lected as an arbitrator. In practice, however, there is a relatively small
group that tends to dominate selection for major arbitrations. The group
consists largely of European lawyers, professors, and retired judges; but
there are also prominent arbitrators from other parts of the world.
B. Garth "International Encyclopedia of the Social & Behavioral
Sciences"
B U I L D I N G T H E INTERNATIONAL
ARBITRATION S Y S T E M
International business was long a world of complex personal rela¬
tions rather than formal laws and dispute resolution processes. The
number of actors was relatively small in any given field, and the actors
could get to know and take account of each other. There might be
contracts, but the contracts were relatively unimportant documents
either in the negotiation or when disputes might arise. Histories of
the petroleum industry, in particular, reveal the key actors behind the
'seven sister' oil companies and how they interacted with the countries
in which they did business. Lawyers were very much part of this his¬
tory, but lawyers for the oil companies — including John McCloy, the
famous lawyer for the Rockefeller family who was termed the 'chair¬
man of the establishment' — relied much more on personal influence
and connections than on their expertise as lawyers.
When this relatively stable set of relationships was shaken up, es¬
pecially by new entrants in the 1960s and 1970s willing to offer more
favorable terms to produce the oil, the lawyers for the oil companies
used contract and international law to try to hold on to their privileged
positions. At the same time, a small number of elite actors in the ex¬
porting countries had taken advantage of oil company paternalism to
obtain education abroad — in law and engineering, for example. They
and a few maverick legal advisors began to formulate legal arguments
that slowly built the legal infrastructure of the industry. The major trans¬
formation, however, came when the processes of readjustment of the
relationships resulted in nationalization of the oil industries in most of
the oil exporting countries. The oil concession agreements typically had
arbitration clauses through an analogy to the arbitration that had long
been practiced in disputes between nations. When the oil was national¬
ized in places such as Kuwait, Libya, and Saudi Arabia, the companies
invoked the arbitration clauses and began arbitration processes.
258
ADDITIONAL TEXTS
Legal accounts of this period typically celebrate the grand arbitra¬

tions that resulted, suggesting that important legal principles supporting
the stability of contracts trumped the political acts of nationalization.
Other accounts, including those by journalists and historians, however,
do not mention the arbitrations at all. They instead emphasize the ne¬
gotiations that took place between those who had long invested in the
relationships, the negotiations between governmental actors at another
level, and the gunboats that were putting not so subtle pressure on
behalf of the oil companies. Lawyers involved at the time suggest that
their activity in the arbitrations was not highly valued or even much
noticed by company executives.
The arbitration processes did go forward, however, and they pro¬
duced raw material that equipped international business with people
and principles to handle trans-national disputes. The raw material was
in the form of written opinions that were widely circulated, academ¬
ic articles about the principles in the opinions, and individuals who
gained or enhanced their reputations as potential arbitrators by virtue
of their participation in the arbitrations. The petroleum arbitrations
thus contributed to the production and legitimization of international
commercial arbitration for trans-national business disputes.
When new sets of problems arose that related to some of the themes
of the petroleum arbitrations, in particular disputes involving the nu¬
merous construction projects that took place in oil-producing coun¬
tries after the price of oil increased in the early 1970s, international
commercial arbitration played a crucial role. The continental academ¬
ics who developed these principles into a new lex mercatoria also de¬
veloped relationships with students from the less developed world, and
the students helped to reinforce the legitimacy of these principles in
their own countries. Put very simply, the process produced lawyers on
both sides, legal principles, and a legitimacy that made it possible to
generate a demand for what this group supplied. For the International
Chamber of Commerce, this increased demand meant that the while
the first 3,000 requests for arbitration came between 1923 and 1976,
the next 3,000 came in the following 11 years.
Sciences"
INTERNATIONAL C O M M E R C I A L ARBITRATION AND

ALTERNATIVE DISPUTE RESOLUTION
The world of international commercial arbitration was dominated
in the 1960s and 1970s by continental academics who wrote about the
259
ADDITIONAL TEXTS
lex mercatoria, but also tended to encourage the parties to find a way
to settle the dispute. The lex mercatoria could be used by the arbitra¬
tors to find a solution that fit the business relationship and left the
parties satisfied with the result. Consistent with the general orientation
of the leading arbitrators and lawyers associated with the pioneers of
international commercial arbitration, the process was not very adver¬
sarial, was relatively inexpensive except for the arbitrators, did not
tend to produce extensive documentary evidence, and did not contem¬
plate such US practices as cross-examination of witnesses. The model
was quite consistent with Continental practices, even for others who
participated in the processes.
When the arbitration business began to take off in the 1970s and
1980s, it coincided with the rise to prominence of business litigation
in the USA. The US law firms in Paris, France, were long involved in
international commercial arbitration, but they tended to play accord¬
ing to the Continental rules. As the practice of international commer¬
cial arbitration grew and expanded outside of a relatively small circle
of people, US businesses became increasingly involved in arbitration,
and developing countries found it to be in their interests to hire US
law firms as well. The enhanced presence of US litigators had im¬
portant consequences. They naturally sought to use the techniques of
discovery, intensive production of documents, cross-examination of
witnesses, and more generally the kind of aggressive adversarial behav¬
ior that was beginning to characterize litigation in the USA. They also
sought to retain arbitrators who would permit the lawyers to use the
techniques that they had developed. The result was that the processes
of international commercial arbitration changed substantially. They
did not become identical with US litigation, but they moved much
closer to US adversarialism.
Litigation in the USA had also been transformed, and that transfor¬
mation had produced the beginnings of the alternative dispute resolu¬
tion movement in that country. New organizations such as the Center
for Public Resources had begun to encourage corporations to practice
more mediation as a way to avoid the high costs and adversarial nature
of business litigation. The movement became quite influential in the
USA and some of the individuals associated with it began to suggest
that it would also be useful for international commercial arbitration.
As international commercial arbitration became more like US liti¬
gation, however, the US-promoted alternative began to gain more
adherents within the international arbitration community. By the end
of the twentieth century, the menu of US alternatives — including
mediation but a range of others as well — had become much more
260
ADDITIONAL TEXTS
common. This gradual transformation illustrates the way that the for¬
mal categories of dispute resolution — litigation, arbitration, and even
mediation — can disguise profound transformations in the way that
the underlying practices proceed. The center of gravity of internation¬
al commercial arbitration moved much closer to US-style litigation,
which was itself a relatively new invention, and the shift also helped to
bring the US-antidote, alternative dispute resolution.
Sciences"
B E C O M I N G AN ARBITRATOR
The international commercial arbitration community is relatively
closed, often termed a 'mafia' even by insiders. One reason for this
'club' is simply that for high stakes arbitration, the parties typically
want to select arbitrators who are known quantities. Untested arbi¬
trators are very risky from the point of view of the parties. It is also
deemed important to select arbitrators who are known for their ability
to 'speak the language' and be taken seriously within an arbitral tribu¬
nal. Since arbitrators often serve as counsel because of their familiar¬
ity with the processes and people, it is common for people from the
relatively closed arbitral community to nominate others from the com¬
munity. The key to success in the arbitration proceeding is selecting
an arbitrator who will be impartial enough to persuade the chair of the
tribunal but will also be able to understand and put forward the case
of the party that appointed him or her. The selection of established
names also serves a protective function in case the decision does not
favor the selecting party. It is easier to avoid blame for a safe selec¬
tion than for a novel one. For many reasons, including the fact that a
relatively small supply serves the economic interests of the arbitrators,
it is not easy to gain entrance into this community.
The easiest way to gain entrance for at least some small cases that
may provide a basis to build a practice is to conform to the character¬
istics of those already in the field. The individuals who set the norms
emphasized scholarly accomplishments, which put an emphasis on
publications, cosmopolitanism, and linguistic ability. Those who seek
to enter must probably also attend a number of the major conferences
in order to display the appropriate characteristics and be judged more
personally. However, the general point is that invitations to enter the
community tend to be issued most easily to those who can offer some¬
thing to the existing community — most obviously persons of high
status who reflect that status back on the arbitral community, persons
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from areas that are not yet committed to the legitimacy of interna¬
tional commercial arbitration (which means they offer both credibility
and a potential new caseload), or sometimes disciples of those already
in the arbitral community. This process helps to explain why individu¬
als without high status may study, write, and attend conferences, but
lacking a prestigious platform, they cannot gain entry. On the other
hand, individuals from developing countries who serve as judges on
the World Court do typically gain entry. The process also helps ex¬
plain why there are so many arbitration centers despite the fact that
the caseloads are concentrated in a relatively few places. Those who
create new centers gain the attention of the elite of the arbitral com¬
munity and also help to provide new domains where businesses will
contemplate arbitration and courts will respect the awards. As a result,
the new center may promote the local leader into a position closer to
the core of the arbitral community. There tends to be relatively few of
these peripheral arbitrators in each relevant site.
Sciences"
ПОНЯТИЕ АРБИТРАЖНОГО РАЗБИРАТЕЛЬСТВА

И ВИДЫ ТРЕТЕЙСКИХ СУДОВ
В условиях интернационализации хозяйственного оборота
организации и фирмы различных государств в случаях возник
новения споров стали часто обращаться к международным ком
мерческим арбитражным судам, а не к государственным судам
страны ответчика. В подавляющем большинстве контрактов, за
ключаемых российскими юридическими лицами с фирмами дру¬
гих стран, предусматривается, что споры будут рассматриваться
в порядке арбитража (в третейских судах). Под арбитражным
разбирательством в международном частном праве понимается
рассмотрение споров в третейских судах, избираемых или специ¬
ально создаваемых сторонами внешнеэкономических контрактов
для рассмотрения возникающих между ними споров. Из этого
следует, что международный коммерческий арбитражный суд —
это орган, предназначенный для разрешения споров с участием
иностранных фирм и организаций. По своей юридической при¬
роде — это третейский суд, т.е. суд, избираемый или создавае¬
мый самими сторонами и исключительно по их усмотрению.
В международной практике известны два вида третейских су¬
дов: так называемые изолированные и постоянно действующие
(институционные). Изолированный третейский суд создается
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сторонами специально для рассмотрения конкретного спора.

Стороны сами определяют порядок создания третейского суда и
правила рассмотрения в нем дела. После вынесения решения по
делу такой суд прекращает свое существование. Он получил так
же название третейского суда ad hoc (буквально — «для этого»,
т.е. для рассмотрения данного дела).
В отличие от третейских судов ad hoc постоянно действующие
третейские суды создаются при различных организациях и ассо¬
циациях, при торгово-промштшенньгх и торговых палатах. Их
часто называют арбитражными центрами.
Характерным для постоянно действующих арбитражей являет¬
ся то, что каждый из них имеет положение (или устав), свой регла¬
мент или правила производства дел, список арбитров, из которых
стороны выбирают арбитров для конкретного разбирательства.
Существует более 100 постоянно действующих арбитражей. В
Европе наибольшим авторитетом пользуются арбитражный суд
при Международной торговой палате в Париже, Арбитражный
институт Торговой палаты в Стокгольме, арбитражные суды в
Лондоне и Цюрихе.
М.М. Богуславский «Международное частное право»
АРБИТРАЖНОЕ СОГЛАШЕНИЕ И ОПРЕДЕЛЕНИЕ

КОМПЕТЕНЦИИ АРБИТРАЖА
Арбитражное соглашение — это соглашение сторон о пере¬
даче в арбитраж всех или определенных споров, которые воз¬
никли или могут возникнуть между ними в связи с каким-либо
конкретным правоотношением, независимо от того, носило оно
договорный характер или нет. Арбитражное соглашение может
быть заключено в виде условия в контракте, получившего назва¬
ние арбитражной оговорки, или в виде отдельного соглашения,
которое часто называется третейской записью.
В большинстве стран, в том числе и в России, предусмотрен
единый правовой режим для арбитражной оговорки и для тре¬
тейской записи. Такое соглашение выражает волю сторон, на¬
правленную на исключение подсудности спора государственным
судам, в пределах, допускаемых законодательством соответству¬
ющего государства. В литературе обращалось внимание на то,
что арбитражное соглашение обладает определенной специфи¬
кой, состоящей в том, что, являясь гражданско-правовой сдел¬
кой, оно имеет процессуальные последствия. Действительность
соглашения как гражданско-правовой сделки определяется
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гражданским законодательством, что же касается исключения

государственного суда, т.е. изъятия того или иного спора из его
ведения и допустимости арбитражного соглашения, то эти во¬
просы решаются на основании гражданского процессуального
законодательства соответствующей страны.
Арбитражное соглашение заключается в письменной форме.
Соглашение считается заключенным в письменной форме, если
оно содержится в документе, подписанном сторонами, или за¬
ключено путем обмена письмами, сообщениями по телетайпу,
телеграфу или с использованием иных средств электросвязи,
обеспечивающих фиксацию такого соглашения, либо путем об¬
мена исковым заявлением и отзывом на иск, в которых одна из
сторон подтверждает наличие соглашения, а другая против этого
не возражает. Ссылка в договоре на документ, содержащий ар¬
битражную оговорку, является арбитражным соглашением при
условии, что договор заключен в письменной форме и данная
ссылка такова, что делает упомянутую оговорку частью договора
(ст. 7 Закона 1993 г.).
На практике часто применяются типовые арбитражные ого¬
ворки, которые обязательны для сторон лишь в случае их прямо
выраженного согласия на это.
ПРОЦЕДУРА АРБИТРАЖНОГО РАЗБИРАТЕЛЬСТВА

Порядок обращения сторон в институционный арбитраж,
формирование состава арбитража и порядок рассмотрения спора
в таком арбитраже определяются внутренним законодательством
страны, на территории которой он находится, международными
соглашениями и соответствующим Регламентом или правилами,
установленными этим арбитражем. В случае рассмотрения спора
в арбитраже ad hoc эти вопросы определяются прежде всего са¬
мим арбитражным соглашением или арбитражной оговоркой, а
также рядом международных соглашений и иных актов.
Так, согласно ст. IV Европейской конвенции 1961 г. преду¬
сматривается право сторон в арбитражном соглашении обуслов¬
ливать, что:
— споры подлежат передаче в постоянно действующий ар¬
битраж и тогда арбитражное производство должно состояться в
соответствии с правилами этого арбитража;
— их споры подлежат передаче в арбитраж ad hoc; в таком
случае стороны могут, в частности: а) назначить арбитров или
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определить порядок, в котором они должны быть назначены; б)

определить место проведения арбитража; в) обусловить правила
арбитражного разбирательства.
Конвенция предусматривает также определенный порядок
формирования состава арбитража ad hoc, определение места и
правил производства, если стороны не договорились по этому
вопросу или если одна из сторон уклоняется от участия в об¬
разовании состава арбитража (участие в решении этих вопросов
представителей торговых палат, создание специального комитета
и т.д.).
В приведенной выше Типовой арбитражной оговорке, реко¬
мендованной МКАС, содержится отсылка к Регламенту МКАС.
В оговорке, рекомендованной Арбитражным институтом в
Стокгольме, наряду с отсылкой к Правилам этого арбитражного
суда сторонам рекомендуется: в случае необходимости допол¬
нительно указать число арбитров, которые будут рассматривать
спор, место арбитражного производства и язык, на котором бу¬
дет такое производство осуществляться. Кроме того, Арбитраж¬
ный институт рекомендует сторонам предусмотреть, какое мате¬
риальное право подлежит применению к их договору.
В отличие от арбитражей ad hoc в постоянно действующих
арбитражных судах обычно имеется список арбитров, из которых
формируется состав арбитража, рассматривающий конкретный
спор. Рассмотрим порядок формирования этого состава и про¬
цедуру арбитражного разбирательства на примере МКАС.
Каждое дело рассматривается в этом арбитражном суде ар¬
битражем в составе трех арбитров или единоличным арбитром.
Образование состава арбитража, а также избрание сторонами
единоличного арбитра или назначение его осуществляются в со¬
ответствии с Регламентом МКАС.
ПРИЗНАНИЕ И ИСПОЛНЕНИЕ
АРБИТРАЖНЫХ Р Е Ш Е Н И Й
Для истца независимо от того, идет ли речь об отечествен¬
ном или иностранном юридическом лице, обращение не к госу¬
дарственному, а к третейскому суду имеет смысл только в том
случае, если есть возможность как в стране местонахождения ар¬
битража, так и в любой иной стране осуществить принудитель¬
ное исполнение такого решения. Конечно, решение может быть
исполнено ответчиком добровольно, точно так же как и мировое
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соглашение, заключенное сторонами в ходе рассмотрения спо¬

ра. Но не всегда это имеет место, поэтому вопрос о признании
и исполнении арбитражного решения так важен. Этот вопрос
регулируется как международными соглашениями, так и нацио¬
нальным российским законодательством.
В отношении иностранных арбитражных решений действует
Нью-Йоркская конвенция 1958 г. о признании и приведении в
исполнение иностранных арбитражных решений.
В соответствии с п. 1 ст. I Конвенции она применяется к ар¬
битражным решениям, вынесенным «на территории государства
иного, чем то государство, где испрашивается признание и при¬
ведение в исполнение таких решений, по спорам, сторонами в
которых могут быть как физические, так и юридические лица».
Она применяется также к арбитражным решениям, «которые не
считаются внутренними решениями в том государстве, где ис¬
прашивается их признание и приведение в исполнение». Под
арбитражными решениями понимаются решения как изолиро¬
ванных, так и постоянных арбитражных органов (институци¬
онных арбитражей). Следует еще раз обратить внимание на то,
что действие Конвенции не распространяется на признание и
исполнение государственных арбитражных судов и иных судов,
входящих в судебную систему государств (хозяйственных, эконо¬
мических, торговых).
Каждое государство — участник Конвенции признает арби¬
тражные решения как обязательные и исполняет их в соответствии
с процессуальными нормами той территории, где испрашивается
признание и приведение в исполнение арбитражных решений.
К признанию и исполнению арбитражных решений, к которым
применяется Конвенция, не должны применяться существенно
более обременительные условия или более высокие пошлины и
сборы, чем те, которые существуют для признания и приведения
в исполнение внутренних арбитражных решений (ст. III).
Нью-Йоркская конвенция устанавливает ограниченный пере¬
чень оснований для отказа в признании и исполнении иностран¬
ных арбитражных решений. Он является исчерпывающим и не
подлежит расширительному толкованию. Перечень включает две
группы оснований для отказа: 1) применяемые судом только по
просьбе стороны в споре, против которой вынесено решение;
2) применяемые судом ex officio, т.е. по собственной инициативе.
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МЕЖДУНАРОДНЫЙ КОММЕРЧЕСКИЙ
АРБИТРАЖНЫЙ СУД
П Р И Т О Р Г О В О - П Р О М Ы Ш Л Е Н Н О Й ПАЛАТЕ РФ
Международный коммерческий арбитражный суд при
торгово-промышленной палате РФ — в России один из посто¬
янно действующих третейских судов. Он действует в соответ¬
ствии с Законом РФ «О международном коммерческом арби¬
траже», а также с Положением о Международном коммерческом
арбитражном суде при Торгово-промышленной палате РФ. Оба
акта утверждены Верховным Советом РФ 7 июля 1993 г. Между¬
народный коммерческий арбитражный суд — самостоятельное,
постоянно действующее арбитражное учреждение. В его ком¬
петенцию входит рассмотрение споров по поводу договорных
и иных гражданско-правовых отношений, которые возникают
при осуществлении международных экономических связей, если
коммерческое предприятие хотя бы одной из сторон спора нахо¬
дится за границей. Этот же суд разрешает и споры предприятий
с иностранными инвестициями, международных объединений и
организаций, созданных на территории РФ, между собой, между
их участниками, а также споры с другими субъектами права РФ.
В Положении содержится примерный перечень видов споров,
разрешаемых указанным судом. Этот перечень охватывает от¬
ношения по купле-продаже товаров, выполнению работ, оказа¬
нию услуг, обмену товарами и (или) услугами, перевозке грузов
и пассажиров, торговому представительству и посредничеству,
аренде (лизингу), научно-техническому обмену, обмену др. ре¬
зультатами творческой деятельности, сооружению промышлен¬
ных и иных объектов, лицензионным операциям, инвестициям,
кредитно-расчетным отношениям, а также др, формы промыш¬
ленной и предпринимательской кооперации. Основанием для
рассмотрения спора в указанном суде также служит арбитраж¬
ное соглашение, которое может быть либо отдельным, либо
принимать форму «арбитражной оговорки», которую включают
в основной договор. Процедура назначения судей определяется
сторонами, а при отсутствии между ними согласия применяется
предусмотренный Законом порядок. Он состоит в том, что каж¬
дая из сторон назначает по одному судье. Оба судьи, избранные
таким образом, выбирают третьего. Решение по делу выносится
большинством голосов. Если в ходе разбирательства спор ока¬
жется урегулированным самими сторонами, достигнутое ими со¬
глашение фиксируется в виде арбитражного решения. В случаях,
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указанных в Законе от 7 июля 1993 г., арбитражное решение по

требованию одной из сторон может быть отменено судом соот¬
ветствующего субъекта РФ. В частности, это возможно вслед¬
ствие того, что решение по спору противоречит публичному
порядку РФ, либо из-за того, что спор вообще не мог быть пред¬
метом третейского разбирательства по законодательству России.
Вынесенное арбитражным судом решение (это в полной мере
относится к арбитражу, состоявшемуся не только в России, но
и за ее пределами) приводится в исполнение по ходатайству за¬
интересованной стороны, адресованному компетентному суду.
Возможные мотивы отказа приведения решения в исполнение
исчерпывающим образом определены в Законе РФ «О междуна¬
родном коммерческом арбитраже». Наряду с М.к.а.с. при ТПП
РФ функционирует и др. постоянно действующий третейский
суд — Морская арбитражная комиссия.
Додонов В.Н., Панов В.П., Румянцев О.Г.
«Международное право»
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UNIT 1 C O R P O R A T E LAW
1. 1 — c shareholders; 2 — b promoter; 3 — b quasi-public corpora
tions; 4 — c corporations; 5 — b a partnership.
4. 1— g to enter into contract
2 — d to make money
3 — c to pay taxes
4 — a to provide guidance
5 — e to run a business
6 — b to share in profits
7 —f to transfer property
5. 1) частная корпорация — private corporation; 2) зарабатывать
деньги — make money; 3) некоммерческая организация — nonprofit
organization; 4) общественность — general public; 5) муниципальная
корпорация — municipal corporation; 6) квазигосударственная
корпорация — quasi-public corporation; 7) коммунальные услуги —
utilities; 8) акционерное общество открытого типа — public corpo¬
ration; 9) подавляющее большинство — vast majority; 10) корпорация
закрытого типа — closely held corporation; 11) торговое право — busi¬
ness law/ commercial law; 12) Ассоциация американских юристов —
American Bar Association; 13) федеральное правительство — federal gov¬
ernment; 14) участвовать в прибылях — share in profits; 15) выплачивать
налоги — pay taxes; 16) заключать договор — enter into contract; 17) вести
дело, управлять предприятием — run a business; 18) передавать
имущество — transfer property; 19) прибыли и убытки — profits and
losses; 20) Примерный закон "О коммерческой корпорации" — Model
Business Corporation Act.
6.
public corporations
Частные корпорации
closely held corpora¬
nonprofit corporations tions
municipal corporations
quasi-public corporations
7. 1) contract — a formal agreement between two or more parties;
269
KEYS
2) articles of incorporation — a written agreement setting forth the basic

structure of a corporation;
3) share — one of the equal parts into which the ownership of a com¬
pany is divided and which can be bought by members of the public;
4) promoter — a person who helps to organize, develop, or finance an
undertaking;
5) requirement — something demanded or imposed as an obligation;
6) assets — any property owned by a person or firm;
7) loan — a sum of money which is borrowed, often from a bank, and
has to be paid back, esp. together with an additional amount of money that
you have to pay as a charge for borrowing.
8. 1 — i small business;
2 — a voting procedure
3 — e legal agent
4 — b articles of incorporation
5 — g business venture
6 — c filing fee
7 — d corporation law
8 — f public corporation
9. 1 — j to set forth — to state
2 — k credit — loan
3 — a to include — to contain
4 — g to choose — to select
5 — e obligation — commitment
6 — b to require — to order
7 — l agreement — contract
8 — c to amend — to revise
9 — h formation — creation
10 — d profit — benefit
11 — f affair — matter
12 — i to differ — to vary
10. 1. The articles of incorporation normally include (1) the name of
the corporation; (2) the length of time the corporation will exist, which can
be perpetual or renewable; (3) the corporation's purpose; (4) the number and
types of shares that the corporation may issue and the rights and preferences
of those shares; (5) the address of the corporation's registered office and the
registered agent at that office who can accept legal service of process; (6) the
number of directors and the names and addresses of the first directors; and (7)
each incorporator's name and address.
2. A promoter's efforts involve arranging the needed capital, or financing,
using loans, money from investors, or the promoter's own money; assembling
the people and assets (such as land, buildings, and leases) necessary to run the
corporation; and fulfilling the legal requirements for forming the corporation.
270
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3. Bylaws regulate the conduct of directors, officers, and shareholders

and set forth rules governing internal affairs.
4. Every statute requires incorporators to file a document, usually called
the articles of incorporation, and pay a filing fee to the secretary of state's of¬
fice, which reviews the filing.
5. Most large corporations select Delaware as their state of incorpora¬
tion because of its sophistication in dealing with corporation law.
6. A corporation's bylaws usually contain the rules for the actual running
of the corporation.
7. The first question facing incorporators (those forming a corporation)
is where to incorporate.
8. After formation, a corporation must somehow assent before it can be
bound by an obligation that a promoter has made on its behalf.
12.
(person) (abstract)
share shareholder share shared —
invest investor investment — —

vote voter vote — —
finance financier finance financial financially
— proxy proxy — —
protect protector protection protective protectively
participate participant participation participatory —
own owner ownership own —
inspect inspector inspection — —
prevent prevention/ preventative/ (un)
preventability preventable
13.
1) quorum — a minimum number of members in an assembly, society,
board of directors, etc., required to be present before any valid business can
be transacted;
2) shareholder — a person who owns some of the equal parts into which
the ownership of a company is divided;
3) proxy — a person authorized to act on behalf of someone else; agent;
4) share — one of the equal parts into which the ownership of a com¬
pany is divided and which can be bought by members of the public;
5) consent — acquiescence to or acceptance of something done or
planned by another; permission;
6) officer — someone who has an important position in an organization;
7) director — a member of the governing board of a business concern
who may or may not have an executive function;
8) investor — a person or organization that invests money in order to
make a profit;
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9) meeting — an event at which people meet to talk and decide things;

10) outsider — a person or thing excluded from or not a member of a
set, group, etc.
d o t a f P a r e a k p e q l a m
o f s h a r e h o l d e r u o p e
r f d i m o g h e o z t a o n d r
e i t a k x w s h a r e b r s i t
h c i c h y o n o f f r c u e r i
k e r o u t s i d e r e e m n e u
e r o n j o o m i t a k x w e c l
a s l s n l m e e t i n g o t t e
n j v e p r a b h s r m e t i o l
p q i n v e s t o r a s l o r r a
t o t t p a t a k x w j v r o i b
s r m e k f p a r e a k p e l e o
14. 1) акционер — shareholder; 2) фондовая биржа — stock ex-

change/ securities exchange; 3) совет директоров — board of directors;
4) Комиссия по ценным бумагам и биржевым операциям — Securi
ties and Exchange Commission (SEC); 5) политика корпорации — cor¬
porate policy; 6) нанимать — to hire; 7) повседневный — day-to-day;
8) мошенничество — fraud; 9) превышение полномочий — abuse of
authority; 10) письменное согласие — written consent; 11) чрезвычайное
собрание — special meeting; 12) ежегодное собрание акционеров —
annual meeting; 13) право участия в голосовании — voting right;
14) ликвидация — dissolution; 15) соглашение о голосовании —vot¬
ing agreement/ pooling agreement; 16) слияние, объединение —
merger; 17) акция — share; 18) выпускать акции — to issue share;
19) зарегистрированный владелец, собственник — record owner;
20) единственный владелец — sole owner; 21) список акционеров,
реестр владельцев акций — share register/ register of shareholders;
22) собственник-бенефициарий — beneficial owner; 23) доверенное
лицо — proxy/ trustee; 24) передача права голоса по доверенности —
voting trust; 25) кумулятивное голосование — cumulative voting;
26) избирательный список — voting list; 27) день регистрации —
record date.
15. 1. Shareholders may examine a corporation's record of sharehold
ers, including names and addresses and classes of shares. True.
272
KEYS
2. The primary players in a corporation are the shareholders, directors,

and officers. True.
3. Officers elect, and sometimes remove, the directors, and occasion-
ally they must vote on specific corporate transactions or operations. False.
Shareholders elect, and sometimes remove, the directors, and occasionally they
must vote on specific corporate transactions or operations.
4. Under cumulative voting, a shareholder may vote his or her shares
once for each position on the board. False. Under straight voting, a share¬
holder may vote his or her shares once for each position on the board.
5. Officers may vote as a group or block. False. Shareholders may vote
as a group or block.
6. Officers run the day-to-day business affairs and carry out the policies
the directors establish. True.
7. Shareholders need to attend meetings in order to vote. False. Share¬
holders don't need to attend meetings in order to vote; they may authorize
a person, called a proxy, to vote their shares.
8. Federal law governs the persons who may call a special meeting.
False. The bylaws govern the persons who may call a special meeting.
9. Shareholders establish corporate policy and hire officers, to whom
they usually delegate their obligations to administer and manage the corpo¬
ration's affairs. False. Directors establish corporate policy and hire officers,
to whom they usually delegate their obligations to administer and manage the
corporation's affairs.
10. Corporations issue share certificates in the name of a person, who be¬
comes the record owner and is treated as the sole owner of the shares. True.
11. Statutes don't require that a quorum exists at any corporation meet¬
ing. False. Statutes require that a quorum exists at any corporation meeting.
12. The main purpose of the annual meeting is to elect directors. True.
13. A shareholder who does not receive a new certificate is called the
record owner and cannot vote, but the record owner is the real owner and
can compel the beneficial owner to act as the record owner desires. False.
A shareholder who does not receive a new certificate is called the beneficial
owner and cannot vote, but the beneficial owner is the real owner and can
compel the record owner to act as the beneficial owner desires.
14. Shareholders typically exercise their voting rights at annual or spe¬
cial meetings. True.
15. Shareholders elect directors each year at the special meeting. False.
Shareholders elect directors each year at the annual meeting.
17. 1 — h advance notice; 2 — a board meeting; 3 — j fiduciary duty; 4 — c
declare dividends; 5 — b illegal act; 6 — i board of directors; 7 — f good faith;
8 — g prudent person; 9 — d personal liability; 10 — e duty of care.
18. 1 — b manage — run; 2 — i empower — authorize; 3 — g appoint —
nominate; 4 — e handle — deal with sb/sth ; 5 — a regulate — control;
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6 — j increase — rise; 7 — d allow— permit; 8 — c endanger — threaten;

9 — f occur — arise; 10 — h prohibit — forbid.
19. 1. Directors often delegate to corporate officers their authority to
formulate policy and to manage the business.
2. Statutes empower directors to decide whether to declare dividends; to
formulate proposed important corporate changes, such as mergers or amend¬
ments to the articles of incorporation; and to submit proposed changes to
shareholders.
3. Directors customarily are paid a salary and often receive incentive
plans that can supplement that salary.
4. A corporation's articles or bylaws typically control the number of di¬
rectors, the terms of the directors' service, and the directors' ability to change
their number and terms.
5. The directors' own fiduciary duties, or obligations to act for the ben¬
efit of the corporation, also serve as checks on directors.
6. Directors may hold special board meetings, which are any meetings
other than regular board meetings.
7. Directors' fiduciary duties fall under three broad categories: the duty
of care, the duty of loyalty, and duties imposed by statute.
8. I f a court finds that a director has violated a duty, the director still
might not face personal liability.
9.Self-dealing usually occurs in one of four types of situations: transac¬
tions between a director and the corporation; transactions between corporations
where the same director serves on both corporations' boards; by a director who
takes advantage of an opportunity for business that arguably may belong to the
corporation; and by a director who competes with the corporation.
10. Directors who are charged with violating their duty of care usually
are protected by what courts call the business judgment rule.
20. The duties and powers of corporate officers can be found in statutes,
articles of incorporation, bylaws, or 0) corporate resolutions. Some statutes
require a corporation to have specific officers; others merely require that
the bylaws contain a 1) description of the officers. Officers usually serve at
the will of those who appointed them, and they generally can be fired with
or without cause, although some officers sign 2) employment contracts.
Corporations typically have as officers a president, one or more vice
presidents, a secretary, and a treasurer. The president is the primary officer
and supervises the corporation's business affairs. This officer sometimes is
referred to as the chief 3) executive officer, but the ultimate authority lies
with the directors. The vice president fills in for the president when the lat¬
ter cannot or will not act. The secretary keeps 4) minutes of meetings, over¬
sees notices, and manages the corporation's records. The treasurer manages
and is responsible for the corporation's finances.
274
KEYS
Officers act as a corporation's agents and can bind the corporation to

contracts and agreements. Many parties who deal with corporations 5)
require that the board pass a resolution approving any contract negotiated
by an officer, as a sure way to bind the corporation to the contract. I n the
absence of a specific resolution, the corporation still may be bound i f it
6) ratified the contract by accepting its benefits or i f the officer appeared
to have the authority to bind the corporation. Courts treat corporations as
having knowledge of information i f a corporate officer or employee has
that knowledge.
Like directors, officers owe fiduciary duties to the corporation: good
faith, diligence, and a high degree of honesty. But most 7) litigation about
fiduciary duties involves directors, not officers.
An officer does not face personal liability for a 8) transaction i f he or
she merely acts as the corporation's agent. Nevertheless, the officer may be
personally 9) liable for a transaction where the officer intends to be bound
personally or creates the impression that he or she will be so bound; where
the officer exceeds his or her 10) authority; and where a statute imposes
liability on the officer, such as for failure to pay taxes.
21. 1 — b president — the chief executive officer of a company, cor¬
poration, etc.; 2 — g director — an individual selected to serve on its board
of directors and thereby oversee the management of its affairs; 3 — a officer
— a person appointed or elected by the company's board of directors; 4 e —
secretary — an officer of a corporation charged with responsibility for keep¬

ing records and taking minutes; 5 —h proxy — a person authorized to act on
behalf of someone else; agent; 6 — c shareholder — a person who owns one
or more shares of stock in a joint stock company or a corporation; 7 — f
treasurer — someone who is in charge of the money for an organization,
corporation etc.; 8 d vice president
— — an officer ranking immediately
below a president and serving as his deputy; 9 j beneficial owner — the
—
real owner of an investment, rather than an organization holding the in¬

vestment for them; 10 - i record owner the owner of real property and
—
stocks, bonds, and other financial instruments as shown by public records.

22. 1. A bill is discharged by payment in due course by or on behalf of
the drawee or acceptor.
2. I f the articles provide for a quorum, that requirement has to be met
before business can be conducted.
3. In English law it is important to examine this requirement along with
consideration.
4. To make sure that there is an adequate number of sufficiently quali¬
fied persons to carry out this task.
5. The government has raised interest rates in an attempt to protect its
currency from speculation.
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6. Actions raised in the Court of Session had to pass the signet and hence
members of the society were involved in the early stages of litigation.
7. The management board has set out its goals for the coming year.
8. Partners in a firm are jointly and severally liable for any breach of
trust committed by one partner, in which they were implicated.
9. When this is done, the property thenceforward belongs to the creditor
but is subject to a right of redemption in 10 years, known as the legal.
10. The alleged offender has the option to proceed to refuse and be
charged with the offence.
23. 1. What is the governing body of a corporation? The governing body
of a corporation is the board of directors.
2. Do directors often delegate to corporate officers their authority to
formulate policy and to manage the business? Yes.
3. Directors' fiduciary duties fall under two broad categories, don't
they? No, directors'fiduciary duties fall under three broad categories: the duty
of care, the duty of loyalty, and duties imposed by statute.
4. May directors hold special board meetings? Yes, directors may hold spe¬
cial board meetings, which are any meetings other than regular board meetings.
5. Who establishes corporate policy and hires officers? Directors estab¬
lish corporate policy and hire officers, to whom they usually delegate their
obligations to administer and manage the corporation's affairs.
6. Where do shareholders exercise their voting rights? Shareholders typi¬
cally exercise their voting rights at annual or special meetings.
7. Do shareholders elect directors twice a year at the annual meeting?
No, shareholders elect directors each year at the annual meeting.
8. Do statutes require that a quorum exists at any corporation meeting?
Yes, statutes require that a quorum exist at any corporation meeting.
9. What must a corporation prepare before each meeting? Before each
meeting, a corporation must prepare a list of shareholders who are eligible
to vote, and each shareholder has an unqualified right to inspect this voting
list.
10. Can a beneficial owner vote? A shareholder who does not receive a
new certificate is called the beneficial owner and cannot vote, but the benefi¬
cial owner is the real owner and can compel the record owner to act as the
beneficial owner desires.
11. Do shareholders typically have two ways of voting? Yes, shareholders
typically have two ways of voting: straight voting or cumulative voting.
12. What does straight voting mean? Under straight voting, a shareholder
may vote his or her shares once for each position on the board. For example,
if a shareholder owns 50 shares and there are three director positions, the
shareholder may cast 50 votes for each position.
13. May shareholders vote as a group or block? Shareholders may vote
as a group or block.
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KEYS
14. Do shareholders have a right to inspect a corporation's books and

records? Yes, shareholders have a right to inspect a corporation's books and
records.
15. What is a pooling agreement? A pooling agreement is a contract among
a group of shareholders to vote in a specified manner on certain issues. Such
an agreement is designed to maintain control or to maximize voting power.
16. Do shareholders need to attend meetings in order to vote? Share¬
holders need not attend meetings in order to vote; they may authorize a person,
called a proxy, to vote their shares.
17. How long may proxy appointment last? Proxy appointment usually
may last no longer than a year, and it can be revoked.
18. Do officers run the day-to-day business affairs and carry out the
policies the directors establish? Yes, officers run the day-to-day business af¬
fairs and carry out the policies the directors establish.
19. Who elects and removes directors? Shareholders elect, and sometimes
remove, the directors, and occasionally they must vote on specific corporate
transactions or operations.
20. Can officers be fired without cause? Yes, officers generally can be
fired with or without cause, although some officers sign employment contracts.
21. Is the secretary responsible for the corporation's finances? No, the sec¬
retary keeps minutes of meetings, oversees notices, and manages the corporation's
records. The treasurer manages and is responsible for the corporation's finances.
22. Officers owe fiduciary duties to the corporation, don't they? Yes,
officers owe fiduciary duties to the corporation: good faith, diligence, and a
high degree of honesty.
26 1) nominal value/ par value номинальная стоимость; 2) preemp
—
tive right — преимущественное право на покупку акций; 3) class of

shares класс акций; 4) illegal dividend незаконный дивиденд; 5) dis
— —
tribution of dividends — выплата дивидендов (из прибыли компании);

6) preferred dividend — дивиденд по привилегированным акциям; 7) liq¬
uidation — ликвидация (дела, предприятия); 8) dividend right — право на
получение дивиденда; 9) voting power — право участия в голосовании;
10) net assets — стоимость имущества за вычетом обязательств; 11) com¬
mon shares/ common stock — обычные, непривилегированные акции;
12) debt security — ценная бумага, представляющая собой долговое
свидетельство.
27. 1. Under a new law, Swiss companies will be able to lower the
nominal value of their shares to 10 Swiss francs from 100.
2. Existing shareholders have preemptive rights to buy new shares in
proportion to their existing holdings.
3. The directors may issue shares only for an authorised purpose and in
the best interests of the company.
277
KEYS
4. The company's accounts are considered and the directors' and audi¬
tor's reports are put before the shareholders.
5. He recommended that the company be dissolved and its net assets
distributed to shareholders.
6. Currently denominated at 500 yen par value, the shares will be
changed to 50 yen.
7. Corporations issued a record $56 billion of common stock.
8. I f there are no available profits there can be no payment of a dividend.
9. Under the Companies Act 1985, that person is personally liable on
the contract.
10. Dividends must be declared by the annual general meeting on the
recommendation of the directors or by the directors themselves between
such meetings.
28. 1. Amendments
2. Mergers and Acquisitions
3. Dissolution
4. Derivative Suits
5. Proxy Contests
6. Insider Trading
29. Across: 1) dissolution 2) amendment 3) asset 4) suit 5) insider
6) avoid. Down: 7) vie 8) solicitation 9) prohibit 10) merger 11) bond
12) takeover
30. 1 d poison pill; 2 e statutory merger; 3 j cash tender offer;
— — —
4 h parent corporation; 5 a white knight; 6 i controlling shareholder;

— — —
7 b attorney's fees; 8 f corporate assets; 9 c sufficient proof; 10 g

— — — —
proxy vote.
31. 1) to pay in cash; 2) an amendment to the contract; 3) to sell off
some of the subsidiaries; 4) to vie with smb; 5) to abstain from entering into
contract; 6) to engage in business; 7) to take over a firm; 8) to be merged
into smth; 9) to take an interest in property; 10) to put up a defense.
32. 1) Federal, and often state, laws don't prohibit a corporate insider
from using nonpublic information to buy or sell stock. False. Federal, and
often state, laws prohibit a corporate insider from using nonpublic information
to buy or sell stock.
2) Mergers only can involve subsidiaries. False. Mergers also can involve
parent corporations and their subsidiaries.
3) A proxy contest is a struggle for control of a public corporation. True.
4) Aggressor corporations never use the cash tender offer in a takeover.
False. Aggressor corporations primarily use the cash tender offer in a takeover.
5) Corporations can employ defensive tactics to fend off a takeover. True.
6) In takeovers of registered or large, publicly held corporations, federal
law requires the disclosure of certain information, such as the source of the
money in the tender offer. True.
278
KEYS
7) A corporation can't terminate its legal existence by engaging in the

dissolution process. False. A corporation can terminate its legal existence by
engaging in the dissolution process.
8) I n some mergers, an acquiring corporation creates a parent corpora¬
tion as the form for the merged or acquired entity. False. In some mergers,
an acquiring corporation creates a subsidiary as the form for the merged or
acquired entity.
9) Shareholders can bring suit on behalf of a corporation to enforce a
right or to remedy a wrong that has been done to the corporation. True.
10) A l l business combinations are consensual. False. Not all business
combinations are consensual.
33. 1) offer; 2) depends; 3) carry; 4) gain; 5) sole; 6) owned; 7) liability
8) limited 9) form 10) entity 11) dividends 12) allocated 13) held 14) cope
15) business
34. 1 — k private corporation частная корпорация
—
2 — s transnational corporation транснациональная корпорация

—
3 — a voting share голосующая акция

—
4 — o quasi-public corporation квазигосударственная корпорация

—
5 — h controlling shareholder / majority shareholder держатель

—
контрольного пакета акций

6 — m hostile takeover враждебное поглощение
—
7 — b poison pill —"ядовитая пилюля", "отравленная таблетка"

8 — d minority shareholder миноритарный акционер
—
9 — v equity financing акционерное [долевое] финансирование

—
10 — r bull market "рынок быков"

—
11 — c closely held corporation — корпорация закрытого типа

12 — e lock-up — капитал, помещенный в труднореализуемые
активы
13 — x bear market — "рынок медведей"
14 — q block [line] of shares пакет акций—
15 — w black knight — "черный рыцарь"

16 — i to issue shares — выпускать акции
17 — y public corporation — акционерное общество открытого
типа
18 — t mergers and acquisitions (M&As) слияния и поглощения
—
19 — u insider trading покупка (акций) осведомленным лицом

—
20 — f annual dividend — годовой дивиденд

21 — g de facto corporation — юридически не оформленная
22 — n white knight — "белый рыцарь"
23 — p non-voting share — неголосующая акция
24 — l limited liability — ограниченная ответственность
25 — j double taxation двойное налогообложение
—
279
KEYS
TEST
1. 1) The directors may issue shares only for an authorised purpose and
in the best interests of the company.
2) While companies are owned by their members (i.e. shareholders),
they are managed by a board of directors.
3) The federal administrative agency established by the Securities Ex¬
change Act of 1934, in order to supervise and regulate the issuing and trad¬
ing of securities and to eliminate fraudulent or unfair practices.
4) The use of poison pills raises the cost of acquisition.
5) A statutory merger occurs when Company A acquires Company B
and dissolves Company B.
6) The potential buyer, to overcome the reluctance of the target com¬
pany, may make a tender offer, which is to advertise its interest in buying
the target company stock from current stockholders at an attractive price.
7) For certain types of mergers or acquisitions, the shareholders have
the right to cast a vote to support or reject the bid.
8) Within legal guidelines, corporations may issue stock, declare divi¬
dends, and provide owners with limited liability.
9) Holders of common stock are invited to attend annual meetings of
stockholders and they have the right to vote on matters of corporate policy
on the basis of one vote per share held.
10) When corporations are formed, they draw up the Articles of Incor¬
poration, usually for approval by shareholders.
II. 1) to abstain from force
2) to be charged with smth
3) to be liable for smb's debts
4) to be involved in payment
5) to share in profits
6) to enter into an agreement
7) to be merged into smth
8) to pay in cash
9) to be engaged in export
10) interest in partnership
III. 1. Акции достигли высшей отметки 13 июня 1990 года, когда
они могли продаваться по 600 долларов.
2. Акционеры должны иметь право беспрепятственного доступа к
реестру директоров и секретарей.
3. Когда инвестор владеет от 20% до 50% голосующих обыкновенных
акций инвестируемого предприятия, обычно считается, что данный
инвестор оказывает значительное влияние на операционную и
финансовую политику инвестируемого предприятия.
4. Компания заявила, что мистер Уайт получает директорское
вознаграждение и посещает заседания совета директоров.
280
KEYS
5. В совет директоров любого банка Федеральной резервной

системы входят девять директоров.
6. Компании, выплачивающие дивиденды, часто повышают
сумму выплачиваемых ими дивидендов, в то время как процент по
облигациям никогда не повышается.
7. Большинство промышленных холдинговых компаний полагаются
на получение денежных ресурсов от своих дочерних компаний.
IV. 1) The term "transnational corporation" refers to an economic
entity operating in more than one country or a cluster of economic entities
operating in two or more countries — whatever their legal form, whether in
their home country or country of activity, and whether taken individually
or collectively.
2) Transnational corporations and other business enterprises shall act
in accordance with fair business, marketing, and advertising practices and
shall take all necessary steps to ensure the safety and quality of the goods
and services they provide, including observance of the precautionary prin¬
ciple. Nor shall they produce, distribute, market, or advertise potentially
harmful or harmful products for use by consumers.
Art. 13. Norms on the Responsibilities of Transnational Corporations and
Other Business Enterprises with Regard to Human Rights
UNIT 2 INTERNATIONAL I N V E S T M E N T
th th
1. 1 — a the 19 century and the beginning of the 20 ; 2 b 1965;
—
1966; 3 — b GATT; 4 — c TRIPS; 5 — a Organization for Economic Co¬

operation and Development.
4. 1 —f legal personality
2 — a portfolio investment
3 — j movable property
4 c minority interest
—
5 — i place of incorporation
6 — b intangible assets
7 h legal status
—
8 e exporting country
—
9 — g commercial treaty
10 — d freedom of conscience
5. 1) развивающиеся страны — developing countries; 2) развитые
страны — developed countries; 3) прямые иностранные инвестиции
— foreign direct investment (FDI); 4) двустороннее инвестиционное
соглашение bilateral investment treaty; 5) страна-экспортер
— ex¬ —
porting country; 6) в отношении — in respect of; 7) договор о дружбе,

торговле и мореплавании — treaty of friendship, commerce and navi-
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KEYS
gation; 8) документ — instrument; 9) право обращения в суд, право

доступа в суд right of access to courts; 10) правосубъектность le¬
— —
gal personality; 11) международная торговля — international trade;

12) торговый договор — commercial treaty; 13) правовой статус — legal
status; 14) свобода совести — freedom of conscience; 15) прозрачность
— transparency; 16) налогообложение — taxation; 17) перечисление
платежей — transfer of payments; 18) государство пребывания —
host state; 19) иностранная корпорация — foreign corporation; 20)
отечественная компания — domestic company; 21) контрольный
пакет акций — controlling interest; 22) слабая связь — tenuous relation¬
ship; 23) миноритарный [неконтрольный] пакет — minority interest;
24) недвижимое имущество — immovable property; 25) нематериальные
активы — intangible assets; 26) движимое имущество — movable prop¬
erty; 27) материальные активы — tangible assets; 28) портфельные
инвестиции — portfolio investment; 29) интеллектуальная собственность
— intellectual property; 30) nationality — гражданство; 31) физическое
лицо — natural person; 32) юридическое лицо — juridical entity;
33) место регистрации компании — place of incorporation.
6. Admission and Promotion of Investment
Under 1) customary international law states have the sovereign right to
regulate and prohibit or condition the admission of 2) investment and inves¬
tors in their territory, in line with their right to admit or not aliens. The ex¬
ercise of such a right may be motivated by a desire to preserve national eco¬
nomic or other public policy goals. The current practice in bilateral invest¬
ment treaties is to follow this approach. Only a very few bilateral investment
treaties confer any right of 3) establishment to investors. I n general, treaty
protection only comes into play after the investment has been admitted.
With regard to admission, 4) consolidated BITs' practice refers to the
need to admit investment in accordance with the laws and regulation of
the host country. This may mean that admission can be subject to the 5)
fulfillment of special conditions, such as the training of local personnel or
the reinvestment of profits. Most bilateral investment treaties stress, with
various formulations, the importance of 6) facilitating or encouraging in¬
vestment, creating favourable conditions and the like. Other areas that are
often mentioned in 'best endeavour' terms or subject to domestic legisla
tion, include: the exchange of information on investment opportunities, the
7) dissemination of law and regulation affecting investment, consultation
mechanisms, the granting of work permits to key and technical personnel.
7. 1) The postwar friendship, commerce and navigation treaties are
broad in scope, dealing with such matter as the right to entry and sojourn,
freedom of conscience, of information gathering and dissemination, the pro¬
tection of persons, treatment of nationals and companies, access to domestic
courts and tribunals, transparency and publication of laws and regulations,
acquisition and disposal of property, protection of property and expropriation,
282
KEYS
taxation, competition, transfer of payments, shipping, social security and pre¬

vention and settlement of disputes.
2) Friendship, Commerce and Navigation Treaties were common in-
struments throughout the 19th century and the beginning of the 20th century,
primarily concerned with the trade and shipping rights of individuals.
3) Bilateral investment treaties have in recent years tried to address such
complexities, often by combining the traditional nationality tests or criteria,
namely the place of incorporation; the location of the 'seat' of the corporation;
and the nationality of the shareholders who own or control the corporation.
4) Most bilateral investment treaties do not distinguish between direct
and portfolio investment.
5) Unlike friendship, commerce and navigation treaties, bilateral in¬
vestment treaties have traditionally been negotiated between developing
countries seeking to attract international investment and developed countries
as the principal homes to foreign investors.
6) The acceptability of investor-State arbitration was significantly ad¬
vanced by the conclusion in 1965 of the Washington Convention.
7) In general, treaty protection only comes into play after the invest¬
ment has been admitted.
8) Bilateral investment treaties are designed to protect, promote and
facilitate foreign investment and constitute to date the most widely used instru¬
ment for these purposes.
9) A BIT's main provisions deal with the scope and definition of for¬
eign investment; admission of investments; national and most-favoured-nation
treatment; fair and equitable treatment; guarantees and compensation in re¬
spect of expropriation; guarantees of free transfer of funds and repatriation of
capital and profits; and dispute-settlement provisions, both State-to-State and
investor-to-State.
10) The definition of the term 'investor' usually includes natural persons
and juridical entities, often referred to generically as 'companies'.
8. 1) compensation - something given as reparation for loss, injury, etc.;
indemnity;
2) abate - to make or become less in amount, intensity, degree, etc;
3) require - to impose as a necessity; make necessary;
4) ensure - to make something certain to happen; guarantee;
5) reduce - to make less in size, amount, degree, importance, etc., or bring
into a different, usually worse, state;
6) arbitrary - using unlimited personal power without considering other
people's wishes;
7) initiate - to begin or originate;
8) expropriation - of government: the action of forcibly divesting another
of a property interest, as by eminent domain;
9) impair - to spoil or weaken (something) so that it is less effective;
10) alien - coming from a different country, race, or group; foreign.
9. 1 b dispute conflict
—
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KEYS
2 g lawful legal
—
3 — d current modern
4 f compensation redress
—
5 a protection
— defence
6 — h general common
7 c alien foreign
—
8 e commitment obligation
—
10. 1. The Board has the authority to grant authorization to carry out a
restrictive trade practice.
2. The bank thus undertakes to the payee of the cheque that the cheque will
be honoured regardless of the state of the customer's account with the bank.
3. The system of law regulating the interrelationship of sovereign states
and their rights and duties with regard to one another.
4. The financial system refers to the complex of markets and institutions
which help move capital (or cash) from suppliers of capital to demanders
of capital.
5. Under the Trustee Investments Act 1961 trustees could invest not
more than half the trust fund in shares in certain companies.
6. The charterparty may provide for the payment of dispatch money
when the charterer saves days in loading or discharging the cargo.
7. He collects the assets, pays debts, and distributes any surplus to com¬
pany members in accordance with their rights.
11. 1) режим наибольшего благоприятствования — most favoured
nation treatment; 2) национальный режим — national treatment;
3) собственность иностранцев — alien property; 4) налагать условия
— to impose conditions; 5) выплата возмещения — payment of compen¬
sation; 6) безопасность — security.
12. Transfer of funds
The provisions on the transfer of 1) payments are quite important as
they concern a key aspect on which the interests of the host country and
the foreign investor may differ. Host countries often prefer that profit be
reinvested or otherwise used in the domestic economy. Furthermore, 2)
developing countries often incur balance-of-payments 3) difficulties that the
sudden repatriation of large profits or the proceeds from sale or liquida¬
tion can worsen. As a result they generally seek some form of flexibility.
However, foreign investors regard the timely transfer of income, capital
and other payments as an indispensable 4) requirement to operate and ben¬
efit from their investment projects, and to meet their obligations vis-a-vis
shareholders, 5) contractors, creditors or licensors. Virtually every bilateral
investment treaty has a provision on the transfer of payments, but there
are important differences among them in terms of specific wording. With
regard to the categories of transfers covered, bilateral investment treaties
284
KEYS
generally address the repatriation of the capital invested, the transfer of

returns generated by an investment and dividends to the investor's share¬
holders, current payments made in relation to an investment (i.e. amounts
that may be needed to pay current expenses, the interest and principal on
loans, or other 6) obligations incurred by the investor, such as royalties),
and proceeds from the sale of all or part of the investment.
Two main approaches are 7) common practice. The first is to guaran¬
tee the free transfer of all payments related to, or in connection with, an
investment, accompanied by an illustrative list of covered payments. The
second approach is simply to include an 8) exhaustive list of the types of
payments covered by the transfer provisions. Bilateral investment treaties,
with a variety of solutions, guarantee to investors the possibility of trans¬
ferring payments in a freely 9) convertible currency, without delay and at
a specified exchange rate (the official rate, the market rate or some other
rate). Exceptions generally allow for a limited delay in cases of emergen¬
cies, such as in instances of 10) insufficient foreign currency reserves. How¬
ever, exceptions are to be administered on a non-discriminatory basis. I n
some instances, transfer guarantees are limited by the explicit application
of the exchange control laws of the host country.
14. 1) consent; 2) remedy; 3) negotiation; 4) jurisdiction; 5 arbitration;
6) settlement; 7) investment; 8) provision; 9) infringe; 10) interfere
d j t a r b i t r a t i o n t r o
o u r t a e k e o k p e b i t u e
r r e a t s e t t l e m e n t d i
e i p c e o h e s a b e t t o u n
h s o o P r o v i s i o n e r n v
k d a n a e t h k o p n a r a d e
e i h s w r t l p o y t e f c e s
a c l e h w a s o p e m k e e l t
n t i n f r i n g e t u a r t o m
p i p t a r e h u i r e m e d y e
t o v e n o p y t a c o l u t e n
s n e g o t i a t i o n e t u t t
15. 1) negotiation — переговоры; 2) consultation — консультация;
3) dispute settlement — урегулирование разногласий; 4) with regard
to — относительно; в отношении; что касается; 5) commercial
285
KEYS
arbitration — коммерческий арбитраж; 6) investment disputes —

инвестиционные споры; 7) diplomatic protection — дипломатическая
защита; 8) arbitration award — р е ш е н и е арбитражного суда; 9) on
the basis of — исходя из, на основе; 10) provision — положение;
11) exhaust local remedies — исчерпать национальные средств
защиты; 12) resort to — прибегать к (чему-л.), обращаться к
(чему-л.); 13) application or interpretation of a treaty — п р и м е н е н и е
или толкование договора; 14) ad hoc arbitration — арбитраж ad
hoc/ ситуационный арбитраж; 15) arbitration panel — список
арбитров; 16) International Centre for the Settlement of Investment
Disputes (ICSID) — Международный центр по урегулированию
инвестиционных споров ( М Ц У И С ) ; 17) International Chamber of
Commerce — Международная торговая палата; 18) United Nations
Commission on International Trade Law ( U N C I T R A L ) — К о м и с с и я
ООН по праву международной торговли ( Ю Н С И Т Р А Л ) .
16. 1. The prohibition of arbitrary and discriminatory measures refers
to the prohibition of actions against foreign investors in general or specific
groups of foreign investors. True.
2. Arbitration awards aren't binding on the parties. False. Arbitration
awards are binding on the parties.
3. In the 1960s many developing countries initiated bilateral investment
treaties as a way to protect their investments abroad against the growing risks
of expropriation and nationalization. False. In the 1960s many developed
countries initiated bilateral investment treaties as a way to protect their invest¬
ments abroad against the growing risks of expropriation and nationalization.
4. Compensation isn't due i f a direct expropriation takes place. False.
Compensation is due if a direct or indirect expropriation takes place.
5. Bilateral investment treaties don't guarantee to investors the possibil¬
ity of transferring payments in a freely convertible currency, without delay
and at a specified exchange rate. False. Bilateral investment treaties guaran
tee to investors the possibility of transferring payments in a freely convertible
currency, without delay and at a specified exchange rate.
6. Investment disputes under bilateral investment treaties may involve dis¬
putes only between one State and investors of the other State. False. Investment
disputes under bilateral investment treaties may involve disputes between one State
and investors of the other State, or between the two States parties to the treaty.
7. Disputes between purely private parties are normally resolved through
recourse to the courts of the State that has jurisdiction, or to commercial
arbitration. True.
8. Only a few bilateral investment treaties require that the investor ex¬
haust local remedies before resorting to arbitration. True.
9. The advantage of arbitration is that the dispute is handled in an in¬
ternational legal forum, generally removed from political interference and
able to deliver a speedy resolution. True.
286
KEYS
10. Arbitration proceedings are rarely confidential, and awards are nev¬
er published. False. Arbitration proceedings are generally confidential, and
awards are sometimes published.
17. 1—B, 2 — C, 3 — A, 4 — E , 5 — D.
18. 1 — e binding — imposing an obligation or duty
2 c stringent — requiring strict attention to rules, procedure, detail, etc.
—
3 — i transparency — the characteristic of being easy to see through

4 g deliberation — formal discussion and debate, as of a committee,
—
jury, etc.
5 a hostile — showing strong dislike; unfriendly
—
6 j protect — to keep (someone or something) safe from injury, dam¬

—
age or loss
7 b club — to gather or become gathered into a group
—
8 f failure — is a lack of success in doing something

—
9 — d agenda — a schedule or list of items to be attended to

10 h commitment — an obligation, promise, etc. that restricts one's
—
freedom of action
19. 1) ASEAN Association of South-East Asia Nations — АСЕАН
Ассоциация государств Юго-Восточной Азии;
2) COMESA Common Market for Eastern and Southern Africa —
КОМЕСА Общий [единый] рынок (государств) Восточной и Южной
Африки;
3) NAFTA North American Free Trade Agreement — НАФТА
Североамериканское соглашение о свободе торговли
4) ITO International Trade Organization — МОТ Международной
организации труда
5) GATT General Agreement on Tariffs and Trade — ГАТТ Генеральное
соглашение о тарифах и торговле
6) TRIPs Agreement on Trade-Related Aspects of Intellectual Property
Rights — Соглашение по торговым аспектам прав интеллектуальной
собственности ТРИПС
7) OECD Organization for Economic Cooperation and Development —
ОЭСР Организация экономического сотрудничества и развития
8) WTO World Trade Organization — ВТО Всемирная торговая
организация
9) Agreement on TRIMs Agreement on Trade-Related Investment Measures —
ТРИМС Соглашение по связанным с торговлей инвестиционным мерам
10) ASCM Agreement on Subsidies and Countervailing Measures — Со¬
глашение по субсидиям и компенсационным мерам
22. 1 — e. The sanctions will involve a ban on all military, economic,
cultural and sporting links.
2 — c. This part of the law is only aPPlicable to companies employing
more than five people.
287
KEYS
3 — k. Britain must try to import fewer goods from overseas, so as to

help her own industries.
4 — a. They sell to their own country but they don't yet export to other
countries.
5 — h. The major condition for open frontiers within Schengen is ef¬
fective controls on the external borders.
6 — j . Goods, which are importable without any restriction, may be
imported by any person whether he is an actual user or not.
7 — b. The law comes into force with effect from January 1.
8 — g. The transfers of funds from domestic accounts to offshore ac¬
counts will only be permitted for transactions initiated prior to December
1, 1986.
9 — f. This Bill is designed to bring our laws into line with existing
practice.
10 — i. The government has decided it will comply with the require¬
ments of the E U Commission.
23.
VERB NOUN NOUN ADJECTIVE
(person) (abstract)
include — inclusion included, inclusive
prohibit — prohibition prohibitive
eliminate eliminator elimination —
notify — notification notifiable
export exporter export, exportable
exportation
import importer import, —
importation
24. 1. The Regulations also contain protections with respect to night
working.
2. The Perjury Act 1911 also creates various offences related to perjury.
3. The Act is also concerned with certain aspects of parliamentary control.
4. Transnational corporations operate in such a way that they exercise a
uniform, cohesive, and common policy in order to further their economic
interests.
5. A hostile witness may, with the permission of the court, be cross-
examined by that party, for example by putting to him a previous statement
that is inconsistent with his present testimony.
6. Shares in private companies and partly paid shares may be subject to
restrictions on transfer.
7. The Act applies to children under 18.
8. All the arrangement for your shipment will be done in conformity with
your instructions.
288
KEYS
9. International law is also known as public international law to distin¬

guish it from private international law, which does not deal with relation¬
ships between states.
10. Since the establishment of the United Nations, self-help with regard
to use of force can only be legal in so far as it forms part of a legitimate
claim to self-defence.
11. Conditions may be imposed on a person released on bail by the police.
26. 1 b foreign — domestic
—
2 g beneficial detrimental
— —
3 — e proponent — opponent
4 c predictable
— unpredictable
—
5 — f increase — reduction
6 — d complex — simple
7 a voluntary compulsory
— —
27. 1 — g transition period

2 a direct investment
—
3 — k host country
4 c service sector
—
5 b bargaining power
—
6 — i domestic law
7 d empirical evidence
—
8 f social responsibility
—
9 — j investment rule
10 — e great care
28. 1. When were Friendship, Commerce and Navigation Treaties com-
mon instruments? Friendship, Commerce and Navigation Treaties were com¬
mon instruments throughout the 19th century and the beginning of the 20th
century.
2. Are bilateral investment treaties designed to protect, promote and
facilitate foreign investment and constitute to date the most widely used
instrument for these purposes? Yes, bilateral investment treaties are designed
to protect, promote and facilitate foreign investment and constitute to date the
most widely used instrument for these purposes.
3. Why did developing countries, as hosts to foreign direct investment,
conclude bilateral investment treaties? Developing countries, as hosts to foreign
direct investment (FDI), concluded bilateral investment treaties in order to cre¬
ate a favourable climate and in some cases to become eligible to participate in
political risk insurance programmes organized by capital-exporting countries.
4. When was the Washington Convention concluded ? It was concluded
in 1965.
5. What is the main objective of bilateral treaties? The main objective of
bilateral investment treaties is to protect investment made by investors of one
party in the territory of the other party.
289
KEYS
6. Do states have the sovereign right to regulate and prohibit or condi¬

tion the admission of investment and investors in their territory? Yes. Under
customary international law states have the sovereign right to regulate and pro¬
hibit or condition the admission of investment and investors in their territory.
7. The prohibition of arbitrary and discriminatory measures refers to the
prohibition of actions against foreign investors in general or specific groups
of foreign investors, doesn't it? The prohibition of arbitrary and discrimina¬
tory measures refers to the prohibition of actions against foreign investors in
general or specific groups of foreign investors.
8. How can you explain "most favoured nation treatment"? Mostfa¬
voured nation treatment provides that investors and investment of one party
will not be treated less favourably in the other party than any third party
investor or investment.
9. When did many developed countries initiate bilateral investment
treaties? In the 1960s many developed countries initiated bilateral investment
treaties as a way to protect their investments abroad against the growing risks
of expropriation and nationalization.
10. Does every bilateral investment treaty have a provision on the trans¬
fer of payments? Yes. Virtually every bilateral investment treaty has a provi¬
sion on the transfer of payments, but there are important differences among
them in terms of specific wording.
11. Why are the provisions on the transfer of payments quite important?
The provisions on the transfer of payments are quite important as they concern
a key aspect on which the interests of the host country and the foreign investor
may differ.
12. Disputes between purely private parties are resolved through re¬
course to the courts of the State that has jurisdiction, or to commercial
arbitration, aren't they? Yes. Disputes between purely private parties are nor¬
mally resolved through recourse to the courts of the State that has jurisdiction,
or to commercial arbitration.
13. Do all bilateral investment treaties require that the investor exhaust
local remedies before resorting to arbitration? No. Only a few bilateral in¬
vestment treaties require that the investor exhaust local remedies before resort¬
ing to arbitration.
14. Are arbitration proceedings always confidential? No. Arbitration
proceedings are generally confidential, and awards are sometimes published.
15. What is the general aim of these agreements? The general aim of
these agreements is to create a more favourable investment climate through
a combination of investment liberalization and protection measures, with a
view to increasing the flow of investment within or between regions. The North
American Free Trade Agreement (NAFTA), the MERCOSUR Protocols and
the Treaty Establishing the Common Market for Eastern and Southern Africa
(COMESA) are all examples.
16. Did developing countries push through many (non-binding) resolu¬
tions, including the Charter of Economic Rights and Duties immediately
290
KEYS
after decolonization? In the United Nations, immediately after decolonization,

developing countries clubbed together and pushed through many (non-binding)
resolutions, including the Charter of Economic Rights and Duties.
17. Why were developing countries generally hostile towards stringent
investment rules? Developing countries were generally hostile towards strin¬
gent investment rules for fear of losing their new-found sovereignty to foreign
investors.
18. When was the attempt to negotiate a U N Code of Conduct on
Transnational Corporations abandoned? The attempt to negotiate a UN
Code of Conduct on Transnational Corporations was abandoned in the early
1990s after many years of deliberations.
19. What does the TRIMs Agreement prohibit? The TRIMs Agreement
prohibits the application of certain investment measures related to trade in
goods to enterprises operating within the territory of a Member.
29. 1 l scope for investment — возможности для капиталовло¬
—
жений
2 a International Centre for Settlement of Investment Disputes (IC-
—
SID) — Международный центр по урегулированию инвестиционных

споров (МЦУИС)
3 w phasing of investment — поэтапное распределение капитало¬
—
вложений
4 t to encourage productive investments — поощрять
—
капиталовложения в производство
5 i effectiveness / efficiency of capital — эффективность капитало¬
—
вложений
6 o direct investment abroad — прямые инвестиции за рубежом
—
7 b fixed investment — вложения в основной капитал

—
8 x foreign investment — заграничные капиталовложения

—
9 s Code of Conduct on Transnational Corporations —

—
Международный кодекс поведения Т Н К

10 d foreign investment screening — рассмотрение заявок на осуще¬
—
ствление иностранных инвестиций

11 — y receptiveness to foreign investment — льготный режим для
иностранных инвестиций
12 — c private investment — частные инвестиции
13 — k tax penalties on foreign investments — налоги на иностранные
инвестиции
14 — u nonresidential investment — инвестиции в нежилые здания
и сооружения
15 — e treatment of foreign investment — режим иностранных инвес¬
тиций
16 — v government investment — правительственные инвестиции
17 — m investment appraisal — экономическая оценка инвестиций
18 — p investment plan — план капиталовложений
291
KEYS
19 — n investment potential — инвестиционный потенциал

20 — q investment programming — планирование ка¬
питаловложений
21 — r tax-sheltered investment — капиталовложение, не подлежащее
обложению налогом
22— h long-range / long-term investment — долгосрочные
инвестиции
23 — j direct private investment — прямые частные инвестиции
24 — f public investment — государственные капиталовложения
25 — g residential investment — инвестиции в жилищное
строительство
26 — z Multilateral Investment Guarantee Agency (MIGA) — Многосто¬
роннее агентство по гарантированию инвестиций (МАГИ).
TEST
1. 1. Investors fled financial markets, putting their money into gold,
collectibles and other tangible assets.
2. Restrictive practices in their home market have given Japanese in¬
dustries an unfair advantage in international trade.
3. Congress approved a commercial treaty with Ukraine that paved
the way for a joint business venture.
4. The United Nations Commission on International Trade Law and
the United Nations Conference on Trade and Development are actively
increasing the range of international law in the fields of economic, financial
and development activities.
5. Britain has attracted a large proportion of Japanese direct invest¬
ment in the EU.
6. Developing countries, including such giants as India and China, have
insisted they need financial and technological help.
7. The content of the most frequently invoked substantive treaty provi¬
sions — the obligations to accord national treatment and fair and equitable
treatment to foreign investors, and to expropriate the property of foreign
investors only in accordance with international law and on payment of due
compensation — is far from clear.
8. The International Centre for Settlement of Investment Disputes was
established under the auspices of the World Bank by the Convention on
the Settlement of Investment Disputes Between States and the Nationals of
Other States, 1965 and administers ad hoc arbitrations.
9. The North American Free Trade Agreement (NAFTA), 1992, linking
the US, Mexico and Canada, aims at the free movement and liberalization
of goods, services, people and investment, and also contains dispute settle¬
ment provisions.
10. Intangible assets such as information, image, and people are the
main drivers of business today.
292
KEYS
II. 1. with regard to truth and justice;

2. a restriction on expenditure
3. in order to avoid obligations
4. with respect to material objects
5. International Centre for the Settlement of Investment Disputes
6. in accordance with the general usage
7. provide for a clause
8. refer to an application
9. Agreement on TRIMs
10 carry out business
III. Статья I I
(a) Капиталовложениям будет предоставляться справедливый и
равноправный режим, они будут пользоваться полной защитой и
безопасностью, и ни в коем случает им не должен предоставляться
режим, не совместимый с принципами и нормами международного
права.
(b) Ни одна из Сторон не будет никоим образом препятствовать
путем принятия произвольных или дискриминационных мер управ¬
лению, функционированию, содержанию, пользованию, обладанию,
приобретению, расширению или распоряжению капиталовложения
ми. Для целей разрешения споров в соответствии со ст. V I и V I I
принятая мера может быть признана произвольной или дискримина¬
ционной несмотря на то, что сторона в споре имела либо восполь¬
зовалась возможностью рассмотреть такую меру в судах или админи¬
стративных органах Стороны.
(Договор между Российской Федерацией и Соединенными
Штатами Америки о поощрении и взаимной защите
капиталовложений)
IV. Article I I I (3).
Nationals or companies of either Party whose investments suffer losses
in the territory of the other Party owing to war or other armed conflict,
revolution, state of national emergency, insurrection, civil disturbance, or
other similar situations shall be accorded nondiscriminatory
UNIT 3 CONTRACTS
1. 1 — b The requirements for a contract in Anglo-American law are
that there be an offer, acceptance and consideration.
2— c Compensatory damages are intended to compensate the non-
breaching party for the actual damages suffered.
3 — c A void contract imposes no legal rights or obligations upon the
parties and is not enforceable by a court.
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4 c Courts often refuse to enforce adhesion contracts on the grounds that

—
a true meeting of the minds never existed, or that there was no acceptance of
the offer because the purchaser actually had no choice in the bargain.
5 — b Oral contracts are enforceable.
3. 1 — e remedy — any of the methods available at law for the enforcement,
protection, or recovery of rights or for obtaining redress for their infringement;
2 h performance of contract the carrying out of obligations under
— —
a contract;
3 a agreement
— an arrangement or promise to do something, made
—
by two or more people or organizations;

4 g trade the activity of buying, selling, or exchanging goods within
— —
a country or between countries;

5 c tenet a belief, opinion, or dogma;
— —
6 d requisite something indispensable; necessity;

— —
7 b bargaining discussion to reach agreement about something, for

— —
example trade, levels of pay etc.;

8 f obligation a legal or moral duty to do something;
— —
4. 1. The GATT trade agreement established a sound basis for interna¬

tional commerce.
2. The seller has undertaken no obligation and there is only a unilateral
contract under which the buyer is committed to pay i f the seller delivers.
3. At common law, contracts to commit a crime or promote sexual im¬
morality are illegal.
4. Scots law also recognizes interference with liberty.
5. The courts merely interpret the code, which can be altered by the
legislature.
6. Uniform Commercial Code applies to almost all sales of goods.
7.
noun verb noun verb
offer offer termination terminate
acceptance accept bargain bargain
deal deal communication communicate
notification notify obligation oblige
forbearance forbear exchange exchange
benefit benefit suit sue
8. to enter into contract; to rely on/upon smth; to be bound by the

terms; to refrain from doing something; to be concerned with smth.
9. 1) оферта — offer; 2) адресат оферты; лицо, которому делается
предложение — offeree; 3) отменять, аннулировать — to revoke; 4) ак¬
цепт, акцептование — acceptance; 5) взаимное согласие — mutual assent;
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6) прекращать(ся), оканчивать(ся) to terminate; 7) оферент; лицо,

—
делающее предложение — offeror; 8) отклонение, отказ — rejection;

9) встречное предложение — counteroffer; 10) юридически обязатель¬
ный договор — binding contract; 11) действительный договор — valid
contract; 12) встречное удовлетворение — consideration; 13) ущерб,
вред — detriment; 14) воздержание от действия; отказ от принятия
мер — forbearance; 15) договорное обязательство — contractual obligation;
16) быть связанным условиями — to be bound by the terms.
10. 1. A contract is a promise or a set of promises for the breach of
which the law gives a remedy, or the performance of which the law in some
way recognizes as a duty.
2. I n medieval England, the courts did not engage in the enforcement of
agreements between individuals.
3. A contract consists of one individual making an offer, another accepting
the offer, and the existence of consideration between the contracting parties.
4. A n offer is the expression of a willingness to enter into a bargain.
5. A valid offer must identify the fundamental elements of the proposed
agreement.
6. A n offer may be revoked at any time before it is accepted or before it
is reasonably relied upon by another individual.
7. A n offer may be accepted only by a person to whom the offer was
directed and only before the offer terminates or is revoked.
8. A n offer and acceptance alone do not create a valid and binding contract.
9. Consideration is a bargained-for exchange, that is, the existence of
mutuality of obligation.
10. A promise to make a gift is not consideration, nor is a moral obligation.
11. 1 — B, 2 - F , 3 - A, 4 - E , 5 - D, 6 - G.
12. 1. A contract obtained by fraud is voidable on the grounds offraudu¬
lent misrepresentation.
2. Documents that are insufficiently or improperly stamped cannot be
admitted as evidence in civil proceedings and they are therefore legally
unenforceable.
3. Where a contract is, on the whole, for the benefit of a minor, it will
not be invalidated because one term has operated in a way which is not to
his advantage.
4. Writing is a requirement in many legal systems.
5. Equity can give relief against 'unconscionable bargains' in cases where
one party is in a position to exploit the weakness of the other.
6. Once the existence of a contract has been confirmed, it is necessary
to explore the scope of the obligations which each party incur.
7. Thus, i f specific performance of a contract can be ordered, a party to
a contract or their personal representative can ensure enforcement of the
contract for the benefit of a third party.
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8. Consideration is the name given to the need for reciprocity in con¬

tracts.
9. Warranties are contractual terms concerning the less important or
subsidiary statements of facts or promises.
10. The term should be expressed in plain English, and any ambiguity
should be interpreted in the customer's favour.
13. 1— d fraudulent misrepresentation
2 a to accept an offer
—
3 j clerical error
—
4 h mutual assent
—
5 — g contractual obligation
6 b mentally ill
—
7 e legal capacity
—
8 c to enter into a contract

—
9 f subject matter
—
10 — i parol evidence
14. Across: 1) consideration; 2) writing; 3) offer; 4) victim; 5) murder;
6) construction; 7) duress;
Down: 8) acceptance; 9) invalidate; 10) mistake; 11) minor; 12) assent;
13) fraud; 14) threat; 15) bargain.
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16. 1. I n order for an individual to enter into a contract, that person
r e s
must have the legal capacity to do so. True.

2. At common law, minors, individuals who are mentally i l l , per¬
sons under the influence of alcohol or drugs, and those under a legal
guardianship have legal capacity to contract. False. At common law,
minors, individuals who are mentally ill, persons under the influence of
alcohol or drugs, and those under a legal guardianship lack legal capacity
to contract.
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3. The statute of frauds doesn't require that in certain specific circum¬

stances, contracts must be in writing. False. The statute of frauds requires
that in certain specific circumstances, contracts must be in writing.
4. Scrivener's errors are generally corrected by an offeree. False. Scriven-
er's errors are generally corrected by a court.
5. Competency is generally defined as the mental ability of a party to
contract. True.
6. The rule as to minors is that a contract of a minor is void, not voi¬
dable. False. The rule as to minors is that a contract of a minor is voidable,
not void.
7. I n addition to capacity, an individual must have the legal compe¬
tency to enter a contract. True.
8. A contract that is based on a fraudulent misrepresentation of a ma¬
terial term is enforceable. False. A contract that is based on a fraudulent
misrepresentation of a material term is unenforceable.
9. I n fact, most oral contracts, i f they fulfill all of the requirements
of a contract, are unenforceable. False. I n fact, most oral contracts,
if they fulfill all of the requirements of a contract, are indeed enforce-
able.
10. I f the parties to a contract make a mutual mistake with regard to
that contract, such as a mutual misunderstanding, there is no mutual assent
and therefore no contract. True.
11. Physical duress, or forcing a person to accept an offer, doesn't in-
validate the contract. False. Physical duress, or forcing a person to accept
an offer, invalidates the contract.
12. The threat of physical harm makes the contract void at the election
of the victim. False. The threat of physical harm makes the contract void-
able at the election of the victim.
13. A contract that is entered into under undue influence is also void¬
able at the election of the victim. True.
14. Punitive damages are often described as conferring the benefit of the
bargain upon the nonbreaching party. False. Expectancy damages are often
described as conferring the benefit of the bargain upon the nonbreaching party.
Punitive damages are those intended to punish the breaching party.
15. Compensatory damages are intended to compensate the nonbreach-
ing party for the actual damages suffered. True.
19. 1. Article X I requires members to refrain from applying restrictions
on international transfers and payments for current transactions relating to
their specific commitments — it also does not apply generally.
2. The member states having negotiating rights with respect to the bind¬
ing being modified or withdrawn are required to take that compensation
into account.
3. According to case law, a WTO Member making a claim/argument
carries the burden of proof to demonstrate that its claim/argument holds.
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4. For the purposes of the present discussion, National Treatment is an

obligation under the GATT to treat foreign firms and products the same as
domestic firms and products.
5. This tends to result in overproduction and displacement of foreign
producers in third-country markets.
6. The US has never agreed to enter into a treaty containing such a 'tax
sparing' provision, but many European nations have.
7. A residence country could impose tax on foreign source income at
some, probably relatively low, rate regardless of the amount of source tax
imposed.
8. One of these roles stems from the fact that in order for the agree¬
ment to be self-enforcing, there must be a common understanding of what
constitutes cooperative behavior, and what amounts to a violation of the
implicit agreement.
9. The net effect of trade, then, depends on the ratio of a country's
global share of production to its global share of consumption of imperfectly
competitive goods.
10. The remaining obligations imposed by the SPS Agreement that are
discussed below relate only to measures that do not conform to interna¬
tional standards.
20. 1) юридический документ —legal document; 2) правовые,
юридические последствия — legal consequences; 3) скрепленный
печатью under seal; 4) неоформленный договор informal contract;
— —
5) подразумеваемый договор — implied contract; 6) оформленный

договор; формальный договор —formal contract; 7) положительно
выраженный договор — express contract; 8) подразумеваемый дого¬
вор — contract implied in fact; 9) квазидоговор — contract imlied in
law/ quasi-contract; 10) взаимное согласие — mutual agreement;
11) обычная практика ведения деловых операций — course of dealing;
12) подразумеваемая обязанность — implied promise; 13) договорные
отношения — contractual relationship; 14) договор с исполнением в
момент заключения — executed contract; 15) договор с исполнением
в будущем — executory contract; 16) в известной степени — to a
certain extent; 17) двухсторонний контракт — bilateral contract;
18) односторонняя сделка — unilateral contract; 19) юридически
обязанный — legally bound; 20) адресат оферты — offeree.
23. 1. Commercial law regulates commercial transactions.
2. Increased quantities of imports can also result from an increase in
domestic demand attributable, for example, to rising consumer incomes.
3. I n May 2004, the E U received a promise from Russia to ratify the
treaty in exchange for the EU's endorsement of Russia's attempt to join the
World Trade Organization.
4. The contract of guarantee was therefore void for common mistake at
common law.
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5. The most important restriction on a plaintiff's choice of forum continues

to be the court's ability to assert personal jurisdiction over the defendant.
6. At times, credit will be sought in order to purchase specific goods; at
other times, a debtor may borrow money to assist it in its general obligations.
7. The duress simply becomes a wrongful act of a similar kind to a
misrepresentation, which, i f it has influenced the other party's decision to
make a contract, provides a basis for that contract being voidable.
8. The only provisions in any way comparable in English law, allowing
courts to set a contract, or part of a contract aside because its provisions
are 'unfair' or ' unconscionable' operate only in much more limited areas
or situations.
9. Moreover, damages may be awarded against a party which has re¬
fused to negotiate, or broken off negotiations, contrary to good faith and
fair dealing.
10. One of the reasons why the parties will put their transaction into the
form of a contract is that it provides a mechanism for enforcement of the
way in which they have agreed to allocate the risks.
24.
NOUN NOUN
VERB ADJECTIVE ADVERB
(person) (abstract)
void void void, voidable
compete competitor competition, competitive competitively
competitiveness
impoverish impoverishment impoverished
consume consumer consumables, consumable,
consumerism, consuming
consumption
enforce enforcement enforceable
assert assertion, assertive assertively
assertiveness
negotiate negotiator negotiation negotiable
execute executor execution, executive
executive
manifest manifestation manifest manifestly
avoid avoidance avoidable
25. 1. What did the seal represent? The seal represented that the parties
intended the agreement to entail legal consequences.
2. Has the seal lost all of its effect by statute in many jurisdictions? In
the past, all contracts were required to be under seal in order to be valid, but
the seal has lost some or all of its effect by statute in many jurisdictions.
3. What do the parties state in an express contract? In an express con¬
tract, the parties state the terms, either orally or in writing, at the time of its
formation.
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4. Is the term quasi-contract a more accurate designation of contracts

implied in fact? No. The term quasi-contract is a more accurate designation
of contracts implied in law.
5. A contract implied in law is actually an obligation imposed by law,
isn't it? Yes. A contract implied in law is actually an obligation imposed by
law and treated as a contract only for the purposes of a remedy.
6. What is an executory contract? An executory contract is one in which
some future act or obligation remains to be performed according to its terms.
7. Do the majority of unconscionable contracts occur in consumer
transactions or financial transactions? The majority of unconscionable con¬
tracts occur in consumer transactions.
8. What does adjective unconscionable imply? The adjective unconscion¬
able implies an affront to fairness and decency.
9. Does an unconscionable contract involve a promise that is made by
only one party? No. A unilateral contract involves a promise that is made by
only one party. An unconscionable contract is one that no mentally competent
person would accept and that no fair and honest person would enter into.
10. Are all adhesion contracts unconscionable? Not all adhesion con¬
tracts are unconscionable, as the terms of such contracts do not necessarily
exploit the party who assents to the contract.
11. Why do courts often refuse to enforce contracts of adhesion? Courts
often refuse to enforce contracts of adhesion on the grounds that a true meeting
of the minds never existed, or that there was no acceptance of the offer because
the purchaser actually had no choice in the bargain.
12. Is a fire insurance policy a form of aleatory contract or adhesion
contract? A fire insurance policy is a form of aleatory contract.
13. Can contracts be only voidable? No. Contracts can be either void or
voidable.
14. Does a void contract impose legal rights or obligations upon the
parties? A void contract imposes no legal rights or obligations upon the parties
and is not enforceable by a court.
15. A voidable contract is a legally enforceable agreement, isn't it? Yes.
26. Bilateral Contract
An agreement formed by an exchange of a promise in which the promise of
one party is consideration supporting the promise of the other party.
A bilateral contract is distinguishable from a unilateral contract, a
promise made by one party in 1) exchange for the performance of some act
by the other party. The party to a unilateral contract whose performance
is sought is not obligated to act, but i f he or she does, the party that made
the promise is bound to 2) comply with the terms of the agreement. In a
bilateral contract both parties are bound by their exchange of 3) promises.
Both parties to a bilateral contract make promises. With 4) respect to
the promise in issue, the party making the promise is the promisor and the
other party is the promisee. The legal detriment incurred by the promisee
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5) consists of a different promise by him or her to do something or 6)

refrain from doing something that he or she was not previously legally ob¬
ligated to do or to 7) refrain from doing. This legal detriment constitutes
consideration, the cause, motive, or benefit that induces one to enter into
a contract. Consideration is an 8) essential component of a contract.
Traditionally, courts have 9) distinguished between unilateral and bilat¬
eral contracts by determining whether one or both parties provided con¬
sideration and at what point they provided the consideration. Bilateral
contracts were said to bind both parties the minute the parties exchange
promises, as each promise is 10) deemed sufficient consideration in itself.
Unilateral contracts are said to bind only the promisor and do not bind the
promisee unless the promise accepts by performing the obligations speci¬
fied in the promisor's offer. Until the promisee performs, he or she has
provided no 11) consideration under the law.
For example, i f someone offered to drive you to work on Mondays and
Tuesdays in exchange for your promise to return the favor on Wednesdays
and Thursdays, a bilateral contract would be formed binding both of you
once you provided consideration by 12) accepting those terms. But i f that
same person offered to pay you $10 each day you drove him to work, a
unilateral contract would be formed, binding only upon the promisor until
you provided consideration by driving him to work on a particular day.
Modern courts have de-emphasized the distinction between unilateral
and bilateral contracts. These courts have found that an offer may be 13)
accepted either by a promise to perform or by actual performance. A n
increasing number of courts have 14) concluded that the traditional distinc¬
tion between unilateral and bilateral contracts fails to significantly advance
legal analysis in a growing number of cases where performance is provided
over an extended period of time.
Suppose you promise to pay someone $500.00 to paint your house. The
promise sounds like an offer to enter a unilateral contract that binds only
you until the promisee accepts by painting your house. But what constitutes
lawful "performance" under these 15) circumstances? The act of beginning
to paint your house or completely finishing the job to your satisfaction?
Most courts would rule that the act of beginning performance under
these circumstances converts a unilateral contract into a bilateral contract,
requiring both parties to 16) fulfill the obligations contemplated by the con¬
tract. However, other courts would analyze the facts of each case so as not
to frustrate the reasonable expectations of the parties. I n neither of these
cases are the legal rights of the parties ultimately determined by the courts
by applying the concepts of unilateral and bilateral contracts.
In still other 17) jurisdictions, courts have simply expressed a preference
for interpreting contracts as creating bilateral obligations in all cases where
there is no clear evidence that a unilateral contract was intended. The rule
has been stated that in case of doubt an offer will be presumed to invite
the formation of a bilateral contract by a promise to perform what the offer
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requests, rather than the formation of a unilateral contract commencing at

the time of actual performance. The bottom line across most jurisdictions
is that as courts have been confronted by a growing variety of fact patterns
involving complicated contract 18) disputes, courts have shifted from rig¬
idly applying the concepts of unilateral and bilateral contracts to a more
ad hoc approach.
Mutuality of obligation must exist in an enforceable bilateral contract,
and this involves the concept of 19) reciprocity. A cannot enforce B's
promise unless A's promise entails a legal detriment, and B can enforce A's
promise only i f B's promise involves a legal detriment. I f a minor enters a
bilateral contract with an adult that is unenforceable due to the minor's
age, the adult party cannot assert absence of mutuality as a defense i f the
minor sues to enforce the contract. This principle 20) applies to any situa¬
tion where the law grants a particular party a privilege to avoid a contract
because of his or her status.
28. 1 c заранее оцененные убытки — liquidated damages
—
2 z договорное обязательство — contractual commitment

—
3 v оспоримый договор — voidable contract

—
4 w отклонить предложение — refuse/ decline an offer

—
5 p подразумеваемый договор — implied contract

—
6 a встречная оферта — counter offer

—
7 b денежные убытки — monetary damages

—
8 y договор о продаже в рассрочку — hire purchase contract

—
9 u договор, страхующий людей от случайных событий — alea¬

—
tory contract
10 f получить компенсацию за убытки — recover damages
—
11 — k не имеющий юридической силы, ничтожный договор —

void contract
12 — d выставлять на продажу — offer for sale
13 — aa нести ответственность за ущерб — be held liable for dam¬
ages
14 — s принимать предложение — accept an offer
15 — h надлежащее встречное удовлетворение — valuable considera¬
tion
16 — e договор страхования — contract of insurance
17 — g отказываться от предложения — withdraw/ revoke an offer
18 — bb возмещение убытков в тройном размере — treble damages
19 — j в порядке возмещения убытков — by way of damages
20 m договор на строительство «под ключ» — turnkey contract
—
21 — x договор с исполнением в момент заключения — executed

contract
22 — i уплатить денежное возмещение — pay damages
23 — l возместить убытки — repair the damages
24 n штрафные убытки — punitive damages
—
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25 — o сумма компенсации ущерба — amount in damages

26 — q выносить решение о возмещении — award payment of dam¬
ages
27 — t срочный контракт, контракт на определенный срок — fixed-
period contract/ fixed-term contract
28 — r фактические убытки — compensatory damages
TEST
I. 1) aleatory contract — an insurance agreement that provides cover
against loss or damage caused by a chance event;
2) acceptance — taking or agreeing to take something offered;
3) executed contract — a contract where the people or groups involved
have done the things that they agreed to do;
4) express contract — a contract which states clearly what has been
agreed;
5) offer — a statement that you are willing to give someone some¬
thing or do something for them;
6) implied contract — a contract that is not specifically stated or written
down;
7) unilateral contract — a contract in which only one of the parties has
to do something, which is therefore not legally a proper contract :
8) offeror — a person or organization that offers to buy something;
9) voidable contract — a contract that can be ended because one of the
people or groups involved has done something unfair;
10) consideration — something of value given by one person or group
signing a contract in exchange for something given by the other;
11) void contract — a contract that is not recognized by a law court
because it is illegal;
12) offeree — a person or organization to whom something is offered
for sale;
13) consideration — something of value given by one person or
group signing a contract in exchange for something given by the other;
14) damages — money that a court orders someone to pay to someone
else for harming them or their property, or causing them financial loss;
15) bilateral contract — a contract between two people or groups.
II. 1) to comply with a rule; 2) to trade in exchange for smth; 3) offer
for sale; 4) to be held liable for damages; 5) to be bound by the terms; 6) to
refrain from doing something; 7) protection under the law; 8) to enter into
an agreement; 9) to be concerned with smth; 10) to rely on/upon smth.
III. Статья 18
1) Заявление или иное поведение адресата оферты, выражающее
согласие с офертой, является акцептом. Молчание или бездействие
сами по себе не являются акцептом.
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2) Акцепт оферты вступает в силу в момент, когда указанное

согласие получено оферентом. Акцепт не имеет силы, если оферент не
получает указанного согласия в установленный им срок, а если срок
не установлен, то в разумный срок, принимая при этом во внимание
обстоятельства сделки, в том числе скорость использованных
оферентом средств связи. Устная оферта должна быть акцептована
немедленно, если из обстоятельств не следует иное.
IV. Article 14
(1) A proposal for concluding a contract addressed to one or more
specific persons constitutes an offer i f it is sufficiently definite and indicates
the intention of the offeror to be bound in case of acceptance. A proposal is
sufficiently definite i f it indicates the goods and expressly or implicitly fixes
or makes provision for determining the quantity and the price.
(2) A proposal other than one addressed to one or more specific persons
is to be considered merely as an invitation to make offers, unless the con¬
trary is clearly indicated by the person making the proposal.

1. 1. a) four ; 2. a) Promissory note; 3. c) Intoxication; 4. a) 30 days
3. 1) promissory; 2) lading; 3) loan; 4) deposited; 5) certificates;
6) check; 7) commercial; 8) payee; 9) bearer; 10) payable; 11) borrow; 12)
exchange; 13) goods; 14) shipment.
4. 1) credit 2) remuneration 3) transaction 4) theft 5) drawer 6) discount
7) payment 8) check 9) loan 10) interest
1c r e d i t
2r e m u n e r a t i o n
3t r a n s a c t i o n
4t h e f t
5d r a w e r
s c o u n t
7p a y m e n t
8c h e c k
9l o a n
10i n t e
И
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5. 1) коносамент — bill of lading; 2) простой вексель, соло-вексель —

promissory note; 3) письменный документ written instrument; 4) текущий
—
(чековый) счет — checking account; 5) тратта — draft; 6) выкупная цена

— redemption price; 7) депозитный сертификат — certificate of deposit;
8) законное право — legal right; 9) коммерческая бумага — commercial pa¬
per 10) вознаграждение — remuneration; 11) трассант — drawer; 12) деловая
операция — business transaction; 13) индоссамент — endorsement;
14) оборотный документ — negotiable instrument; 15) Единый торговый
кодекс Uniform Commercial Code; 16) чек check (US), cheque (UK);
— —
17) векселедатель — maker; 18) предъявитель (лицо, предъявляющее к

оплате вексель или иной долговой документ; владелец ценной бумаги
на предъявителя) — bearer; 19) движимое имущество — personal property;
20) срочный вексель — term bill/ time note; 21) получить платеж — to re¬
ceive payment; 22) договор о ссуде — credit/loan agreement; 23) индоссант,
жирант — endorser/ endorsee; 24) вкладчик, депозитор, депонент — depos¬
itor; 25) сберегательная облигация — savings bond; 26) потребительский
кредит — consumer credit 27) срок, число, когда наступает срок — date of
maturity; 28) номинальная стоимость — face value; 29) получать деньги (по
чеку, по векселю) to cash; 30) индоссировать endorse; 31) процентная
— —
ставка — interest rate; 32) трассат (лицо, на которое выставлена тратта)

— drawee; 33) документ на предъявителя — bearer paper; 34) банковский
чек — cashier's check; 35) сертификат собственности — certificate of
title; 36) поручительство по займу — security for a loan; 37) банк-
корреспондент — correspondent bank; 38) отгруженный товар — shipped
goods; 39) договорные отношения — contractual relationship; 40) класть
деньги на депозит — to deposit money.
6. 1. Облигации были выпущены в предъявительской форме. —
The bonds were issued in bearer form.

2. Для того чтобы растаможить товары, импортер должен заполнить
предписанную форму и представить коносамент от иностранного
экспортера. — I n order to clear goods through customs, the importer
must complete a designated form and present a bill of lading from the
foreign exporter.
3. Произвести оплату можно в любой кассе приема платежей
наличными или чеком. — Payment can be made at any payment office
by cash or cheque.
4. Если обращающийся документ предъявлен к оплате, но не
оплачен, говорят, что по нему отказали в платеже. — Where a negoti¬
able instrument is presented for payment but not paid, it is said to be dis¬
honoured by non-payment.
5. Тратта вначале должна быть предъявлена к акцепту - плательщик
становится "акцептантом", а на лицевой стороне тратты должны
быть проставлены дата и место платежа. — The draft must be presented
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first for acceptance - the drawee becomes the "acceptor" and the date and
place of payment must be written on the face of the draft.
6. Налоги на личное имущество становятся очень обременительными. —
The taxes on personal property are getting heavy.

7. Текущий контроль и управление гарантиями осуществляется
вместе с кредитованием или инвестированием, проводимых
ассоциированным банком. — Monitoring and administration of guar¬
antees are carried out in conjunction with the associated Bank loan or
investment.
8. Платежи задержаны более чем на 24 месяца. — Payments are in
arrears by over 24 months.
7. 1. Commercial Paper is a written instrument or document such as
a check, draft, promissory note, or a certificate of deposit, that manifests the
pledge or duty of one individual to pay money to another.
2. The ordinary purpose of a promissory note is to borrow money.
3. A draft, also known as a bill of exchange, is a three-party paper order¬
ing the payment of money.
4. A check is a specific kind of draft, which is drawn on a bank and
payable on demand to a particular individual or to the bearer, in which case
it can be written payable to "cash".
5. A promissory note serves as documentary evidence of a debt.
6. The drawer is the individual issuing the order to pay, while the drawee
is the party to whom the order to pay is given.
7. A certificate of deposit is a written recognition by a bank of the ac¬
quisition of a sum of money from a depositor for a designated period of time
at a specified interest rate, coupled with a promise of repayment.
8. A draft is often used in business to obtain payment for items that must
be shipped over long distances.
9. The most fundamental type of commercial paper is a promissory
note, a written pledge to pay money.
10. An individual who opens a checking account is engaged in a con¬
tractual relationship with a bank.
10. 1) g; 2) c; 3) e; 4) a; 5) b; 6) d; 7) f
dishonor — refusal or failure to accept or pay a commercial paper
accept — to agree to pay (a bill, draft, shipping document, etc.), esp
by signing
funds — money that is readily available
endorse — to write something, esp. your signature, on the back of (esp.
a cheque), in order to make it payable to someone else
obligation — a moral or legal requirement; duty
insurance — the act, system, or business of providing financial protec¬
tion for property, life, health, etc., against specified contingencies, such
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KEYS
as death, loss, or damage, and involving payment of regular premiums i n

return for a policy guaranteeing such protection
debt — something that is owed, such as money, goods, or services
11. 1. A drawee is liable to the drawer i f the drawee refuses to pay a
draft or check that is properly drawn and presented because such action
constitutes a noncompliance of the drawee's contractual obligation to the
drawer. True.
2. Any person who places his or her unqualified endorsement on a
commercial paper incurs primary liability for its payment. False. Any person
who places his or her unqualified endorsement on a commercial paper incurs
secondary liability for its payment.
3. A draft is accepted for payment when the acceptance is indicated
by the drawer on the face of the document. False. A draft is accepted for
payment when the acceptance is indicated by the drawee on the face of the
document.
4. The drawee of a draft or check has secondary liability to the holder.
False. The drawee of a draft or check has primary liability to the holder.
5. The drawer of a check or draft is secondarily liable, since that indi¬
vidual makes an unconditional promise to pay the instrument. False. The
drawer of a check or draft is secondarily liable, since that individual does not
make an unconditional promise to pay the instrument.
6. The maker of a promissory note is primarily liable, since that person
is the individual who has originally promised to pay. True.
7. A n individual who signs an instrument is either primarily or second¬
arily liable for payment. True.
12. Secondary Liability

Individuals who are secondarily 1) liable on a 2) negotiable instrument
are not obliged to pay unless it has been presented for payment and dishon¬
ored. The 3) commercial paper must first be 4) given to the person who is
primarily liable for payment. I n the event that the instrument clearly notes
the date of 5) payment, the instrument must be presented on the date indi¬
cated. I f payment is unjustifiably refused by the individual who has 6) pri¬
mary liability, the secondary party must be given notice of the 7) dishonor
and the presentation of the instrument for payment must be made within
a 8) reasonable period of time. What constitutes a reasonable time is con¬
tingent upon what type of instrument is involved. I f the paper is a check,
the drawer has primary 9) liability for thirty days following the date on the
check or the day it was given or 10) sent to the payee, with the later date
prevailing. A n 11) endorser is secondarily liable for seven days following his
or her endorsement. When presentation does not 12) occur within these
time periods, either the drawer or the endorser may 13) escape liability.
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KEYS
Individuals who are secondarily liable must receive notice of the dis¬
honor of a commercial paper in order to be 14) held liable for its payment.
Such notice must be given by a bank prior to midnight on the date fol¬
lowing the dishonor. Notice can be 15) oral or in writing, as long as the
language identifies the paper and indicates that it has been dishonored. I f
more than one person is 16) eligible to obtain payment, only one of them
need 17) notify those parties who are secondarily liable.
14. 1 d preemptive right; 2 f negotiable instrument; 3 a insuf¬
— — —
ficient funds; 4 — b holder in due course; 5 — c in good faith; 6 — e due

date; 7 — g holder for value.
15. 1) holder 2) payable 3) validity 4) bearer 5) endorser 6) value 7) dis
honoured 8) faith 9) negotiable 10) transactions.
17. 1- B; 2 - F; 3 —D; 4 - C; 5 - E; 6 — A
18. 1) отказываться от уплаты refuse payment; 2) незаконность
— —
illegality; 3) оформление (документов) — execution; 4) выставлять чек

на банк — issue a check; 5) небрежность — negligence; 6) договорное
обязательство — contractual obligation; 7) держатель оборотного
документа — a holder of a negotiable instrument; 8) добросовестно —
in good faith; 9) интоксикация (наркотическая); опьянение — intoxi¬
cation; 10) несовершеннолетие —infancy; 11) аннулировать nul¬ —
lify; 12) законный держатель — a holder in due course 13) индоссант,

жирант — endorser; 14) принуждение — duress; 15) ограничение
дееспособности, ограничение правоспособности — legal incapac¬
ity 16) мошенничество — fraud; 17) преступление; правонарушение —
wrongdoing; 18) угроза threat; 19) сделка transaction; 20) срок платежа
— —
— date of payment; 21) исправление — alteration; 22) невменяемость —

legal insanity; 23) душевнобольной — insane; 24) отказывать в акцепте
(векселя) — dishono(u)r; 25) юридически обязанный — legally bound
19. 1 - e; 2 -a 3 - g; 4 - b; 5 - h; 6 - c; 7 - f
20.
noun verb noun verb
defence UK
defend dishono(u)r dishono(u)r
defense US
suit sue threat threaten
payment issue issue
validity validate inducement induce
alteration alter deletion delete
exclusion exclude change change
endorsement endorse enforcement enforce
transaction transact entitlement entitle
nullification nullify avoidance avoid
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noun verb noun verb

intoxication intoxicate protection protect
22. 1. Are real defenses valid against ordinary holders as well as hold¬
ers in due course? Yes. Certain defenses, known as real defenses, are valid
against ordinary holders as well as holders in due course.
2. Are personal defenses valid against holders in due course? No. Per¬
sonal defenses are only valid against ordinary holders.
3. The most common way to be discharged from liability on a com
mercial paper is through payment, isn't it? Yes.
4. May the holder also discharge an individual from liability for pay¬
ment through renunciation? Yes.
5. Is intoxication a valid defense? No. Intoxication is not a valid defense
to dishonor of a commercial paper.
6. What are the basic types of fraud? The basic types of fraud are: fraud
in the essence and fraud in the inducement.
7. What is a material alteration? A material alteration is an addition or
deletion of the language of an instrument, which changes the obligations of any
party to it.
8. Is fraud in the inducement only valid against a holder in due course?
No. Fraud in the inducement is only valid against an ordinary holder, not a
holder in due course.
23. 1 p by negligence — по небрежности;
2 m defense of insanity защита ссылкой на невменяемость
—
3 a endorsement — индоссамент
4 q promissory note — простой вексель
5 g defense of minority защита ссылкой на несовершеннолетие
—
6 j drawee трассат
—
7 b holder of a bank account — владелец банковского счета

8 s valid defense юридически обоснованное возражение
—
9 c savings bond — сберегательная облигация

10 u holder for value держатель на возмездных началах
—
11 r error facti defense — защита ссылкой на фактическую ошибку

12 d bill of lading — коносамент
13 t endorser/ endorsee индоссант, жирант
—
14 e material alteration существенное изменение

15 k holder in due course законный держатель
—
16 h to bear an endorsement иметь индоссамент (о векселе и т. д.)

—
17 l primary debtor первоначальный [основной] должник

—
18 i payment for honour — оплата опротестованного векселя

19 f mere holder/ ordinary holder простой векселедержатель
—
20 v bill of exchange/ draft — переводной вексель/тратта

21 n drawer — трассант
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KEYS
22 o bearer — предъявитель
TEST
1. 1. A draft may involve three parties: the drawer, who writes or cre
ates it, the drawee, who has custody of the funds to be paid (for example,
a bank), and the payee, who will receive the funds.
2. The use of commercial paper is generally governed by the Uniform
Commercial Code.
3. A promissory note differs from a bill of exchange in that the maker
stands in the place of both the drawer and the acceptor.
4. However, where a bill has been materially altered but the alteration
is not apparent and the bill is in the hands of a holder in due course, such
a holder may treat the bill as i f it had not been altered and may enforce
payment of it according to its original tenor.
5. Promissory note are one species of negotiable instrument.
6. If, however, a material alteration is made to a deed after execution
without the consent of the parties, the deed may become void in part.
7. A bill of lading is also issued by a shipowner to a charterer who is
using the ship for the carriage of his own goods.
8. When value (which includes a past debt or liability) has at any time
been given for a bill, the holder is a holder for value, as regards the acceptor
and all who were parties to the bill before value was given.
9. For example, under English conflict rules, i f a person dies intestate,
the succession to his personal property is governed by the law of the coun¬
try in which he is domiciled.
10. Since 1925, a trustee may delegate any business of the trust to an
agent provided that he does so in good faith.
11. 1. The mortgagor has a right to redeem the goods on repayment
of the debt and usually remains in possession of them.
2. Compensation orders may be made in addition to other sentences.
3. Since a cheque is payable on demand it need not be presented to the
drawee bank for acceptance.
4. A factory outlet sells goods at a discount.
5. A n occupier of land or buildings is not liable for a fire that begins
there accidentally.
6. They must take their own decision according to their own legal advice.
7. On the face of the document the transaction appears to be an outright
gift, and the existence of a trust is not apparent.
8. A n interest in property created as a form of security for a loan or
payment of a debt and terminated on payment of the loan or debt.
9. A holder may sue on the bill in his own name.
10. Ignorance of the law is no excuse, i.e. no defence against criminal
or other proceedings arising from its breach.
III. Если индоссамент совершен представителем, не имеющим пол¬
номочий или поручения обязывать представляемого в данном вопросе,
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KEYS
представляемый или любая другая сторона, подписавшая вексель до

совершения такого индоссамента, имеет право требовать возмещения
любых убытков, которые этот представляемый или эта сторона могли
понести в результате совершения такого индоссамента, от:
a) представителя;
b) лица, которому вексель был передан непосредственно пред¬
ставителем;
c) стороны или плательщика, которые оплатили вексель непосред¬
ственно представителю или через одного или нескольких индоссатов
на инкассо.
Конвенция "О международных переводных векселях и
международных простых векселях" 1988 Статья 26
IV. 1. I f an instrument is materially altered:
(a) A party who signs it after the material alteration is liable according
to the terms of the altered text;
(b) A party who signs it before the material alteration is liable according
to the terms of the original text. However, i f a party makes, authorizes or
assents to a material alteration, he is liable according to the terms of the
altered text.
2. A signature is presumed to have been placed on the instrument after
the material alteration unless the contrary is proved.
3. Any alteration is material which modifies the written undertaking on
the instrument of any party in any respect.
Convention on International Bills of Exchange and International Promis¬
sory Notes, 1988, Article 35

1. 1 — c; 2 — a; 3 — c; 4 — b; 5 — a
4. 1) patent term d; 2) policy instrument g; 3) industrial application i;
4) inventive activity a; 5) competitive prices c; 6) technological innova¬
tion j ; 7) creative expression e; 8) government subsidy f; 9) encourage
investment b; 10) social functions h.
5. 1) срок действия патента — patent term; 2) конкурентная цена
— competitive price; 3) товарный знак — trademark; 4) общественные
затраты — social cost; 5) Бернская конвенция по охране литературных
и художественных произведений Berne Convention for the Protec
—
tion of Literature and Artistic Works; 6) патентные права patent rights;

—
7) государственная дотация — government subsidy; 8) промышленное

применение industrial application; 9) Генеральное соглашение по тарифам
—
и торговле — General Agreement on Tariffs and Trade (GATT); 10) под

покровительством, при содействии... under the auspices; 11) Всемирная
—
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KEYS
организация интеллектуальной собственности (ВОИС) World Intellectual

—
Property Organization (WIPO); 12) изобретатель inventor; 13) Парижская

—
конвенция по охране промышленной собственности — Paris Convention

for the Protection of Industrial Property; 14) новая технология — techno¬
logical innovation; 15) копирайт, авторское право — copyright; 16) intellec¬
tual work — интеллектуальное произведение; 17) цифровые технические
средства — digital technology; 18) патентообладатель patent holder; 19)
—
изобретательская деятельность — inventive activity; 20) повышать цену —

increase the price.
6. 1. After some years, generic producers are allowed to copy the drug
and enter the market providing enhanced access to patients. 2. Intellectual
property comprises an interrelated set of legal regimes protecting economic
and in some contexts personal interests in inventions, information, works of
authorship, images, symbols, and sound recordings. 3. The patent is intended
to perform three functions: (1) to stimulate inventive activity; (2) to encourage
investment in the products of inventive activity, and (3) to disseminate technical
information to the public.4. The minimum term of a patent under the TRIPS
Agreement is 20 years from the filing of the application. 5. The 'patent' is a
set of rights granted to the inventor of a product or process which is 'new'
(or 'novel'), involves an 'inventive step' (or is 'nonobvious') and is 'capable of
industrial application' (or 'useful').
8. 1. authorship — the origin or originator of a written work, plan, etc.;
2. goods — items for sale, or movable possessions;
3. patent — a government grant to an inventor assuring him the sole
right to make, use, and sell his invention for a limited period;
4. antitrust — chiefly regulating or opposing trusts, monopolies, cartels,
or similar organizations, esp. in order to prevent unfair competition;
5. trademark — the name or other symbol used to identify the goods
produced by a particular manufacturer or distributed by a particular dealer
and to distinguish them from products associated with competing manu¬
facturers or dealers;
6. piracy — the unauthorized use or appropriation of patented or copy¬
righted material, ideas, etc.;
7. duration — the length of time that something lasts or continues;
8. commerce — the activity embracing all forms of the purchase and sale
of goods and services;
9. licence — an official document which gives you permission to own, do
or use something, usually after you have paid money and/or taken a test;
10. enjoin — to require (a person) to do or refrain from doing (some
act), esp. by issuing an injunction;
11. copy — an imitation or reproduction of an original.
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KEYS
5t a d 10e m a r k 11c
7d~
4a n t i t r
9l
u ИEl o
p
j
1a u t h o r Иh i 6p
ШE a 8c У
r i c 2g o o E
a n e m
t 3p a e n t m
i c e
o r
n c
e
9.
to license licence (n) —
— to distribute — distribution (n) —
licensee (n) licensor (n) — — distributor (n) distributional (adj)

— —
licensed (adj) distributive (adj)

to pirate piracy (n) pirate
— — to alter alteration (n)
—
(n) piratical (adj)

— pirated —
(adj)
to copy copy (n) copier (n)
— to dilute dilution (n) diluted
— — —
— copious (adj); (adj)

to confuse confusion (n) — to perpetuate perpetuation (n) — —
confusing (adj) confused (adj) —perpetuity (n) perpetually (adv) — —
perpetual (adj)
to circumvent circumvention — to own own (n) - ownership (n)
— —
(n) owner (n) own (adj) —
10. 1) What does Copyright law protect? Copyright law protects the
expressive elements of a broad range of works - including books, graphical
works, dramatic works, choreography, musical compositions, sound recordings,
films, sculpture, architectural works, and computer programs - but does not
extend to facts, ideas, or utilitarian aspects of such works.
2) Do copyright owners have the exclusive right to make copies, prepare
derivative works? Yes, for most categories of works, copyright owners have the
exclusive right to make copies, prepare derivative works, and distribute, per¬
form, and display their works during the term of protection.
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KEYS
3) What and why does the WIPO Copyright Treaty require signatory
nations to provide? In response to the increased vulnerability of digital works
to widespread piracy, the WIPO Copyright Treaty requires signatory nations to
provide adequate legal protection against the circumvention of copy protection
systems and the removal or alteration of copyright management information
conveyed along with a copyrighted work.
4) Does copyright law provide for compulsory licensing of musical
compositions and television signals for cable distribution under particular
circumstances? Yes, Copyright law also provides for compulsory licensing of
musical compositions and television signals for cable distribution under par¬
ticular circumstances.
5) What does trademark law facilitate and enhance? Trademark law
facilitates and enhances consumer decisions and encourages firms to supply
quality products and services by protecting names, logos, words, phrases, sym¬
bols, sounds, trade dress, product configuration and other means of designating
the source of commercial products or services.
6) Why do US trademark owners prosecute trademark applications in
each country where they seek protection? Because the USA has not joined
the Madrid Agreement Concerning the Prevention of False or Deceptive Indi¬
cations of Source, the main international trademark convention, US trademark
owners must prosecute trademark applications in each country where they seek
protection.
7) Do trademark owners have the right to prevent others from using
their marks? Yes, trademark owners have the right to prevent others from using
their marks or otherwise confusing consumers as to the source of a product.
8) Can the owner of a famous mark enjoin and obtain damages for
the dilution, blurring, or tarnishment of the owner's mark? Yes, in some
jurisdictions, and now under federal law in the USA, the owner of a famous
mark can enjoin and obtain damages for the dilution, blurring, or tarnishment
of the owner's mark.
9) What does national registration afford? National registration affords
nationwide protection of trademarks and the opportunity to obtain foreign reg¬
istration.
10) Trademark law protects functional aspects of a product, doesn't it?
No, trademark law does not protect functional aspects of a product and al¬
lows others to use a mark fairly, such as for comparative advertising or other
descriptive purposes, so long as such use does not confuse consumers.
11. A trade secret is 1) information that derives independent eco¬
nomic value from not being generally known or readily ascertainable
and is the subject of reasonable efforts to maintain 2) secrecy. Unlike
3) patent law, information need not be 4) novel in order to qualify for
trade secret protection. Most nations protect trade secrets through 5)
national or regional regimes. Trade secret protection 6) lasts until the
information becomes publicly known. By contrast with patent protection,
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KEYS
trade secret law does not protect against independent discovery or re¬
verse engineering by 7) competitors. Those who violate trade secret law
are liable for damages and i n some cases 8) injunctions against use or
further disclosure.
12. Suggested answers
1) unfair competition; 2) appropriation; 3) intellectual property law; 4)
right of publicity; 5) new technologies; 6) adopted; 7) databases.
14. 1 — B; 2 — E; 3 — A; 4 — D
17. 1) subsidy; 2) responsibility; 3) product; 4) imbalance; 5) innova
tion; 6) negotiation; 7) quota; 8) brand name; 9) recourse; 10) export; 11)
remedy; 12) sanctions
18. 1) GATT (General Agreement on Tariffs and Trade) Генеральное
—
соглашение по таможенным тарифам и торговле;

2) ICJ (International Court of Justice) — Международный суд
(ООН);
3) WTO (World Trade Organization) — ВТО, Всемирная торговая
организация;
4) WIPO (World Intellectual Property Organization) — ВОИС,
Всемирная организация по охране интеллектуальной собственности;
5) TRIPS (The Agreement on Trade-Related Aspects of Intellectual
Property Rights) Т Р И П С , Соглашение по торговым аспектам прав
—
интеллектуальной собственности;
6) IPR (Intellectual Property Rights) — права на интеллектуальную
собственность;
7) UNCTAD (United Nations Conference on Trade and Develop
ment) ЮНКТАД, Конференция ООН по торговле и развитию;
—
8) NIEO (New International Economic Order) — Н М Э П , Новый

международный экономический порядок.
19. 1) with; 2) in, of; 3) with; 4) over; 5) on; 6) on, of.
20. 1) по сравнению с as compared with = as compared to; 2) уре¬
—
гулирование разногласий — dispute settlement; 3) многосторонний —

multilateral; 4) активы в виде интеллектуальной собственности — in¬
tellectual property assets; 5) применять санкции (к, против) — impose
sanctions (on); 6) Уругвайский раунд —Uruguay Round; 7) зависеть
(от) — depend (on); 8) предоставление принудительной лицензии,
выдача принудительной лицензии — compulsory licensing; 9) развитые
страны — developed countries; 10) столкновение/противоречие инте¬
ресов clash of interests; 11) подход "кнута и пряника" a carrot and
— —
stick approach; 12) развивающиеся страны — developing countries; 13) в

пользу — in favor of; 14) иерархия — hierarchy; 15) беспокоиться о
чем-л., из-за чего-л. — to be anxious about smth.
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KEYS
21. 1. F. WIPO was affected by a fundamental clash of interests and

values in the mid-1980s.
2. F. By the late 1970s, manufacturers in the United States had grown
concerned with the protection of their intellectual property assets, particu¬
larly in developing and newly industrializing countries.
3. T. The WIPO Conventions permit recourse to the International
Court of Justice.
4. F. Recording companies and film studios were increasingly anxious
about copyright piracy.
5. T. The concern of industry coincided with a movement among devel¬
oping countries in favor of a 'New International Economic Order'
6. F. The NIEO sought at WIPO to relax protection of IP, such as by
providing more flexible rules for the compulsory licensing of patents.
7. F. I n negotiations for revision to the Paris Convention, the United
States and other developed countries, including those of the European Com
munity and Japan, demanded stronger protection of intellectual property
rights (IPRs).
23. 1) лицензионное вознаграждение licencing fee; e
—
2) владелец авторского права — copyright holder; s

3) подавать заявку на патент — to apply for a patent, to file a pat¬
ent application; p
4) patentee — патентовладелец; h
5) патент на промышленный — образец patent for a design; l
6) получать лицензию to get/obtain a licence; r
—
7) нарушение патента, нарушение патентного права — patent in¬

fringement; c
8) лицензиат, получатель лицензии, владелец лицензии — licensee; o
9) патентная заявка — patent application; i
10) по лицензии —under licence; d
11) лицензиар — licensor; t
12) предоставить лицензию to issue (sb) a licence / to grant a li¬
—
cence; f
13) произведение, охраняемое авторским правом — copyright work; g
14) передача патента — patent assignment; j
15) нарушение авторского права copyright offence; k
—
16) обновлять лицензию — to renew a licence; b

17) действующий патент patent in force; q
—
18) раскрывать изобретение — to disclose an invention; n

19) утративший силу патент — void patent; a
20) подтвержденный патент — confirmation patent; u
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TEST
I 1. indications; 2. license; 3. rights; 4. World Trade Organization;
5. trademark; 6. innovation; 7. subsidy; 8. inventor; 9. holder; 10. patent;
11. Copyright; 12. TRIPS Agreement; 13. Paris Convention; 14. auspices;
15. term.
II. 1) with; 2) of; from; for; 3) for; 4) in; 5) of; under; 6) for; 7) unless;
8) —; of; 9) on; 10) from; of; over.
III. Предоставляемые права
Владелец зарегистрированного товарного знака имеет
исключительное право не разрешать третьим лицам без его
согласия использовать в ходе торговли идентичные или подобные
обозначения для товаров или услуг, которые идентичны или подобны
тем, в отношении которых зарегистрирован товарный знак, когда
такое использование могло бы привести к появлению вероятности
смешения. В случае использования идентичного обозначения для
идентичных товаров или услуг вероятность смешения считается
существующей. Права, описанные выше, не наносят ущерба каким-
либо существующим правам, возникшим ранее, и не влияют на
возможность членов ставить существование прав в зависимость от их
использования.
(ТРИПС Статья 16)
IV. Conditions on Patent Applicants
1. Members shall require that an applicant for a patent shall disclose
the invention in a manner sufficiently clear and complete for the invention
to be carried out by a person skilled in the art and may require the ap¬
plicant to indicate the best mode for carrying out the invention known to
the inventor at the filing date or, where priority is claimed, at the priority
date of the application.
2. Members may require an applicant for a patent to provide informa¬
tion concerning the applicant's corresponding foreign applications and
grants.
(TRIPS Agreement Article 29)
UNIT 6 TORT LAW

1. 1 c Latin; 2 c lex loci delicti (commissi); 3 b three; 4 c strict
— — — —
liability; 5 b expert testimony.

—
4. 1) неосторожное поведение — reckless behavior; 2) нести ответ¬

ственность за to be held liable for; 3) деликвент tortfeasor; 4) сторона
— —
в гражданском процессе — litigant; 5) неправомерное лишение сво¬

боды — false imprisonment; 6) кляузничество, сутяжничество — chi-
317
KEYS
canery; 7) убытки в деньгах, денежная компенсация ущерба — pe¬

cuniary/money damages; 8) нанесение побоев — battery; 9) тяжкие
телесные повреждения grievous bodily harm; 10) экономические
—
связи/отношения — economic affairs; 11) деликтный иск — tort ac¬

tion; 12) штрафовать — fine; 13) деликтное поведение — tortious con¬
duct; 14) диффамация — defamation; 15) законное право — legal right;
16) принуждение — coercion; 17) общее право — common law; 18)
истец — plaintiff; 19) законодательный акт — legislative enactment;
20) материальный ущерб — pecuniary loss; 21) клеветать в устной
форме — slander; 22) причинение (вреда) по небрежности — negli¬
gent infliction; 23) уголовное преследование — criminal prosecution; 24)
мошенничество — fraud; 25) загрязнять атмосферу — to pollute the air;
26) инфекционная болезнь — communicable disease; 27) нападение —
assault; 28) вредное последствие — harmful consequence; 29) иск о
взыскании убытков — action on the case; 30) вмешательство в чью-л.
личную жизнь — invasion of one's privacy; 31) ответчик — defendant; 32)
злоупотребление влиянием — undue influence; 33) средство судебной
защиты — remedy; 34) небрежность — negligence; 35) смертоносное
насилие — deadly force; 36) гражданский суд — civil court; 37) смерть
в результате противоправных действий — wrongful death; 38) пасквиль
(клевета письменно или через печать) — libel; 39) самооборона — self-
defense; 40) присвоение движимого имущества — conversion.
5. 1 f pecuniary monetary
— —
2 a offence wrongdoing
— —
3 h negligent careless
— —
4 b reprehensible culpable
— —
5 g defamation slander
— —
6 — c defendant — accused
7 — d enactment —law
8 e deception fraud
— —
6.
noun verb noun verb
injury injure trespass trespass
assault assault prosecution prosecute
imprisonment imprison fine fine
fraud defraud kill kill
vindication vindicate defamation defame
7. 1 — fraud; 2 — trespass; 3 — damages; 4 — plaintiff; 5 — liability; 6 —
injury; 7 — negligence; 8 — tortious; 9 — assault; 10 — defendant.
8. 1) nuisance; 2) tortfeasor; 3) negligence; 4) assault; 5) fraud; 6)
libel; 7) tortious; 8) defendant; 9) plaintiff; 10) slander.
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2t r 7t f
8d
e a s
1 n u
o r
i 10 s a
l
• с e
o f 9p a
r 3 n e g l i g e n c
И
4 a JL JL H l t n a d
o
i d
a
i
n
6l Ш b e
r
l
u n t
s t i
f
5f r • И
9. 1. to be responsible for the legal education of solicitors; 2. to suf¬
fer physical abuse from another person; 3. to breach a contract; 4. to be
under a legal duty; 5. liability for negligence; 6. to be derived from Latin;
7. to protect smb. from prosecution; 8. interference with private rights; 9.
seclusion from the world; 10. freedom from taxation.
10. 1. Deadly force may only be used by persons who reasonably
believe that their lives are endangered and for whom there are no reasonable
means of escape.
2. Consent induced by coercion, duress, undue influence, or chicanery
is not legally effective.
3. In economic affairs, tort law provides remedies for businesses that are
harmed by the unfair and deceptive trade practices of a competitor.
4. Unlike criminal prosecutions, which are brought by the government,
tort actions are brought by private citizens.
5. Remedies for tortious acts include money damages and injunctions.
6. The word tort comes from the Latin term torquere, which means
"twisted or wrong.
7. A n intentional tort is any deliberate interference with a legally recog¬
nized interest.
8. In the workplace, tort law protects employees from the intentional or
negligent infliction of emotional distress.
9. Tort law also helps regulate the environment, providing remedies
against both individuals and businesses that pollute the air, land, and water
to such an extent that it amounts to a nuisance.
10. The law of torts serves four objectives. First, it seeks to compensate
victims for injuries suffered by the culpable action or inaction of others; sec¬
ond, it seeks to shift the cost of such injuries to the person or persons who are
legally responsible for inflicting them; third, it seeks to discourage injurious,
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KEYS
careless, and risky behavior in the future; fourth, it seeks to vindicate legal
rights and interests that have been compromised, diminished, or emasculated.
11. The law of torts is derived from a combination of common-law prin¬
ciples and legislative enactments.
12. Individuals may exert sufficient force in self-defense to repel an im¬
minent threat of bodily harm.
13. The person who sustains injury or suffers pecuniary damage as the
result of tortious conduct is known as the plaintiff.
14. Reasonable force may be employed in defense of property.
15. The person who is responsible for inflicting the injury and incurs
liability for the damage is known as the defendant or tortfeasor.
12. 1) product liability; 2) strict liability; 3) act of god; 4) fault; 5)
negligence.
13. 1) m; 2) a; 3) o; 4) e; 5) h; 6) n; 7) j ; 8) c; 9) k; 10) b; 11) g; 12)
d; 13) l; 14) i; 15) f
1) hazardous material; 2) legal fault; 3) common sense; 4) human con¬
duct; 5) to inflict harm; 6) strict liability; 7) act of God; 8) to assume risk;
9) public consumption; 10) contractual relationship; 11) dangerous sub¬
stances; 12) to cause injury; 13) degree of care; 14) intentional wrongdoing;
15) negligence actions.
14. 1. The rule that a plaintiff cannot claim damages for negligent in-
fliction of emotional distress unless there has been some physical impact,
such as an assault.
2. A legal system can look at harmful conduct in different ways.
3. Poverty arises from faulty distribution and not for want of goods to
distribute.
4. Courts have power to allocate responsibility among the joint tortfea-
sors, but each is wholly and severally liable to the victim.
5. "Beyond a reasonable doubt" is the amount of certainty that a juror
must have in order to find a criminal defendant guilty as charged.
15. 1. False. Negligence is the term used by tort law to characterize
behavior that creates unreasonable risks of harm to persons and property.
2. True. Not every accident producing injury gives rise to liability for
negligence.
3. False. I n some cases tort law imposes liability on defendants who are
neither negligent nor guilty of intentional wrongdoing.
4. True. Consumers who have been injured by defectively manufactured
products rely on strict liability.
5. False. Under the doctrine of strict product liability, a manufacturer
must guarantee that its goods are suitable for their intended use when they
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KEYS
are placed on the market for public consumption. (ultra vires - Beyond the
powers; outside one's official authority; used especially to describe actions
by a corporation that exceed the powers granted to it by its charter or by
state law).
16. 1) strict; 2) intentional; 3) act; 4) evidence; 5) omission; 6) con
duct; 7) tort; 8) plaintiff; 9) substantial; 10) establish; 11) causation; 12)
limits; 13) defendant; 14) tortious; 15) loss; 16) imposed; 17) recover; 18)
damages; 19) property; 20) punitive
18. 1 — E; 2 — G; 3 — A; 4 — D; 5 — B; 6 - F
20. 1) постоянная [стойкая] нетрудоспособность permanent disa¬
—
bility; 2) в соответствии с законом — under the law; 3) иск о возмещении

убытков — damage claim; 4) судебный запрет, средство правовой
защиты в виде судебного запрещения — injunctive relief; 5) судебный
процесс по гражданскому делу — civil litigation; 6) виндикация;
взыскание в судебном порядке — recovery; 7) государственная
политика — public policy; 8) распоряжение суда — court order; 9)
служебные обязанности — official duties; 10) расчетная (условная)
арендная плата — rental value; 11) личная собственность; движимое
имущество — personal property; 12) защищать от — insulate from; 13)
должностное лицо — public official; 14) штрафные убытки, убытки,
присуждаемые в порядке наказания — punitive damages; 15) понести
ущерб, получить повреждение — suffer damage; 16) образовательное
учреждение —educational institution; 17) расходы на лечение — medical
costs; 18) обезображивание —disfigurement; 19) трудоспособность —
earning capacity; 20) движимое имущество, движимость — personalty.

21.
noun verb adjective
evidence evidence evident
recovery recover recoverable
disruption disrupt disruptive
damage damage damaging, damaged
immunity immunize immune
harm harm harmful, harmed
deprivation deprive deprived
litigation litigate litigable, litigatory, litigious
22. 1. Damages may be recovered for physical, psychological, and emo
tional injury.
2) Persons who are temporarily deprived of personality may sue to re¬
cover the rental value of the property for the period of deprivation.
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KEYS
3) I f the property is destroyed, irreparable, or economically infeasible to

repair, damages are measured by the replacement value of the property.
4) Damages for injury to real property may be measured by the differ¬
ence in the realty's value before and after the tort.
5) Mental, emotional, and physical harm that is sustained in the process
of a tortious injury to real property is compensable.
6) Punitive damages are recoverable against tortfeasors whose injurious
conduct is sufficiently egregious.
7) Although punitive damages are typically awarded for injuries suffered
from intentional torts, they can also be awarded against tortfeasors who act
with reckless indifference to the safety of others.
8) I n addition to damages for past tortious conduct, plaintiffs may seek
injunctive relief to prevent future harm.
9) Certain individuals and entities are granted immunity from both
damage awards and assessments of liability in tort.
10) Charities and philanthropic organizations have been given qualified
immunity from tort liability.
11) Historically, immunity from tort litigation has been granted to gov
ernment units, public officials, charities, educational institutions, spouses,
parents, and children.
12) Several jurisdictions have abolished tort immunity for entire groups
and entities.
13) A n immunity is a defense to a legal action where public policy de¬
mands special protection for an entity or a class of persons participating in
a particular field or activity.
14) Government immunity, also known as sovereign immunity, insu¬
lates federal, state, and local governments from liability for torts that an
employee commits within the scope of his or her official duties.
15) Educational institutions generally have been immunized from tort
actions to protect students and faculty from distraction.
16) In a number of states, tortfeasors have been given immunity from li¬
ability if they are related to the victim as husband or wife, or parent or child.
17) The movement to restrict tort immunity has been based in part on
the rule of law, which requires all persons, organizations, and government
officials to be treated equally under the law.
18) Tort immunity persists in various forms at the federal, state, and
local levels.
23. 1 — c affirmative defence заявление о фактах, опровергающих
—
иск или обвинение

2 — e provisional remedy — предварительное средство судебной
защиты (в порядке обеспечения иска)
3 — h mandatory injunction, mandatory injunction обязывающее
—
решение суда, обязывающий судебный приказ
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KEYS
4 — j permanent injunction = perpetual injunction — бессрочный

судебный запрет
5 — a preliminary injunction — временный, предварительный
судебный запрет
6 — n joint and several liability — солидарная [совместная и
индивидуальная] ответственность
7 — q joint liability — совместная ответственность
8 — w secondary liability
— акцессорная ответственность;
9 — b primary liability — основная ответственность, первичное
обязательство
10 — r strict liability — обязанность граждан возмещать ущерб,
причиненный в результате какого-либо недоразумения другим лицам
11 — x vicarious liability — ответственность за действия других лиц;
12 — k lex loci delicti commissi — закон места совершения
преступления (лат.)
13 — t lex fori — закон места рассмотрения дела, закон суда (лат.)
14 — d abatable nuisance — устранимый вред или источник вреда
15 — z attractive nuisance — привлекающий (напр. детей) источник
опасности
16 — cc private nuisance — источник опасности или неудобства для
какого-л. лица или группы лиц
17 — g public nuisance — источник опасности или неудобства для
всех окружающих
18 — bb actual damages — реальные, фактические убытки
19 — dd consequential damages — косвенные убытки
20 — p liquidated damages — заранее оцененные убытки; оценочная
неустойка; ликвидные убытки (определяемые посредством
арифметического подсчета)
21 — v nominal damages — номинальные убытки, номинальное
возмещение, имеющее символическое значение
22 — u punitive damages = punitory damages exemplary damages —
штрафные убытки, убытки, присуждаемые в порядке наказания
23 — f speculative damages — предполагаемые убытки
24 — aa treble damages — возмещение убытков в тройном размере
25 — l aggravated assault — нападение при отягчающих
обстоятельствах
26 — o assault and battery — нападение с нанесением удара (побоев)
27 — y fraudulent conversion — мошенническое присвоение
имущества, обманное присвоение имущества
28 — i common recovery — виндикация по нормам общего права
29 — s double recovery — взыскание убытков, превышающих размер
ущерба
30 — m recovery of (civil) damages — взыскание убытков
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KEYS
TEST
I. 1) torts 2) disability 3) prosecution 4) Pecuniary loss 5) common 6)
actions 7) assault 8) imprisonment 9) liable 10) injunctive 11) earning 12)
mandatory 13) joint liability 14) Contemptuous damages 15) recovery
II. 1) courts typically rely on expert testimony; 2) to recover damages
for false imprisonment; 3) in addition to damages for past tortious conduct;
4) immunity from punishment or recrimination; 5) to proceed despite dif¬
ficulties; 6) to be responsible for an offence or misdeed 7) liability for neg¬
ligence; 8) to protect from accidents; 9) gratuitous interference with private
rights; 10) freedom from taxation
III. Статья 5
1) Право, применимое в соответствии со статьями 3 и 4 к ответс
твенности перед пострадавшим пассажиром, регулирует ответствен¬
ность за вред причиненный вещам, перевозимым в транспортном
средстве и принадлежащим или вверенным пассажиру.
2) Право, применимое в соответствии со статьями 3 и 4 к ответ¬
ственности перед собственником транспортного средства, регулиру¬
ет ответственность за вред, причиненный вещам, перевозимым в
транспортном средстве, иным, чем вещи, указанные в предыдущей
части.
3) Ответственность за вред, причиненный вещам вне транспорт¬
ного средства или транспортных средств, регулируется националь¬
ным правом государства, в котором имело место происшествие.
4) Однако ответственность за вред, причиненный личным вещам
пострадавшего вне транспортного средства или транспортных
средств, регулируется национальным правом государства регистра¬
ции, если такое право применимо к ответственности по отношению
к пострадавшему согласно статье 4.
IV. Article 7
1) I n the case of vehicles which have no registration or which are
registered in several States the internal law of the State in which they are
habitually stationed shall replace the law of the State of registration. The
same shall be true i f neither the owner nor the person in possession or
control nor the driver of the vehicle has his habitual residence in the State
of registration at the time of the accident.
2) Whatever may be the applicable law, in determining liability account
shall be taken of rules relating to the control and safety of traffic which
were in force at the place and time of the accident.
UNIT 7 FAMILY LAW

1. 1 — b both parents; 2 — c covenant marriages; 3 — a 1980; 4 — c
no-fault divorce; 5 — a mothers.
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KEYS
4. provided for by collective agreement; despite the fact; rely on God;

based on principles; enter into a treaty; obtain a divorce.
5.
noun verb adjective
1) legislation, legislator legislate legislative
2) divorce, divorce, divorcee divorce divorced
3) marriage marry married
4) support, supporter support supportive
5) inheritance inherit inheritable, inherited
6) judicatory, judge judge judicial, judicatory
7) prove proof provable
8) presume presumption presumptive
9) fault fault faultless, faulty
10) dispute dispute disputed, disputable
6. 1. What did the "best-interests-of-the-child" doctrine balance?
The "best-interests-of-the-child" doctrine balanced a new right of the mother
to custody of the child against the assessment of the needs of the child.
2. Were marriage and divorce private matters during Anglo-Saxon times
in England or in the United States? Marriage and divorce were private mat-
ters during Anglo-Saxon times in England.
3. Texas in 1780 was the first state to allow judicial divorce, wasn't it?
No, Massachusetts was the first state to allow judicial divorce.
4. How did the Catholic Church label divorce? The Catholic Church
labeled divorce a sin.
5. Why was divorce extremely rare in colonial America? This was partly
because obtaining a divorce decree required legislative action, a process that
was time-consuming and costly.
6. Traditionally, fathers retained custody of their children, didn't they?
Yes, traditionally, fathers retained custody of their children.
7. Has the law relating to family disputes and obligations grown dra¬
matically since the 1970s? Yes, the law relating to family disputes and obliga¬
tions has grown dramatically since the 1970s.
8. When did the "tender years" doctrine arise? The "tender years" doc¬
trine arose after the Civil War, giving mothers a presumptive right to their
young children.
9. 1 e antenuptial marriage contract - a contract made between a
—
man and a woman before they marry, agreeing on the distribution of their
assets in the event of divorce; 2 g spouse — a person's husband or wife;
—
3 a annulment
— — a formal invalidation, as of a marriage, judicial pro-
ceeding, etc; 4 f bigamy the crime of marrying a person while one is
— —
still legally married to someone else; 5 h visitation rights the right of

— —
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KEYS
the non-custodial parent, granted by the divorce or family court, to visit

with the child on some sort of scheduled or regular basis; 6 b separation
—
agreement a written agreement between husband and wife in contempla-

—
tion of divorce detailing how their property is to divided, how alimony or

child support is to be paid and in what amount by whom to the other, and
custodial arrangements for children; 7 d divorce the termination of a
— —
marriage by court order; the state of having terminated a marriage; 8 c —
adultery — voluntary sexual intercourse during the subsistence of a mar-

riage between one spouse and a person of the opposite sex who is not the
other spouse.
11. 1. imprisonment; 2. support; 3. marriage; 4. adultery; 5. wedding;
6. religious; 7. blood; 8. separation; 9. permission; 10. judge.
12. 1. Separation agreements are concerned with child support, visita¬
tion, and temporary maintenance of a spouse.
2. Antenuptial agreements involve property rights and the terms that
will be in force if a couple's marriage ends in divorce.
3. I n covenant marriages, parties mutually agree to reject "no-fault di¬
vorce," agree to enroll in premarital or post-wedding counseling, and also
agree to divorce only under certain, more limiting conditions, such as domestic
violence, abandonment, adultery, imprisonment of a spouse, or lengthy sepa¬
ration.
4. Today, the names of applicants for marriage licenses are published
in local newspapers.
5. Many states require a blood test or a blood test and physical exami-
nation before marriage, to show whether one party is infected with a venereal
disease.
6. The U.S. Supreme Court has held that states are permitted to rea-
sonably regulate marriage by prescribing who can marry and the manner in
which marriage can be dissolved.
7. Once someone is married, the person must be legally released from
his or her spouse by death, divorce, or annulment before he or she may legally
remarry.
8. Every state proscribes marriage between close relatives.
9. Persons who enter into a second marriage without legally dissolving
a first marriage may be charged with the crime of bigamy.
10. Modern statutes ordinarily provide that females may marry at age
16 and males at age 18.
13. 1) sex; 2) license; 3) revived; 4) legal; 5) scrutiny; 6) prohibited;
7) levels; 8) passed; 9) extend; 10) settlement; 11) counties; 12) exten¬
ded.
16. 1 e property assets; 2 b spousal maintenance; 3 i monetary
— — —
contribution; 4 a drug addiction; 5 j community property; 6 h divorce

— — —
326
KEYS
proceedings; 7 c equitable distribution; 8

— — d no-fault divorce; 9 — g legal
recognition; 10 f marketable skills.
—
17. 1) adultery; 2) divorce; 3) cruelty; 4) alcoholism; 5) addiction; 6)

maintenance; 7) alimony; 8) assets
d m a 1 n t e n a n c e p
u t 1 u h n o r d a t e m
r g
c t e r s n u h w a o
n o o a c r u e 1 t y
1 u
h z h b t e n a t a r 1 n
g
P o k a a s s e t s m h
n a 1 m J a s r r o g
o r
u d 1 v o r c e У e f n e
a k s d 1 c t e 1 p
a y
o
h p
m h u n a o t a n
k h a a d d 1 c t 1 o n g
1 a r u o p
z d r 1 m 1 o
18. 1. False. By 1987, all fifty states had adopted no-fault divorce,
exclusively or as an option to traditional fault-grounded divorce. 2. True.
3. True. 4. False. No-fault divorce has become an inexpensive means of
ending a marriage, especially when a couple has no children and moderate
property assets. 5. False. Alimony, or spousal maintenance, can be either
temporary or permanent. 6. True. 7. True. 8. False. Maintenance is most
often used to provide temporary support to a spouse who was financially
dependent on the other during the marriage.
19. 1) договор — contract; 2) прав собственности — proper
ty rights; 3) договор между мужем и женой, заключенный после
бракосочетания — postnuptial agreement; 4) государственная
политика — public policy; 5) исходя из предположения — under the
assumption; 6) брак — marriage; 7) запрещать — prohibits; 8) void —
аннулировать; 9) под принуждением — under duress; 10) стороны —
parties; 11) свидетелей — witnesses; 12) недвижимого имущества — real
estate.
21. 1) custody — the act of keeping safe or guarding, esp the right of
guardianship of a minor; 2) abuse maltreatment of a person; injury; 3)
—
petition— a formal application in writing made to a court asking for some

specific judicial action; 4) alimony law (formerly) an allowance paid
—
under a court order by one spouse to another when they are separated but
not divorced; 5) lien a right to retain possession of another's property
—
327
KEYS
pending discharge of a debt; 6) upbringing —the way in which someone

is treated and educated when they are young, esp. by their parents, particu-
larly in relation to the effect which this has on how they behave and make
moral decisions; 7) delinquent — a person, usually young, who behaves in
a way that is illegal or unacceptable to most people.
22. 2 h tax; 3 k visitation; 4 a support; 5 j welfare; 6 b
— — — — —
joint; 7 i convention; 8 f animosity; 9 deadbeat; 10 g survey.

— — — —
23. 1. What does the Uniform Reciprocal Enforcement of Support

Act allow? The Uniform Reciprocal Enforcement of Support Act allows an
individual who is due alimony or child support from someone who lives in a
different state to bring action for receipt of the payments in the home state.
2. What do all custodial rights include? These include decision making
power over all aspects of upbringing, religion, and education
3. Do usually mothers or fathers pay child support? In most cases, a
divorce decree will require the noncustodial parent, usually the father, to pay
child support.
4. Does legal custody remain with both parents? Yes. Legal custody
(the decision-making power over the child's conduct of life) remains with
both parents.
5. How many states have adopted provisions in their family laws al-
lowing visitation for grandparents under certain circumstances? Each of
the 50 states has adopted provisions in their family laws allowing visitation for
grandparents under certain circumstances.
6. When did Congress pass the Parental Kidnapping Prevention Act?
In 1980, Congress passed the Parental Kidnapping Prevention Act.
7. When did the USA adopt the Hague Convention on the Civil Aspects
of International Child Abduction? In 1986, the United States adopted the
1980 Hague Convention on the Civil Aspects of International Child Abduction.
8. Why was the Hague Convention on the Civil Aspects of International
Child Abduction designed? The convention was designed to facilitate the
return of abducted children and the exercise of visitation rights across inter¬
national boundaries.
9. Why was the UCCJA created? The UCCJA was created to deal with
interstate custody disputes.
10. The failure of parents to pay child support has significant con-
sequences, doesn't it? Yes, the failure of parents to pay child support has
significant consequences.
11. Are all custodial rights exercised by both parents during a marriage?
Yes, during a marriage, all custodial rights are exercised by both parents.
12. In 1986, Congress enacted a provision that created the Office of Child
Support Enforcement in the Department of Health and Human Services,
didn't it? No, in 1975, Congress enacted a provision that created the Office of
Child Support Enforcement in the Department of Health and Human Services.
328
KEYS
13. Must state laws require employers to withhold child support from
the paychecks of parents who are delinquent for one month or for three
months? State laws now must require employers to withhold child support from
the paychecks of parents who are delinquent for one month.
14. State laws must provide for the imposition of liens against the prop¬
erty of those who owe support, mustn't they? Yes, state laws must provide for
the imposition of liens against the property of those who owe support.
15. Who gained custody of children since the nineteenth century? In
the United States, since the nineteenth century, mothers traditionally gained
custody of children.
25. 1 - h; 2 - s; 3 - o; 4 - a; 5 - t; 6 - c; 7 - p; 8 - r; 9 - b; 10 - f;
11 - m; 12 - d; 13 - k; 14 - e; 15 - j;16 - l; 17 - g; 18 - n;19 -i; 20 - q
1. separation agreement соглашение между супругами о
—
раздельном проживании
2. divorce decree судебное решение о разводе
—
3. defending spouse супруг-ответчик

—
4. divorce a mensa et thoro решение суда об установлении

—
статуса раздельного жительства супругов

5. alimony pendente lite содержание (мужем жены) на период
—
судебного процесса о разводе

6. divorce suit бракоразводный процесс
—
7. parental custody — родительское попечение

8. no-fault divorce развод "без чьей-либо вины"
—
9. incompatibility — несовместимость
10. alimony in gross общая сумма (присужденных) алиментов;
—
11. adultery — адюльтер, прелюбодеяние

12. drug addiction наркомания
—
13. bigamous marriage бигамия, двоебрачие

—
14. marriage articles соглашение по имущественным вопросам

—
брака, брачный договор (регулирующий будущие имущественные

отношения супругов)
15. ad interim alimony временное содержание
—
16. alimony in general (присужденная) сумма алиментов,

—
подлежащих регулярной выплате;

17. ex parte proceeding судопроизводство при наличии одной
—
стороны (а не по спору между сторонами)

18. claiming spouse = complaining spouse — супруг-истец
19. marriage by proxy брак по доверенности, заключение брака
—
по доверенности;
20. antenuptial agreement предбрачный договор (об имущест¬
—
венных отношениях будущих супругов).
329
KEYS
TEST
I. 1) No-fault 2) blood 3) close 4) agreement 5) custody 6) joint, joint 7)
common; 8) marriage; 9) noncustodial; 10) visitation
II. 1) Once someone is married, the person must be legally released from
his or her spouse by death, divorce, or annulment before he or she may legally
remarry.
2) Every state proscribes marriage between close relatives.
3) Sometimes a lower age is permitted with the written consent of the parents.
4) The names of applicants for marriage licenses are published in local
newspapers.
5) State laws must provide for the imposition of liens against the property
of those who owe support.
6) Every state forbids marriage to a child or grandchild
7) The UCCJA was created to deal with interstate custody disputes.
8) Despite court challenges, marriage can occur only between persons of
the opposite sex.
9) Persons who enter into a second marriage without legally dissolving a
first marriage may be charged with the crime of bigamy.
10) State laws now must require employers to withhold child support from
the paychecks of parents who are delinquent for one month.
III. Статья 3. Перемещение или захват ребенка рассматриваются
как незаконные, если:
a) при этом нарушаются права попечительства над ребенком,
принадлежащие какому-либо лицу, учреждению или иному
органу, коллективному или индивидуальному, в соответствии с
законодательством государства, в котором ребенок постоянно
проживал до его перемещения или захвата; и
b) в момент перемещения или захвата эти права эффективно
осуществлялись, коллективно или индивидуально, или осуществлялись
бы, если бы не перемещение и захват.
Права попечительства, упомянутые в п. а), могут возникнуть, в
частности, в соответствии с каким-либо правовым актом, либо в силу
решения судебных и административных властей, либо вследствие
соглашения, влекущего юридические последствия по законодательству
этого государства.
Конвенция о гражданско-правовых аспектах
международного похищения детей
IV. Article 1
1. No marriage shall be legally entered into without the full and free
consent of both parties, such consent to be expressed by them in person
after due publicity and in the presence of the authority competent to sol
emnize the marriage and of witnesses, as prescribed by law.
330
KEYS
Article 2
States Parties to the present Convention shall take legislative action to
specify a minimum age for marriage. No marriage shall be legally entered
into by any person under this age, except where a competent authority has
granted a dispensation as to age, for serious reasons, in the interest of the
intending spouses.
Convention on Consent to Marriage, Minimum
Age for Marriage and Registration of Marria
UNIT 8 ARBITRATION
1. 1 a 1985; 2 — c United Nations Convention on Recognition and
-
Enforcement of Foreign Arbitral Awards; 3 — a 2004; 4 — a Institutional

arbitration; 5 — b International Bar Association.
4.
noun verb noun verb
arbitration arbitrate determination determine
requirement require investment invest
dispute dispute scrutiny scrutinize
mediation mediate submission submit
award award intervention intervene
application apply legislation legislate
5. 1) арбитражный процесс — arbitration proceeding; 2) коммерческий,
торговый арбитраж — commercial arbitration; 3) торговый спор —
commercial dispute; 4) государство пребывания — host state; 5) го
сударственный арбитраж — state arbitration; 6) посредничество — me
diation; 7) альтернативное урегулирование споров — alternative dispute
resolution; 8) Международная торговая палата (МТП) — International
Chamber of Commerce (ICC); 9) ситуационный арбитраж — ad hoc
arbitration; 10) Конвенция о признании и приведении в исполнение
иностранных арбитражных решений — Convention on Recognition and
Enforcement of Foreign Arbitral Awards; 11) Типовой закон ЮНСИТРАЛ
о международном коммерческом арбитраже — UNCITRAL Model
Law on International Commercial Arbitration; 12) United Nations Com
mission on International Trade Law (UNCITRAL) — Комиссия ООН
по праву международной торговли (ЮНСИТРАЛ); 13) Прецедентное
право по текстам ЮНСИТРАЛ (ППТЮ) — Case Law on UNCITRAL
Texts (CLOUT); 14) вместо чего-либо — in lieu of smth.
6. 1) resolution; 2) binding; 3) judicial; 4) transactions; 5) transactions;
6) home; 7) arbitrators; 8) expertise; 9) languages; 10) enforced; 11) obliges;
12) awards.
331
KEYS
7. 1. Depending on the parties and the nature of the dispute, one can
distinguish different types of arbitration, each of which have particular
features despite their common basic structure: state arbitration, investment
arbitration between a host state and an investor, consumer arbitration involv¬
ing at least one party which is a consumer, and statutory arbitration, where the
jurisdiction of the tribunal is not based on an agreement between the parties
but on statute.
2. I n commercial arbitration a distinction must be made between na¬
tional or domestic cases and international cases.
3. Arbitration is a process in which the parties agree to refer their dis¬
putes to one or more neutral persons (arbitrators) in lieu of the court system
for judicial determination with a binding effect.
4. The binding and judgment-like nature of the final arbitral award dis-
tinguishes arbitration from other forms of alternative dispute resolution, such
as mediation and all types of expert determination.
5. Institutional arbitration is characterized by the fact that the parties
have submitted their dispute to the rules of a particular arbitration institution
which provides the necessary administrative support, in particular concerning
the constitution of the tribunal.
6. I n general, the provisions regulating international arbitration give
greater room for party autonomy and allow for less court intervention dur¬
ing the arbitration proceedings and the post award stage than is found in the
domestic context.
7. In ad hoc arbitrations, by contrast, it is generally left to the parties
to draft their own arbitration rules or to provide for application of one of the
existing sets of arbitration rules for ad hoc arbitration, such as the UNCITRAL
Arbitration Rules.
8. Modern national arbitration laws usually leave it to the local courts
to provide any necessary procedural support in these cases.
9. In the early 1970s, the national arbitration laws in various countries
differed considerably as to the extent of court intervention and supervision.
10. I n countries with a long tradition in arbitration, such as England,
the law allowed considerable court intervention culminating in the 'case stated
procedure' by which a party could ask the tribunal to refer any question of law
to the English courts.
11. Since the 1970s, many countries have enacted new arbitration laws,
and the trend is for such new laws to take a very favourable approach towards
arbitration.
12. Adopted in 1985 by UNCITRAL after years of intensive discussion
on a global level, the Model Law was meant to provide 'a sound and prom-
ising basis for the desired harmonization and improvement of national laws'.
13. The Model Law is written in a user-friendly way and covers all
stages of the arbitral process.
332
KEYS
14. Arbitration is frequently the chosen mechanism for dispute resolu¬

tion in situations where there is either no court that has binding jurisdiction
over the parties, as is often the case in arbitrations between sovereign states,
or the parties want to avoid actual or perceived disadvantages of the relevant
judicial system.
15. More than 130 countries are party to the New York Convention,
Art. I I I of which obliges the courts of these Contracting States to enforce
foreign awards unless one of a very few bases to resist enforcement enumerated
in Art. V exists.
10.
1. Since self-help was regarded at international
law as a legal remedy, the results secured by it
a) MANDATORY
were recognized by the international community
as a final settlement of the case. e
2. In exceptional circumstances the judge may
choose not to impose the mandatory sentence b)
on such an offender but must provide a full ENFORCEMENT
explanation as to why this has not been done. a
3. Strictly, any enforcement action can only be
justified under Article 42 of the Charter, which
c) D O M I C I L E
requires agreement by member states to place
their armed forces at the disposal of the U N . b
4. The conduct of elections is regulated by the
e) LEGAL
Representation of the People Acts 1983 and 1985. h
5. A domicile of choice is acquired by making
a home in a country with the intention that it f) BOUND
should be a permanent base. c
6. Regulations are of general application, binding
in their entirety, and directly applicable in all
g) APPLICABLE
member states without the need for individual
member states to enact these domestically. g
7. The Cabinet is bound by the convention of
h) REGULATED
collective responsibility. f
11. 1. The country is dominated by a power struggle between the com-
munists on the one hand and the nationalists on the other.
2. Advocates no longer enjoy immunity from law suits for negligence in
relation to civil or criminal litigation.
3. Mensrea, in the sense of knowledge of the facts that make the action
criminal, is required by at least two of the conspirators, even i f the crime
agreed upon is one of strict liability.
4. I n debt collecting, someone other than the creditor takes steps to
procure the payment of debts owing to him.
333
KEYS
5. Usually the protected state allows the protector full control over its
external affairs but retains control over its internal affairs.
6. A fixed-term contract cannot be terminated by notice unless the
contract expressly provides for this.
7. Decisions were often made on the basis of incorrect information.
8. The company's results are in line with stock market expectations.
13. 1. Arbitration is regulated by a complex interplay of different legal
sources of statutory or contractual origin. True.
2. Arbitration practice comes into play only as a separate legal source.
False. Arbitration practice comes into play at all stages, not only as a separate
legal source but also to interpret the provisions of the applicable arbitration
laws and the arbitration agreement as well as the chosen rules.
3. The place of arbitration is a legal concept which is independent of the
place of the hearings or the domicile of the parties or the arbitrators. True.
4. In practice the contractual sources are of greater importance, since
most modern arbitration laws now clearly embrace the principle of party
autonomy. True.
5. I n commercial arbitration the trend in recent decades has been to
diminish the scope of arbitration and enlarge the number of disputes which
are not arbitrable. False. In commercial arbitration the trend in recent dec¬
ades has been to enlarge the scope of arbitration and diminish the number of
disputes which are not arbitrable.
6. The role of party autonomy receives protection only by domestic law.
False. The role of party autonomy receives protection by the international and
regional conventions, where they apply.
7. Under most modern arbitration laws the parties don't freely deter-
mine the place of arbitration. False. Under most modern arbitration laws the
parties may freely determine the place of arbitration.
8. Contracts form part of the applicable law and aim to ensure that
arbitration agreements and awards are enforced. False. The international
conventions form part of the applicable law and aim to ensure that arbitration
agreements and awards are enforced.
9. In arbitration the applicable national arbitration law has a double
function, which is reflected by the separation into mandatory and nonman-
datory provisions. True.
10. The governing national arbitration law in international cases generally
depends on the New York Convention. False. The governing national arbitra-
tion law in international cases generally depends on the place of arbitration.
15. 1 — B There can be no arbitration between parties which have not
agreed to arbitrate their disputes.
2 — F The New York Convention as well as the Model Law and most
national laws nowadays recognize the validity of pre-dispute agreements
and enforce them.
334
KEYS
3 — E I n particular its validity is not dependent on that of the main

contract and it may even be submitted to a different law.
4 G To be valid and enforceable most arbitration laws as well as the
—
New York Convention require that the arbitration agreement be in writing.

5 — A The writing requirement imposed by such provisions is meant to
ensure that the arbitration agreement does not become part of the contract
unnoticed, given that it entails a loss of the right to a day in court.
6 — C A comparable definition can be found in the more recent Model
Law, which explicitly allows for an exchange via all forms of telecommu¬
nication.
16. 1 c arbitration agreement
-
2 - g statutory provision
3 — a host country
4 - j investment arbitration
5 — e national law
6 — i commercial case
7 — b clause compromissoire
8 d arbitral tribunal
—
9 f damage claim
—
10 h exchange of letters
—
17.
2c n f
1v
e
a
r
l i
E
3s u b m i t
5a
4j
r
u
e e
r i
m
s
e
d
n
i
t
c t i
EE
g
6p
7l
r
a
e
w
v
EEE
8s t i p u l a t e
E a r t i c i p a t e
10 v i o l a t e
E _L mEl e m e n t
19. 1 g claim — to demand as being due or as one's property; assert
—
one's title or right to

2 — a autonomy freedom to determine one's own actions, behaviour, etc
—
3 — h appointment the act of placing in a job or position

—
335
KEYS
4 f provision a demand, condition, or stipulation formally incor¬

— —
porated in a document
5 d impartial
— —not prejudiced towards or against any particular
side or party; fair; unbiased
6 - b independent — free from control in action, judgment, etc.; au¬
tonomous
7 e challenge to make formal objection to
— —
8 c mandatory which must be done, or which is demanded by law

— —
20. 1) единоличный арбитр — sole arbitrator; 2) четное число — even

number; 3) третейский судья — umpire; 4) императивная норма —
mandatory provision; 5) Международная ассоциация юристов — the
International Bar Association; 6) арбитражное соглашение — arbitration
agreement; 7) необходимое условие — prerequisite; 8) законоположение,
предписание закона, статута — statutory provision; 9) арбитражная
оговорка — arbitration clause; 10) предоставлять юрисдикцию — to
confer jurisdiction; 11) иск о возмещении убытков — damage claim;
12) государство пребывания — host state; 13) отнести к своей
юрисдикции — to assume jurisdiction; 14) обмен письмами — exchange
of letters; 15) договорное обязательство — contractual obligation.
21. 1. The existence of a valid arbitration agreement is normally a
necessary prerequisite for any arbitration.
2. The New York Convention as well as the Model Law and most na¬
tional laws nowadays recognize the validity of pre-dispute agreements and
enforce them.
3. To be valid and enforceable most arbitration laws as well as the New
York Convention require that the arbitration agreement be in writing.
4. Only in the very rare cases of statutory arbitration can arbitral tribu¬
nals, like state courts, base their jurisdiction on statutory provisions.
5. The New York Convention provides in Article I I (3) that a court in
a 'Contracting State, when seized of an action in a matter in respect of
which the parties have made an agreement within the meaning of this article,
shall, at the request of one of the parties, refer the parties to arbitration, unless
it finds that the said agreement is null and void, inoperative or incapable of
being performed.'
6. The New York Convention stipulates that the writing requirement is
fulfilled i f the agreement is contained either in a document signed by both
parties or in an exchange of letters or telefaxes by the parties.
7. Unlike domestic courts, arbitral tribunals are not standing adjudica-
tive bodies, but are normally constituted for every single case.
8. I n the various national arbitration laws and the Model Law the com¬
position of the arbitral tribunal is submitted to party autonomy.
9. The umpire only steps in if the party-appointed arbitrators cannot
agree on an award, and then decides the dispute as a kind of sole arbitrator.
336
KEYS
10. I f the parties have not settled the composition of the tribunal either
directly in their arbitration agreement or by reference to a set of arbitration
rules, the national arbitration laws contain fall-back provisions.
11. Under the fall-back provisions contained in the national arbitration
laws, the appointment of a sole arbitrator usually requires an agreement by
the parties, while each party appoints one arbitrator to a three-member tribu¬
nal, and those two arbitrators then select the chairman.
12. Under the Model Law, the right to challenge an arbitrator before
a court is one of the few mandatory provisions from which the parties cannot
derogate.
22. 1) outset — a start; beginning;
2) guideline — a principle put forward to set standards or determine a
course of action;
3) evidence — matter produced before a court of law in an attempt to
prove or disprove a point in issue, such as the statements of witnesses,
documents, material objects, etc.
4) opportunity — a favourable, appropriate, or advantageous combina¬
tion of circumstances;
5) power — an official or legal right to do something;
6) jurisdiction — the authority of an official organization to make and
deal with (esp. legal) decisions;
7) exclude — to keep out or omit (something or someone);
8) freedom — the condition or right of being able or allowed to do, say,
think, etc. whatever you want to, without being controlled or limited;
23. 1. Arbitrators are appointed by the parties in accordance with the
terms of the arbitration agreement or in default by a court.
2. This doctrine is thus part and parcel of the notion of the supremacy
of Community law over national law.
3. The lawful authorities now have this power in many legal systems.
4. I n civil matters the judge hears cases without a jury and can award
compensation of up to J30,000 and deal with issues relating to land where
the rateable value of the land does not exceed J200.
5. An unenforceable contract made with a minor can become enforce¬
able i f the minor ratifies the contract when he comes of age.
6. This method then takes effect as a legally binding agreement between
the parties.
24. 1 e default — neglect; 2 a doctrine — tenet; 3 j award — decision;
4 f domestic — internal; 5 c power — authority; 6 b recognize — accept;
7 i fulfill — carry out; 8 d contrary — opposite; 9 h interim — transient;
10 g rule — principle.
26. 1) выбор правовой нормы — choice of law; 2) процессуальное
нарушение — procedural irregularity; 3) принцип недопустимости
повторного рассмотрения, однажды решенного дела — res judicata;
337
KEYS
4) общее право — common law; 5) решение (судьи, арбитра) —

award; 6) за отсутствием чего-либо, кого-либо — in the absence
of; 7) применяемое право — applicable law; 8) договаривающееся
государство — contracting state.
27. THE R O L E O F THE COURTS IN ARBITRATION
Courts perform important 1) supportive and supervisory functions in
arbitration. The general prohibition against assuming jurisdiction when the
parties have concluded a valid arbitration agreement only pertains to ac¬
tions on the merits, but does not preclude courts from getting involved with
a wide variety of 2) procedural issues that arise in the course of arbitration.
The Model Law, for example, provides that parties may apply to the courts
for the appointment, challenge, and substitution of arbitrators, for interim
relief , assistance in the taking of evidence, and to have an award declared
3) enforceable. Furthermore courts are empowered to control the correct¬
ness of the arbitration proceedings and the 4) compliance of the award with
public policy in setting aside proceedings. I n addition to these competenc¬
es, which can be found in most national arbitration laws, some countries
provide for further types of court intervention. Under German law, for
example, a party may apply to the court for a declaration that arbitration
is or is not 5) admissible, until tribunal has been constituted. The English
Arbitration Act 1996 contains a comparable procedure, and also allows the
parties to submit a question of law to the courts for 6) determination or to
apply for an extension of time limits. Article 5 of the Model Law illustrates
the modern trend to enumerate explicitly the powers of the courts in rela¬
tion to 7) arbitration and to prohibit any further intervention.
28. 1. What is a crucial issue in any arbitration? The jurisdiction of the
arbitral tribunal is a crucial issue in any arbitration.
2. Are courts empowered to control the correctness of the arbitration
proceedings and the compliance of the award with public policy in setting
aside proceedings? Yes.
3. Does the Model Law provide that parties may apply to the courts for
the appointment, challenge, and substitution of arbitrators, for interim re¬
lief, assistance in the taking of evidence, and to have an award declared en¬
forceable? Yes.
4. What important functions do the courts perform in arbitration? Courts
perform important supportive and supervisory functions in arbitration.
5. Do many ancient arbitration laws contain special provisions to guide
the tribunal in its choice of law? No. Many modern arbitration laws (and
rules) contain special provisions to guide the tribunal in its choice of law.
6. Must the award give reasons for the decision? According to the Model
Law and various other arbitration laws, the award must give reasons for the
decision, unless the parties have agreed otherwise.
338
KEYS
7. What are the grounds for resisting enforcement under the New York
Convention? The grounds for resisting enforcement under the New York Con-
vention include the lack of the tribunal's jurisdiction, the violation of a party's
right to a fair trial or its right to be heard, an incorrectly constituted arbitral
tribunal or proceedings which were not in line with what the parties agreed, and
where enforcement of the award would be contrary to the forum's public policy.
8. Explain the term "res judicata". "Res judicata" is the principle that
when a matter has been finally adjudicated upon by a court of competent ju¬
risdiction it may not be reopened or challenged by the original parties or their
successors in interest.
9. May proceedings challenge the award only be based on procedural
irregularities or a violation of public policy? Yes. Under the majority of
arbitration laws, proceedings to challenge the award may only be based on
procedural irregularities or a violation of public policy.
10. Are the bases for challenging an award virtually identical to the
grounds to resist enforcement? Yes.
12. Do national arbitration laws usually impose an obligation on the
courts to declare awards enforceable and thus turn them into a title upon
which execution can be based? Yes. National arbitration laws usually impose
an obligation on the courts to declare awards enforceable and thus turn them
into a title upon which execution can be based.
13. What does the English Arbitration Act 1996 contain? The English
Arbitration Act 1996 contains a comparable procedure, and also allows the
parties to submit a question of law to the courts for determination or to apply
for an extension of time limits.
14. Does the arbitral tribunal have the power to order interim relief?
Yes. Under the Model Law and most modern arbitration laws, the arbitral
tribunal has the power to order interim relief necessary to ensure the pres¬
ervation of evidence or to protect the parties' position during the arbitration
proceedings.
15. Explain the doctrine "Kompetenz-Kompetenz''. The Model Law as
well as most other new arbitration laws recognize the power of the arbitral tri-
bunal to decide on its own jurisdiction, which doctrine is known as Kompetenz-
Kompetenz.
16. What and why did the International Bar Association prepare in 1999?
In an effort to harmonize the different approaches found in the various legal
systems, the International Bar Association prepared in 1999 Rules on the Tak¬
ing of Evidence in International Commercial Arbitration, which may be used by
tribunals as a guideline or may be expressly agreed upon by the parties.
17. Is the tribunal free to conduct the proceedings in a manner it consid¬
ers appropriate? The tribunal is free under most arbitration laws and rules to
conduct the proceedings in a manner it considers appropriate, unless the parties
have explicitly provided that a particular type of procedure will be followed.
339
KEYS
18. Is it common practice for tribunals to agree on a certain procedure

with the parties at the outset of an arbitration? Yes.
29. 1 — k arbitrable — подлежащий арбитражу;
2 — a arbitral authority/ body — арбитражный орган;
3 — w arbitrament — решение третейского суда, арбитража
4 — j cost of arbitration — арбитражные издержки;
5 — b arbitral procedure — арбитражный процесс;
6 — s request for arbitration — просьба об арбитраже;
7 — x treaty of arbitration — договор об арбитраже;
8 — o through arbitration — в арбитражном порядке, через
третейский суд;
9 — u to recourse/ to resort to arbitration — обратиться в арбитраж /
к третейскому суду;
10 — c to settle by arbitration — разрешать спор третейским судом;
11 — q to submit a dispute to arbitration — передать спор на арбит¬
раж;
12 — g arbitration agreement — арбитражное соглашение;
13 — l arbitration award/ arbitral award — арбитражное решение;
14 — e arbitration clause — арбитражная оговорка;
15 — v international commercial arbitration — международный
коммерческий арбитраж;
16 — h compound arbitration of exchange — многосторонний валют¬
ный арбитраж;
17 — y disqualification of an arbitrator — неправоспособность арбитра;
18 — d to challenge an arbitrator — заявить отвод арбитру;
19 — f to propose the disqualification of an arbitrator — заявить о
неправоспособности арбитра;
20 — p challenge of an arbitrator — отвод арбитра;
21 — i arbitrability — подсудность (дела, спора) арбитражу;
22 — z res judicata — принцип недопустимости повторного
рассмотрения, однажды решенного дела;
23 — m to submit to the decision of the arbiters — подчиниться
решению арбитров/ третейских судей;
24 — t arbitral tribunal — арбитраж;
25 — n to appoint arbiters — назначить арбитров / третейских судей;
26 — r state arbitration — государственный арбитраж.
TEST
1. 1. Arbitration is a well-established and widely used means to end
disputes.
2. The agreement endorses, inter alia, the right to free and fair elections.
3. Arbitrators are appointed by the parties in accordance with the terms
of the arbitration agreement or in default by a court.
340
KEYS
4. The Model Law is written in a user-friendly way and covers all stages
of the arbitral process.
5. A n arbitrator is bound to apply the law accurately.
6. Consent to arbitration by a state can be given by inclusion of a special
arbitration clause in a treaty.
7. The group met ad hoc, whenever the need arose.
8. The governing national arbitration law in international cases generally
depends on the place of arbitration.
9. The place of arbitration is a legal concept which is independent of the
place of the hearings or the domicile of the parties or the arbitrators.
10. In commercial arbitration a distinction must be made between na¬
tional or domestic cases and international cases.
11. 1. Decisions were often made on the basis of incorrect informa¬
tion.
2. The basic reason for obeying conventions is to ensure that the ma¬
chinery of government should function smoothly
3. The government is to impose stringent restrictions on the number of
immigrants to be allowed into the country.
4. There is an enforceable right to compensation for unlawful detention.
5. The company's results are in line with stock market expectations.
6. The Sex Discrimination Act 1972 provides a range of control over
discrimination based on sex.
7. It is important in relation to what the company can and cannot do
both as regard to the world and in relation to its shareholders.
8. Judges in Florida, for example, possess authority to submit most
types of cases to mediation or arbitration in lieu of litigation.
III. Статья 7 Определение и форма арбитражного соглашения
1) «Арбитражное соглашение» — это соглашение сторон о передаче
в арбитраж всех или определенных споров, которые возникли или
могут возникнуть между ними в связи с каким-либо конкретным
правоотношением, независимо от того, носит ли оно договорный
характер или нет. Арбитражное соглашение может быть заключено
в виде арбитражной оговорки в договоре или в виде отдельного
соглашения.
2) Арбитражное соглашение заключается в письменной форме.
Соглашение считается заключенным в письменной форме, если оно
содержится в документе, подписанном сторонами, или заключено
путем обмена письмами, сообщениями по телетайпу, телеграфу
или с использованием иных средств электросвязи, обеспечивающих
фиксацию такого соглашения, либо путем обмена исковым
заявлением и отзывом на иск, в которых одна из сторон утверждает
о наличии соглашения, а другая против этого не возражает. Ссылка в
договоре на документ, содержащий арбитражную оговорку, является
341
KEYS
арбитражным соглашением при условии, что договор заключен в

письменной форме и данная ссылка такова, что делает упомянутую
оговорку частью договора.
IV. Article 30 Settlement
If, during arbitral proceedings, the parties settle the dispute, the arbitral
tribunal shall terminate the proceedings and, if requested by the parties and
not objected to by the arbitral tribunal, record the settlement in the form
of an arbitral award on agreed terms.
Article 31 Form and contents of award
The award shall be made in writing and shall be signed by the arbitrator
or arbitrators. I n arbitral proceedings with more than one arbitrator, the
signatures of the majority of all members of the arbitral tribunal shall suf¬
fice, provided that the reason for any omitted signature is stated.
Article 35 Recognition and enforcement
An arbitral award, irrespective of the country in which it was made,
shall be recognized as binding and, upon application in writing to the com¬
petent court, shall be enforced subject to the provisions of this article.
342
LIST OF REFERENCE BOOKS
• Abbott Frederick M . "Intellectual property rights in world trade"
Research Handbook in International Economic Law, 2007.
• Clifford W. Smith: The Concise Encyclopedia of Economics: Library
of Economics and Liberty http://www.econlib.org/library/CEETitles.html
(1 of 4) [11/4/2004 10:48:12 A M ] .
• Collier J. G. Conflict of Laws Fellow of Trinity Hall and Lecturer in
Law, University of Cambridge 2004.
• Encyclopedia of business and finance / Burton S. Kaliski, editor-in-
chief. - 2nd ed.2001.
• Encyclopedia of small business / Kevin Hillstrom, Laurie Collier
Hillstrom. Library of Congress Cataloging-in-Publication Data Hill-
—
strom, Kevin, 1963 - 2nd ed.

• International Encyclopedia of the Social & Behavioral Sciences, 2001.
• International encyclopedia of marriage and family / James J.
Ponzetti, Jr., editor in chief. 2nd ed., 2003.
—
• Menell P. S. Intellectual Property: Legal Aspects International Ency

clopedia of the Social & Behavioral Sciences, 2001.
• Nolo's Encyclopedia of Everyday Law 4th edition.
• Rebecca Attree A Specially Commissioned Report International
Commercial Agreements 2002.
• Stefan M . Knjll "Arbitration" Elgar encyclopedia of comparative
law Library of Congress Cataloguing in Publication Data, 2006.
• Stone Richard The Modern Law of Contract Fifth edition, 2002.
• The encyclopedia of American law/edited by David Schultz.2002.
• West's Encyclopedia Of American Law / Jeffrey Lehman, Editor,
Shirelle Phelps, Editor.— 2nd Ed.
• Zampetti Americo Beviglia and Sauvii Pierre "International invest¬
ment" Research Handbook in International Economic Law, 2007.
• Ануфриева, Л. П. Международное частное право: В 3-х т.
Том 2. Особенная часть: Учебник. — 2-е изд., перераб. и доп. М.:
—
Издательство БЕК, 2002.

• Гражданское право: Учебник. Том I / Под ред. доктора
юридических наук, профессора О.Н. Садикова. —М.: Юридическая
фирма «КОНТРАКТ»: «ИНФРА-М», 2006.
• Большая юридическая энциклопедия. — М.: ДиректМедиа
Паблишинг, 2006.
• Богуславский, М.М. Международное частное право: учебник
(издание пятое, переработанное и дополненное), Юристъ, 2005.
343
• Додонов, В.Н., Панов, В.П., Румянцев, О.Г. Международное
право. Словарь-справочник/Под общей ред. акад. М А И , д.ю.н.
В.Н. Трофимова. — М.: И Н Ф Р А - М , 1997.
• Макарова, О.А. Корпоративное право. М.: Волтрес Клувер,
2005.
• Рузакова, О.А. Право интеллектуальной собственности. /
Московская финансово-промышленная академия, М., 2004.
• Тихиня, В.Г. Международное частное право: ответы на экза
менам вопр. / В. Г. Тихиня, М. Ю. Макарова.— 5-е изд.
— Минск:
ТетраСистемс, 2008.

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Н.В.

Пособие состоит из двух частей. В первой части представлены

УРОК 1 КОРПОРАТИВНОЕ ПРАВО

УРОК 2 МЕЖДУНАРОДНЫЕ ИНВЕСТИЦИИ

УРОК 4 КОММЕРЧЕСКИЕ ДОКУМЕНТЫ

УРОК 5 ИНТЕЛЛЕКТУАЛЬНАЯ СОБСТВЕННОСТЬ

УРОК 6 ДЕЛИКТНОЕ ПРАВО

УРОК 7 СЕМЕЙНОЕ ПРАВО

УРОК 1 КОРПОРАТИВНОЕ ПРАВО

УРОК 4 КОММЕРЧЕСКИЕ ДОКУМЕНТЫ

УРОК 5 ИНТЕЛЛЕКТУАЛЬНАЯ СОБСТВЕННОСТЬ

УРОК 6 ДЕЛИКТНОЕ ПРАВО

УРОК 7 СЕМЕЙНОЕ ПРАВО

СПИСОК ИСПОЛЬЗОВАННОЙ ЛИТЕРАТУРЫ

1. What do you know about Corporate Law? Choose the right

most require basically the same essentials in forming a corporation.

9. Match the synonyms.

A corporation determines who may vote based on its records. Cor¬

a national securities exchange. These regulations aim to protect investors

7) a member of the governing board of a business concern who

15. Are the following statements true or false?

directors to decide whether to declare dividends; to formulate pro¬

Self-dealing transactions raise questions about directors' duty of

If a court finds that a director has violated a duty, the director

2. Statutes empower directors to decide whether to declare ... ; to

9.Self-dealing usually occurs in one of four types of situations: ... .

22. Fill in the correct prepositions.

15. What is a pooling agreement?

7. Corporations issued a record $56 billion of c _ _ stock.

Mergers can involve sophisticated transactions that are designed

11) finance a certificate of debt issued in order to raise funds;

30. Match the words in column A with the appropriate words

31. Fill in the correct prepositions.

into contract; 6) to engage . business; 7) to take . a firm; 8) to be

МОДЕЛЬ КОРПОРАТИВНОГО УПРАВЛЕНИЯ

долл. Для улучшения своих финансовых показателей компа¬

стратегия предполагала максимизацию богатства акционеров,

37. Choose any questions (topic, problem) relating to Corpo­

I. Fill in the missing words.

4) The use of poison ... raises the cost of acquisition.

6. Dividend-paying companies frequently increase the amount of

UNIT 2 INTERNATIONAL INVESTMENT

1. What do you know about international investment? Choose

3) The WTO's aims are to continue the work of . in agreeing

FRIENDSHIP, COMMERCE AND NAVIGATION TREATIES

trade and production expanded, old commercial treaties became in¬

BILATERAL INVESTMENT TREATIES

voured-nation treatment; fair and equitable treatment; guarantees and

of the shareholders who own or control the corporation. The place of

6. Fill in the correct word derived from the words in capitals.

6) The acceptability of investor-State arbitration was significantly

Most favoured nation treatment provides that investors and invest¬

9. Match the synonyms.

10. Fill in the correct prepositions.

amici curiae is normally not allowed. Enforcement is usually carried

1 — B) On the other hand, there are agreements such as the 1998

(COMESA) are all examples. [ 2 ] . The great diversity of regional

were agreed in the Uruguay Round of trade negotiations, concluded

19. Translate the following abbreviations into Russian.

This fertile environment, characterized by a number of far-reaching

requirements and restrictions on exportation. The Agreement bans not

requirements were inconsistent with the national treatment obligation of

23. Complete the table.

or multilateral in scope. Advantages and disadvantages can be viewed

37. Choose any questions (topic, problem) relating to Corpo

25) residential investment y) льготный режим для иностран

рота, обусловившая активизацию процессов движения капита

• mercial -sited -able •missory ods -ficates -ing -an ck

6) договорное обязательство; 7) держатель оборотного доку