Pair work

B.

A.

The Rights of Third Parties Act 1999

This Act fundamentally reforms contract law by allowing 1 (contract) parties to confer 2 (enforce) rights on third parties. For 3 (source), the Act presents a new way of allocating risk in complex deals, and a way to protect the customer in prime and sub-contractor situations. The Act erodes the position of the prime-contractor and 4 (strong) the hand of the sub-contractor.

Before the Act, the doctrine of privity of contract prevented a person who was not a party to a contract from enforcing a term of that contract. This meant that even if a contract affected other people, only the parties to it had rights and 5 (oblige) under it. Until now, the only answer for English law contracts was to create either a complex web of trusts or back-to-back contracts or to allow end-users to call off direct contracts with the 6 (provide).

Ex. 5. Choose the correct word or phrase in italics to complete these sentences from a tenant’s Right of Assignment document.

1. Notwithstanding anything to the contrast / contrary / opposition contained in the lease, Tenant can / may / shall have the following rights with respect to assignment, transfer or sub-lease (referred to / in / as hereinafter as a “Transfer”) of the demised premises.

2. Landlord agrees that it will not unreasonably withdraw / rebut / withhold its approval to any Transfer of the demised premises or any part thereof / thereafter / thereunder, provided such Transfer shall be subject to all of the terms and circumstances / conditions / inclusions of the lease.

3.Tenant shall waive / have / own the right to perform any of the following acts without the necessity to request or obtain Landlord’s refusal / withdrawal / approval therefor.

4. Transfer the demised premises or any portion thereof to / from / at any ‘affiliate company’. An affiliate company shall mean, for purposes of this Article 49, any corporation, partnership or other business entirety / entreaty / entity under common control and ownership with the Tenant, or with the parent or any subsidiary of the Tenant.

Ex. 6. Complete the phrases and sentences below using the correct preposition in the boxes. You may need to consult a dictionary.

against from to (x4) under upon

1. the parties ______ a contract

2. pursuant ______ the contract.

3. to have rights and obligations ______ a contract

4. to benefit ______ the contract.

5. to assign rights or delegate duties ______ a third party

6. enforce a contract ______ someone

7. a third-party beneficiary ______ a contract

8. in reliance ______ the contract

against of on to (x5) under (x2)

1. A party ______ a contract may transfer the rights arising ______ the contract ______ another.

2. Privity of contract refers ______ the fact that only the actual parties ______ a contract should have rights and liabilities ______ the contract.

3. A third-party beneficiary contract is formed when the parties intend ______ confer a benefit ______ a third party.

4. The benefit ______ a contract is an enforceable right ______ the other party.

Ex. 7. Differentiate between assignment and novation using a dictionary. Complete the text below with the words from the box.

assignment (x3), benefits, novation (x4), parties, third party

¹⁾ ______ is a means by which one party to a contract totally removes himself from the contract by transferring not only all of the ²⁾ ______ conferred by that contract, but also all of the obligations. The ³⁾ ______ replaces the original party as a party to the contract. Following ⁴⁾ ______, the other contracting party is left in the same position as he was in before it was carried out, except that there is a new obligor. A ⁵⁾ ______ requires the agreement of all three parties. In contrast, an ⁶⁾ ______ refers to transfer of a right (and sometimes, in general speak, obligations) of one person to another.

⁷⁾ ______differs from novation in that the ⁸⁾ ______ to the contract do not change. Most rights and obligations are capable of ⁹⁾ ______, but not all are capable of ¹⁰⁾ ______.

Ex. 8. These clauses are typically included in a company’s general terms and conditions of sale. Match the clause types with their definitions.

claims and credit, changes or cancellation, delivery, indemnification of vendor, limitation of remedies, orders, prices and payment, retention of title, title and risk, warranties

1. Contains provisions governing the payment of the monetary consideration for the goods. It may include, among other things, terms governing the manner and time of payment, as well as modification of the amounts charged for the goods.

2. Contains, among other things, provisions governing the ownership of the goods and exactly when the peril of loss is shifted from the Vendor.

3. Provides that, despite the fact that the purchaser has taken possession of the goods, the vendor maintains ownership thereof until some condition (usually payment) is fulfilled.

4. Contains provisions governing the manner in which orders for goods are submitted by the buyer and accepted by the vendor.

5. Contains, among other things, provisions regarding the time, limitations and manner of which the sale of the relevant goods becomes complete and final if payment has been made.

6. Contains provisions governing the time and manner of any complaints by the purchaser regarding the goods.

7. Contains, among other things, the terms and conditions governing any express warranties, often including provisions regarding inspection of the goods by the seller and liability, and limitations thereof, of the seller for breach of such warranties. Often matters related to notice of defects and disclaimers are included.

8. Contains provisions restricting the vendor’s legal responsibility to pay damages due to, among other things, errors in the goods and in many cases governing the maximum amount payable by the vendor for such things.

9. Provides that the purchaser guarantees any possible loss the vendor might incur connected with any use of the goods, including violation of any intellectual property rights.

10. Contains provisions governing modifications by the purchaser regarding, among other things, the character or manner in which the goods are manufactured, payment of any expenses related thereto and termination of any orders placed.

Ex. 9. Read through the text quickly and decide whether these statements are true or false.

1. A third-party beneficiary contract is one which intends for someone who is not a party to that contract to benefit from the contract.

2. The term privity of contract refers to the relationship which exists between the immediate parties to a contract.

3. The transfer of rights under a contract is known as delegation.

4. Novation is the renewal of a contract by the contracting parties.

Generally, a contract operates to confer rights and impose duties only on the parties to the contract and no other parties. The principle that follows from this is that third parties have no rights and, as such, cannot enforce contractual provisions. This contractual relationship is summed up in the term privity of contract. However, in many jurisdictions, there are two exceptions to this general rule: the first is when the original contract provides for rights to be conferred on a third party, and the second is when contractual rights and duties are transferred to a third party at a later date.

When speaking of this first type of situation, lawyers generally refer to third-party beneficiary contracts. The most common form of this type of contract is where party A enters into a valid contract with party B which stipulates that party B shall render performance for the benefit of party C, i.e. the third-party beneficiary. No problems arise if party B performs. But what happens when party B fails to perform? Have rights been vested in party C such that C can enforce the contract, or must party A do so? In many jurisdictions, this problem is addressed through a determination of whether the contract expresses an intent to create a legally enforceable right in the third party. However, must the intent be from both parties to the agreement (A and B) or just the recipient of the promise to be enforced, i.e. the promise (A) as opposed to the promisor (B)? The courts usually look to the intent of the promise and ask the question: According to the contract, who was to receive the benefit of the promise, the promise or a third party directly?

In deciding the promisee’s intent, the courts look at the following factors: (1) is the third party identified in the contract?; (2) is performance to be made directly to the third party?; (3) does the third party have any rights (specific or general) under the contract?; and (4) is there any relationship between the promise and the third party such that it could be inferred that the promise wished to enter into a contract for the benefit of the third party? Of course, the greater the number of times the court answers “yes” to the above questions, the more likely it is that the court will rule that the third party is an intended beneficiary, and thus entitled to enforce the contract, as opposed to an incidental beneficiary.

In the second case mentioned above, rights and duties are transferred after the original contract has been signed. If in the original contract the transferring party (A) is owed a right by the non-transferring party (B), then A is known as the obligee and B is the obligor. However, if in the original contract A owes B a duty, then A is known as the obligor and B the obligee. When it is not specified whether rights or duties are being transferred, the term assignor can be used for A, who attempts to transfer his rights and/or duties under the contract to a third party (C, the assignee). If a right is being transferred, C becomes the obligee in place of A. (Although this does necessarily release A from any obligations to B under the original contract.) If a duty is being transferred, A is known as the delegator, while C is referred to as the delegate (US: delegatee). The term assignment of contract can mean several different things. This term is ambiguous, as it does not indicate whether there is both an assignment of rights and a delegation of duties. In everyday usage, it generally means that both are applicable. However, in the interests of precision, the term “to assign” should really be reserved specifically for the transfer of rights, and the term “to delegate” should be used in connection with the transfer of duties (and therefore with performance). This distinction is crucial because, while an obligee can rid himself of a right merely by making an effective assignment, an obligor cannot rid himself of a duty by the same means. Generally, in order for the obligor to discharge his duties under the contract through assignment, the oblige must first release him from his obligations under the contract. When this takes place, there is a novation of the original contract, in which the obligor’s position is taken on by a new party.

The right to assign is generally governed by an assignment clause in the contract, the enforceability of which depends on many factors, including the particular wording of the clause, the nature of the obligations to be performed and the nature of the contract.

Ex. 10. Look through the text again and complete these verb-noun collocations. Then express the meaning of each phrase in your own words.

1. confer r______ (paragraph 1)

2. impose d______ (paragraph 1)

3. enforce с______ p______ (paragraph 1)

4. render p______ (paragraph 2)

5. delegate d______ (paragraph 4)

6. assign r______ (paragraph 4)

Ex. 11. Paragraphs 1 and 3 of the above text refer to third-party rights.

In the context of third-party beneficiary contracts, the time when the third party's rights actually arise differs between jurisdictions. Some jurisdictions find that the third-party rights take effect immediately at the time the contract is made, while others find that these rights do riot arise until the third party acquires knowledge of the rights and agrees to accept the benefits. Finally, some jurisdictions find that the third-party beneficiary must change his position in reliance upon the contract in order for his rights to arise. This means that in some jurisdictions the third-party beneficiary must take some type of action which he would not necessarily have taken or refrain from taking some type of action which he would not necessarily have refrained from taking, unless he thought he was to receive some benefit under the contract.

How is this question handled in your jurisdiction? Choose the sentence below that applies to your jurisdiction and discuss with a partner. If you are uncertain of the law in your jurisdiction, discuss what you think the law should be and support your position.

1. Third-party rights arise immediately at the time the contract is made.

2. Third-party rights do not arise until the third party acquires knowledge of the rights and agrees to accept the benefits.

3. Third-party rights do not arise until the third-party beneficiary has changed his position in reliance upon the contract.

4. Third-party rights as described above are not recognised.

Ex. 12. Form pairs of nouns in italics ending with -or and - ее following the pattern of promisor/promisee using these verbs. Then match some of the noun pairs with their definitions. Find other pairs in the text above3 and add them to your list. Think of some other pairs and their definitions.

franchise, mortgage, consign, lease, transfer

1. Someone (usually the owner) who gives a lease (right to possession) in return for a consideration / someone to whom a lease is granted and who uses the property.

2. Someone who conveys title to property or property to another/ someone to whom title to property or property is conveyed.

3. Someone who borrows money and pledges real property as security for the loan / someone who lends money and receives real property as security for a loan.

4. Someone who sends goods to another in a contract of sale/someone who receives goods.

5. Someone who owns the rights or licence of a business who grants the licence or permission to another / someone granted the rights or licence of a business.

Ex. 13. Translate the following dialogue into English.

А.: –Какие пункты контракта вызывают больше всего споров на переговорах перед его заключением, и с чем это связано?

В.: –О, это довольно сложный вопрос. Начнем с цены, Если прейскурантная цена разумная, и если базисные условия не вызывают разногласий, цену удается согласовать сравнительно легко, Однако, если нужно согласовывать и базисные условия, и стороны настаивают на своем, на это может уйти много времени. Или же, если в экономике стран договаривающихся сторон имеются колебания (неустойчивость в отношении стоимости сырья, рабочей силы и т.д.), тогда стороны могут согласиться на скользящие цены, хотя это и не является нашей обычной практикой.

А.: –И часто приходится указывать в контракте скользящие цены?

В.: –Я уже сказал, это зависит от состояния экономики. Далее, если конъюнктура рынка резко меняется, особенно если предложение начинает превышать спрос, как, например, в отношении нефти и нефтепродуктов, то вопрос цены обсуждается дольше, чем обычно.

А.: –И чем это кончается?

В.: –Приходится снижать прейскурантную цену до уровня мировых цен.

А.: –Это значит получить меньше валюты, чем предусмотрено планом со всеми вытекающими отсюда последствиями (with all that this implies), не так ли?

В.: –Да, конечно. А возьмите, к примеру, вопрос скидки с цены. Иногда мы вынуждены, к сожалению, предоставлять большие скидки, чтобы не потерять рынок.

А.: –Да, вы правы. Я согласен, что необходимо учитывать состояние рынка.

В.: –Теперь возьмем условия платежа. В современных контрактах предусматривается такая их комбинация иногда, что сразу трудно разобраться.

А.: –А это чем объясняется?

В.: –Все тем же. Продавец хочет сразу же иметь наличные деньги за свой товар, а покупатель заинтересован в получении кредита, чтобы иметь возможность платить за товар только после его получения. И это вызывает горячие дебаты.

А.: –Мне кажется, согласование других статей контракта, таких, как «Упаковка, маркировка и отгрузка», не ведет к продолжительной дискуссии.

В.: –По сравнению с другими статьями контракта безусловно это так, хотя не всегда.

А.: –А как насчет таких статей, как «Гарантия» и «Санкции»?

В.: –Что касается «Гарантии» часто долго согласовывают ее срок, так как в разных странах разный подход к этой проблеме. Более того, это связано с организацией послепродажного обслуживания и некоторыми другими вопросами.

А.: –Ну уж «Форс-мажор» и «Арбитраж» не могут вызывать долгих споров, не так ли?

В.: –Я бы так не сказал. Например, некоторые фирмы настаивают, чтобы государственные санкции были обязательно включены в обстоятельства непреодолимой силы, а мы, само собой разумеется, против этого. А что касается «Арбитража», некоторые фирмы, особенно те, которые раньше с нами не торговали, предпочитают разрешать споры и рекламации в Стокгольме в соответствии со шведским гражданским и коммерческим правом или с правом другой страны.

А.: –И как мы к этому относимся?

В.: –Сначала пытаемся доказать, что наш Арбитражный суд урегулирует претензии и разногласия надлежащим образом, даем списки стран, которые пользовались их услугами, а если это не помогает, у нас нет другого выхода, как согласиться с этим.

А.: –Понятно.

В.: –А еще хочу добавить, что, если фирма оспаривает каждый пункт и по мелочам, не имеющим большого значения, значит, она не заинтересована в развитии с нами торговых или других экономических отношений. Это тоже надо иметь в виду и не попадаться на удочку (not to get hooked).

А.: –Благодарю за всю эту информацию. Она весьма интересна.

В.: –Пожалуйста. Всегда рад беседе с вами.

Дата добавления: 2014-12-23