D. The words below are often used in connection with contracts. Use some of them to complete the sentences which follow. You may need to put certain words in the plural.

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B. Read the text.

When striking a deal, contract forms are widely used. Standard contracts are not a must as some articles may be altered and supplemented, eliminated and replaced, but still normally they include the following parts: legal title of the contracting Parties, Subject of a Contract, Price and Total Amount of a Contract, Delivery and Payment Terms.

Introduction part of a Contract contains the legal names of the contracting Parties, personal names and official positions of the representatives from the parties.

Subject of Contract names the product for sale or purchase. It also indicates the unit of measure for specific commodities.

Quality. The Quality of machines and equipment is to be in conformity with the technical specification of the Contract. The Quality of raw materials and foodstuffs is determined, as a rule, by standards, by sample or by description.

Price. The price in a contract may be firm, fixed or sliding. Firm price. Firm price are not subject to change in the course of the fulfillment of the contract. Fixed price. It is the price governing in the market on the day of the delivery or for a given period. Sliding prices. These prices are quoted for machinery and equipment which require a long delivery.

Payment. A cheque is a written order to a bank given and sighned by someone who has money deposited there to pay a certain amount mentioned in the cheque to a person named on it.

In the place of the cheque system Banks provide an international system of Bank Transfers. The Seller gives TT (telegraph transfer) or mail remittance terms to a Buyer when he is a trusted customer or agent. It involves risk as the Seller ships goods without any assurance of getting payment.

Like a cheque, a draft is an order to pay. It is made out by an exporter and presented to the importer. It is also called a bill of exchange. A sight draft is a bill which is paid immediately on presentation. A bill to be paid at a later date is called a term draft. There are 30-day, 60-, 90- and 120-day drafts.

A very useful method is to attach the shipping documents (the Bill of Lading, the Insurance Policy and the Invoice) to the Draft and hand them to the Bank for collection. This method of payment does not involve risk when drafts are presented against L/C. With a letter of credit, at least when it is confirmed and irrevocable, the payment is guaranteed.

C. Answer the questions.

1)  Why are standard contracts widely used?

2)  What are the essential items of a contract?

3)  What information is contained in different sections of a contract?

4)  What sort of prices may be indicated in a contract?

5)  What is a check?

6)  Whom do you give TT terms to?

7)  What are the two types of drafts?

8)  What is an irrevocable L/C?

9)  Who guarantees payment against a confirmed letter of credit?

10) Does a term draft involve risk for an exporter?

terminate

condition

provide for

litigation

clause

binding

arbitration

out of court

section

compromise

breach

term

agreement

party

comply with/abide by

1) A contract is an … drawn up between two … It is divided into …, …, and …

2) The contract … … any problems between two parties. The conditions of the contract are … on both parties. If one party does not want … … the clauses, this is called a … of a contract.

3) In the case of a dispute, many contracts provide for …, but in some cases the dispute results in … Most parties reach a … without going to court, and the dispute is settled … …

4) Some contracts are for a fixed period, or …, also, there are ways in which the parties can end, or …, the contract.

Reading 4: Draft Contract

The firm BINGO Ltd hereinafter known as the «SELLER», on the one hand, and MONKBERRY MOON DELIGHT plc hereinafter referred to as the «BUYER», on the other hand have concluded the present Contract on the following:

The Seller undertakes to sell the Buyer and the Buyer undertakes to buy 120,000 super widgets* in accordance with specification and conditions stipulated in Annexe No. 1 to the present Contract, which is an integral part of this Contract.

All freight/loading and insurance charges will be covered by the Seller.

The terms of payment and immediate payment of delivery charges by confirmed and irrevocable letter of credit are to be standard.

A penalty clause will be included in the contract. It will be invoked against the Seller for late delivery or substandard quality; against the Buyer for late payment.

In the event of non-payment, the Seller shall be entitled to reclaim the goods.

In case of dispute between the parties to the contract, the matter will be taken to independent arbitration. All the terms of the contract must be compiled with both parties.

* widget - условное название для любого вида товаров

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