Have you ever negotiated / entered into a contract? What kind of contract was that? Tell the group about your experiences.
Match the words and phrases typically used talking about contracts with their meanings.
| Term | Meaning |
| 1. agreement | a) n. a particular statement or stipulation in a contract etc; article |
| 2. arbitration | b) n. conditions or stipulations |
| 3. clause | c) invalid; without legal force; not binding |
| 4. force majeure | d) n. an arrangement between two or more people, countries etc; contract |
| 5. fulfil | e) adj. which people can be made to obey |
| 6. null and void | f) n. superior, power; unforeseeable event excusing one party from fulfilling contract |
| 7. party | g) n. the person or persons forming one side of an agreement |
| 8. enforceable | h) n. settlement of a dispute by a person chosen by both parties |
| 9. terms | i) adj. that cannot be legally avoided or stopped |
| 10. binding | j) v. to satisfy a condition; to complete the required task |
Now complete the sentences with one of the terms above. Use the correct form of the words.
1. The dispute was settled by a(n) ………. that satisfied both sides.
2. They might now activate the ………. clauses that will allow them to demand their money back.
3. In order to be considered a(n) ………. contract, the parties to the contract must exchange something of value.
4. Once signed, these documents are legally ………. .
5. Both ………. were happy with the result of the negotiations.
6. We have agreed compensation ………. .
7. The Texas high court said they had to go to ………. because that's what the signed contract required.
8. They claimed that the goods did not ………. the terms of the agreement.
9. The change in the law makes the previous agreement ………. .
10. They have added a ………. in the contract which says the company can make people redundant for economic reasons.
Read the text about contracts and answer the questions.
Requirements for a Contract
Contracts are legally binding agreements, and they pervade almost every aspect of our personal and business lives. If you own or manage a business, you deal with contracts all the time in your relations with employees, contractors, vendors, commercial landlords, banks, utilities, insurance companies, and, of course, customers and clients.
What makes a contract special – and essential for business dealings – is that it is binding on the parties. If one party doesn't fulfil its obligations, the other party has legal remedies for any resulting damages.
To be enforceable by a court, every contract (whether written or oral) must meet several requirements:
Consideration. As Cole Porter wrote in the song, True Love, "You give to me and I give to you." That sums up consideration. Each party has to promise or provide something of value to the other. Without this exchange, there is no contract.
Offer and acceptance. There must be a clear or definite offer to contract ("Do you want to buy this?") and an unqualified acceptance ("Yes!").
Legal purpose. The purpose of the agreement must not violate the law. For example, you won't be able to enforce a loan agreement that charges interest in excess of what is allowed by law or a service agreement to hire someone to rob a bank or kill your mother-in-law.
Capable parties. To be "capable" of making a contract, the parties must understand what they're doing. For example, there is a presumption that minors and insane people usually don't know what they're doing and, for that reason, contracts they enter into won't be enforced under certain circumstances.
Mutual assent. This is also sometimes referred to as a "meeting of the minds." The contracting parties must intend to be bound by their agreement and must agree on the essential terms.
In addition to these general rules, laws may impose more requirements on particular types of contracts. For example, certain consumer contracts must meet additional requirements, and some contracts must be in writing.
1. Why are contracts so important in life today?
2. What is the main characteristic feature of a contract?
3. Are you able to make any kind of contract?
4. What difficulties may people have with contracts?