Unit 9 FORMATION OF A SALE CONTRACT
1. Contracts and the Law điều khoản rõ ràng: nằm trên bề mặt hợp
đồng và đc các bên thảo thuận cụ thể
The general principle:
- Contract + Private Law = Total Agreement điều khoản ngụ ý: nằm trong luật
- Contract = express provisions + implied provisions
- In case parties want to restrict the effect of unknown provisions of an unknown legal system, they
often incorporate the following clause in their contract:
Comprehensiveness
The rights and duties provided for in this Contract are the only rights and duties existing between the
parties, and all further rights and duties, be they under this contract or otherwise, are hereby
expressly excluded.
Notes:
private law
- A contract is an exchange of rights and duties within the framework of the ____________________.
- Most rights and duties under the private law are __________;
disposive the parties can agree to set them aside.
- Parties to a contract create new, ____________________rights
legally enforceable and duties that exist only between the
two of them.
- Parties cannot set aside rights or duties under the ____________________.
public law
- Provisions stipulated in a contract: ____________________
express provisions
- Provisions stipulated in a private law: ____________________
implied provisions
2. Definitions of contract under laws
General definition:
- A contract is a ___________agreement
legal between and among parties, ___________at
enforceable laws.
- A contract is an exchange of ____________ scope and ____________
price
- A contract is a legal agreement which must be in conformity with the Rules of ___________ Offer
Acceptance
and___________. (Offer, Acceptance and Consideration)
Rules of Offer and acceptance
Notes:
- A contract is formed on the basis of offer and acceptance.
- An Inquiry or a request is made by a buyer or an ___________offeree
- An offer or a ___________is
tender made by a seller or___________.
offeror
- An offer is ___________when
valid it leaves the hands of the offeror.
- Acceptance is ___________when
valid it leaves the hands of the offeree.
- A firm offer is a legal ___________of
commitment sale for goods/services with certain ___________by
engagement the seller.
- An offer must be___________, communicated seriously intended, which means, it must be clear and
___________to
understandable the buyer.
Under Common Law: luât Anh Mỹ
- A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the
property
___________in goods to the buyer for a money consideration, called the___________.
price
Under Civil Law: luật châu âu
- A contract of sale is an agreement whereby one of the parties obligates himself to deliver something
to the other who, on his part, ___________himself
binds to pay therefore for a sum of money or
its___________.
equivalent
Under Sale of Goods Act (British Law)
A contract of sale is a legal contract for an exchange of goods, services or property to be exchanged
from sellers to buyers for an agreed upon ___________in money paid or the ___________to pay the
same.
Under Uniform Commercial Code (UCC- American Law)
"Contract for sale" includes both a present sale of goods and a contract to sell goods at a future time. A
"sale" consists in the passing of ___________from
title the seller to the buyer for a ___________
price (Section
2-401)
Under Vietnamese law (Economic Contract Order)
Commercial law is an agreement in writing in respect of production performance, transactions of
express stipulations
goods or services for the purpose of business with ___________ ___________of rights and duties to
the parties concerned.
3. Express and Implied Contracts
words
- An EXPRESS CONTRACT is characterized by stating the terms in ___________. Terms can either
be in spoken word, written word, or both.
- An IMPLIED CONTRACT is one, the existence and terms of which are manifested by
___________.
conduct An implied contract is created by conduct, NOT spoken words.
hành vi ngụ ý
4. Forms of contract
Under commonly accepted international practice, a contract may be:
- oral,
- written,
- partly oral and partly written, or
- implied from conduct
Under Vietnamese law:
(Article 24) Form of contracts for purchase and sale of goods
verbal
- Contracts for sale and purchase of goods may be expressed in ___________or written
___________form or
established by specific acts.
- For types of contracts for purchase and sale of goods, which, as provided for ___________ by law
international___________,
sale contract must be made in writing, such provisions must be complied with.
5. Essential clauses
The principle:
- A contract must contain essential clauses
What essential clauses must be incorporated into a contract?
- Legal national systems define different regulations.
Under British Law:
- A contract must contain: Subject of a contract (Commodity, quantity, specification)
Under French Law:
- A contract must contain: Subject of a contract and price
Under Vienna Convention (Article 19-3)
- Quality
- Quantity
- Place of delivery
- Price
- Payment
- Settlement of disputes
- “Additional or different terms relating, among other things, to the price, payment, quality and
quantity of the goods, place and time of delivery, extent of one party's liability to the other or the
settlement of disputes are considered to alter the terms of the offer materially.”
Under Vietnamese Civil law (2005)
A contract must contain 8 essential clauses:
1. Subject matter (Commodity)
2. Quality, Quantity
3. Price, Payment
4. Validity, Place and Methods of Contract performance
5. Rights and obligations of Seller and Buyer
6. The parties’ liabilities in case of breach of contract
7. Jurisdictions for breach of contract
8. General conditions
Practice 1 Vocabulary: distinguishing meaning
Which word in each group is the odd one out? You may need to consult a dictionary to distinguish the
differences in meaning.
1 agreement franchise covenant contract
2 should in the event if whereas
3 consent authorization injunction permission
lệnh cấm
4 withdraw breach cancel rescind
5 deleted taken out unwarranted removed
6 contention proposition proposal suggestion
7 valid bất đồng efficacious enforceable in effect
hiệu nghiệm
Practice 2 Collocations
Complete the table below using these verbs, which all collocate with the noun contract.
amend cancel enter into execute modify rescind
sign supplement terminate
1 To form or make a contract 2 To make a contract partly 3 To change or add to a
valid or wholly invalid contract
sign enter into cancel am end supplement
terminate modify
execute
rescind
Practice 3 Word formation
Complete this table by filling in the correct abstract noun form.
Verb Abstract noun
renew renewal
draft _________________
draft
include _________________
inclusion
omit _________________
omission
terminate termination
_________________
encrypt _________________
encryption
adopt _________________
adoption
negotiate negotiation
_________________
propose proposal
_________________
transact _________________
transaction
Practice 4 Vocabulary: antonyms
Write the opposite of each of the adjectives used to describe a contract.
1 enforceable /_______________________contract
unenforceable
2 implied /__________________________contract
express
3 binding /__________________________contract
non-binding
4 valid /_______________________
invalid/void ______contract
Practice 5 Contract Formation
Read through the text quickly. Then match these questions (a-e) with the paragraphs that
answer them (1-5).
a What form can an enforceable contract take? 3
b When do third parties possess enforceable rights in a contract? 5
c Upon which grounds related to the formation of a contract may its validity be attacked? 4
d What are the elements of an enforceable contract? 1
e What are the essential terms of a contract? 2
Introduction to contract formation under Common law
1 Under the common law, a promise becomes an enforceable contract when there is an offer by one
party (offeror) that is accepted by the other party (offeree) with the exchange of legally sufficient
consideration (a gift or donation does not generally count as consideration); hence the equation
learned by law students: offer + acceptance + consideration = contract. The law regards a counter
offer as a rejection of the offer. Therefore, a counter offer does not serve to form a contract unless, of
course, the counter offer is accepted by the original offeror.
2 For a promise to become an enforceable contract, the parties must also agree on the essential terms
of the contract, such as price and subject matter. Nevertheless, courts will enforce a vague or
indefinite contract under certain circumstances, such as when the conduct of the parties, as opposed to
the written instrument, manifests sufficient certainty as to the terms of the agreement.
3 An enforceable agreement may be manifested in either written or oral words (an express contract)
or by conduct or some combination of conduct and words (an implied contract). There are exceptions
to this general rule. For example, the Statute of Frauds requires that all contracts involving the sale
of real property be in writing.
4 In a contractual dispute, certain defences to the formation of a contract may permit a party to escape
his/her obligations under the contract. For example, illegality of the subject matter, fraud in the
inducement, duress and the lack of legal capacity to contract all enable a party to attack the validity
of a contract.
5 In some cases, individuals/companies who are not a party to a particular contract may nevertheless
have enforceable rights under the contract. For example, contracts made for the benefit of a third party
(third-party beneficiary contracts) may be enforceable by the third party. An original party to a
contract may also subsequently transfer his rights/duties under the contract to a third party by way of
an assignment of rights or delegation of duties. This third party is called the assignee in an
assignment of rights and the delegate in a delegation of duties.
Practice 6
1. Read the extract of a contract below and identify the type of clause listed in the box
exemplified by each of these clauses. (notes: 04 clauses are not required)
Acceleration, Assignment, Confidentiality, Consideration, Force Majeure, Liquidated Damages
Entire Agreement, Severability, Termination, Payment of Costs
1 The seller’s liability for damages shall in no case exceed the purchase price of the particular
quantity delivered with respect of which damages are claimed.
Liquidated Damages
2 Whenever, within the sole judgment of Seller, the credit standing of Buyer shall become impaired,
Seller shall have the right to demand that the remaining portion of the contract be fully performed
within ten (10) days. Acceleration:
tăng tốc trả nợ
Điều khoản
3 Neither party shall be liable in damages or have the right to terminate this Agreement for any delay
or default in performing hereunder if such delay or default is caused by conditions beyond its control
including, but not limited to, acts of God, government restrictions (including the denial or cancellation
of any export or other necessary licence), wars, insurrections and/or any other cause beyond the
reasonable control of the party whose performance is affected.
Force Majeure
4 This Agreement may not be assigned without the prior written consent of the other party, except
that Buyer may assign the Agreement to a subsidiary or related corporation so long as the owners of at
least seventy-five per cent (75%) of the stock of such corporation are either Buyer or the shareholders
of Buyer. Assignment
5 In the event Operator defaults in the performance of any covenant or agreement made hereunder, as
to payments of amounts due hereunder or otherwise, and such defaults are not remedied to the
Supplier's satisfaction within ten (10) days after notice of such defaults, the Supplier may thereupon
terminate this agreement and all rights hereunder of the Operator but such termination shall not affect
the obligations of the Operator to take action or abstain from taking action after termination hereof,
in accordance with this agreement. Termination
6 This Agreement, including the Schedules and Exhibits attached hereto, constitutes and contains the
entire agreement of the parties with respect of the subject matter hereof and collectively supersedes
any and all prior negotiations, correspondence, understandings and agreements between the parties
respecting the subject matter hereof. No party is relying on or shall be deemed to have made any
representations or promises not expressly set forth or referred to in this Agreement.
Entire Agreement
2. In your own words, explain the following words and expressions in italics from the clauses in
the contract
1 liability for damages (clause 1)
_______________________________________________________________________________
legal responsibility to pay compensation
2 within the sole judgment of Seller (clause 2)
_______________________________________________________________________________
the party alone can decide
3 delay or default (clause 3)
carry out later or not at all
_______________________________________________________________________________
4 prior written consent (clause 4)
Agreement given before in writing
_______________________________________________________________________________
5 In the event Operator defaults in the performance... (clause 5)
_______________________________________________________________________________
If operation defaults in performance
6 abstain from taking action (clause 5)
do nothing
_______________________________________________________________________________
7 Schedules and Exhibits (clause 6)
attachment/appendices dịch là phụ lục hết
_______________________________________________________________________________
8 deemed (clause 6)
considered
_______________________________________________________________________________
Unit 10 THE BASIC STRUCTURE OF A CONTRACT
1. Basic structure
A contract consists of 03 parts:
- Background information
- Exchange
- Legal framework
1.1 Background
- It is the information necessary to a full _______________of a contract
- It consists of 03 parts:
+ Preamble
+ Whereas-recital
+ Words of agreement
(1) The Preamble identifies:
- the type of agreement,
- the date the agreement is signed,
- the parties to the agreement, their status (in other words whether they are individuals or entities), and
their addresses.
E.g:
CONTRACT FOR THE PURCHASE AND SALE OF RICE
No.018/VNF/20--…
The present Contract is made and entered into force in Hochiminh City on this 15 May 20... by and
between:
GALLUCK Co.Ltd.
Flat A. 3/F , Causeway Tower, 16 – 22 Causeway Road, Causeway Bay, HONGKONG
Tel : 8153084 ,8955992 Fax : 5764980 Telex : 61355 WSGTC HK
Represented by: Mr. ABC
(hereinafter called the “Buyer” )
And TOCONTAP EXPORT IMPORT Co.
40 Hai Ba Trung Street, Hai Ba Trung District, Hochiminh City, VIETNAM
Tel : 084256771 Fax: 084-33453567 Telex : 411526 – VNFVT
Cable Address : TOCONTAP HCM
Represented by: Ms.XYZ
(hereinafter called the “Seller” )
The parties hereby agree (it is hereby agreed)
(2) The “whereas” identifies: the desires, conditions, and the wills of the parties
E.g.:
WHEREAS, the BUYER is in the business of [INSERT BUSINESS] and is in need of [TYPE OF
GOODS] for the purpose to conduct its business;
And WHEREAS, the SELLER is in the business of [INSERT BUSINESS] and has [INSERT TYPE OF
PRODUCT];
And WHEREAS, the BUYER] desires to purchase the GOODS, as more specifically set forth in this
Contract of Sale (hereinafter “Contract”) from the SELLER;
And WHEREAS, the SELLER desires to sell the GOODS to the BUYER;
WHEREAS, it is the intention of the Parties that the SELLER shall sell Goods as more specifically set
forth in this Contract. Herein, the BUYER shall purchase said goods from the SELLER, based on the
terms and conditions set forth herein.
(3) Words of agreement
- NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows.
- NOW THEREFORE, the Parties agree as follows:
1.2 Exchange
- It is the exchange of ____________ (goods/services) for _______________ (Money)
Common provisions:
(1) Scope of supply (quality/quantity/inspection)
(2) Price
(3) Payment (how & when and consequences of late payment)
(4) Delivery (how and when)
(5) Defect liability
(6) Breach of contract
1.3. Legal framework
- Stating the applicable law: in order to regulate all ____________ regulations
Common provisions:
(1) Applicable law
(2) Definitions section
(3) Provisions concerning the parties (identification/ addresses for notices/regulation of assignments)
(4) Provisions on lifetime of the contract (start of the contract, duration and renewal of the contract,
ending of the contract)
(5) Provisions on the legal status of the contract (Language, partial invalidity, entire agreement)
(6) Provisions on the settlement of disputes
Notes:
- In very simple contracts, there few, if any, express provisions on the _______________or the legal
framework.
- If the contract says nothing, then background and framework are _______________from the
contract or provided by the applicable law.
- The exchange is the _______________of the contract
- A full legal framework exists for every contract. Sometimes the parties create it, in whole or in part,
in the contract; any ____________ ____________ are provided by the __________
_____________.
2. Specific clauses in a contract for sale and purchase of goods
1. Preamble
The Parties to a contract
Clause 1: Applicable Law
Clause 2: Definition
Clause 3: Entire Agreement and Contract documents
2. What the Buyer will get? What the Seller will give?
Clause 4: Scope of supply/Commodity
3. How the Goods will be supplied?
Clause 5: Delivery
Clause 6: Notification of Delivery
Clause 7: Inspection before shipment
Clause 8: Early Delivery, Partial shipment &Delay in Delivery
4. What the Buyer will give? What the Seller will get?
Clause 9: Price
5. How the Buyer will pay? How the Seller will be paid?
Clause 10: Terms of payment
Clause 11: Inspection of the Goods at loading port
Clause 12: Defect liability
6. Liability outside the Contract
Clause 13: Liabilities to third parties.
Clause 14: Taxation
7. Legal status of the Contract
Clause 15: Assignment of Rights and Delegation of Duties
Clause 16: Coming into Force
Clause 17: Force Majeure
Clause 18: Termination
Clause 19: Partial invalidity
Clause 20: Modification
Clause 21: Language
Clause 22: Notices
Clause 23: Settlement of Disputes
8. Execution
Details not included in the main text of the Contract: Appendices
Practice 1 Vocabulary: distinguishing meaning Which word in each group is the odd one out? You
may need to consult a dictionary to distinguish the differences in meaning.
1 purchaser vendor buyer consumer
2 comparable distinct corresponding equivalent
3 plaintiff appellant defendant petitioner
4 postpone decide delay defer
5 void non-arbitrary invalid non-binding
6 material pecuniary monetary financial
7 originate from lead to arise out of result from
Practice 2 Word formation Complete these tables by filling in the correct forms.
Verb Noun
disclaim disclaimer
exclude exclusion
indemnify indeminication
tolerate tolerance
specify specifications
retain retention
postpone postponement
Verb Adjective
suit suitable
accept acceptable
imply implied
bind binding
ascertain ascertainable
Practice 3 Prepositions Complete the sales contract clause below with the prepositions in the
box.
by for in of under with
Governing Law
Anderson County, Texas, shall be the proper place of venue 1)____________
for suit on or in respect
2)____________of the Agreement. The Agreement and all of the rights and obligations of the parties
hereto and all of the terms and conditions hereof shall be construed, interpreted and applied 3)
in with by
____________ accordance 4) ____________ and governed 5) ____________ and enforced 6)
____________
under the laws
of the State of Texas.
Practice 4 Word choice Complete this paragraph about consumer rights by choosing the correct word
in each case.
When you buy goods from any seller, you have the right to expect certain standards. The UK Sale of
Goods Act 1979 states that the goods must be 1) for / of / in satisfactory quality 2) in comparison to /
by virtue of / in respect of the appearance and finish of the goods, their safety and durability, and their
freedom from defects - except where they have been pointed out to you before purchase. They must
also be 3) special / fit / made for their purpose, including any particular purpose mentioned by you to
the 4)vendor / purchaser / consumer. If the 5) merchandise / supply / sale does not meet these
standards, you are 6) obliged / entitled / required to reject it and get your money back. You have a/an
7) reasonable / acceptable / exclusive time to return faulty goods, after which you are 8) requested /
deemed / implied to have accepted the goods and their faults, although you may still be able to 9)
claim / incur / charge damages.
Practice 5 Study this transfer of ownership for a car, then answer the questions below.
KNOW ALL MEN BY THESE PRESENTS
THAT
The Albert Motor Company , the Seller, whose address is 3 Dry Boulevard, Alton, New Hampshire,
for and in consideration of $17,000 paid by Joe Ditherspoon, the Buyer, whose address is 1839
Long Lane, Alton, New Hampshire, has bargained, sold , granted and conveyed and by these
presents does bargain, sell , grant and convey unto the Buyer, the Buyer’s successors (heirs,
executors, administrators) one Ford Mustang
Model 2020 Factory No 380984762HX543 Motor No 72LK753
TO HAVE AND TO HOLD
The same unto the buyer and Buyer’s successors (heirs, executors, administrators) and assigns
forever.
IN WITNESS WHEREOF,
The Seller has set his hand and seal or caused these presents to be signed by its proper corporate
offices and caused its proper corporate seal to be hereto affixed, the eleventh day of October, 20--.
1. Is reference made here to the background of the sale?
YES NO
2. Is the basic exchange documented here?
YES NO
3. If yes what is exchanged for what?
________________
cash for __________________
car
4. Is the legal framework of this contract:
EXPRESSED IN THE CONTRACT
IMPLIED FROM THE APPLICABLE LAW
5. What law do you think applies to the contract?
__________________________
The law of the State of New Hamsphire
Practice 6 Read the contract below and answer the questions
CONTRACT FORM
(To be stamped in accordance with the Stamp Act )
THIS AGREEMENT made [DATE] BETWEEN [NAME OF PURCHASER] (hereinafter called “the
Purchaser” of the one part and [NAME OF SUPPLIER] (hereinafter called “the Supplier") of the other
part.
WITNESSETH THAT
WHEAREAS the Purchaser is desirous that certain Goods and ancillary Services shall be provided by
the Supplier, viz____________. [BRIEF DESCRIPTION OF GOODS AND SERVICES] and
accepted a bid by the Supplier for the provision of those Goods and Services in the sum
of____________ [CONTRACT PRICE IN WORDS AND FIGURES] (hereinafter called the
“Contract Price”)
THE PARTIES ABOVE NAMED HAVE AGREED AS FOLLOWS:
1. In this Agreement words and expressions shall have the same meanings as are respectively assigned
to them in the Conditions of Contract referred to below.
2. The following documents shall be deemed to form and shall be read construed as part of this
Agreement
a. The Bid Form and the Price Schedule;
b. The schedule of Requirements;
c. The Technical Specifications;
d. The General Conditions of Contract; and
e. The Special Conditions of Contract.
In the event of a conflict among the Contract Documents, the order of precedence laid down in the
General Conditions of Contract shall apply.
3. In consideration of the payments to be made by the Purchaser to the Supplier as hereinafter
mentioned, the Supplier hereby covenants with the Purchaser to provide the Goods and Services and
to remedy defects therein in conformity in all respects with the provisions of the Contract.
4. The Purchaser hereby covenants to pay the Supplier in consideration of the provision of the Goods
and Services and the remedying of defects therein, the Contract Price or such other sums as may
become payable under the provisions of the Contract at the time and in the manner prescribed by the
Contract.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed the day and
year first above written.
Signed, Sealed and Delivered by _____________(For the Purchaser) in the presence of ___________
Signed, Sealed and Delivered by_____________ (For the Buyer) in the presence of _____________
Questions:
1. What is the background of this contract?
The WHEREAS clause
_________________________________________________________________________________
2. What is the exchange of this contract?
Cash for goods and service
_________________________________________________________________________________
3. What is the legal framework of this contract?
_________________________________________________________________________________
It is implied in the Stamp ACt
Practice 7 Match these types of contract clauses (1-10) with their definitions (a-j).
1 Acceleration a clause stating that the written terms of an agreement may not be varied by
2 Assignment prior or oral agreements because all such agreements have been consolidated into
the written document
3 Confidentiality b clause designed to protect against failures to perform contractual obligations
4 Consideration caused by unavoidable events beyond the party’s control, such as natural
disasters or wars
5 Force Majeure
c clause outlining when and under which circumstances the contract may be
6 Liquidated terminated
Damages d clause concerning the treating of information as private and not for distribution
beyond specifically identified individuals or organisations, nor used other than
7 Entire
for specifically identified purposes
Agreement e clause in a contract requiring the obligor to pay all or a part of a payable
8 Severability amount sooner than as agreed upon the occurrence of some event or circumstance
stated in the contract, usually failure to make payment
9 Termination f clause setting out which party is responsible for payment of costs related to
10 Payment of preparation of the agreement and ancillary documents
Costs g clause expressing the cause, motive, price or impelling motive which induces
one party to enter into an agreement
h clause referring to an amount predetermined by the parties as the total amount
of compensation a non-breaching party should receive if the other party breaches
a part of the contract
i clause prohibiting or permitting assignment under certain conditions
j clause providing that, in the event that one or more provisions of the agreement
are declared unenforceable, the balance of the agreement remains in force
