Understanding Contracts 2
SOME MORE TYPICAL CONTRACT CLAUSES ~16 min
Read this text about some of the typical clauses you will find in commercial contracts. The most important words are in the key vocabulary below. Complete the exercises that follow.
At the beginning of most commercial contracts there are sections that deal with information such as the names of the parties, the background to the contract and the defined terms. After these sections you will find the main body of the contract. The main body of the contract is made up of clauses. There are some types of clause that you will find in most commercial contracts.
company. The advertising company agrees to create an advertising campaign for a new kind of medicine that the drugs company produces. The contract will include a clause that obliges the advertising company not to tell or disclose certain information to any third party about the drugs company’s products, production methods or financial information. This clause is often known as the confidentiality clause or the non-disclosure clause.
A commercial contract usually contains, for example, a clause that states what the term of the contract will be. The term of the contract is the duration of the contract. It means the period of time for which the contract is valid. There will also be a termination clause. This clause contains information about the expiration of the contract. Expiration means end. So, the agreed date of expiration of a contract is the agreed date upon which the contract will end. A contract of employment, for example, might have a term of one year. The termination clause tells the employer and the employee how the contract can end after a shorter period of time, before the agreed date of expiration.
Many modern contracts also have a clause that deals with intellectual property rights. This is very common in contracts under which someone such as an author or a self-employed, freelance designer produces creative work for a third party such as a publisher or a company. For example, Anna is a good artist. She designs birthday cards for children. The Cinderella Card Company commissions Anna to create two new designs for its birthday cards. To commission someone means to formally ask that person to do something or produce something, usually of a creative nature. The contract should make clear who is the owner of the design after the company prints the cards. Is it Anna or is it the card company? Can the card company use Anna’s designs on other goods? The design is intellectual property and it can be very valuable. Most contracts make clear who has copyright in intellectual property. To have copyright in a design, for example, means that you are the owner of that design.
There is often a clause in a contract that deals with information that must remain secret. This clause usually obliges one of the parties to keep confidential certain information connected with the other party. For example, let’s say an advertising company enters into a contract with a drugs
Match these words from the key vocabulary with the more informal word that has the same meaning.
| # | Phrase | Definition |
|---|---|---|
| a | Term means… | …end. (1) |
| b | Expiration means… | …self-employed. (2) |
| c | Confidential means… | …end. (3) |
| d | Disclose means… | …secret. (4) |
| e | Freelance means… | …duration. (5) |
| f | Author means… | …writer. (6) |
| g | Termination means… | …tell. (7) |
Complete these definitions with the correct word from the key vocabulary.
aCreative workis work that requires some imagination, such as a painting, a book or a song.
b To havecopyrightin creative work, such as a book or a song, means to have legal ownership of that work.
c The writer who writes a piece of work such as a book or a song is usually referred to in a contract as theauthorof that work.
d To be afreelanceworker means to be self-employed, usually in a creative area of work such as design.
e Sometimes large businessescommissionfreelance workers to do creative work for them, such as designing a company logo.
f Aterminationclause states the way in which a contract can come to an end.
gConfidentialinformation is information that is private and must be kept secret.
h The parties to a contract often agree not todiscloseany confidential information to any third party.
i Another word for the duration of a contract is thetermof the contract.
j Theexpirationof a contract is the end of that contract.
k Anon-disclosureclause states that one party to the contract is not allowed to tell anyone certain confidential information concerning the other party.
l Anintellectual propertyclause states which of the parties to a contract has copyright in creative work.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
SOME IMPORTANT COMMERCIAL VOCABULARY ~21 min
Look at this list of questions. Each question asks about the meaning of a word that is important in understanding commercial contracts. Match each question with the correct answer.
a What are perishable goods? g Why are some buildings called premises?
b What kind of goods can I describe as merchandise?
c What kind of building is a warehouse? i What is the job of a liquidator?
d What is a budget? j What does it mean if a business is insolvent?
e What does it mean if I owe money to someone? k What is an invoice?
f What does store mean? l Why do some businesses put a serial number on their goods?
h What does it mean if I pay for something in instalments?
It means to pay for something in several regular It means that you have an obligation to pay money payments over a period of time. Sometimes businesses pay for goods in this way. (1)
to that person. (7)
It means to keep goods in a particular place They are goods like meat, fish, milk or fruit. These where the goods will be safe until you are ready to use them or you are ready to sell them. (2)
things are impossible to use or to sell after a certain time because they become dangerous for people to eat. (8)
These are goods that the public can buy It is very similar to a bill. It is a list of goods or from shops. They might also be described as ‘consumer goods’. (3)
services that a seller supplies to a buyer and it names the price that the buyer must pay. It often says how many days the buyer has to make the payment, for example, 30 days. (9)
It is a very specific amount of money. It is the Some businesses do this so that they can identify exact amount of money that a person has available to spend in order to do a particular thing. (4)
their goods in the future. It helps the business in situations where they want to have their goods returned because the buyer did not pay. (10)
Because this name is often used for buildings It is a large building where a business keeps goods and land which are for businesses to use and not for people to live in. (5)
for a period of time before it sells them. (11)
It is a person who sells the assets of a business It means that the business does not have enough in order to pay the business’s creditors. This person is sometimes called ‘a receiver’. (6)
money to pay its debts. (12)
Here are the words from Exercise 1 again. These words are very common in commercial contracts, especially contracts for the sale of goods. Some of the words are connected with the subject of money and payment. The other words are connected with goods. Decide which area the words are connected with, money and payment or goods. Write your answers under the headings below.
Complete these sentences with a word from Exercise 2.
a The buyer will pay for the goods in six equal monthlyinstalments.
b The agent has an advertisingbudgetof £10,000 to advertise the company’s products in Italy and he must not exceed this amount without written permission.
c My company produces goods in China and we need a place tostorethe goods for three weeks before we transport them to England.
d Awarehouseis a large building that businesses often use to store their goods.
e Meat and fish areperishablegoods and will go off very quickly if they are not stored correctly.
f This contract will terminate immediately if the buyer becomesinsolventor has any other serious financial difficulty.
g How much money do weoweto our supplier?
h We enclose ourinvoicewith the goods, which gives a full description of the goods that the buyer ordered and the amount of money that the buyer must pay.
i If the buyer becomes bankrupt and aliquidatoris appointed to deal with the buyer’s creditors, then the seller has the right to terminate the contract.
j The businesspremisesfor sale consist of a factory, a separate office building and a warehouse.
continued k It is easy to identify our company’s goods if someone steals them because every item has astamped on it before it leaves the factory.
l The shop was full ofmerchandiseat the time of the fire and the retailer had to make a claim on his insurance policy for all of the goods that were destroyed.
Help desk
What do these words mean?
to exceed (something) — to go above the amount that is allowed.
a creditor — a person or company that you must pay because they supplied you with goods or services.
to go off — when food such as fish or meat goes off it means that you cannot eat the food because it is decaying.
a factory — a building where goods are manufactured. A factory is sometimes called a ‘plant’.
stamped on — put on or placed on, usually by a machine.
a retailer — a person or company that sells goods to the public.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
TERMINATION CLAUSES ~13 min
Read this text about termination clauses. Complete the text by filling each gap with the correct word from the box below.
All modern commercial contracts contain a termination clause. This clause tells the parties the circumstances under which the contract can (a)before the agreed date. A termination clause often lists three ways in which this can happen. When a contract ends before the agreed date we say that the contract is (b).
• The first way in which a contract can terminate is that one party (c)notice to the other. This is a period of warning that one party is about to end the contract. It is usual for a termination clause to say that notice must be in (d). A typical notice period in an employment contract, for example, is four weeks.
• The second way in which a contract can terminate is in circumstances where one of the parties
| # | Phrase | Definition |
|---|---|---|
| (e) | a material breach of the contract. A material breach is a significant breach. The breach must have a major effect on the injured party. It is not usually possible to terminate a contract because of a minor breach. A minor breach is a (f) court in the UK does not consider this type of breach (g) | and more insignificant breach. A enough to end the contract. |
• The third way in which a contract can terminate is in circumstances where one of the parties has serious problems concerning (h). Many termination clauses state that if one party’s business goes into liquidation and a liquidator is appointed to sell the assets of the business, this will terminate the contract. This is to (i)the party who may (j)money if the contract is allowed to continue. Many termination clauses also state that if one party’s business ceases trading, which means it (k)operating as a business, then the contract will terminate immediately.
Here are some questions and answers about termination clauses. Match each question with the correct answer.
What is the correct way to say that one party is Is a minor breach sufficient to terminate a warning the other party that a contract is about to end? (1)
contract according to UK law? (6)
A termination clause usually requires the parties to What is a liquidator? (7)
give notice in a specific way. What is the usual way to give notice? (2)
How long is a typical notice period stated in the What are assets? (8)
termination clause of an employment contract? (3)
What is a material breach? (4) What does cease trading mean? (9)
What is a minor breach? (5) Who are creditors? (10)
| # | Phrase | Definition |
|---|---|---|
| a | It is a very serious breach. | f It should usually be in writing. |
| b | It means to stop operating as a business. | g They are the things that a business owns, such as equipment or machinery. |
| c | It is usually four weeks. | h No. |
d They are people or companies that you must pay.
i It is called giving notice.
| # | Phrase | Definition |
|---|---|---|
| e | It is a breach that is not too important. | j It is a person who must sell the assets of a company in order to pay that company’s debts. |
Here is a simple example of a termination clause. Complete the clause by filling the gaps with a word from the blue box below.
Either party may terminate this (a)by 7.1 giving six weeks’ (b)notice to the other; or 7.2 giving notice where there is a (c)breach of terms; or 7.3 giving notice where one of the parties (d)to trade or is unable to pay its debts.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
INTELLECTUAL PROPERTY CLAUSES ~26 min
Read the following text about intellectual property clauses. The most important words are in the key vocabulary below. Answer the questions that follow using a full sentence.
An intellectual property (IP) clause in a contract deals with intellectual property rights. This means that the contract clearly states which of the parties owns any creative work, such as writing, music or designs. When a lawyer drafts an IP clause he or she must be sure of the wishes of the parties. Does the party who created the intellectual property really want the other party to have ownership of it? Or does he or she want the other party only to have permission to use the intellectual property for a particular project, but not to own it?
the right to use it too. Granting a licence is often a good idea. The creator of the work can make money from his or her work but continues to own the work.
A person who assigns his or her IP rights is called an assignor in a contract. In our case the assignor is the songwriter. The person or company who buys the IP rights is called the assignee. A person who grants a licence to use his or her intellectual property is called a licensor. The person who is allowed to use the intellectual property is called the licensee.
Let’s look at an example. A songwriter sends a new song to an advertising company. The company agrees to pay the songwriter £5,000 to use his song in a television advertisement for coffee. The songwriter accepts. Two years later, the manager of a different advertising company contacts the songwriter. This advertising manager wants to use the same song in an advertisement for a car. Can the songwriter give permission to the second advertising manager to use his song? The answer is that it depends on the terms of the contract with the first company.
When an assignor assigns his or her IP rights to a third party, the assignor usually has to make certain guarantees to the assignee. One of these is that the intellectual property assigned is free of any encumbrance. An encumbrance is the right that some third party has in the intellectual property. In our case the songwriter must guarantee that his song is completely his own work and he is legally able to assign it to the advertising agency.
A contract clause that deals with IP rights usually states what will happen when there is an infringement of the rights. To infringe an intellectual property right means to break the law concerning that right. We breach a contract but we infringe copyright.
Did the contract with the first advertising company state that the songwriter agreed to assign all IP rights to the company? Assign means to transfer ownership. If the answer is ‘yes’, then the advertising company owns the song. The songwriter cannot give permission to anyone else to use his song. He does not own it. This is bad luck for the songwriter and for the second company.
When an assignee buys IP rights he or she usually requires a guarantee from the assignor that the work, for example, a book, a play, a song, is not in the public domain. In the public domain means the public can find the work easily because the work is on the Internet or copies of it exist. In our case the songwriter cannot give this guarantee. His work is in the public domain because it was on television.
However, maybe the songwriter only agreed to grant a licence to the first company to use his song. In this case, this means he gave the first company permission to use his song, but he remains the owner. Therefore, he can probably give the second company a What must a lawyer be sure of when he or she drafts an intellectual property clause?
Answer: He or she must be sure of b What does to assign ownership of IP rights mean?
Answer: To assign ownership of IP rights means to c In situations where I want to give a company permission to use my intellectual property for a particular project what must I do?
Answer: In situations such as this I must d What is an assignor?
Answer: An assignor is a person or company that e What is an assignee?
Answer: An assignee is a person or company that f What is a licensor?
Answer: A licensor is a person or company that g What is a licensee?
Answer: A licensee is a person or company that h What is an encumbrance?
Answer: An encumbrance is a i What does to infringe an IP right mean?
Answer: To infringe an IP right means to j Where do we say intellectual property is when intellectual property is easily available to the public?
Answer: We say that intellectual property is in
Complete the following sentences with a word from the key vocabulary in Exercise 1.
a Who owns theintellectual property rightsin this piece of writing?
b My client is interested in buying your designs and he wants permanent ownership of them. Are you willing toassignyour IP rights to him?
c My client is a publisher and she wants to use your designs as an illustration in a new book. However, she does not want to buy the IP rights to the designs. I have instructed her that to do this she needs alicencefrom you.
d Our client does not want to assign copyright in her design to anyone but she is willing togranta licence to you to use it.
e Your use of our company logo on your products is aninfringementof our intellectual property rights and we will take legal action against you.
f Our client owns the IP rights in the design. When she grants a licence she will be described in the contract which grants the licence as thelicensor.
g Our client is selling the IP rights in the design. When she sells the rights to you she will be described in the sale contract as theassignor.
h We want to use a piece of music in our new advertisement. However, we must first check that this will notinfringeanyone’s IP rights.
i My client paid £10,000 for the rights to the music and he is now the owner. In the sale contract he is described as theassignee.
continued j My client paid £1000 to use the music in his new radio advertisement. He is not allowed to use the music again without a new licence. In the contract which grants the licence he is described as the.
k It is important to the publishing company that no one has seen your new book. Are there any copies? Is any part of the book in thepublic domain?
l The contract guarantees that you assign your work to the buyer free from anyencumbrance. This means that no third party has any interest in the work.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
RETENTION OF TITLE CLAUSES ~12 min
Read this text about retention of title. Decide if the statements that follow are true or false.
Retention of title clauses In a contract for the sale of ordinary goods which do not involve IP rights, there is a question about when title in the goods passes from one party to the other. To have title to or in goods means to be the legal owner of those goods. Lawyers also refer to having title in goods as having ‘property in’ goods. The two phrases mean the same thing. Having title in goods or having property in goods means to have legal ownership of those goods.
the leather. However, the furniture company uses the leather to make chairs just seven days after receiving it. Who is the legal owner of the leather? When does ownership pass from the seller to the buyer?
Lawyers often include a retention of title clause in contracts for the sale of goods. This is a sensible precaution. A precaution is something that prevents trouble in the future. A lawyer must anticipate the pitfalls that his or her client might experience in the future and try to protect the client from such problems when drafting the contract. A pitfall is a problem that is very likely to happen in the future in connection with a particular activity. For example, getting injured is a pitfall of playing football. A retention of title clause protects a seller from the pitfall of a buyer who does not pay. The clause says that the seller retains title to the goods until the seller receives full payment. In our example the seller continues to own the leather even after the buyer uses it to make chairs.
In a contract for the sale of goods there is often a clause called a retention of title clause. To retain something is to keep it. Let’s say that there is a contract between a company that produces leather and a company that makes furniture. The leather company signs a contract with the furniture company. The leather company agrees to provide the furniture company with good quality leather, suitable for making chairs. The invoice states that the furniture company must pay for the leather within 30 days of delivery of a To have property in goods and to have title to goods mean the same thing. b The correct heading that lawyers use in a contract is a retain of title clause. c Retain means ‘keep’. d A precaution and a pitfall are the same thing. e A retention of title clause in a contract is to protect the seller from a buyer who does not pay.
f After the seller delivers goods to the buyer, the seller can remain the owner of the goods according to a retention of title clause.
Complete these sentences with a preposition from the box below.
a A retention of title clause deals with when ownership of goods passesfromthe seller to the buyer.
b The seller will retain titletothe goods until the buyer makes payment in full.
c The seller will retain ownershipofthe goods until the buyer makes payment in full.
d The buyer must pay the seller for the goodswithin30 days of receiving those goods.
e A retention of title clause often states that the seller continues to own the goodsuntilhe or she receives payment.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
WARRANTY, INDEMNITY AND FORCE MAJEURE CLAUSES ~16 min
Read this text about warranty, indemnity and force majeure clauses. Complete the text by filling each gap with the correct preposition from the box below.
You will see clauses dealing with warranty, indemnity and force majeure in most commercial contracts.
pay. The contract will say that the hirer must ‘take out’ a policy of insurance. Take out means buy. In the USA an indemnity clause is sometimes called an indemnification clause.
A warranty is a guarantee that one party gives to the other. It is a statement of fact. In a contract (a)the hire of an industrial machine, the hirer will warrant to the owner that he will return the machine (b) the same condition and (c) the date stated in the contract.
A force majeure is something that happens that stops one of the parties from fulfilling his or her contractual obligations. It might be a problem with very bad weather, or something like a terrorist attack. A force majeure clause protects the parties from these unexpected circumstances. It describes the force majeure as an ‘unforeseeable’ event. Unforeseeable means that the parties did not and could not imagine that such a thing could happen. This clause states (e)what unexpected circumstances the parties are free from fulfilling a contractual obligation. In the above example, the hirer of the machine promises to return it on a certain date. What happens if there is a serious fire at the owner’s premises? The police will not allow the hirer to enter the premises. The hirer will not be in breach of contract because the force majeure clause will protect him.
An indemnity is a promise that one party makes to the other. It is a promise by one party to compensate the other if there is a loss that ‘arises from’ the contract. Arises from means comes from. The process of indemnity is sometimes called ‘covering’ someone against a loss. In the example above, one party hires a machine (d) the other and warrants that he will return it in the same condition. What happens if he does not do that? The indemnity clause states that the hirer must compensate the owner for his loss. An indemnity clause usually requires the party who gives the indemnity to buy a policy of insurance to make sure that he or she can keep his promise to
Jumbled words. Look at the definitions below. Some of the words from the text above are mixed up. Put the letters in the correct order to spell the words and complete the definitions. The first letter of each word is there for you.
Example: A clause in which one party makes certain guarantees to the other party.
WARRANTY (ARRTYNAW)
a A clause in which one party says that he or she will compensate the other party for certain losses that may happen as a result of entering into the contract. IINDEMNITY(DEMINYTIN)
b A phrase that means ‘comes from’ or ‘as a result of’ something.
AINDEMNITYF(RIASES) (ROMF)
c A word that means to pay someone money so that they do not suffer the effects of a loss.
CCOMPENSATE(PENTASMOCE)
d A phrase that means to buy something, especially insurance.
TO(AKET) (TUO)
e The formal name for an insurance document.
P(LICYPO)
f The word that American lawyers sometimes use instead of indemnity.
I(MNIEDINCATIFONI)
g An international term that describes an event that stops a party from fulfilling a contractual obligation.
FINDEMNIFICATIONM(ORECF) (JEUREAM)
h A word that means ‘could not be imagined in advance’.
U(FOREUNABSEEEL)
Put a word or phrase from Exercise 2 into these sentences.
a In thewarrantyclause of this contract the hirer guarantees that he or she will comply with the terms and conditions it contains.
b Theindemnityclause requires your client to cover any loss that my client suffers as a result of entering into this contract.
c Your client agrees tocompensatemy client for any financial loss that he suffers as a result of entering into this contract.
d It is necessary totakeoutinsurance when you enter into this contract. This means the other party knows that you have the money to compensate him for any loss that he suffers.
e Do you have apolicyof insurance? It is an important document and you should keep it in a safe place.
f When a lossarises froma breach of the terms of a contract, the indemnity clause usually covers the injured party against that loss.
continued g Our New York office has sent us a contract that uses the clause headinginstead of indemnity.
h Events that are usually classified as aforce majeureinclude war, revolution, and terrorism.
i The terrible storm on 10 July was anunforeseeableevent and therefore can be classified as a force majeure.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
MORE ABOUT FORCE MAJEURE CLAUSES ~23 min
Read this information about force majeure clauses. The most important words are in the key vocabulary below. Complete the sentences that follow by matching the first half of each sentence with the correct ending.
of contract. This is because there is a supervening event that is preventing the contract from being carried out. A supervening event is something that is unexpected. It stops or interrupts an event or situation.
It is usual for a contract to contain a clause that tells the parties under what circumstances they will be excused from fulfilling a contractual obligation. Excused means the party is free of the obligation. The obligation no longer exists. However, the circumstances under which this can happen are very limited. A party can usually be free of a contractual obligation only because something unusual happens that stops him or her from fulfilling the obligation. The clause in a contract that mentions the ways in which this cancellation of an obligation can happen is called the force majeure clause.
The force majeure clause states that if a supervening event happens that is completely out of the control of the contracting parties, such as a strike, then the party who is unable to fulfil his or her obligations will not be liable under the contract. Lawyers describe an event like this is as ‘unforeseeable’. In other words, neither party could have predicted or imagined it. Other force majeures include things like computer failure, war, revolution, earthquake or fire. Lawyers sometimes refer to a force majeure, especially an event that is not connected to human activity, as an ‘Act of God’. Fire, hurricane, flood or earthquakes can each be described as an Act of God. When a party wants to use a force majeure clause to avoid being in breach of contract, we say that he or she ‘relies on’ the force majeure clause.
Let’s say that one party to a contract agreed to deliver goods by plane to the other party. However, on the delivery date agreed in the contract the delivery company’s local air traffic controllers decided to have a strike, which continued for more than a month. It was impossible to deliver the goods on the agreed date because the airports were closed. Under circumstances like these, there is normally no breach a To be excused from fulfilling an obligation means…
…an event that interrupts the performance of a contract. (1)
b A force majeure clause is… …a situation where many people stop working, usually because they have a dispute with their employer. (2)
c A supervening event is… …the parties could not predict when they signed the contract. (3)
d An event that is unforeseeable is something that…
…that you are no longer responsible for fulfilling that obligation. (4)
e An Act of God is… …a type of force majeure such as a natural disaster. (5)
f To rely on a clause means… …to use or depend on that particular contract clause. (6)
g A strike is… …a clause in a contract that states that neither of the parties will be in breach of contract if certain things happen. (7)
Here are some lawyers speaking on behalf of their clients. Each lawyer mentions a force majeure clause. Complete what each lawyer says by filling the gap with a word from the key vocabulary in Exercise 1.
a ‘My client is not in breach of contract. Under certain circumstances a contracting party iscontrolfrom fulfilling his obligations. This means he is free of the obligation. My client is free of his obligation due to a force majeure.’
b ‘My client agreed to provide his hotel garden for your wedding. I am sorry that you were unable to have the ceremony there after all. However, the storm that happened on 15 July was completelynotify. Even the government’s weather office did not predict such a terrible event!’
c ‘My client contracted with you to keep your goods in his warehouse. There was a gas explosion at the warehouse last week, before you delivered your goods. The warehouse was destroyed. This is clearly what a lawyer calls abreachevent. My client is not in breach of contract.’
d ‘My client contracted to deliver goods to you by lorry. There was a flood that blocked all of the roads in your town and the lorry could not get there. We are not in breach of contract. He willdelaythe force majeure clause in the contract if you try to sue him.’
e ‘My client is a travel agent. You booked a holiday on a Caribbean island with his company. There was a hurricane that damaged all of the hotels on the island. Your holiday is cancelled. My client is not in breach of contract as this is the type of natural disaster that we describe as anAct of God.’
f ‘My client owns a nightclub. You booked the nightclub so that you could have a party to celebrate your birthday. There was a fire at the club last night. Please look at your contract with my client. You will see that there is aforce majeure Exercise 3 (205)clause that covers situations such as this.’
Here is a simple example of a force majeure clause. Complete the clause by filling the gaps in the text with a word from the box below.
5.1 For the purpose of this Agreement ‘Force Majeure’ means an event outside the reasonable (a) of a party affecting his or her obligations under this Agreement.
5.2 If either party is affected by a Force Majeure he or she must immediately (b) the other party in writing.
5.3 A Force Majeure does not entitle either party to terminate this Agreement and neither party shall be in (c) of this Agreement by reason of any (d) in performance or non-performance of any of its obligations due to Force Majeure.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
UNIT 10 VOCABULARY CHECK ~1 min
- Act of God
- arises
- assets
- assign
- assignee
- assignor
- author
- budget
- cease
- commission
- compensate
- confidential
- copyright
- creative work
- creditor
- disclose
- encumbrance
- exceed
- excused
- expiration
- force majeure
- freelance
- grant
- indemnification
- indemnity
- infringe
- infringement
- insolvent
- instalments
- intellectual property rights
- invoice
- licence
- licensee
- licensor
- liquidation
- liquidator
- material breach
- merchandise
- minor breach
- non-disclosure
- notice
- owe
- perishable
- pitfall
- policy
- precaution
- premises
- public domain
- rely on
- retailer
- retain
- retention
- serial number
- store
- supervening
- take out
- term
- termination
- title
- trading
- unforeseeable
- warehouse
- warranty
FOUNDATION LEVEL PRACTICE ~15 min
Read the following pairs of sentences. For each pair of sentences there are two possibilities, A or B. Decide which sentence uses the correct preposition. Write your answers in the box below. There is an example at the beginning (*).
Example (*) (A) To pay for something in instalments means to make several regular payments.
(B) To pay for something to instalments means to make several regular payments.
1 (A) A termination clause informs the parties of the circumstances under which a contract can end.
(B) A termination clause informs the parties of the circumstances at which a contract can end.
2 (A) The Seller retains title in the Goods until the Buyer pays for full.
(B) The Seller retains title in the Goods until the Buyer pays in full.
3 (A) A force majeure prevented my client to fulfilling his obligations.
(B) A force majeure prevented my client from fulfilling his obligations.
4 (A) Copyright in the design belongs to the artist.
(B) Copyright for the design belongs to the artist.
5 (A) The Hirer agrees to comply with the terms and conditions of this Agreement.
(B) The Hirer agrees to comply to the terms and conditions of this Agreement.
(*) A (1) (2) (3) (4) (5)
Look at this list of words. They are all verbs. Put the correct word into the following sentences. Write your answers in the boxes numbered 1-10 below. There is an example at the beginning (*).
| # | Phrase | Definition |
|---|---|---|
| (A) | store (D) assign | (G) draft (J) owe |
| (B) | disclose (E) grant | (H) commit |
Example: (*) If a party wishes to terminate the contract he or she must (*)four weeks’ notice in writing.
1 I (1)money to two people. I must pay Mary £20 and I must pay Andrea £10.
2 This information is confidential and you must not (2)it to anyone.
3 Please (3)this information strictly confidential.
4 When I (4)a breach of contract it means that I do not fulfil my obligations under that contract.
5 I (5)my goods in a warehouse in Manchester.
6 I agree to (6)a licence to your client to use my design on his merchandise for a period of one year.
7 To use someone’s artwork without his or her permission is to (7)that person’s copyright.
continued 8 I will (8)a new termination clause for my client’s contract as he is not satisfied with the current clause.
9 The author agreed to (9)her intellectual property rights to the publishing company, so the author no longer has legal ownership of those rights.
10 When I (10)someone against a loss it means that I promise to compensate him or her for that loss.
(*) AA (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
Read the text below. It is from a contract. Some of the words in the text are underlined. The meanings of these words appear in the list below, but they are not in the same order. Match the underlined words in the text with the correct meanings by writing the letters (A, B, C, etc). in the list below. There is an example at the beginning (*).
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
FROM A TERMINATION CLAUSE ~5 min
This (AA) Agreement shall (A) commence on the 25 June 20XX and shall continue for a (B) term of one calendar year.
Each party to this Agreement may at his or her own discretion and without being required to pay (C) compensation (D) terminate the Agreement by (E) serving two months’ written notice in advance.
Each party to this Agreement may by giving written notice to the other party terminate the Agreement immediately as follows:
3.1 If the other party has committed a (F) material (G) breach of this Agreement 3.2 If the other party goes into (H) voluntary or compulsory liquidation 3.3 If the other party is insolvent or unable to pay his or her (I) debts when they become due 3.4 If a receiver is appointed over the whole or any part of the (J) assets of the other party.
(*) AA contract sending a document in the correct, formal way money to pay someone for a loss amounts of money that a person owes to other people serious, significant start violation duration, the period of time for which a contract is valid intentional, something that a person chooses to do end property, including money and equipment
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LEGAL PROFESSION ~9 min
Exercise 2 (p15) a. suing b. negligence c. damages d. allegations e. grounds
c. sick pay d. discriminate e. redundancy
WORKING IN LAW
Exercise 8 (p19) a. formation of a business b. capital c. insolvent d. merger e. partnership
Exercise 1 (p10) a. Barrister b. Attorney c. Solicitor d. Lawyer
Exercise 3 (p15) a. Mary b. Michael c. Tom d. Cory e. Polly f. Kayleigh g. Sunitta h. David i. Jennifer j. Alistair
Exercise 9 (p19) a. tenant b. conveyancing c. lease d. landlord e. real estate
Exercise 2 (p10) a. True b. True c. False d. True e. False
FOUNDATION LEVEL PRACTICE
MAKING A CLAIM IN THE CIVIL COURT
Exercise 4 (p16) a. criminal law b. merged c. intellectual property law d. drafting e. the law of equity and trusts f. based in g. family law h. goods i. the law of tort j. valid
Exercise 1 (p21) 1. When a student finishes his or her legal
Exercise 1 (p11) a. civil b. civil c. criminal d. civil e. criminal
studies he or she has to make a two- year training contract with a law firm. 2. The law of tort says that everyone
must to be careful and not harm other people. 3. I will start my training contract with the
Taylor Wallis in September. 4. If we issue a claim against you we will
Exercise 2 (p12) a. True b. False c. True d. True e. False f. False
ask for a very high damages. 5. He breached the contract and I will
Exercise 5 (p16) a. insolvent b. merger c. tenant d. Conveyancing e. discriminate f. Unfair dismissal g. Sick pay h. lease of land and buildings i. formation of a business j. partnership k. Maternity leave l. Capital m. Redundancy n. landlord o. Real estate
prosecute him in the civil court.
Exercise 2 (p21) 1. False 2. True 3. False 4. True 5. True
Exercise 3 (p13) a. (3) b. (6) c. (1) d. (2) e. (7) f. (5) g. (8) h. (4)
Exercise 3 (p22) 1. * 2. c 3. a 4. d 5. f 6. h 7. b 8. g 9. e
Exercise 4 (p13) a. issues b. fee c. serves d. respond e. hear f. find g. order h. bailiff
Exercise 6 (p18) Employment law unfair dismissal maternity leave discriminate sick pay redundancy Business law formation of a business capital insolvent partnership merger Land law lease of land and buildings landlord tenant conveyancing real estate
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF BANKING ~8 min
A NEW BANK ACCOUNT
AREAS OF LAW
Exercise 1 (p24) Verbs: to issue, to withdraw, to deposit, to transfer Nouns: charges, statement, balance, bills, fees, overdraft Adjectives: eligible, current
Exercise 1 (p14) a. Lawyers say to breach a duty of care. b. In England and the USA the law of tort
is an area of civil law. c. A tort is a type of civil wrong. d. The name of this tort is negligence. e. Suing means starting proceedings
Exercise 2 (p25) a. balance b. deposit c. current d. issue e. overdraft f. bill
against someone in a civil court. f. The correct name for this money is damages. g. The correct name for this arrangement
Exercise 7 (p19) a. maternity leave b. unfair dismissal
is a no win no fee arrangement.
g. fee h. withdraw i. transfer j. eligible k. charges l. statement
f. If a stranger has your address and credit card details they can use your money to buy things or take money out of your account.
d. Ella Moran took legal action before the
Office of Fair Trading made its report because she was too angry to wait for them to help her. e. Ella Moran’s agreed overdraft limit was
Exercise 2 (p31) a. False b. False c. True d. False e. False
£500. f. Ella Moran’s overdraft accidentally reached £560 because her pay arrived at the bank three days later than usual. g. Chatsworth solicitor Barry Henshall
Exercise 3 (p26) 1. d 2. b 3. f 4. a 5. c 6. e 7. g
acted for Ella Moran in court. h. Ella Moran won her case very
LOANS
easily because the bank did not file a defence. i. The bank had to pay £565 to Ella
Exercise 1 (p31) a. Alison Goldsmith b. The Royal Chatsworth Bank c. Her house d. 22 Bluebell Crescent, Chatsworth e. She is single f. £5000 g. No h. By instalments
Moran to pay back the unfair charges and to cover legal costs. j. Consumer law says that banks must
Exercise 4 (p26) a. DEBIT b. INCOME c. OUTGOINGS d. LEND e. BORROW f. OWE g. DEBT h. RED i. BLACK
not use penalty charges to make a profit.
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF CONTRACT LAW ~12 min
Exercise 2 (p32) a. Yesterday b. When she completed the application
A CONTRACT CASE
Exercise 5 (p27) a. red b. debits c. borrow d. lend e. debts f. owe g. income h. credits i. black j. outgoings
Exercise 1 (p38) a. Client details b. General information c. Facts of the case d. What I need to do
form c. Alison’s personal details d. The bank approved it e. By letter f. The loan agreement g. 36 months h. No
Exercise 2 (p39) a. False b. True c. False d. False e. True In some legal systems Charlotte may have made a contract with Chatsworth CitiTravel. According to English law she has not. We will look at the reasons in this unit.
Exercise 3 (p32) a. from b. for c. to d. in
Exercise 6 (p28) a. within b. at c. for d. at e. from f. with
Exercise 4 (p33) a. debt b. arrears c. arrears d. accrue e. debt f. accruing
Exercise 3 (p39) a. (5) b. (1) c. (2) d. (6) e. (4) f. (3)
Exercise 7 (p29) a. 5 b. 4 c. 6 d. 8 e. * f. g. 7 h. 1 i. j. k. 10
FOUNDATION LEVEL PRACTICE
Exercise 1 (p35) 1. (D) 2. (B) 3. (D) 4. (D) 5. (A)
Exercise 4 (p40) a. contract b. obliged c. precedent d. acceptance e. offer f. offeror g. case
Exercise 2 (p35) 1. (B) 2. (B) 3. (A) 4. (A) 5. (A)
WORKING IN A BANK
MORE ABOUT PRECEDENT
Exercise 1 (p30) a. The bank likes to have new customers
Exercise 1 (p40) a. False b. True c. False d. False e. True
because they make money for the bank. b. The bank can open a business account
Exercise 3 (p36) a. The head office of the Glen Royal Bank
for them. c. The bank offers an interest rate of 4.3%
is in Edinburgh. b. The Chatsworth branch opened
on its SmartSave account. d. A debit card takes money out of
in 1988. c. They complained because some UK
Exercise 2 (p41) a. common b. precedent c. ratio decidendi d. binding
someone’s account immediately. e. To default on a loan means that you do
banks were charging their customers more than £100 for going over their agreed overdraft limit.
not pay the money back.
FOUNDATION LEVEL PRACTICE
e. instance
f. A general election
Exercise 3 (p42) 1. g 2. d 3. f 4. e 5. a 6. h 7. b 8. i 9. c
Exercise 2 (p48) a. True b. False c. True d. False e. False
Exercise 1 (p55) 1. (D) 2. (C) 3. (B) 4. (D) 5. (D)
THE ELEMENTS OF A CONTRACT
Exercise 2 (p55) 1. (A) 2. (B) 3. (B) 4. (A) 5. (B)
Exercise 3 (p49) Verbs: covers (to cover), places (to place) Nouns: terms, transactions restrictions, liability
THE ELEMENTS OF A CONTRACT
Exercise 1 (p43) The answer key does not provide an answer to this question. This is because the question asks for your opinion.
Exercise 4 (p49) a. transaction b. cover c. restriction d. liability e. terms f. place
Exercise 3 (p56) 1. (A) 2. (D) 3. (F) 4. (E) 5. (H) 6. (B) 7. (I) 8. (G) 9. (J) 10. (C)
Exercise 2 (p43) The elements of a contract in English law are: intention, offer, acceptance and consideration
Exercise 5 (p49) a. Terms 2 b. Term 2 c. Term 1 d. Terms 1
Exercise 3 (p44) a. offer b. consideration c. intention d. acceptance
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF EMPLOYMENT LAW ~15 min
READING CONTRACT LAW
Exercise 4 (p44) The answer key does not provide an answer to this question. This is because the question asks for your opinion.
BEING AN EMPLOYER
Exercise 1 (p49) a. False b. True c. True d. True e. False
Exercise 1 (p58) a. Peter Connolly owns shoe shops. b. Peter Connolly employs 12 staff. c. Two staff work in the office. d. The payroll shows Peter Connolly
THE END OF AN OFFER
Exercise 1 (p45) (a) LAPSED
Exercise 2 (p51) a. capacity b. seal c. sum d. discharged e. enforceable f. injured party g. voluntarily h. contrary to i. donation j. comply with
who works for the business and what remuneration each person receives from him each month. e. Remuneration means payment. f. Peter Connolly’s staff are paid monthly. g. Peter Connolly’s full-time staff work for
The offeror is: DDS Furniture Ltd The offeree is: David Jackson (b) COUNTER-OFFER
The offeror is: Julie Smith The offeree is: Alex Harrison (c) REJECTED
35 hours a week.
The offeror is: Jamie Hammond The offeree is: Ben Wardle (d) REVOKED
Exercise 2 (p59) a. well-motivated b. maternity leave c. C.V. d. team e. wide range f. temporary g. applicant h. covering letter i. closing date j. track record
The offeror is: Mia Thomas The offeree is: Andrea Stewart
GOING TO COURT
WHAT IS CONSIDERATION?
Exercise 1 (p52) a. False b. True c. False d. False e. True
Exercise 1 (p46) a. intention b. provide c. precedent(s) d. forbearance e. reciprocal f. benefit g. detriment
Exercise 3 (p60) a. for b. in c. at d. to e. at f. from
Exercise 2 (p52) a. 4 b. 5 c. 1 d. 6 e. 2 f.
Exercise 2 (p47) See page 220 at the end of the Answer Key.
CONTRACT AND STATUTE
Exercise 4 (p61) a. apply b. enclosed c. cashier d. skills e. enthusiastic f. free g. opportunity
Exercise 3 (p53) a. defective b. direct c. sue d. defendant e. consequential f. claimant
Exercise 1 (p47) a. Parliament b. MPs c. A statute/an Act of Parliament d. Elected e. Legislation
Exercise 6 (p67) a. from b. of c. on d. for e. in f. of g. for h. on i. of j. on/upon
h. position
h. Mr Penhaligon would prefer to employ an older woman or a man as assistant manager. i. Julie Murphy is very angry about Mr Penhaligon’s decision. j. The grounds for the claim are discrimination.
AN EMPLOYMENT CONTRACT
Exercise 1 (p61) a. Remuneration b. Confidentiality c. Term of the contract d. Working hours e. Disciplinary procedure f. Pension g. Job title h. Holidays i. Termination j. Grievance procedure k. Non-competition l. Sick pay
FOUNDATION LEVEL PRACTICE
Exercise 1 (p73) 1. Your skills are the things that you can do good. 2. Your employer did not make the correct procedure when he dismissed you. 3. Could you please confirm me that you agree to pay my client for his work? 4. Marco explained me at our meeting yesterday that his company dismissed him because he is a foreigner. 5. I would like to discuss about my salary for next year.
ACTING FOR AN EMPLOYEE
Exercise 1 (p67) a. (3) b. (6) c. (4) d. (2) e. (8) f. (7) g. (5) h. (1)
Exercise 2 (p63) a. term b. provisions c. title d. hours e. salary f. holiday g. sick pay h. terminate
Exercise 2 (p69) a. discrimination b. constructive c. tribunal d. appraisal e. unfair
Exercise 2 (p73) 1. notice 2. grounds 3. claim 4. factors 5. procedure 6. writing 7. trade 8. appeal 9. spot 10. sue
Exercise 3 (p63) a. Non-competition b. Remuneration c. Grievance procedure d. Job title e. Sick pay f. Term g. Pension h. Holidays i. Confidentiality j. Disciplinary procedure k. Working hours l. Termination
ACTING FOR AN EMPLOYER
Exercise 1 (p69) a. (2) b. (6) c. (1) d. (8) e. (7) f. (3) g. (4) h. (9) i. (5) j. (10)
Exercise 3 (p74) I bad or unacceptable behaviour J tell, reveal H end B the duties and conditions contained in
a contract D to have the right to something A a person or company who signs a
HOW CAN AN EMPLOYMENT CONTRACT END?
contract E a period of time a person is away from
Exercise 1 (p66) a. resign b. resignation c. notice d. handing
Exercise 2 (p70) a. legislation b. regulations c. seminars d. duty of care e. contentious f. allegations g. docked h. on-the-spot i. trade union j. strike
the place they are expected to be G money that a person receives after he
or she stops working F to give because you choose to give
and not because you must C payment
Exercise 2 (p66) a. retire b. retirement c. pension d. plan
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF THE LAW OF TORT ~21 min
AN EMPLOYMENT CASE
WHAT IS THE LAW OF TORT?
Exercise 3 (p66) a. redundant b. Redundancy c. payment d. training
Exercise 1 (p71) a. He has an estate agency. b. Julie Murphy was a receptionist. c. Yes, Julie Murphy did have a good relationship with the other people in her office. d. Julie Murphy had two days away from work. e. Mr Penhaligon advertised the job of assistant manager in the local newspaper. f. There were 16 candidates for the job of assistant manager. g. Mr Penhaligon refused to interview Julie Murphy for the job.
Exercise 1 (p76) a. True b. False c. False d. False e. True
Exercise 4 (p66) a. dismissed b. misconduct c. procedure d. sacked
Exercise 2 (p77) a. compensate b. liable c. intention d. negligence e. damage
Exercise 5 (p67) a. leaving b. fixed c. period d. month
Exercise 3 (p77) a. A tort is conduct that causes harm to
Exercise 3 (p88) 1. False 2. True 3. False 4. True 5. True
e. False
Exercise 3 (p82) a. upon/on b. for c. under d. in e. at
another person. b. The heads of tort are the different
categories of tort that exist in English law. c. To bring an action in tort means to sue
UNDERSTANDING CONTRACTS (1)
someone on the grounds that I have suffered harm. d. A remedy is something that
MORE ABOUT NEGLIGENCE
compensates me for my loss or that stops the harm from happening again. e. The usual remedy for a tort
THE STYLE OF WRITTEN CONTRACTS
Exercise 1 (p82) a. (4) b. (5) c. (1) d. (6) e. (3) f. (2)
is damages. f. Lawyers give the name ‘tortfeasor’ to the person who commits a tort.
Exercise 1 (p90) a. The English of contracts is more
difficult than general English. b. A typical sentence in a contract written
TYPES OF TORT
in English can be 100 words or more. c. No. Lawyers sometimes use a different
A FAMOUS CASE IN ENGLISH LAW
Exercise 1 (p78) a. with b. against c. into d. as e. into
word order when they draft contracts. d. Lawyers use long lists of synonyms
Exercise 1 (p83) a. The McLibel case lasted for nine years
when they draft contracts because they think about the fact that a judge will interpret the contract if there is a dispute. e. People give the name ‘legalese’ to the
and six months. b. The claimant in this case was
McDonald’s. c. The two defendants in this case were
Exercise 2 (p78) a. To trespass means to interfere with
Helen Steel and David Morris. d. Helen and David were worried
style of writing that lawyers use. f. Modem lawyers are encouraged to write in a style called ‘plain English’.
something or someone. b. The two types of trespass are trespass
about the way that certain large corporations were behaving in relation to the environment. e. Helen and David told the public about
to land and trespass to the person. c. No, the law of tort does not always stay
Exercise 2 (p91) a. 5 b. 4 c. 7 d. 6 e. 2 f. g. 3 h. 8
the same. d. Lawyers usually divide the heads of tort
their worries by giving out leaflets. f. Helen and David claimed that McDonald’s was partly to blame for the destruction of the rainforests. g. McDonald’s did not need proof of
into torts that cause harm to people and torts that cause harm to land.
Exercise 3 (p78) a. negligence b. duty of care c. false imprisonment d. assault e. battery f. trespass to the person g. defamation h. slander i. libel
damage because libel is actionable per se. h. The court of first instance held that
Exercise 3 (p92) a. 3 b. 1 c. 2
Helen and David were guilty of libel. i. The European Court decided that Helen and David’s defence was not so well prepared as McDonald’s’ claim because Helen and David could not pay for an expensive legal team. j. The European Court of Human Rights also ruled that Helen and David’s right to free expression was violated.
UNDERSTANDING FORMAL EXPRESSIONS
Exercise 4 (p80) a. permission b. walking c. objects d. enjoy e. Claimants f. factory g. committed h. grounds
Exercise 1 (p92) a. soon b. now c. if d. while e. until f. by g. because h. at least
FOUNDATION LEVEL PRACTICE
Exercise 1 (p86) 1. (*) 2. f 3. h 4. a 5. d 6. b 7. g 8. e 9. c
THE DUTY OF CARE
Exercise 2 (p93) a. While b. If c. until d. Because e. soon f. now g. by h. at least
Exercise 1 (p80) a. (5) b. (6) c. (3) d. (8) e. (1) f. (2) g. (7) h. (4)
Exercise 2 (p87) 1. heads 2. trespass 3. nuisance 4. conduct 5. failure 6. care 7. foreseeable 8. compensate 9. remedy 10. tortfeasor
Exercise 3 (p94) a. inasmuch as b. notwithstanding c. notwithstanding d. inasmuch as
Exercise 2 (p81) a. True b. False c. False d. True
Exercise 4 (p95) a. before (4) b. depending on (1) c. involved in, doing (2) d. including (5) e. named, called, mentioned (3)
Exercise 3 (p106) a. parties b. scratch c. recitals d. bank e. delivery
d. thereinafter e. thereon
Exercise 4 (p100) a. invoice b. delivery date c. delivery note d. defective goods
FOUNDATION LEVEL PRACTICE
Exercise 5 (p95) a. inclusive of b. referred to c. engaged in d. prior to e. subject to
UNDERSTANDING SOME COMMON WORDS
Exercise 1 (p108) 1. (A) 2. (B) 3. (B) 4. (A) 5. (A)
Exercise 1 (p101) a. Premises b. Copyright c. Import duty d. Carriage e. Staff f. trademark g. patent h. In transit i. hirer j. invention k. On board l. owner
UNDERSTANDING TECHNICAL WORDS
Exercise 2 (p187) 1. (G) 2. (E) 3. (C) 4. (A) 5. (H) 6. (J) 7. (F) 8. (B) 9. (D) 10. (I)
Exercise 1 (p96) a. 6 b. 3 c. 4 d. 2 e. 1 f.
Exercise 2 (p96) a. outlet b. invoice c. defective d. manufacture e. sum f. retailer
Exercise 2 (p102) A contract for the hire of a hotel for a company’s conference: premises, staff, hirer, owner. A contract for the transport of goods by ship: import duty, carriage, in transit, on board. A contract concerning a company’s intellectual property rights: copyright, trademark, patent, invention.
Exercise 3 (p109) B contract C amount of money F receiving D written, specified E the currency of the United Kingdom; pounds. J agreed date when something must be done G grow, accumulate A provided H late I if
Exercise 3 (p97) a. TERM b. GIVE NOTICE c. EXPIRATION d. PROCUREMENT e. AGGREGATE f. UNDERTAKE g. INCUR
Exercise 3 (p103) a. owner b. hirer c. premises d. staff
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF BUSINESS LAW ~21 min
Exercise 4 (p97) a. expiration b. aggregate c. undertake d. procurement e. give notice f. term g. incur
Exercise 4 (p103) a. on board b. carriage c. import duty d. in transit
SOLE TRADERS
Exercise 1 (p112) Verbs/phrasal verbs: to set up, to register, to manage. Nouns/compound nouns: sole trader, profit, option, investment, assets, expenses. Adjectives: liable, self-employed, annual.
Exercise 5 (p103) a. invention b. copyright c. patent d. trademark
UNDERSTANDING ARCHAIC TERMS
Exercise 1 (p98) a. archaic b. legal c. delete d. preposition e. clause f. mentioned g. hereinafter h. thereon
THE STRUCTURE OF A CONTRACT
Exercise 2 (p113) a. option b. expenses c. investment d. setup e. sole trader f. self-employed g. profit h. assets i. liable j. register k. manage l. annual
Exercise 1 (p105) a. 2 b. 4 c. 1 d. 7 e. 3 f. g. 6
Exercise 2 (p99) a. hereinafter b. heretofore c. hereby d. herein e. hereunder
Exercise 2 (p105) a. the defined terms/definitions b. the parties c. the delivery of goods/services d. the recitals e. the operative provisions
Exercise 3 (p114) a. (5) b. (4) c. (3) d. (1) e. (2)
Exercise 3 (p100) a. thereby b. thereto c. therein
PARTNERSHIPS
b. What name will the partnership
g. A shareholder won’t have to use his or
trade under? c. How much capital will each partner
her own money to pay the debts of the company because the shareholders have the protection of limited liability.
Exercise 1 (p115) a. in b. of c. between d. for e. for
contribute to the partnership? d. How will the partners share the profits
Exercise 3 (p124) a. True b. True c. False d. False e. True f. False
or the losses? e. How much will each partner’s monthly
drawings be? f. Who will have authority to sign partnership cheques? g. How long will the notice period for
Exercise 2 (p115) a. (3) b. (6) c. (4) d. (2) e. (1) f. (5)
resignation be? h. What will the retirement age be?
Exercise 4 (p125) a. (1) b. (3) c. (4) d. (5) e. (2)
Exercise 2 (p120) a. Samantha Sully and Kate Mace b. Revitalise c. £2500 each d. 50:50 e. £500 a month each f. Either partner can sign cheques g. Three months h. 55
Exercise 3 (p116) a. Francesca Rodd advises them to have
a partnership agreement. b. To contribute money to the
Exercise 5 (p125) a. £4 b. £1 c. £3
partnership means to invest money in the partnership. c. Partners usually divide losses in
LIMITED LIABILITY PARTNERSHIPS
the same proportion as they share the profits. d. Partners usually draw money out of the
PUBLIC AND PRIVATE LIMITED COMPANIES
Exercise 1 (p121) a. Limited liability partnership b. personal assets c. limited liability d. incorporated business e. legal entity f. member
partnership bank account for their own use each month. e. The other way is resignation. f. A notice period is the period of warning that a partner has to give to the other partners before he or she leaves the partnership. g. To expel someone means to force that
Exercise 1 (p126) a. False b. True c. False d. True e. False f. True
Exercise 2 (p122) a. for b. at c. to d. on e. to f. to
person to leave the partnership. h. To dissolve a partnership means to end
Exercise 2 (p127) a. Yes b. No c. No d. Yes e. No
the partnership.
Exercise 4 (p117) a. False b. False c. True d. True e. False f. False
COMPANIES
Exercise 3 (p128) 1. d 2. h 3. c 4. j 5. a 6. f 7. e 8. g 9. b 10. i
Exercise 1 (p122) a. (7) b. (4) c. (2) d. (6) e. (10) f. (1) g. (9) h. (12) i. (8) j. (5) k. (11) I. (3)
Exercise 5 (p117) a. drawings b. contribute c. loss d. notice period e. retire f. expel g. resign h. capital i. management j. dissolved k. trade under l. proportion
INCORPORATING A COMPANY
Exercise 1 (p129) a. off-the-shelf b. articles of association c. certificate of incorporation d. memorandum of association e. annual return
Exercise 2 (p123) a. To incorporate a company means to
set up and register a new company in the proper way. b. All companies in England are registered
Exercise 6 (p118) a. EQUITY b. SALARIED c. SLEEPING
Exercise 2 (p130) a. COMPANY NAME b. REGISTERED OFFICE c. STATEMENT OF COMPLIANCE d. SHARE CAPITAL e. SUBSCRIBERS
with Companies House. c. A new company can begin to trade
in the company’s name when the name appears on the official register of companies. d. Another name for a legal personality is
Exercise 7 (p118) a. salaried b. sleeping/dormant/silent c. equity
a legal entity. e. The people who own a company are
A PARTNERSHIP AGREEMENT
Exercise 3 (p131) a. subscribers b. registered office c. company name
called the members or shareholders. f. A dividend is a payment of a company’s profits to the shareholders.
Exercise 1 (p119) a. What is the full name of each partner?
SALUTATIONS
Exercise 4 (p150) a. consider b. earlier/above c. concerning/regarding d. ask that e. buyers f. as soon as possible
d. share capital e. statement of compliance
Exercise 1 (p140) a. Ms Slater b. Sir or Madam/Sirs c. Mattheis d. Ms Gabanna e. Ms Wallis and Mr Dongahue f. Dr Barley g. Sir or Madam/Sirs h. Sir or Madam i. Mr and Mrs Simpson j. Mrs Robson k. Madam
FOUNDATION LEVEL PRACTICE
Exercise 1 (p133) 1. (J) 2. (H) 3. (C) 4. (F) 5. (I) 6. (A) 7. (E) 8. (D) 9. (G) 10. (B)
Exercise 5 (p150) a. confirms this b. waived c. breach d. have failed to make your payments e. your creditors f. liable
COMPLIMENTARY CLOSE
THE CONTENT OF THE LETTER
Exercise 2 (p134) 1. (D) 2. (B) 3. (A) 4. (C) 5. (A)
Exercise 1 (p141) a. Yours sincerely b. Yours faithfully c. Yours sincerely d. Yours sincerely e. Yours faithfully f. Yours faithfully g. Yours sincerely h. Yours sincerely i. Yours faithfull
Exercise 1 (p151) a. We are writing to confirm that...
Thank you for your letter of/dated 12 June. With reference to our telephone conversation... b. We are pleased to inform you that...
Exercise 3 (p134) 1. True 2. False 3. True 4. False 5. True
I am pleased to tell you that... c. Unforunately/Regrettably...
We regret to inform you that... I am afraid/sorry... d. We would be grateful if you could/
SUBJECT LINES
would... I would appreciate it if you could... Please/Kindly... e. I am sorry about the delay in replying.
Exercise 1 (p144) a. Letter 3 b. Letter 1 c. Letter 2
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
MODERN LETTER WRITING ~11 min
THE LAYOUT OF A LETTER
We apologise for any inconvenience caused. Please accept our apologies. f. I enclose... Please find enclosed... g. If you have any questions, please do
PUTTING A LETTER TOGETHER
Exercise 1 (p136) a. Sender’s address b. The date c. Recipient’s details d. Subject line/the salutation e. The salutation/subject line f. The body of the letter g. The complimentary close h. The signature i. Printed signature block
Exercise 1 (p163) 1. b 2. f 3. j 4. h 5. I 6. d 7. a 8. g 9. i 10. e 11. c 12. k
not hesitate to contact us. If we can help in any way, please let us know. I look forward to hearing from you...
TYPICAL SENTENCES IN LEGAL LETTERS
Exercise 2 (p137) a. The letterhead b. The date c. Reference d. Recipient’s details e. Subject line/the salutation f. The salutation/subject line g. The body of the letter h. The complimentary close i. The signature j. Printed signature block
Exercise 1 (p153) a. I act on behalf of... b. I am instructed that... c. I am writing to... d. If I do not hear from you within 14 days
THE REGISTER OF LETTER WRITING
of the date of this letter, I am instructed to start legal proceedings immediately. e. I look forward to hearing from you as
Exercise 1 (p147) a. (3) b. (2) c. (1)
soon as possible.
LETTER WRITING CLINIC
DATES
Exercise 2 (p148) a. (1) b. (3) c. (1) d. (3) e. (2)
Exercise 1 (p155) a. (6) b. (9) c. (3) d. (2) e. (1) f. (10) g. (4) h. (8) i. (5) j. (7)
Exercise 1 (p138) a. UK b. US c. US d. UK e. US f. UK g. UK h. US i. UK j. UK k. US
Exercise 3 (p149) a. (4) b. (8) c. (2) d. (1) e. (3) f. (5) g. (7) h. (6)
Exercise 2 (p157) a. the b. provide/supply
c. trips d. for/in respect of e. proof f. My client requests a full account of how his funds have been used. g. advised h. court i. incur j. Please confirm as soon as possible that you have received this letter.
e. evidence f. compensation g. proof h. research
2. denied/refuted 3. have breached 4. liability 5. substandard work 6. start proceedings 7. further notice 8. be successful 9. as soon as possible 10. contact me
Exercise 9 (p162) a. a lot of b. some c. policy d. much e. piece of f. compensation g. proof h. a great deal
Exercise 2 (p167) 1. dated 14 July 20XX 2. claim 3. dispute 4. grounds 5. suffered 6. none of my client’s staff were 7. negligent 8. earnings 9. emotional distress 10. costs
CORRECTING COMMON MISTAKES IN LETTER WRITING
Exercise 1 (p158) a. (5) b. (2) c. (3) d. (4) e. (1)
Exercise 10 (p162) a. disturbance b. admission c. amendment d. dismissal e. response f. abatement g. distinction h. loss
Exercise 2 (p158) a. Dear b. instructed, Mr c. requesting, received, response d. received, enclosed e. resolved/settled, start
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.
THE LANGUAGE OF COMPANY LAW ~32 min
Exercise 11 (p163) a. advice b. response c. journey d. effect e. proof
WHO RUNS A COMPANY?
Exercise 3 (p159) a. information b. to c. said d. explain to me e. start to build
Exercise 1 (p170) a. The employees are the people who
work for the company. b. The directors are the people who run
Exercise 12 (p163) a. incorrect b. correct c. incorrect d. correct e. correct f. incorrect g. correct h. incorrect
the company. c. An accountant deals with the financial
paperwork of the company. d. A company secretary makes sure that
Exercise 4 (p159) a. (1) b. (5) c. (3) d. (2) e. (4)
the legal requirements of the company are complied with. e. An auditor inspects all the financial
records of the company. f. Creditors are the people who the company owes money to. g. Debtors are the people who owe
Exercise 5 (p159) a. hereby b. abovementioned c. forthwith d. hereto e. hereunder
Exercise 13 (p164) a. rate, take out b. waste, incur c. due, outstanding d. dispute, pay e. denies, find
money to the company.
Exercise 2 (p171) a. shareholder b. creditor c. director d. secretary e. auditor f. accountant g. debtor h. employees
Exercise 6 (p160) a. act b. his/her/the c. conduct, immediately d. attached/enclosed e. requested
Exercise 14 (p164) a. to act for your behalf (on) b. responsibility of your case (for) c. currently of the rate (at) d. placed at a client account (in) e. audited from (by) f. responsibility of (for)
AREAS OF COMPANY LAW
Exercise 7 (p160) a. provide b. If c. According to d. obtain e. perform f. people g. consider h. ended i. agreed j. start k. connected with i. clear
Exercise 15 (p165) a. of b. to c. for d. as e. to
Exercise 1 (p172) a. Directors’ service agreements b. Insolvency c. Mergers d. raising finance e. Acquisitions f. Incorporating companies g. Restructuring companies h. joint ventures i. shareholders’ agreements j. directors’ duties
Exercise 16 (p165) a. in b. of c. with d. to e. on
Exercise 2 (p173) 1. e 2. b 3. g 4. d 5. a
Exercise 8 (p161) a. damage b. advice c. insurance d. evidence
FOUNDATION LEVEL PRACTICE
Exercise 1 (p166) 1. on your behalf
COMPANY FINANCE - A CASE STUDY
6. i 7. c 8. h 9. f
d. proceedings
Exercise 2 (p186) a. administrator b. manage c. benefit d. going concern
Exercise 1 (p180) Verbs: to borrow, to finance, to lend, to repay, to grant, to default (defaults) Nouns: asset, loan, guarantee, charge, mortgage, security
DIRECTORS
Exercise 1 (p174) a. (6) b. (2) c. (4) d. (8) e. (9) f. (1) g. (7) h. (5) i. (3)
Exercise 3 (p186) a. debt b. charge c. receiver d. subject to
Exercise 2 (p180) a. borrow b. lend c. loan d. repay e. asset f. finance g. guarantee h. Security i. mortgage j. defaults k. charge l. grant
Exercise 4 (p186) a. resolution b. to wind up c. realise d. proceeds
Exercise 2 (p175) a. True b. True c. True d. False e. False f. False
Exercise 5 (p186) a. presents b. winding-up petition c. grounds d. Official Receiver
Exercise 3 (p181) a. After b. by c. for d. from e. on f. of
COMPANY MEETINGS
FOUNDATION LEVEL PRACTICE
Exercise 1 (p176) a. The directors of the company attend
Exercise 1 (p188) 1. (D) 2. (C) 3. (B) 4. (A) 5. (B)
board meetings. b. The shareholders of the company
Exercise 4 (p181) a. This is an unsecured creditor. b. This is a secured creditor. c. This is a secured creditor. d. This is an unsecured creditor. e. This is an unsecured creditor.
attend company meetings. c. The minutes of a meeting are the
written record of the meeting. d. The chairperson controls the meeting. e. An annual general meeting takes place
Exercise 2 (p188) 1. * 2. b 3. g 4. a 5. e 6. h 7. c 8. f 9. d
once each year. f. The abbreviation EGM means extraordinary general meeting. g. This minimum number of people is
CLOSING A COMPANY
Exercise 1 (p182) a. To strike off a company means to
called a quorum. h. The two methods of voting at a
remove a company from the central register of companies. b. To liquidate a company means to
company meeting are a show of hands and a poll.
formally close a company. c. The adjective that describes a
Exercise 2 (p177) a. quorum b. minutes c. annual general meeting d. company meetings e. adjourn f. proxy g. show of hands h. extraordinary general meeting i. board meetings j. convene k. poll l. chairperson
Exercise 3 (p189) 1. As a director I must to exercise the
company which is able to pay all of its debts is ‘solvent’. d. The phrasal verb that has the same
duty of care and skill. 2. In my opinion, this motion is not for the
best interests of the company. 3. At the meeting the shareholders
meaning as ‘to liquidate’ is ‘to wind up’. e. The liquidator has the task of winding
passed the resolution unanimous. 4. The bank will lend us the money but it
up a company. f. To realise assets means to sell those assets. g. An insolvent company is a company
wants security of the loan. 5. Our non-executive director knows
about this and she will give us an advice.
which does not have enough money to pay its debts.
UNDERSTANDING CONTRACTS (2)
Exercise 2 (p184) a. insolvency practitioner b. solvent c. members’ voluntary liquidation d. liquidate, wind up e. strike off f. insolvent g. liquidator h. realise i. dissolved
Exercise 3 (p178) a. True b. False c. True d. False e. False
SOME MORE TYPICAL CONTRACT CLAUSES
Exercise 1 (p193) a. (5) b. (1/3) c. (4) d. (7) e. (2) f. (6) g. (1/3)
Exercise 4 (p179) a. motion b. passed/carried c. ordinary resolution d. notice e. special resolution f. unanimously g. written resolutions
INSOLVENT COMPANIES
Exercise 1 (p185) a. due b. insolvent c. Insolvency
Exercise 2 (p193) a. Creative work b. copyright c. author d. freelance e. commission f. termination g. Confidential h. disclose i. term j. expiration k. non-disclosure l. intellectual property
Exercise 3 (p202) a. warranty b. indemnity c. compensate d. takeout e. policy f. arises from g. indemnification h. force majeure i. unforeseeable
j. (7)
Exercise 3 (p197) a. Agreement b. written c. material d. ceases
INTELLECTUAL PROPERTY CLAUSES
MORE ABOUT FORCE MAJEURE CLAUSES
Exercise 1 (p198) a. the wishes of the parties b. transfer ownership of those rights c. grant a licence d. assigns IP rights e. buys IP rights from someone f. grants a licence to use his or her IP rights g. is allowed to use someone’s intellectual
SOME IMPORTANT COMMERCIAL VOCABULARY
Exercise 1 (p203) a. (4) b. (7) c. (1) d. (3) e. (5) f. (6) g. (2)
Exercise 1 (p194) a. (8) b. (3) c. (11) d. (4) e. (7) f. (2) g. (5) h. (1) i. (6) j. (12) k. (9) l. (10)
property for a specific period of time h. right that some third party has in the
intellectual property i. break the law concerning that IP right j. the public domain
Exercise 2 (p204) a. excused b. unforeseeable c. supervening d. rely on e. Act of God f. force majeure
Exercise 2 (p199) a. intellectual property rights b. assign c. licence d. grant e. infringement f. licensor g. assignor h. infringe i. assignee j. licensee k. public domain l. encumbrance
Exercise 2 (p195) Money and payment: insolvent, invoice, budget, liquidator, instalments, owe. Goods: perishable, warehouse, merchan dise, premises, store, serial number.
Exercise 3 (205) a. control b. notify c. breach d. delay
FOUNDATION LEVEL PRACTICE
Exercise 3 (p195) a. instalments b. budget c. store d. warehouse e. perishable f. insolvent g. owe h. invoice i. liquidator j. premises k. serial number l. merchandise
RETENTION OF TITLE CLAUSES
Exercise 1 (p207) 1. (A) 2. (B) 3. (B) 4. (A) 5. (A)
Exercise 1 (p200) a. True b. False c. True d. False e. True f. True
Exercise 2 (p207) 1. (J) 2. (B) 3. (F) 4. (H) 5. (A) 6. (E) 7. (I) 8. (G) 9. (D) 10. (C)
Exercise 2 (p201) a. from b. to c. of d. within e. until
TERMINATION CLAUSES
Exercise 1 (p196) a. end b. terminated c. gives d. writing e. commits f. small g. serious h. money i. protect j. lose k. stops
WARRANTY, INDEMNITY AND FORCE MAJEURE CLAUSES
Exercise 3 (p208) E sending a document in the correct,
Exercise 1 (p201) a. for b. in c. on d. from e. under
formal way C money to pay someone for a loss I amounts of money that a person owes to other people F serious, significant A start G violation B duration, the period of time for which a
Exercise 2 (p197) a. (4) b. (9) c. (3) d. (10) e. (5) f. (2) g. (8) h. (6) i. (1)
Exercise 2 (p202) a. INDEMNITY b. ARISES FROM c. COMPENSATE d. TAKE OUT e. POLICY f. INDEMNIFICATION g. FORCE MAJEURE h. UNFORESEEABLE
contract is valid H intentional, something that a person
chooses to do D end J property, including money and equipment
Exercise 2 (p47)
I N T E N D R B F P E A A F L L X P I N T E I P R O T C A F A C C E P T A N C E E K T A A P A F O F E N D R C L V C C X S S F F N R F I E E T B O T T E E C F A T L N C D U E B K R D T O E C W R G Q E F N I J E L A S R K A C A O N M E T O B H S I O B I T E C T D F E F I O D E T R I M E N T E I R F N R A T C L I R H F A T T A E D D E T R P N B O R V R A T R A S O C O N S I D E R A T I O N F S O U R C E I N T L A S R R F A R A T I O Z S L A B I T E
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.