, - -

a type of company

3 The minutes of a O~anguage use 1: Expblning a

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1 IntrodutUon to 1 Easernenb Writ* U@.h &&.6fi,, v-. . property law 2 !3@q e house In 1 Dwcribtng e flrm's 2 A law firm's practice Sparn pra~tice arMs

law areas 2 Summrising axl p4ge 134 3 Understanding a requesllng

lease or tenancy agrwmcnt

- 1 Pnsenration: an

4 Case revrew asp& of mi, 5 Reference emal Pirrperty law

2 Csaa disrbh

Unit lo Language Focus page 146

0 Key terms: Parties referred to In real property law

0 Lai-i@E# me 1: Ccwwwalng hleas

0 Langmge use 2: Clfissify~ng mi dlsUn@ishing types or Ulfe$orisS

0 Language use 3: Giving a prsrmtsZikn - structuring and signdng trwitions

3 Leglslatlon governing electronic negotiable

4 Internal email 5 An unsettkd area of

2 A job interview

competition law 1 Using passive conStFmtions

ICT 7'' Gidng opinions: a merger regulation m i l h r IL' competition law case

The practice of law

PART I: THE LEGAL SYSTEM Bodies of law

Read the excerpts below from the course catalogue of a British university's summer-school programme in law and answer these questions.

1 Who is each course intended for? 2 Which course deals with common law? 3 Which course studies the history of European law?

C LAW 121: Introduction to English law LAW 221 : Introduction to civil law

This course provides a general overview of More indviduals in the world solve their English law and the common-law system. legal problems in the framework of what is The course will look at the sources of law called the civil-law system than in the and the law-makulg process, as well as at 1 Anglo-Saxon case-law system. This course the justice system in England Students will introduce students to the legal systems will be introduced to selected areas of of Western Europe that have most

English law, such as crimird taw, contract influenced the civil-law legal systems in ;

law and the law of torts. The relationship the world. It aims to give students an

between the English comm~n law and EC insight into a system based on the

law wlll also be covered. 1 4 superiority of written law. The course will

cover the application and development of The course is designed for those oma an law in Europe to the making of internationld students who wlll be studylng iational codes all over the world. at English unlvwsities later in the academic year. Other studerrts with an Interest in the The course is intended to prepare students I!:

subject are also welcome to anend, as the who are going to study in a European i i

contact points between Engllsh law and lniversity for the different approaches to

civil law are numerous. T b seminars and law that they are likely to face in their year all course materials are in English,. abroad.

t !. 1, d 5

1- 2 Match these bodies of law (1-3) with their definitions (a-c).

1 c vll law Qa L a

a area of the law which deals with crimes and their punishments, including sm fines and/or imprisonment (also penal law)

2 common law C b 1) legal system developed from Roman codified law, established by a state for its regulation; 2) area of the law concerned with non-criminal matters, rights and remedies

3 criminal law q c legal system which is the foundation of the legal systems of most of the English-speaking countries of the world, based on customs, usage and court decisions (also case law, judge-made law)

e w i ~ 1 ent of

- x E

based on bound by codified custom disputes legislation non-criminal precedents provisions rulings I

Complete the text below contrasting civil law, common law and ctlmlnal law wing the words in the box.

The term 'civil law' contrasts with both 'common law' end 'criminal law'. In the first sense of the term, civil law refers to a body of law 1) b . e . % w n en legal codes derived from fundamental normative principles. Legal 2) ...&..*

In contrast, ccmmon law was originally developed through 6)%-.. , At a ,,me before laws were written down. Common law is based cg 7) ...WY. d -&ated by Judicial decisions, which means that past 8) %%. . re taken

breach of contract. m' . , - .

tirsword k ~ p e d y t o . k g a l b a c m t s w M c h ~ c t f o r t C 3 d c s ~ ~ a ~ l r i n 8 o f a ~ .

types af laws. In which kind of document do you think eac

d parliamentary speech 5'- 1 0 . brochure for employees

h e n a s ; plain and nambiguous, the court must give effect D the intention of the legislature as xpressed, rather than determine what he law should or should not be

The purpost this Ordinance' IS 10 regutale

traffic upon me Streets and Public Places in the Town of Hanville, Neb Hampshire, for the orornotion of the safety and welfare of the public.

I B Find words In EKercise 5 which.match these definitiarr9. Consult the glossary If

necessary.

1 rubs issued by a government agency to carry out B e htaot of the iaw; atlthorised by a Statute, and generally provldhg r t l ~ r e detail on rj.suQect than the statute w

2 law enacted by a town, city or county government &- 3 draft document befare it is made into law k d t q I legal d~vlce used by the ~urb&Unim to establish polic)O at the d - h ~ d $ b ~

E w ~ e a n level to be incarporatfad lrrto the laws of the Member States - 7 - -- S formal written law emcted by a legklative body

7 Complete the sentences belaw

1 bill directive ordinanoe -

1 The Town Council will conduct -..%%concerning property tax. 2 According to t h e ~ ~ ~ c o n c a r n i n g ~ 0 r k l ~ g tlme, overtlme work is mFb

which ie Micielly ordered in cxce8s of 40 hours 10 a w~rklng week sr in excess of eight ham a day.

3 Early this year, the government inuodmed a new .u- on ektctrcnic m m n ~ ta PafliemaiT.

4 A number 9f changes have &en made t~ the f@ji?rd g the seidng of m w h m .en@ the @thering of alectronic e v i m .

6 The Eusopean ~krio&i%b orl Data Protection eaafdidhed p r k l p l e ~ aimed at protect.hg ~Wmrral date prima and Me free flaw uf d m .

- Speaking I: Explaining what a iaw s a z - . - - Tw rn id. t

There are several ways to refer to what a law says. Look at the following sentences:

The law stipulates that corporations must have three governing bodies. The law provides that a witness must be present. . The patent law specifies that the subject matter must be 'useful'.

These verbs can also be used to express what a law says: The law states / sets forth / determines / lays down / prescribes that ...

f' ihoose a law in your jurisdiction that you are familiar with and explain what it says using the verbs listed in the box above.

Types of courts c ~ a m b . & ~ a w l ( h ' n g . i ' t o ~ ~ * ~ o f cuath*hsr. 9 Match each of the following types of court (1-9) with the explanation of M a t

happens there (ai) .

1 appellate court (or court of a This is where a person under the age of 18 would be tried. appeals, appeals court) C b This Is the court of primary jurisdiction, where a case is hear$$

2 crown court 9 for the first time. P

3 high court ( o supreme c This is where smafl crimes are tried in the UK. F court) \ d This is where law students argue hypothetical cases.

kd . ; heard

e This is where a case is reviewed which has already been heard lower court (or court of in a lower court.

f This is where cases involving a limited amount of money are handled.

g This is where serious criminal cases are heard by a judge and a jury In the UK.

h This is where a group of specially chosen people examine legal problems of a particular type, such as employment disputes.

Speaking 2: mil court system?

& Describe the different types of court in your jurisdiction and the areas of law they deal with.

- ,

the authority to hear and decide cases

initiates a civil

specialised knowledge of a particular subject

who is called to

records, files papers appeals a decision

m a p e d witness

(US) plaintkf c person who is sued in a civil I b rva~ i t (US) atso petitioner 4 officer of the court whose duties include keeoine order and assist

the judge and jurors r person who pleads cases in court f hypothetical person who uses good judgment or common sense in handling

practical matters; such a person's actions are the guide in determining whether an individual's actions were reasonable Unit I fhr;pm#ks af

~Bihi ing I: Documents in coud&H%~ &qf Listen to a lawyer telling a client about some of the documents lnvolved In

44s case and answer these questions.

1 What clam has been ftled agarnst the cl~ent? 2 Will the case go to tr~at?

Match these documents (2-9) with their definitions (a+).

1 affidavit Q. a a document lnformtng someone that they will be *e\'$l~\\/\t'l, involved In a legal process and instruct~ng them what

-. da- * 1 they must do 2 answer ; *a document or set of documents containlw the details , Mibq

about a court case

action or the defence In a case e a written statement that somebody makes after they

have sworn offtdally to tell the truth, whlch m used as proof In court

7 notice C doing something

h m c~vrl law, the first pleading filed on behalf of a

,' facts on whtch the clalrn is based

I

1 answer 0 2 affidavit fl 3 brfef 0 4 complaint a 5 Injunction 6 motlon 7 notice a 8 pleadmg fl 9 writ 5 Match each veh used by the fawyer (1-5) with its defmttlon (a-8).

1 to draft a documonZ b a to deliver a legal document to someone, demanding 2 to ~~ a document e that they go to a court of taw or that they obey m order 3 to We a document with an au thon ty i b to produce a piece d wi t~ng or a plan that you Intend 4 to serve a document on someone to change later

c to deliver a document formally for a decision to be made by others

d to offic~ally record something, espec~alty in a court authority C of law

e to produce smethrng offlcral

3.6 Decide whlch of the nouns In Exercise 13 can go with these verbs. The frrst one has been done for you.

1 draft #I amww a b w f , a coq&a&, a m , 2 Issue ~\W4QUkQ- , aJt\* 3 frle (w~th) p-G4E 4 serve (on someone) bbA* k, 4 C t t , \<+kt*- 5 submit ',-$ w t % ~ + , d r j t

, - - - - - - ' he claim for breach of contract faiis inter alia to state facts sufficient to constitute a cause of

-

action, is uncertain as to what contract plaintiffs are suing on, and is uncertain in that it cannot be determined whether the contract sued on is written, oral or implied fy conduct.

-he complaint alleges breach of contract as follows: 'At all times herein mentioned, plaintiffs were a part [sic] to the Construction Contract, as well as intended beneficiaries to each sub-

"ontract for the construction of the house. In light of the facts set out above, defendants, and each of them, have breached the Construction Contract.'

3n its face, the claim alleges only that defendants 'breached the Construction Contract'. But LongCo is not a party to the Construction Contract. Therefore LongCo cannot be liable for its )reach. See e.g. GSI Enterprises, Inc. v. Warner (1993).

t14338P ' "1 use Latin words and expressions when writing legal texts of every khd,Fm ' "

., I .I

7 Umrline the c m & Win words md phrasts In text. DO yw know what

S MaPbh 880h LEIW ward ot mpm-~W (La) with I& W k h w~liwlek erng the I

crrpmatldn d use (a+),

e md otM6 ( c r g ~ a & W b s n P r t M a ~ s t d p m p l s , ~ a l l l d t o f autnbrg, apPdlQnt5 rud-ts)

i$ Mmch emoh kamlsnn (140) with rts English equivalent (rtjf.

a rwmbq d shareholders or dreams wP14 W b be pmsent at a board mestmg so tha I t can be d M y conductad

e of one's MNA right; abfe to exercise ane's awn legal r*

1 as f d i m J beyond the h&d pmms of a pffsQn pr a b@y

;.. 7 , . I - b --,- 0 - . . . . diiC PART 11: A CAREER IN THE L A N -

Listening 2: Lawyers 20 IF Several different words can be used to refer to a lawyer. Listen to three

law students in the UK talking about the kind of work they would like to do when they have completed their law s tdes. Write the correct wwci.for hwyer in the gaps.

Anna: So, what are you two planning to do later, when you've completed your degree? Daniel: Well, right now, I'm planning to become a l ~ . . ~ e c a u s e I'd really like to plead

cases in court. Anna: You've been watching too many of those American films, when the handsome young I

2) .*<..... wins the case against the big, bad corporation! Daniel: Very funny. 1 just like the idea of arguing a case. I think it'd be exciting. What about you? I Anna: Actually, I'd like to work for a big corporation and advise them on their legal affalrs, as

I

'1 3) ..bs54&f?lrve heard the work ca be very challenging. What are your plans, Jacob? , dl- Jacab: I'm thinking about becoming a 4) .......................... . I'm not that interested in pleading cases in , court. I'd rather do research and give legal advice - I think that'd suit me better.

21 Discuss these questions. - - '

1 Does your native language have more than one word for lawyer? Do they correspond to the different English words for lawyer mentioned above? If not, how do the concepts differ?

2 What is each type of legal practitioner in your jurisdiction entitled to do? 3 What English term do you use to describe your job or the job you would like

to do?

22 a Combine the nouns in the box with the verbs below to make combinations to describe the work lawyers do. Some of the verbs go with more than one noun,

1 cases clients contracts ~orporations decisions defendants I disputes law legislat I

a 4 litigate practise a - 5 reoresent iSfW * - - F - - - 6 research

b Choose three Verb + now' pairs from above and write sentences using them.

23 Choose the words from the box which can be combined with the word lawyer to describe different types of lawyer. Say what each one doc

pubtic-sector sole tax trial , I

a. --. -

Legal education: A call to the Bar 4 Engllsh-speaking countries, the Bar is a term for the legal profession ibelf, while a bar association i s the association which regulates the profession. A penon who qualifies to practise Law is admitted to the Bar; on the other hand to disbar a lawyer is to make him or her unable to practise law. Srprl

m.1 The faltowing text is an excerpt from a guide written for school leavers about courses of study in English-speaking countries. This section of the guide deals with the study of law and the requirements for entering the legal profession in the UK and the USA.

1 24 Read the text and say whether legal education in your country is more similar

I ( to the UK or the US modal

ou?

dcob?

I .

I Studying law in the UK In the UK, a legal education usually begins with the completion of a bachelor degree in law, known as an LLB, which usually takes three years. In the subsequent vocational stage, a person who wishes to become a barrister joins one of the Inns o f Court before beg~nning the Bar Vocational Course.The completion of this stage is marked by a ceremony referred to as the call to the Bar. A third stage, known as pupillage, is a year-long apprenticesh~p, usually at a set of barristers' chambers, which customarily consists of groups of 20-60 barristers. Slmnilarly, a person wishing to become a solicitor must also complete three stages: the first stage ~nvolves gaining a law degree; the second stage requlres passlng a one-year-al Practice Course (LPC);pnd the final stage entalls working for two years as a trainee solicitor with a firm of sobcltors or in the legal department of a local authority or large company.

Studying law in the USA I

In the USA, a regal education comprises &ur yuus ufunckq@~;~qrtu@ followed by three years of law school. A im-t&oSBzpdu~a;a &k&s'ibc degree of juris doctor 0.D.). In order to qualify a hv&& i b- . school graduate must pass the - bar examination.

f Find terms with the word b8r in the Introduction to thls Section and in t h ~ text abma which match these definitions.

1 a hmye~ who is qualified to plead m behalf of clients 2 in the UK, a training course which enables people who wish to beaorne

barristers and who have registered with the jnm of Court to acqdre Rre 9kilk and knowledge to prepare them for the speclaYsed Mining of the pupillage

3 a ceremony held at the end of this training course, whem a candidate enters the prufessim

4 crrganisetion regulating the legal prohasion 5 in the USA, en important test taken hy lewschod graduates which, when

passed, quJMe6 a p e m n tr~ practrse law

I 6 granted entrance to the legal pro4essim 7 to compel a lawyer to stop practising law due ta an OQfmee committed

Unif 1 Itra practke i ~ f b

A lawyer's curriculum vita*^^ UI n .IIIJIJIJIAIIXI . . ...... *--. I

2$ Read the following CV (curriculum vitae)l of a young British lawyer and answer these question6

1 Where did he work In summer 2002' 2 What languages does he speak? 3 Where did he complete his first degree? 4 What was his main duty at the European Commissi

, (SCR). Drafting ophians in English md French dealing with contracts award for projects

sl~rntners G. R. Foster & Co. Solicitors, Carobridge, I;TK . . 2001-2004 Liaison with clients; conducting research into multiple legal areas,

including family law, tort Iaw and contracts; assisting with trial preparation"{ Summer 2000 Westlake Chambers, Bath, UK

itening j: Law firm structure

I inttmhw and mswer these qmstians.

9 #hat dues Mt N I c h d ~ say shut the atmosphere Mthe flrm7 2 W M t Unws-8e(/ abaut the dre d the firm?

a8 45 Uata amin and camdm U11s organ- of the f m , u s h g rn ,ymd~ h

I -. . . - . ---

Associate Full Partners M; ~ob&tson Paralegal Real Proaertv Salaried Partner 1

1 Speaking 3: Deserfbing a law firm . -

., --d 1 - - ;I a Look at the following phrases used by Mr Nichols to describe the firm. Which

can be used to speak of a department or company, and which af a person? , Which can be used for both?

= . . . is/are headed by . . . . . . is/are assisted by . . .

I . . . is/are managed by . . . 1 . . . is/are responsible for . . .

... is/are in charge of ...

.. . report to .. .

the phrases in Exercise 29, describe the structure of a law flrm with which you are familiar or the one just described In Listening 3. Refer to the osltions and duties of the persormel.

Listening 4: Practice areas I$ Listen to f i e lawyers talking about Weir fu-ms, practice weas and cllents. Tick the information you hear about each speaker.

Speaker 1 ... 1 has a few years' working experience.

rr - 2 works as a clerk at a mid-size commercial law firm. 3 will get to know other departments of the firm. 4 meets with clients regularly. 6 plans to specialise in commercial litigation.

el d

Speaker 2 ... ¶. is a sok practitianer. 2 works in the area of ernloy-nent law.

d F- 3 deals with wage dbputes. 4 represents clients in mechation.

8 llP' 5 has many clients who are small businesses. [7 Speaker 3 ,. 1 works in the area of secured transactions. 2 carries out trade-mark registrations. 3 asslsts alients who are in artistic professions. 4 serves as an expert witness in court. 5 is a partner in a large IP firm.

P .rl Speaker 4 ,.. 1 is a senior partner in a mid-site law firm. 2 specialises in competition law. 3 represents clients before the employment tribunal. [rJ 4 deals with infringements of the Competition Act. 5 has cilents In the telecommunications sector. a Speaker 5 ... 1 owns shares in his firm. 2 argues cases in court. 3 works in the area of real property law. 4 represents landlords but not tenants.

Q'

5 teaches cowses on litigatbn at the law university. 0 32 Discuss these questions.

1 Which kind of firm do you work in or would you like to work in? 2 Which areas of the law have you specialised in or would like to specialise in?

Listening 5: Law firm culture 33 Read this excerpt Trom an article In a law-school newspaper about

law firm culture. Which type of firm would you prefer to work for? Why? --

One factor which play d sole g i t i o a 7 lawyer:~ somerimes lawyers, while a large law

- important role in the global firms employing known as a boutique firm is considered to be culture of a law firm is its hundreds of attorneys all firm, as it often specialises one employing 50 or more size. Law firms can range over the world. A small in a specific area of the atrorneys. from a one-person solo law firm, which typically law. A mid-size law firm practice (conducted by a engages from two to ten generally has ten to 50

a 1 5 Listen to Rlchard, a law student talk~ng to a group of first-year law students at an orientation event at law school. He tells them about his expeFience as a clerk in different Law firms. Answer these questions.

1 Why do the professors encourage students to do work experience? 2 How Long have R~chard's clerkships generally lasted? 3 What is Richard's final piece of advice?

$8 4s Listen again and tick the advantages of small and large law fwms Richard mentions. In same cases, he says both types of firm have the same advantage.

'w Discuss these quhsmns.

Z Do flu h a v ~ any exwlence worhng as a derk In a law flm? Ln What w&e was it similar IX rlflerent from Ridwd's sperlencc?

2 What klnds of b k s and responsibilities do clerks ip your fim have? t Do you agree wkh the way Rlmard charactetiies small and Bge law firm?

id+-- L l--q * Reading I: Tinfroduct~onTo company law This text provides an introduction to the key terms used when talking about companies as legal entities, how they are formed and how they are managed. It a h coven the Lugal duties of company directors and the courts' rote in policing thtm.

L A company1 is a business association which has the character of a legal p m , dlstinct from its officers and shareholders. This is signiflcant, as it allows the company to own property in its own name, continue perpetually despite changes in ownership, anp insulate?)^ owners against '--. personal i4abblity. However, in som'nstances, for example when thecompany is used to perpetrate fraud or acts ultra v i r q , t e court may ' l i f t2 the corporate veil' and subject the shareholders to personahlat5i[ity:

X I ? By contrast, a partnership is a business association which, strlctty speaking, is not considered to

be a legal entity but, rather, merely an association of owners. However, in order to avoid impractical resutts, such as the partnership being precluded from owning property in its owrn name, certain rules of partnership law treat a partnership as if it were a legal entity, -- -> --, Nonetheless, partners are not --., insulate?bgainst personal liability, and the partnership m y cease i to exist upon a change in ownership, for example, when one of the partners dies. -

3 A company is formed upon the issuance of a certificate of incorporatii by the appropriate governmental authority. A certificate of Incorporation is issued upon the fillng of the constitutional documents'of the company, together with statutory forms and the payment of a filing fee. The 'constitution' of a company consists of two documents. One, the r n e m o r e of assocCatlon4, states the objects of the company and me details of its authorbed capital, otherwise known as the

capital. The second document, the articles of a%sociatton5, contains provisions far the internalbpanagement of the company, for example, shareholders' annual general meetTngs6, or - - AGMs, and exUamfhwy general meetings7, the board of directors, corporate contracts and loans.

1 The management of a company is carried out by its officers, who include a director, manager and/or company secretary. A director is appointed to carry out and control the dayteday affairs of the company. The structure, procedures and work of the board of directors, which as a body govern the company, are determined by the company's articles of association. A manager is delegated superviwry control of the affairs of the company. A manager's duties to the company are generalty more burdensome than those of t k employees, who basically owe a duty of confidentiality to the

I company. Every company must have a company secretary, who cannot also be the sole director of

(US) corporation (US) articles uf incarpomtion or cerfificate of incarparation (US) pierce (US) bylaws (US) genereMy no offlclbf certiticate is issued; companies are (US) ennual meetings of the shareblders

formed upon We filing of the articles/certificate of incorporation ' (US) speOjal meeaings of the shareholders (sea footnote 4)

the company. This requirement is not applicable if there is more than one director. A m

auditors are appointed at general meetings. The auditors do not owe a duty to the cc . . legal entity, but, rather, to the shareholders, to whom the auditor's report is addressed.

5 The duties owed by directors to a company can be classified into two groups. The first is a duty

1 of care and the second is a L Muclary duty. The duty of care requires that the directors must exercise the care of an o r d ~ n a r l ~ u i ~ n t and diligent person under the relevant circumstances. The fiduciary duty stems from the position of trust and responsibility entrusted to directors. This duty has many aspects, but, broadly speaking, a director must act in the best interests of the company and not for any collateral purpose. However, the courts are generally reluctant to interfere, provided the relevant act or omission involves no fraud, illegality or conflict of interest.

5 Finally, a company's state of health is reflected in its accounts8, including ~ t s balance sheet and

1 profit-and-loss accountg. Healthy profits might lead to a bonus1* or capitalisation issuel1 to the shareholders. On the other hand, con.tinclous losses may result in insolvency and the company going: into liauidation.

*(US) fbnanc~al statements

1 (US) profit-andioss statement or Incanla statement 1s) stock d~vldend JS) c s h dividend

by terms: Roles in company managerneht

I '&some 6 1 ule important roles ill company management are diiswsed i r ~ Reading 1 above. Which roles are mentioned? w* Here is a more comprehensive list of roles in company manageme;?. Match the roles (1-10) with their definitions (a-j).

1 auditor Q a person appointed by a sharehokler to attend and vote at a meeting in his/her place when the shareholder is unable to attend

2 company secretaryb b company director responsible for the day-teday operation of the company ' 3 directoc c person elected by the sharehoMers to manaee the company and decide

1. . . A a. its general policy 4 '

4 liquidator J d person engaged in developing or taking the initiative to form a company (arranging capital, obtaining personnel, making arrangements for f~ling corporate documentation)

5 managing direct& e person appo~nted by the company to examine the company's accounts and to report to the shareholders annually on the accounts

6 official receiver k- f company's chief administrative officer, whose responsibilities include accounting and finance duties, personnel adminlstration and compliance with employment leg~slation, security of documentation, insurance and intellectual property r~ghts

7 p r m o t e r d g member of the company by virtue of an acquisition of shapes i l 'F company

8 h officer of the c o w who commonly acts as a liquidator of a company I being wound up by the court

JratibA \ recl !r 1 i person appointed by creditors to oversee the repayment of debts

10 shareholder j person appointed by a court, the company or its creditors to wind u the company's affairs

Listening E Company formation, i ~ m f mla in ihr t d r m h br'a idvlrht~ rUarts whleh rntkles

m#iwt wit4 tm Wr P#ndr Iffa msww tsl;t tkC proper d x h we duly B i d IJ-,., -

hu uk going to hear a canvenatio~ between an Amerkan Inwpr, Ms Norrls, and her' tllmt, Hr O W m . The h p r deserE$cr how,& spe~iflr: type ef cerperatbn h M t d in state af Delaware.

4 df Listen to the conversation and t~ck the documents required for formation that the lawyer mentions.

1 DBA filing 2 articles of ~ncorporation 3 stock ledger 4 general partnership agreement 5 stock certificates 17 6 IRS & State S Corporation elect~on 7 bylaws 8 organisational board resolutions

b Company types (USA) Look at the following table, whlch provides information on the documents required to form and operate the different company types in the United States. Based on what you heard in Exercise 4, which type of business associati~n vas the lawyer discussing with her client?

--8 2- - - - [ sole proprietorship I DBA filing ,?+. . - . - . , I general partnership I General Partnership Agreement, local filings If partnership holds real estate .,,. - . . - - - - -

limited partnership Limited Partnership Certificate, Limited Partnership Agreement - . - - r ,, 1 C corporation Articles of Incorporation, Bylaws, Organisational Board Resolutions, Stock Certificates, Stock Ledger

6 Company types (UK) The table on page 23 contains informatlon about five types of common UK business associations, covering the aspects of liability of owners, capital contributions and management. (In many jurisdictions in the world, there are entities which share some or all of these characteristics.) Look at the table and decide which entity (a-e) is being described in each row {I-5).

a private limited company (Ltd) b -OSu4 b general partnership c public limited company (PLC) C U---SLLI d limited partnership e sole prop?etorship

Business is managed hy the

Company is managed through

can be raised through the

lirnltations of the Limited

ding 2: Memorandum of association

es/cettificate of incorporation [USA). This document sets forth the objects of the any and its capital structure; as such, it represents a legally binding declaration of

nt to which the members of the company must adhere,

through the text quickly and tick the issues it addresses.

f appointingmembers of the b a r d of direotors 0 2 changing corporation bylaws

4 stipulations for keeping corporation records

Y)he power to alter, amend or repeal the bylaws

entitled to vote for the election of directors, or a new

The Corporation s h & shareholders and dire

, , , .

a,; Read the text again and decide whether these statements ere true or false.

1 The board of directors only has the power to change the bylaws if the shareholders in turn have the power to amend any changes made by the board of directors.

2 The board of directors is proscribed at all times from changing any bylaw which has been altered by a vote of the &areholders \

3 Records must only be kept of decisions reached by sharet-lolders and directors in the course of a meeting. C__

4 Records of the shareholders must list the number of shares they own.

proscribe = prohibit, ban prescribe = stipulate

S For each of these words or phrases, find the italicised word(s) in the text that most closely matches its meani g

'-*I/+ 1 passed

T < ~ % w Q # 3 Instead 5 cancelled 7 given to

2 who hwe the right to 4 on condition 6 revised en*~W ta waW-4 * S d t *

Language k e : Shall and may Read through the text on page 23 agah,'>-dtiiig'hdw shall and may are used.

1 Which of these words most closely matches the meaning of shall in each case? & a) will *w b) must &QJ)

2 What do you dotice about the use of shall. in line 7? 3 Which of these words most closely matches the meaning of may in the text?

I) a\ can b\ could . ,

1 in legal documents, the verb shaN is used to indicate obligation, to exprGss a promise or to make a declaration to which the parties involved are legally 1 bound. This use differs from that in everyday speech, where it is most often used to make offers (Shall I open the window?) or to refer to the future 1 (I shall miss you), although this latter use is less frequent in modern English.

I In legal texts, shaM usually expresses the meaning of 'must' (obiigation):

Every notice of the meeting of the shareholders shall state the place, date and hour.

I or 'will' (in the sense of a promise):

The board of directors shall have the power to enact bylaws.

, Shall can also be used in legal texts to refer to a future action or state:

... until two years shall have expired since such action by vote of such shareholders.

, In everyday speech, this future meaning is commonly expressed using only tht 1

present perfect (. . . until two years have expired . . .).

/ Another verb commonly found in legal documents is may, which generally I expresses permission, in the sense of 'can' (this use is less common in

I everyday English): 1 .. any bylaw or amendment thereto as adopted by the Board of Directors may

de altered, amended or repealed by a vote of the shareholders. 1 2 . 1

1 In everyday English, may is sometimes used as a substitute for might, t 2 ' 'ndicating probability (He may want to see the document).

- - - - - - - - rn

!Lfstcntng 2: Forming i '6 i ink' ln the UK

I I Y&cn tb the p b m -n end tlcls the twq c ~ l m w q Qmi rhc are dimhg.

1 sole prapdetor 2 UK IlrnRcd pammhlp

I 3 iJK prm company tmited:bygharss A

4 UK rxiwk m p a n y I'mW by gmmptee 5 UK public llmttad h p w . 6 US Q corporatton

0 13

7 US s wrtsorathw II

1 The d*nt nes not d e u t c ~ wtleit m._d cammny M mnts b fm. 2 The dent has nwur fomled a mrnpany'bektre. s Thr:hwyer p W . ~ u t , v m r n e two @ p w of mmpaw.diffw. rn w m t~.m

of parsanal ltabllity. 4 TIM E I W ~ B L I ~ o C'-tiun rn be Trebly ~ e d e d qp p : h k mztWg~-' 6 'hI3-1. wmpa~y types maned by-^ hvpr can beikmmd W c.pMtd~

mo 18 $dtTzr~l d:kmt COG*+ ) TW W oompagwe d b c d pteabs a rawdon ck tka n y W d

. . . A . . .

r are Ilk m&h UQH la itrd'stmilartd o differs. d @I b d ? e that5 ht.Be cask wfrn ', € ' thee la' he b&'dW&qfie W* I

% 1 C corporations ................. private limited companies in the UK in many ways, particularly in respect of liability.

2 Share olders ar not personally liable for the debts of the corporation .... 3 .... ?dh ..... I... a C corporation and a privHe

3 In this respect, a private limited company ........... .... c. Its shares are not available to the general public.

4 The two types of company .............a ............................ in that both can be founded by persons f any nationality, who need not be a resldent ofthe country.

5 And .................. 4 ......................... a C corporation in the US and our private limited company: thdt's the limit on the number of shares.

............... 6 But Q- a prlvate limited company. The Companies Act stlpulates that not more than 50 members can hold shares within the company.

Spe.&ing: --.-. Informal- presentatio~: &type pf .,campany.. .. . 3 - / I 9 ' I I . 1 .

When speaking briefly about a topic of professional interest, experienced speakers will organise their thoughts in advance. A simple but effective structure divides information into three parts:

1 introductory remarks; 2 main points; 3 concluding statement.

I Similarly, the main points are best limited to three, as this is easy for the speaker to remember and for the listener to follow.

Votes for a response to Exercise 14 mlght look like this:

introductory remarks I

4 publiht aktjebolag is the closest Swedish equivalent to a public limited company - most cpdmon form for major international businesses in Sweden.

/---

-.-

Main points 1 liability: no personal liability 2 management: board of directors (Swedish equivalent, styrelsen) has power to

make decisions; shareholders don't participate in management 3 needed for formation: memorandum of association (stiftelseurkund) and

articles of association (bolagsordning)

Concluding statement 4n aktiebolag is similar to a public ilmited company, with the most significant difference being that its shares do not need to be listed on an exchange or uthorised marketplace. c - Which types of corn ur jurisdiction? Choose one and describe it as you would for a client from another country. In your description, refer to some of the features given in the UK company table on page 23. Tell your client which documents must be filed to complete the formation process. Wherever relevant, compare and contrast your company type with a UK business entity.

Reading 3: Limited Liability Partnership Bil l New legislatlm is often proposed in order to improw r situation which many people feel is unsatiductory. The article an page 27 comes from a legal journal and deals with a bill i n t r e d d to the House of Cwnmons which ueatn a nm type of rompany.

l 8 Read the flrst paragraph of the article. What situation is the bill trying to improve?

l.8 Read through the entlre article and match these headings (8-f) with the paragraphs (1-6).

of limited liability accounting requirements

c Despite imperfections, long awaited d The need for a new form of partnership

" I ' e Benefits of the new company form 7 f Drawback: management \lability

July this year in response to the growng

fims moving their business operations offshore. Large accountancy practices had expressed their unhappiness about organising their affairs by way of partnership, especially since a partner is liable under the Partnership Act 1890 for his own acts as well as for those of lais Ibbility, it is worth noting that an LLP colleagues. It is unrealistic to assume that ?kmber.,yill enjoy less limited liability each partner can stay informed about his . & k ~ ' b . m U ~ ~ a n ~ director. In the ordinary fellow partners' actions, let alone control mrse of events, a company director is

mt liable to a M party for his negligent a d s rn wnissqfqJ,p the course of his

2 Tnus, the Bill sets out to create a new &kg HLS kb@:is to the company of institution, the limited liability partnershrp w h ' i he is a dire& ?he position is (LLP), in which obligations accrue to the rwc& in.dd&'to'an LLP member. name of the partnership rather than the The daw-back ptc,- of the Insolvency joint names d Its individual members. The Act i 985 will aka ?@w Et LPs. Thus, a only penond liability that am individual liquidawr will beable .ts s& wide any partner has wlll be in respect of his pre- t r a m c t l m ( c h w l ~ ~ ~ bf %lay W determined contributions to partnership repayment d money wed) w t h ~ v g funds. This is somewhat similar to a yearspriortoinmhendyw.he$I~ .

shareholder in a limited E a b i i company. member knew, or M @dl

However, unlike a company, the LLP will for believing, that lhe LLP was or 4 be more flexibk in te rm of decision- theteby become insofvent making, and board meetings, minutes books, and annual or extraordinary general 5 indeed, limited liability is o k n hghly meetings are not required. In addiion, the illusory or perhaps even over-rated, LLP will enjoy the tax status of a especially when one considen that banks partnership and limited liatdity of its $&n lequire p e r m 1 investment

guatmkes from rti-rs in order to lift the carporate veil which protects ampany

3 The Bid Is not without its w e a k n m , Mimn The same will undoubtedly apply however. One weakness which hB's been tp tLQ5 observed is the fact that the accounting &, requirements contained in Pan VII of th.e. .6 in undwim' he due d th. new Companies Ad 1985 are proposed rn i d t u t m has b m weakened by the : apply to the LLP. Not only are these rules' pqaied.inmpmrntim d heaccounting ,

same d ihe most demandmg in Europe!. 7ltatie Angle mast

example, the U P must submit an mnuaf return to Compania House and maintain a list of accounts according to Companies

F s e statements are true or fals,

ltains that it is unreahstic to expect a partner to be times about the activities of the other partners in the company. es that In an LLP, a company director Is not liable for breaches takes made when carrying out his responslbilities. L

lies that large LLPs will be exempt from the more cornpl&rted A &counting requirements set forth in the Companies Act of 1985. -

4 The wrlter claims that it is likely that the limited liability provided by an LLP will be restricted. -+

18 Do you agree that the LLP is long overdue?.,!n$oyr ~ k w ~ q Q - e , r & ~ ! ~ , ~ - e e d ..- for such an institution in your iurisdiction? - ..&a - -

Reading 4: ~oi=nce

oes the dispute spec/fical!y invplve?

L

ting of Longfellow kc.

I have now had an opportunity to research the law on this point and I can provide you with the following advice.

Firstly, to summarlse the facts of the case, a p u p of shareholders of Longfellow Inc. has fllect an action In the district court seeking to set aside the election of the board of

5 directors on the grounds that the shareholders' meeting at which they were elected was held less than a year after the last such meeting.

The bylaws of the company state that the annual sbreholders' meeting for the election of directbrs be held at such time each year as the Ooard of clirectors determines, but not later than the fourth Wednesday in July. In 2001, the meeting was held on July

10 18th. At the discretion of the board, in 2002 the meetlng was held on March 20th. The issue in this case is whether the bylaws provide that no election of directors for the ensum year can be held unless a full year has passed since the previous annual -= \. election meeting.

The law in this jurisdiction requires an 'annual' election of the directors for the ensulng 15 'year'. However, we have not found any cases or interpretation of this law which

determine the issue of whether the law precludes the holding of an election until a full year has passed. The statutes give wide leeway to the board of directors in conducting the affairs of the company. I believe that it is unlikely that a court will create such a restriction where the legislature has not specifically done so. I

20 However, this matter is complicated somewhat by the fact that there is currently a proxy fight underway in the company. The shareholders who filed suit are also alleging that the early meeting was part of a strategy on the part of the directors to obstruct fhe L anticipated proxy contest and to keep these shareholders from gaining representation on the board of directors. It is possible that the court will take this into consideration

25 and hold that the purpose in calling an early meeting was to improperly keep themselves in office. The court might then hold that, despite the fact that no statute ( bylaw was violated, the election is invalid on a general legal theory that the directors have an obligation to act in good faith. Nevertheless, courts are usually reluctant to second-guess the actions of boards of directors or to play the role of an appellate body

30 for shareholders unhappy with the business decisions of the board. Only where there is a clear and serious breach of the directors' duty to act in good faith will a court step in and overturn the decision. The facts in this case simply do not justify such court action and I therefore conclude that it is unlikely that the shareholders will prevail. I

. -. -. . . . - . - .-, . . .

-3 . u m r .

'9 Read the wLtnle i e ' m and choose the best answer to each of m e queeridns.

1 On which gmunds ctid the ahareholdds file the action? , a an tbs grounds 04 their rrghts as sharehdders

@an U'tc ground6 of a vioMion of the bylaws c or1 the grounds of an ohgoing proxy ftght d on t@ ground$ of their laok of faith in the board d directors

2 W daes the m.ter Identify as the issue in the case? a W~ett~er the mnual shareholders' meeting determines tlte W m of The

board uf directors b whether the atectior, of the board of directors requires a quorum

Owbether the m u d shmholders' meeting must be held a full year sfkr the Last one

d whaftrer the bytews define the term 'full year'

3 What doe$ tfe wrlter say regarding earllsr cases related to this one? a They proviBe for an snslysls in favour of the shareholders.

B f h e y r glve the bmrd of dlrectow the freedom to run the c o w as mey L-

sea ttt, o T h y ham m m f y provided Y They d~ not tickhs~s the is

an interprets nue Involved.

ifion af t h e

Q Meit re&Son d06s the wlWr @ve for his condudon? '@It ~ E I dubious that the eharshkkrs wlll prevail.

b The bets of the case do not suppot7 judicial irtterwmtkm, a A court of appeal wlll on)y Iaok at the facts of the msa. d The board of d i r m w has a duty to a q in @&I faith,

Choose the !aest 6xdansMn for ench of mew words GIT phases from the ktB9r.

t on the gmunds Mat (Ihe 5) a in the area or' -

e w4de leewe can u a ¶ ~ *

@on the basis of the fact that 6 statu(es allow am-b f m d m e despite the f& that c statutes rcsMat extmdvely

2 at the drscretion bf (line 10) 9 atltglng (lhe 21) @crorang to the deobion of @tatmg wimout p m ~ (

b through the tact at b m,km$ rafwwca ta c due to the secrecy of c propmirig

3 the ensuing yem (lines 31-12) 6 to ec-4 In good faith (Line 28) e ad f i ~ m a reluaus belhf &E kZZkar @o do ~ w n e t ~ q g wim i w e t h7tentl~n

I c the past yeer c to plan fw tlw f~&~racare~ully

22 Answer these iqu88tims.

1 What do the bylam of the company stipulate csncemlng the dbife of the "II electlon of company directors? 1:

2 What 00 the sharehabders claim was the reason why the annual sh~rehokrs' meeting was held early?

ZI What rde m w t the concept of 'good faith' play in the court's declsian?

23 Whet is y ~ u r opinion d the case? De you Mink the sharehoMel6' claim 16 justifled? - 7.-

6 S s t d d d - &:-- - - -

- - m

24 In the letter, diffefent verbs are used to refer to what the company bylaws and the relevant legislation say. Complete these phrases using the appropriate verbs from the letter.

1 the bylaws of the company ... 2 the law in thls jurisdiction ... 3 the law ...

Text analysis: A letter of advice 25 Look at Reading 4 again and discuss these questions.

1 What is the purpose of the letter? 2 Who do you think might have requested it? 3 Looking at the letter carefully, what would you say is the function of each

paragraph? . -

!=tenpresents a lAer of advice, a type of text written UY ( lawyer for a client.

The function of a letter of advice is to provide an analysis of a legal problem so that the client can make an informed decision concerning a course of action.

Another type of text which should be mentioned here because of its similarity to a letter of advice is a legal opinion. While the language of this

- -\ --- type of text is similar, a legal opinion is generally much longer, as it entails thorough research and covers the issues in greater detail. A legal opinion also carries much more weight and greater potential liability for the lawyer or

' firm issuing it.

Regarding the contents, we can say that, in general, a letter of advice: 6 identifies the legal issue at stake in a given situation and explains how

the law applies to the facts presented by the client;

L . & indicates the rights, obligations and liabilities of the client; r @ outlines the options the client has, pointing out advantages and

disadvantages of each option; & considers factors such as risk, delay, expense, etc., as well as case-specific

factors; g makes use of facts, relevant law and reasoning to support the advice.

The structure of the letter can be made clear by using standard signalling phrases. The table on page 31 provides examples of phrases used to structure I '

the information in a text, These phrases serve as signals, pointing to information before it is presented, thus increasing the clarlty of a text.

- -

RskrliIlg to prevrous court do*

Drawing conoWons

1: . -rd;,'$P . - e; rvw- ,*- - - !y :# , !&#q 1 - - - -- h'&!'Vocabulary: ditinguihlng 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 stipulate specify prescribe < a-i- 2 succeeding @- .ensuing- subsequent caYyU.. 3 responsibility du$Q.@Y< obligation

4 prior previous rerequisite preceding

5 margin leexay- latitude i interpretation \

P- 6 preclude w~ % t a b prevent

2 Vocabulary: word choice These s e n t a h company formation and management. In each case, choose the correct word or phrase to complete them.

1 The constitution of a company comprises contains of two docum0nts. - 2 The memorandum of association states / provides f o r m h e objects - of the company and details its authorised capital.

3 The articles of association contain argurnen~Pro~ is ions ) l directives for - --d -

the internal management of a company. 4 The company is governed by the board of directors, while the day-to-day

management is delegated upon /-or the managing director. 5 In some companies, the articles of association^ give / allow provision

. for rotation of directors, whereby only a certain portion of the board must retire and present itself for re-election before the AGM.

6 Many small shareholders do not bother to attend shareholders' meetings and will often receive proxy circulars from the board, seeking authorisation to

-- -- vote on the basis of / in respect of /--on behampf the shareholder. L .--,

I) Word formation Complete this table by filling in the correct noun or verb form. Underline the stressed syllable in each word with more than

4 Vocabulary: prepositional phrases The following prepositional phrases, wh~ch are common in legal texts, can all be found in Read~ng 3. Match the prepos~tional phrases (1-4) with their definitions (a-d).

1 in terms of a 1) for the purpose of; 2) by the route through 2 rn the course of b as an answer to; in reply to 3 by way of 7 c 1) wlth respect or relation to; 2) as indicated by 4 in response t o b d while, during

I 8 Vocabulary: prepositional phrases Complete these sentences using the

prepositional phrase from Exercise 4 that best fits in each one. For one of the sentences, there IS more than one correct answer.

1 !.!I ,&.%. ..CFZ!ME.% .,&. choosing the name of the company, a number of matters must be considered.

2 Confidential information acquired\*hthhP.%bA*/% one's directorship shall not be used for personal advantage.

3 1 would advise that members of your project group formalrse your relationship %w, -%a partnership agreement, incorporation or l~mited liability company.

4 This form of corporation is often considered to be the most flexible body \%..WS-%.. Q& corporate structure.

5 Our cornparty formations expert is unable tcr provide advice \%*&hi, . . your query, as there are a number of factors which need

to be taken into account which do not relate directly to l?is area of expertise. 6 The relationship between management and boards of directors at US

rnaltinatfanal companies has been changed dramatrcally through a series OT corporate governance initiatives begun 1 %%h~&kbcorporate scandals, Me Sarbanes-Oxley Act and @her requirements.

7 Shareholders and Omer in\lestors in corporaions tend to view corpbrate goverl iance\~W*b. .w.. .. the corporation's increasing value wer time.

8 Regular end extraordinary board meetings may be held by telephone, video- telephone and .&%.%. written resolutions.

Q VerMoum ooHocattorrs Match each verb (1-5) with the nourl it collocates with (a%) in Reeding 4. If you have difficulty matching them, look back at the leter.

L

1 violafa a affairs 2 call 'e b representation 3 metturn d Q gajn 5 q n d w t '9 I

1 7 C Q ~ ~ W S v&h file Decide which of the fo!lowing words and phrases can go I wim7.k verb fs file. You ma need to c o ~ u l t a dictionary. 4 ;fr

an a endmemt a breach a b ef a defence a dispute

-k - a dae",&on provisions a L ad

I 4& W ~ P W ~ ~ Q Q -

Q-ta

t4E. a p=..-

-*A g - 'wg- ' tn - 'w.

1

I

A ' . . - . - I - 3 !.

Reading I: Introduction to company capitalisation f ..- f , V~,--,J .

Company law is a very wide area. This text serves as an introduction to the Legal terminology and issues regarding hew companies raise capital in the UK. I* .

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

1 The shares of a company which are actually owned by shareholders are known as authorised share capital. -

2 Share capital is subdivided into two basic types of share: ordinary and - reference shares. 3-

3 people who already Awn shares possess the right of first refusal when new shares are issued. -b

< .>'&. ,. #IC,,',-.'r2 t..'

4 In addition to share capital, loan capital is another means of financiE$&, +

r ( I? 1) I' " 1

a). The m8mmnbum of assochtion also states & names aS the share capital fior a wbEic limited ComgMny in Gmat Bgtain is ESO,Wi i%sW

m m l but refrain frm issuing alE af iZ until a Sater date - or 8% all.

* (US) authorized shares

(US) common shares . . .-k

(US) preferred shares (US) stock spllt

"US) reverse (stock) spl~t (US) preemptive nghts

I - ?aWr may be sold to a particutar group or individuals (a dirt3eta piacement). L - Share c a w i is wt, of course* the wly means af finance, The other 1s k m

The @ant of SE\GU&~ for a ing the cW&or the if= assets is termed a . Companies may aisg

I

1'. The

Key terms: Shares 2 Match these terms related to shares (1-8) with their definitions (a-h).

1 authorised share capital 2 dividend . 3 issued share capital 4 ordinary share 5 pre-emption rights 6 preference share 7 rights issue 8 subscriber

a someone who agrees to buy shares or other securities '8- b offer of additional shares to existing shareholders, in proportion to their

holdings, to raise money for the company T c type of share in a company that entitles the shareholder to voting rights and

dividends G d entitlement entailing that, when new shares are issued, these must first be

offered to existing shareholders in proportion to their existing holdings A- d

e maximum number of shares that a company can issue, as specified in the firm's memorandum of association A-

f proportion of authorised capital which has been issued to shareholders in the form of shares 3

g type of share that gives rights of priority as to dividends, as well as priority &

i over other shareholders in a company's winding-up h part of a company's profits paid to shareholders

3 Underline the words (1-5) in the text. Then match them with their synonyms (a-e).

1 term C a to be an example of 2 to entail b to give up 3 to waive 'Q c name

4 to typify7 d to regain a*, , 5 to recover 4 e to involve

4 According to the text, the minimum amount of share capital of a public limited company in the UK is £50,000. Do similar restrictions apply in your jurisdiction? If so, what are they?

Unit 3 Company law: capitalisation 6

Language use I: Contrasting information ,

---- . . _ f.-T-- Ih 14

"3 - " ' Look at this sentence fmm Reading i that defines issue@ share ca@taf: '. .:,- X-;

a t . . . . - - .,>t < 1

; issued share capital, as - oppastx# C authorised share capitat, refers to shams '>.

I act&& heid by shareMl-ders. . . ::>. ! 2

I $* . "$& 3 - . .

When describing a new idea, it can be contrasted with an idea that y a k -.+ 4

, +

I listener is al$eady farnifiar with, using tfie preposition as oppased to. The :"< : 1 p r e ~ & t l n s unfjke and in mtrast to can be y ~ e d in the sfam way: > a *

L /sued share capital, aufhon'sed share mpital, refers to sA

to author'& share capital, I

E rddrs to shares mtualfy held by sh~rehoJders.

er, it is necessary ta inseft which in

ital that B mmpany can is&- '

. . . , .$.<, % , - \ - . . , 5

1 LlnWce ordinary shares, prefevence shares do not USMOL~ e n W the - sQ,f . . .! r-

i' - . ' # . ... shweholdev to vote.

L + 1 .--::;+- , ,- '. + - I t - In contvdst to o r h a r y shares; w h h e n W the shareholclev td vo .'J - ' ' " t"h,;.:- . preference shcwes do not ( A S M ~ U ~ give such a right to the shareholhr. : '

Listening I: A rights issue QQM- Lawyers with expert knowledge of corporate finance are often asked to explain complex matters in simple terms to company members or to shareholders. This dialogue takes %-zjp. 2: ' - C

place at a seminar held at a large law firm specialising in capitalisatiey matten. . . q-ywzie -+.-.a <: ; i--v* - A member of a shareholders' association (Mrs Whiteman] is asking a corporate f inwce ,jpi l.~-: -+- Y - ~ . r- - . * . .-'(-= r

expert [Mr Young) to explain a rights issue, one of the key terms in Reading I . ,_ . - . .- .,:: -T&-,T -A - . ,.

v - b. L: .,' .=+* L , -j . *=, 2

1 6 I( E Listen to the dialogue and answer these questions. ; ., +g-,r. a: . -r -

I 1 What is the purpose of a rights issue? K!Xl P91 weAEw*w 1 2 What options do the shareholders have if they do not wish to buy the newly -. \. -

issued shares? _. . . 7 d t Listen again and choose the correct answer to each of these queStions.

. . 1 According to Mr Young, one reason why shareholders would want to take up

their pre-emption right is . * - . t . ,: t,. . - .

a to help the company raise cash. . $. -. - @to maintain the proportion of shares they own. l 2 -? &-, ,;:+- . %', -. . A ;; P.LI'. .- .tr' ..

c to be able to waive this right later, if desired, .- ., ,. = .,,. . , _ , , ?-. :

2 Why are the new shares offered to shareholders at a discount? . , , - - , -

a so the shareholders do not sell their rights to non-shareholders;?, b to keep the market price of the shares from falling

@ to increase the likelihood that the issue is fully subscribed &.I. ' - - -.--

1. . '

3 A share issue is said to be 'fully subscribed' when - , . . . - - , . .., .... a all of the shareholders have been duly informed of the share issue. - *-. .. < , b all of the shareholders have sold their rights to the newly issued shares.

@ll of the newly issued shares have been agreed to be purchased. ; >*. . + -'; t::, ,, .: TF-. ,*,; $ .. 7, - .--

4 What does Mr Young say about shareholders' reactions to rights issues? ) ,>A a-

a They can be unhappy about having to decide whether to buy shares or sell - -J-- < .

o r i g h t s . ,

b They fear that discounts may make the market price of the shares , .. , f ( ~ i ; ~ &-I. -,:.. ;-l;&

decrease. .%- - #:-z - * , . \ j -,, - c They are concerned about outsiders gaining influence in the compaqw-: ...>+- ; -? .

' !

' 2

Reading 2: Shareholders and . -.

supervisory boards - - <. ..., The excerpt on pages 38-39 deals with the topics o f shareholders' rights and the role o' - . the supervisory board. It is part of the required reading in a comparative law course dealing with European and Anglo-American company management structures.

3 8 Read through the text quickly and answer these questions.

- L \ rs s.:b ' -- mi; ,a .,$$&*:-- - .,. .-, . -. ., . .- C - - A

d.- - - - , 7.4,- . . . 1 What basic rights does a shareholder possess? : , . *; - , a - - . - . 2 What options does a dissatisfied shareholder have in the ~ n g l o - ~ a i o n a.:i- , , , -

? ' system?

3 What is meant by the concepts of the one-tier board and the two-tier board? (Note: the word tier means 'rank' or 'level'.) Which do you think is the best model of organisation?

Unit 3 Company law capitallsation

count7ies, We supervisorjr boards of large companies are IegafIy b u n d to incorpora - f oms of employee re~esentation. Under cMetemination jaws, some corporations with a t - least 5433 empioy?es, and at! those writh more than 2,000 emplows, mu& aalfow empi

elect one half of the members of the suprvisory bard, Cdetemination mles w e r the prvisory board, the funotians of which are, to control and monixor ffK, ma~agemnt , to

int and dismiss members of the management board their salaries, and to ap -isions of tRe management board. In 1998, the to appoint audltois was

vested Mth the suwrvisory board COrganimtion for Economic CCP-opration and aevelv ..- (OECD). 1998). ,

G How iare is this Iroiw'? Okwiously, it allows a partiei~tory shamholders, managers and e m p l w s under the de tem ina t i on w.nelple, but

sory-board &stem also is designed for argues that 'the degree of monitclring a

ari Wo-tier& board system seems to k wry limits in gmd times, white it may pi i m p m n t role when the corpomtion comes under stress'. Of cou1;$8, the same? i

boards; t h y exeft more autRoritgr in a crisis, too. But the boards h An@ ve no2 @en notably successfu! in prewnt iq ci$stl.s. W s the mmnk

m of h r d structure do btter? There is etot much evidence on this point. Same a@ue f b system encourages worker commitms3nt to the firm and reduces d ~ t o c i a y

r f e r e m in managemetnt decfsions, altowing both to get on with the job. O t b r s mnsid $he system encourages 'cosiness; with bad strategic dc3cisiot-t~ internah& rather tha

to the wbiic gaze as occurs when -

9 Read the text again carefully. In which paragraph (A-G) are the following mentioned? Some of the items may be found in more than one paragraph.

1 some stipulations of co-determination laws F 2 the functions of supervisory boards in Germanic countries 3 two options open to a shareholder when dissatisfied with management 4 activities carried out at the annual general meeting 5 opinions on effectiveness of the two-tiered system in times of crisis G 6 the difficulty of co-ordinating management monitoring efforts $ 7 three rights to which the owner of an asset is generally entitled - 8 comparison of the composition of executive board and supervisory board k

20 In your own words, explain to a partner the meaning of the following expressions (in italics in the text).

1 risk diversification 2 awkward questions 3 flow of information 4 face ... obstacles 5 the free-rider issue - 4

6 vote with one's feet 7 answer to the annual meeting 8 co-operative conflict resolution 9 participatory framework

10 subjected to the public gaze

~ a - i h w U(GQJ-W~\ .--- at, ~ A - * - ~ J U ~ Q - m I

lave done ial

cially in

Unit 3 Company Law: capitalisation c

Text anatysis: Understanding Leqalese

T h k is an @=!apt f r m pr&si-ons r@ula2,5@ t h ~ qitali~tix3.n of a corp~mtion, wdttefi Im I ~ l a x s @ , Rmd it, notidng the l a n w and homplex s&npen@w, Then

&-(I) ftte maximum numbr of shares d st& of the on that may be issued is 25,000 of a

(2) m stated mpbf of the mtw of all fsstred shares having

be divided into pn?f.t)M, to wnsnsist of 5,W shams of 20,W shares W o U t par wiue.

Rw? holders of tlte orr tk par value &erwf* and N, mare*

p p b l e semknnua5ly on %he first

s &ail cumulate m such

I fitst haw k e n paid,

1 (6) Afl *mining pfoFiZ:s wrhl~h d i rmm may memine b app& in nt d diwideMs shall !# be distributed among the holders of common shares exclusively.

7 - - , , ' I ' 3 " L

19 For each instance of the word such in the text above, suggest a more natural- sounding alternative.

20 Match these words beginning with there- (1-6) with their equivalents (a-f). The first three occur in the text on page 42.

1 thereto T, a of it/them 2 thereon @, b on it/them

c to it/that 4 therewith d fo i it/that 5 therefor 4 e with that 6 therein f in or into a particular place or thing

therefor = for it, for 1 that

therefore = consequently I

21 Complete the sentences below using the words in the box.

therewith thereof(x2) therefor therein thereon thereto 7-

-- )_--I*_ --

1 Each partner shall maintain both an individual drawing account and an individual capital account; into the capital account.shall be placed that partner's initial capitalisation and any increases m.

2 Every issuer must comply in all respects with the provisions, including all filing and notice deadlines .......................... .-tXhW au\

3 Her experience in corporate finance includes representing banks and other financial institutions in numerous secured financings, including drafting and negotiating credit agreements and security documents in connection .W.&J*

4 The Chair of the Committee shall, in consultation with the other members ot the Committee and appropriate officers of the Company, be responsible for calling meetings of the Committee, establishing the a g e n d a w g . w a n d supervising the conduct%@-

5 The circular prescribes requirements for the accounting and reporting of interest on loans and other interest-bearing assets and for the capitalisation of interest-%

, if

with the Registrar.

Speaking: Paraphrasing and expressing opinions 22 Working with a partner, take turns rephrasing the sentences from the text on

page 42 in your own words as if you were explaining their content to a client. You may want to break them into shorter sentences and turn passive constructions into active ones (e.g. instead of shares may be issued, say the corporation may issue shares).

EXAMPLE:

(1) A corpordtion cum issue no more than 25,000 shares. Five thousand of these are worth $50 & and the rmMig E0,000 have no par value.

23 When expressing an opinion, it is common to begin the statement with a phrase signalling that it is an opinion. Read the transcript of Listening 2 on page 265 and underline the phrases the speakers use to signal an opinion.

Unit 3 Company law: capitalisation ( 43

27 List the six limits on the buying back of shares mentioned in the text.

28 Discuss these questions.

1 Has similar legislation been enacted in your own jurisdiction? 2 Can you think of any examples of other laws passed recently in your

jurisdiction concerning company capitalisation?

29 Which noun collocates with these verbs in the text? A- &BJ- buy back cancel hold in treasury transfer re-issue

30 Complete the following phrases from the text using the prepositions in the box.

\ I 1

into (x2) to (x3) under with - ... 1 uh current company legislation

......... ... 2 ... amendments ...% the regulations ...... ... 3 ... a new company law will come .)1?.%&~ force

4 This new legislation will only apply ..... bQ ............ company shares that are listed ... on the London Stock Exchange's official list,

5 This change .... ............. company law ....... 6 The new law will also bring the UK ..!.%+Q line . .~>%. . . other EEA

countries.

To improve your web-based research skills, visit www.cambridge.org/elt/legalenglish, click on Research Tasks and choose Task 3.

Unit 3 Companylaw: capitalistion

- -

Initially, c lance of shares. A company may aurnorrse cap :ne mandatory minimum share capi I but refrain .k!?-,...... IaaulrlE a t 1 Ir u l l t l l a later date - or at all.

I tn return ... b .... the privilege of limited liability .w&. law, shareholders' powers are generally restricted.

= Someone with ownership rights .. .?\.% ......... a company can express their disappointment .A\%. the company's performance by either getting rid c their shares or in some way expressing their concern. With the Anglo-Saxon one-tier board, managing executjves are also represented ........ 'Cs.M, ..... the board, and all directors, executives as well as non-executives, arc appointed ..... % .... the controlling shareholders and must answer . ....... the annual meeting.

6 The shares sha!l be divided .\..%%?... preferred, to consist of 5.000 shares having a par value, and common, to consist of 20,000 shares without par valua

1 Adjective formation Add the prefixes in-, ir-, il-, ab- or un- to each of these form its oppasite.

9 formal 10 comparable

Company law: fundamental

r changes in a company

Reading I: Introduction to changes in companies This text provides an overview of the area of company law dealing with the changes made to a company that generally require the involvement of lawyers.

1 Before you read the text, match these key terms (1-7}, which all refer to types of changes in company structure, with their definitions (a-g). If necessary, consult the glossary.

1 constitutional amendment 8, 2 consolidation 3 acquisition of controlling shares @ 4 voluntary liquidation '? 5 merger & 6 sale of substantially all assets 3 7 compulsory winding-up C3,

a the liquidation of a company after a petition to the court, usually by a creditor

b the combining of two companies to form an entirely new company c liquidation proceedings that are supported by a company's shareholders d a change in a company's name, capital or objects e the purchase of shares owned by shareholders who have a controlling

interest f the acquisition of one company by another, resulting in the survival of one of

them and dissolution of the other g a form of acquisition whereby all or almost all assets and liabilities of a

company are sold

r resoluaon upon appfimtiwl by a small group of mi~lority shareholders.

takes plam when one wmpany is ifit-re commm x is

and disapwrs, In a

is ordered by the court when t rekrs to ta p r w s s ei-ch may

(US) tender offer (US) involuntary bankruptcy (US) also dissolution or winding-up

C

Key terms: Opposing concepts in company law 2 The text contains several pairs of opposing concepts. Find the counterpart of

each of these words.

1 acquiring company \*# 2 hostile takeover M u d 4 3 acquirer 4 compulsory 5 solvent

3 Work in pairs. Making use of the prepositions introduced in the previous unit (as opposed to, unlike, in contrast to), take turns contrasting the pairs of opposing concepts listed in Exercise 2.

EXAMPLES: In contrdst to an q ~ ~ k i i g company, w h u k i s a company thdt pctrchases mother, d~ acql~iYed company i5 one which is purchased md taken ovw by another compmy.

An q l ~ i v e d company i s one which i s p ~ r c h a s e d and W e n ovw by mother company, ~ n k e an q u W i . n g company, which i5 a company thdt purchdses m o t h w .

Unit 4 Company Law: fundamental changes in a company

Listening I : Explaining Legal, aspects of an acquisition A lawyer's involvement in the mergers and acquisitions of companies often entails communicating with the parties concerned: a lawyer may explain to the owner of a company what procedures have to be completed in the course of an acquisition or inform shareholders how the changes resulting from a merger will affect them.

In the following listening exercise, you will hear a lawyer speaking to a group of business owners. Each of these business owners is considering acquiring another business.

4 4 C Listen to the first part of the presentation and choose the correct answer to each of these questions.

1 Which of these is the most likely entry for the talk in the programme? a Mr A. Crawford of Corporate Restructuring (evening session) b Mr A. Cranford of Mergers and Acquisitions (evening session) ,'i-*

; 'c '!Mr A. Crawford of Mergers and Acquistions (evening session) d Mr A. Crawford of Mergers and Acquisitions (morning session)

2 What is the speaker's aim? a to provide the business owners with an overview of the law of mergers

and acquisitions b to persuade the business owners that they should use this opportunity for

their businesses to grow i3 to inform the business owners what they can expect if they decide to carry out an acquisition

d to tell the business owners about the process of making their businesses more attractive as potential targets

3 Which of the following topics will not be included in the presentation? a factors involved in deciding on a company to acquire

@? staffing issues after an acquisition c evaluating the prospective acquired company d details of one specific deal the speaker has carried out

5 4: Listen to the second part of the presentation, in which the speaker discusses legal aspects of acquisitions. Decide whether these statements are true or false.

1 The important legal steps that must be carried out in the course of the A7

acquisition process can be completed in any sequence. 2 'Due diligence' refers to the process of gathering and analyslng financial

information and other relevant information about a business before it is '-?- acquired.

3 One aspect of due diligence is verifying ownership of intellectual property. ,--

4 In the course of due dlllgence, the acquirer should terminate all of the target ,- company's contracts with suppliers.

5 A warranty is wrltten statement by a party attesting that a fact relevant to '

the deal IS true. \- 6 The target may provide Indemnities to protect the acquirer against future \

liabilities. l l ~ B ( ~ - - \ ~ d QS \+ &&,L,&Q~,

- 1 The term 'spin-OW refers to any distribution by a corporation to its

shareholders of one of its two or more businesses. Sometimes the spun-off business is transferred first to a newly formed subsidiary corporation. The stock of that subsidiary is then distributed to the shareholders of the distributing corporation. Other times, the stock of a pre-existing subsidiary is distributed.

2 Spin-offs can include distributions on a proportional basis (i.e. pro rata), in which the receiving shareholders do not give up any of their stock in the distributing corporation when they receive the spun-off stock, Sometimes the distribution only goes to certain shareholders. In this case, the receiving shareholders give up some (or all) of their stock in the distributing corporation in exchange for the stock of the controlled subsidiary. Non-pro-rata spin-offs are sometimes referred to as 'split-03s'. A non-pro-rata spin-off that results in one group of shareholders holding all the stock of the distributing corporation and a second group holding all the stock of the former subsidiary' ' corporation is referred to as a 'split-up'. he,- , up+* -9

3 A spin-off is used to separate two businesses that have become incompatible. In a case where investors and lenders may want to provide capital to one but not all business operations, a spin-off can be a good solution. Spin-offs are also used to separate businesses where owner-managers have different philosophies. Spin-offs may furthermore be used by publicly held companies when the stock market would value the separate parts more highly than combined operations. The separation of business operations could also lead to a greater entrepreneurial drive for success.

4 The tax characteristics of a qualifying spin-off under Internal Revenue Code Section 355 make this an attractive tool for solving certain corporate challenges. Without Section 355, the distributing corporatiqn would have to recognize a gain on the stock it distributed

i I

as if it had sold that stock. In addition, shareholders receiving the distribution would be taxed on the shares received, either as a dividend or as capital gain. This double tax usually makes spin-offs extremely expensive. Code Section 355 permits a spin-off to be accomplished without tax to either the distributing corporation or to the receiving shareholder. Any gain realized by the shareholder is deferred until the stock is sold. ----

a-

10 Read the text again and answer these questions.

1 Under which circumstances would a company typically decide to make a spin-off?

2 What benefits for the corporation and for the shareholders result from Internal Revenue Code Section 355?

Chc ant tic1 twc col,

Speaking: Presenting a spin-off One of your corporate clients is planning to carry out a spin-off. He has written you the following email.

/ Dear Mr Daniels

Ms Diaz has told me that you are going to be at the shareholders' meeting next Wednesday. Would you mind addressing the group briefly before the meeting starts? I think they would appreciate some basic information about things like what a spin-off is, why the spin-off wil l be done, etc. just so they can understand the rationale - behind it better. Of course, it 's very important that they realise that the spin-off will not affect them negatively. I think 10-15 minutes will be enough for this, and then you and I could field their questions and try t o clear up any misunderstandings.

Please let me know what you think.

Best wishes

dam ~~1et-O I

11 Using the presentation in Listening 1 as a model and the information from Reading 2, prepare the beginning of such a presentation.

12 Take turns presenting your beginning to a partner. Check that your partner has:

0 introduced him/herself g informed you about what points will be covered (C1 mentioned any practical matters (questions, timing, etc.)

Listening 2: A checklist Lawyers play an important role in the processes involved in altering the structure of a company. For example, they review the documents connected with such changes to ensure that all the relevant statutes have been complied with.

Checklists are useful tools far making sure that the proper procedures have been followed and the necessary documents drawn up. Once an issue has been addressed, a lawyer will tick the box to confirm that he has considered the particular matter Listed. You will hear two lawyers discussing such a checklist. A more experienced lawyer guides his younger colleague through the l ist of actions to be taken and documents to be filed.

13 4 2 Listen to the dialogue and answer these questions.

1 What kind of change are they discussing? 2 What two meetings need to be held? 3 How many documents need to be filed at Companies House?

.- -- - -- -r A

. z - v d . - - * - - A ~ Listen agaln and complete the missing items (1-10) in the lefthand

I

:olumn of the checklist, using up to three words for each space. - C

Checklist on increasing a company's share oastal ( Matter considered

Check the memorandum of association to identify the company's I)-.*. ..% . See also authority to increase mpitnl under &vWQ Articles. Consider whether creation of new shares will involve variation of class rights. If so, appropriate consents may be

e

lnguage use I: Explaininq a procedure

vvrlall explaining how a procedure is carried out, the order of the steps to be taken can be indlcated using sequencing words. ~ o o k at the following examples from the listening text:

fj Well, the first thing you have to do is check the memorandum of association . . . Then you have to find out whether they've issued all their share capital already or not. The next step would be to determine the amount of increase of share capital. But before the EGM can take place, the shareholders have to be informed by notice about the EGM. Finally, within 15 days, the following documents have to be filed at Companies House ...

Here are some more sequencing words:

After that, Atterward(s), At this point, Following this, Once you have done that, Subsequently

Another feature of such an explanation is the use of words and expressions indicating necessity, such as to have to, must, to be required and to be necessary:

The first thing you have to do is . . . Tell your client that they have to call a board meeting . . . This notice must state the following things . . . The chairperson is required to preside at the EGM, and it's necessary that a - quorum is present. Minutes of the two meetings . . . have to be drawn up.

Think about a complicated legal procedure you have to deal with in the course of your work or which you have studied. Make a checklist to identify what you have to do to complete this procedure. Explain the procedure carefully to your partner. He/She should make notes. When you have finished, ask your partner to repeat back to you the stages of the procedure.

r isc cuss these questions.

1 Who writes the minutes of a meeting? 2 When would a lawyer have to read such a text?

I - &T The text on page 56 is the minutes of a meeting held by board members of a small company. Read through the minutes quickly. Why was the board meeting called? Why was the EGM called?

-+

Longfellow Ltd Minutes of a meeting of the Board of Directors held at Company premises, Langdon Building, Sherwood Road, Manchester

On: 10 September, 2005, at 3 p.m. Q@& ' 1

Present: Debra Smith (Chairperson)

Anna Bean (Director)

I Claire Thunnan (Secretary)

7 1 The chairpers&i cbn rrmed that notice of the meeting had been given to all the Directors of the Company and that a quorum of the Board of Directors was present at the meetlng.

2 Applications were presented to the meeting from Debra Smith, Anna Bean and Allison Sharp for the

3 It was noted that Debra Smith and Anna Bean had declared their interests in the shares pursuant to s317 Companies Act 1985.

4 The Chairperson reported that it was proposed to in Company by 50,000.

5 The Chairperson reported that the directors required authuniy tb allot sh-, 84 th power in the Company's articles of association.

6 The Chairperson also iflfo~ITf3d the members that the Company would need tn Companies Act 1985 in relation to pre-emption rights.

7 There was presented to the meeting a notice of an extrmdinary general meeting 1 WW! , resolutions would be proposed to Implement the above proposals to increase the C o a t j y 3 &m! capital; to authorise directors to allot the new shares; and to disapply the requirements 6 f d Companies Act 1985. It was resolved that the notice be approved, that the Secretary be i d & to send it to all the members and the &rtors of the Company, and, subject to all the members

notice of an EGM had been duly passed.

12 The Secretary was instracted to prepare share certificates In respect

13 The Secretary was instructed to prepare and file with the Registrar of Companies: (return of allotments) in respect of the allotment just made; Form 123 (increase of the special and ordinary resolutions in connection with raising capital for the Company.

14 There being no further business, the meeting was closed.

adopt arrange attend authorise - ca l l cmcel conven6 , ,, draft endorse introduce oppose pass preslde at schedule summon table

Read Me minutes again and answer these questions.

1 Whioh r e s o l ~ o n s were passed at the meeting? 2 What mps must be undertaken by the Secretary subsequent ta the meeting?

.As a record of what occurred at a meeting, the minutes include en accomt af what the participants sad. Verbs referring to speech acts, such as to stsite & tu pmpuse, are comrnonky used. Whkh verbs of this kind can be found in the

The minutes on page 56 contain examples of verbs that often appear together with the nouns meeting and resolution. Find and underline them.

Complete the table below to show whlch of the verbs m the box can be used with meeting and resolution. You may need to consult a dictionary. .-

- . C

Reading 4: Shareholder rights w m m ~ * h b * m m ~ p f n ~ ~ f n ~ ~ * ~ ~ m-&-dsMoC$w. a Read the letter and dlscuss these questions.

1 What kind of letter is it? 2 What exactly is the query it responds to?

Read the letter again and decide whether these statements are true or false.

P The shareholder seeks to set aside the transaction on the grounds that he was not able to vote at the shareholders meeting. -t-

2 The lawyer states that in a true merger, the statutes do not provide appraisal rights to the shareholder. -

3 The lawyer points out that looking at the substance rather than the form of the transactlon might appear at first to help the shareholder's case. -+

4 The lawyer believes that it is likely that the courts in the jurisdiction in

question will decide along the lines of tleil v. Star Chemical. -f U l r w r ~ h l b k m a l ~ i n 8 ~

ne: Shareholder Rights in Stock for Assets k a c t i o n

Dear Mr. Fitzwilliam

You have requested advice regarding your rights as stockholder in Alca Corporation (the "Target Corporation") which entered into a stock-for-assets agreement with Losal Corporation (the "Purchasing

The advice and statements set forth belaw are based on the facts you presented to me m our telephone I

conference of January 27. Tbs advice should be viewed in h@t thereof and remains subject to future discovery and research, I

The facts are as follows: you are a stockhdder in the Twget Corporation. On or about October 1 last year, ?tie Target Corporation and the Purchasing Corporation entered into a Reorgankation Ageemeat by which the Target Corporation agreed to sell all its assets to the Purchasing Corporation in consideration for 350,000 shares of the Purchasing Carpdrationb stock. The Target Corporation Galled a stackholders'

' meeting Lo approve the Reorganization Agreement and the voluntary dbsolution of the Target Corporation upon distribution of the shares to the Target Corporation's stockholders. As I understand it, the stockholders meeting approved the plan, 70% of all stockholders voting. You did not vote at the meeting. Your query to me is whether it is possible to set aside the transaction based on your rights as a stockholder.

Generally, a stockholder's rights in a merger situation m twofold. First, the stockhoider has the right to approve or disapprove the agreement. Second, the stockholder holds an appraisal right, which means that - I he is entitled to have an independent appraiser determine what his shares are worth. The aforesaid I

provides the stockholder with assurance tbat the Purchasing Corporation is not getting a discount on the shares. As I understand it, you were not dorded any appraisal rights.

The W~cully in the i m m case is that h e transaction is not a "true" merger but rather a sale of assets in exchange for shares. In the latter case, strictly speaking, the statutes do not provide the shareholder appraisal rights. However, it might be argued that, due to the fact that the transaction at issue achieved the I. I .3 same results as a merger, the court should look at the substance of the transaction rather than its form in ,

order to protecl your rights as asharehdder. h asence, the argument is that a "de facto" merger has taken I

place aad that you should be entitled to the same rights as if a "true" merger had taken place. Ifthe court- finds in your favor, thqtransaction could then be set aside as being in violation of the appkcable statutes.

,illthough I consider the argument above to be penwive, J doubt whether the courts of tBis jurisdiction wiU accept it. The ~wtrine of de fact6 mrge~ b widely accepted in many other jurisdictions for the reasons I have set forth above. However, in this jurisdiction, the courts have been hesitant to take a position. In addition, in one particular case, Heil v. Star Chemical, the court, although not addressing exactly the same situation as in this case, referred to the fact that the provisions governing merger and the sale of all the assets in a corporation are separate and sho4d be peated as such. The mere fact that they overlap does not 1 change the legislative intent.

I

h summary, you have an argument, but in my ophion your chances are slim. It will most likely take an appeal to win, as I suspect the trial court will not spay from the reasoning established in the Heil case. Hence, as your attorney, I would suggest that you take a look at your options frorP a Mancia1 pe~pective and make a determination as to whether it is worth it.

As always, I remain at your disposal should you wish to discuss your options. I look forward to hearing h m you and answering any furlher questions you may have.

. .

I M Match these words and phrases from the letter (1-5) with their synonyms fa-e). The words are in italics in the letter.

I 1 instante a basically 2 in essence $ b simple 3 persuasive4 c reluctant 4 hesitant C d convincing 5 mere e present

According to the letter of advice on page 58, there is a good reason why a court might rule in favour of the shareholder, but also a good reason why it would not. Discuss these reasons with a partner and decide how you wouM advise your

Referring to previous contact Closing, offering further assistance With reference to vour letter of 15 February ... Please contact me again if I can help in any way In response to your query concerning . . . Should you have any further questions, do not Further to our (telephone) conversation of . . . hesitate to contact me. Thank you for your email of 15 February. Referring to future contact Stating the reason for writing I look forward to your reply / to meeting you / to I

client in this situation.

. r.-

m~ dmrass r n ~ : ~ ! wn$eon wanofh-m$quop - . . . . .

- -.

- .

To improve your web-based resear Research Tasks and choose Task 4.

4,- Language Focus 14 -

i 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 pause suspend @ [adjourn, !FAW--~$--

2 according to pursuianrfo in conformity with 3 exempt (%&a freed released

p 4 convoke call E n - convene &- Q--+i'-

5 continue resume pick up -03 .

6 said e n 1 7 aforementioned aforesaid

? Vocabulary: definitions Match these words and expressions in italics (1-8) with

:' - their definitions (a-h). They are all taken from the Reading sections in this unit.

1 pro-rata distribution a before 2 under Internal Revenue Code Section 35 b enter into 3 prior to distribution q c determining 4 become a party to a transaction b d according to 5 no consideration is paid \ e actual 6 de facto merger e f relevant 7 applicable statutes g payment 8 provisions governing merger e h proportional

.a Word formation Complete this table by filling in the correct verb or noun form. Underline the stressed syllable in each word that has. more than one syllable.

Abstract noun I -~9--- merger I

approval - . msolidate I - -

:quire ~ u - 4 ~4;"\&& liquidation

mcel

€ww alteration m-

- I barnply with

4 Language use: verbs plus prepositions Complete the sentences below using the correct forms of the verb and preposition combinations in the box* ' -

dispose 01 - 1 The resolution must be .*...* Companies House within 15 days. 2 According to the statutes, the chairperson must .y.a.h.* the EGM. 3 The EGM authorised the Board of Directors to repurchase and

.#Ak@%L...~...... not more than 50,000 shares in the Company. 4 All of the requirements of the Compan'es Acts 1985 and 1989 in respect of

reduction of capital have been .&?%&*.%% 5 The two corporations announced that they have &\.* definitive

merger agreement.

5 Language use: Rxed phrases Match a word from each column to form three-word colbocations as they appear in the unit.

Vocabulary: word formatlon Complete this text using the noun form of each of the verbs in parentheses.

It is not uncommon for a company, or a group of companies, to undergo changes in corporate structure. The change may be due to the 1) ...~.*!%... (to take over) by one company of another, the transfer of a whole or part of a company's 2) u~-dertake) to a new company, the 3) W..... (to merge) of two or more companies irrto a new company, or a it of one company into two or more companies. These corporate 4@.%+orm) are termed '5) ~ d - ~

(to reconstruct) and amalgamations'. The terms are not actually defined in the Companies Act, but descriptions have been by case law. A reconstruction is a transfer by a company of its assets to a new company, or an 6e-o to the capital structure of a company or a group of companies. An 7 ) .......................... amalgamate) is the 8) .......................... (to unite) of two or more companies under common control. MY/--=-

- .. , , Vocabulary: antonyms Match these words (1-8) with their opposites (a-h).

a formation b division

f liability 7 newly formed y g sale

h friendly I

The facts of the case S Your law firm has asked you to review the following company law case and the relevant

1 documents in preparation for a meeting with the other party's lawyer.

Read this description of the facts of the case. What is the legal issue here?

The Greenview Company, a public company incorporated under the laws of the country of Westland,

r 'l owned a golf course. Some land adjoining the golf course became available for sale, and one director of the corporation informed the board of this availability. If Greenview bought the adjoining land and sold it together with the golf course, this would greatly increase the value of the golf course. In fact, on several occasions, the directors and stockholders had discussed the possibility of acquiring more land

L- next to the golf course. Although the board and the stockholders expressed an interest in buying this land, it again did not take any immediate steps to purchase it. A few months later, two other directors of ' Greenview (not including the one who had informed the company that the land was for sale) decided to buy the land in their individual capacities. A few years later, the golf course and the adjoining land were

I sold as a package to outside investors for a high price. A large share of the profit went to the two directors because of their ownership of the adjoining land.

Now a group of disgruntled minority shareholders wishes to bring an action against the twa directors for a breach of their duty of loyalty to the company through the theft of a corporate opportunity.

I Task I: Speaking I' -1. Divide into two different groups, with one group representing the shareholders and the other representing the directors being sued.

1

) 1 Prepare for negotiations with the other party, referring to the relevant legal documents on the opposite page. You should:

1 identify the legal issues of the case and determine arguments fM your side;

,Q list the strengths and weaknesses of your side of the case;

1 Q decide whlch parts of the relevant legal documents most strongly support your case and can be used to argue against the other party's case; r Q make notes for the negotlation: What are your goals? What are you willing to give? What are you not willing to give?

2 Pair up with a representative of the other party and negotiate a settlement.

1 3 Report the results of your negotiations to the class.

Task 2: Writing Write a letter of advice to one of the partles (your choice), in which you outline the legal issues raised by the case, refer to relevant statutes and provide your opinion as to the likelv outcome of the case.

I I

Nevsnt . , legal documents )3 F 1 Text I: excerpt from Section 202 of the Westland Corporations Act -1 . \

. . -. ----.a. -

(I):- di re tor and oficer of a corpor&ion in exercising their powers and discharging their duties shall

fhb ~~~y and in good faith with a view to the best interests of the corporation; and I

.#Wer& the cite, diligence and skill that a reasonably prudent person would exercise in comparable 1 - ,4..;ymsmc&.

. . - - _ - . - - Y--

Text 2: Westland Principles of Corporate Law, Section 5.05, Part 3 The Westland Principles of Corporate Law, published by t h e Westland Law Institute, is used as a guideline for the interpretation of corporate law in Westland. Part 3 of Section 5.05 deals with t h e duty of loyalty owed by a director to h i s company.

A director shall act in the best interests of the corporation. This includes the duty of loyalty and th duty of care. (3) The duty of loyalty includes not taking advantage of a corporate opportunity. A corporate

opportunity is a business opportunity that:

(a) a director or senior officer becomes aware of in his or her c o p = (2apatity: '- (b) a director or senior executive should know the outside pai-ty is Daering td lhe ca

(c) a director or senior executive, who became aware of it through the use d coq@&T?Z.: information, should know the corporation would be interested in;

(d) a director or senior executive knows is closely related to the corpdon's currentw expected business.

-. . -

Text 3: excerpt from a textbook on corporate law - - -

16.2 Corporate opportunity

The doctrine of corporate opportunity requires a corporate director to further the interests of the corporation and give to it the benefit of his uncorrupted business judgment. He may not take a secret profit in connection with the corporate transactions, compete unfairly with the corporation or take personally profitable business opportunities which belong to the corporation.

.. - - izisaG

to this consideration, such as (i) whether the director became aware of the relevant opportunity as a result of his or her position, (ii) whether the director urilised property belonging to the company to take advantage of the opportunity, (iii) whether previous discussions were held regarding the opportunity within the corporation, and (iv) whether the opportunity was presented to the directot as an agent of the corporation. The basic test is a two-part test. The first part requires

a determination of whether the opportunity falls The second part of the test allows for a justification to within the line of business of the corporation; if this is relieve liability from an affirmative answer to the first so, then the second part examines the circumstances part of the test. In this part, courts examine whether under which the director is nonetheless permitted to the director had a persuasive reason to take exploit the opportunity advantage of something which was in the company's

line of business. Some examples of situations that The 'line of business' test compares the closeness of I ' ,;* courts have considered to be fair are that the the opportunity to the areas of business in which the corporation is incapabIe of taking advantage of the corporation is engaged. Other factors may be relevant opportunity.

, ,

Case Study I: Company law

Contracts: contract formation

Reading I: Introduction to contract formation Thb text g h s aw o u c ~ u b I sam4 df the rr~oH h p w t a canccpb and tsrtnindog. relatad b wtmt constitutes a legal tsntract arid when It is e+Rfseable.

4ead through the text quiokly. Then match these questions (a-e) with the jaragraphs that answer them (1-5).

a What form can an enforceable contract take? > b When do third parties possess enforceable rlghts in a contract? c Upon wmch grounds related to the formation of a contract may its validity be

attacked? \ d What are the elements of an enforceable contract? 4 e What are the essential terms of a contract?

1 unaer tne common law1, a promise wcomes an enrorceable contract wnen tnere IS an oner &y

one party (offeror) that is accepted by the other party (offeree) with the exchange of legally sufficient consideration (a aft or donation does not generally count as consideration); hence h ~uation-learned by law students: offer + acceptance + consideration = contract. The law

regards a counter~Mer as a rejection of the offer. Therefore, a counter offer does not serve to Term 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 P essential tgrms of the contract, such as price and subject matter. Nevertheless, courts will * enforce a vakue or indefinite contract under certain circumstances, such as when the conduct -

of the parties,,as opposed tg 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.

\

wm

It should be noted that, in the United States, contracts for the sale of goods are governed by the Unifotnf Commercial Code (UCC) and in the United Kingdom by the Sale of Goods Act, and theretore the above common law contiactual principles may have been supplemented or replaced by these statlrtory provisions.

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, lndividuals/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 benef~iary 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 r iats or delegation of duties. This third party is called the asslgnee in an assignment of rights and the delegate in a delegation of duties. (See Unit 7 for a more detailed look at assignment and third-party rights.)

Keyntenns: M n c e s to contract formation b&t&t these Mences (14) w~th the# def in i t im (a-df.

4 Iqch of legal capacity q g whenom perty dbes not have the abtlfty to enter itrto a legal cornact,

, 1.e. is not of legal age, is insane or is a mnviet ar enemy allen h when m e perty Indutes another Inti, mering h t o a cmtmut by use br threat .

c# force, v & m , &Onmic pressurn or crther shlltit meet% the subject matter (B.& VLe a e of hmr drugs1 Qr tb

mn8Idsmbn of d ccbnmct i$ Illegal tty is intcdonaltj rnlbled about Vm .ism, qmIQ m 6The-t aepect

cd the aontrs6tual rgterflonshtp Utat lead6 the party ta b r r k kWthe3mmacMn

is: Understanding contracts Lawyers are usually involved at the formation stage of a contract, which includes advising, drafting and negotiating. Drafting is commonly carried out with the help of contract templates or forms. Nevertheless, legal counsel must advise on the inclurion or omission of clauses and their wording. To do this, familiarity with common clause types and the language typically used in them is necessary. I

" Match these types of contract clauses (1-10) with thelr definitions (a-j).

1 Acceleration a clause stating that the written terms of an agEement may not be varled by prior or ord agreements because all such agreements have been consolidated into the M I W ~ document

b clause deglgned to protect against failures to perfmn contractual obligations caused by unavoidabk events beyond the patTy's control, such as natural disasters ar wars

c clause outlining when and under whdah circurns~wes the contract may Ibe terminated

4 Cons~deration % d clause concemlng the treat- wf llnbrmatian as p t l w and not for diHrlbution beyond specifically idanOfled individuals or organrsations, nor used ather than far specifically identified purposes I

5 Force Majeure 90 e clause in a comtracl requ~ring the obligor to pay aW or a part of a payable amount sooner than a$ weed upon the occurrence of some went M circumstance stated in the corrtract, usually failure to make payment

6 Liquidated 0amagesh f clause setting out whlch p a p is responsible for payment of costs related to preparation of the agreement and d l l z t r y documents

7 Entire Mreementzq g clause expressing the cause, tnotive, price or impelling motive which I indu~es one party to enter into an agreement

h clause referring to an amount predetermlnecl by the parties as the totel amount of compensation a non4reaching party shoutti receive if the other party breaches a part of the contract

9 Termination r I clause prohibiting or permitting assignment under certain conditions

I 10 PavrneM of Costs j clause provUng that. In the event that one or rnvre providons of the

agreement are declared unenfon>eaMe, the bdance of the agreement remains in force

'I, - a- q,+&-.rL -, ..,- - r l 21 i ' i m b i i ( E tdrm md ~vldsnoe II UIC~ ~n rn a md the UW]

___I

t k r k 5 ~ ~ ~

clauses. B & d Q - Q h *

Z 7Re seflefs % if* rbrohmg~slr8f/iin m awe iwa%w'* pwd,aep&e of the particular quantity &livenad wlth respect of which damages are clalmed.

2 Whenever, within the sole judgment of Seller, the credit stundng of Buyer shall become impaired, Seller shall have the right to demanct that the remining portion of the Contract be ful!y performed within ten (10) days.

3 Nelther party shell be liable in damages or have t h e right to termhate this Agreement for any delay or default m perfwmjng hemunder if such delay or

# default is caused by conditions beyond its contra1 including, but not limited w ~ & t o , acts of God, government restrictions (including the denial or cancellation

of any export or othe~ necessary licence), wars. insurections andfor any other cause beyond the reasonable control of & pa* whose performance is affected.

4 This Agreement may not be assigned without the prior written consent of the &thw party, except that Buyer may assign the Agreement Co a subsidiary or

~ l f i b d corporation so long as me owners of st ,=st -ntHvs per cent (75%) of the s t ~ c k of such corporation irre either Buyer or Wie 3hareholdw6

8 l . l . . - - -.- of Buyer. I

S In the event Operator defaults in the performam af any covenant or $tarn made hereunder, as to psymerrts of amounts due hmurldW'bt

utt~ervvlst, and such defmb are not remedjed to the Supplier's ssthfactron cpsp""Vls I " within ten { lo) days flu notice of such defaults, the Swplier m y thereupon terminate mfs agreemen!! and all rights hereunw of the Qperatov but such termination she# nbt affect U7-e obl@tlons of the O@t'aior to W e , , action or abstain from tking acfi aftert8rmhIethn hemof, in a~cbrdance with this agmemfmt. ,?

0 This Agreement, mdudhlg the &hedulss and Exhibits attach& M e t o . constitutes and contains thedntire a&nenent of the parties with respect of the s u e c t matter herecr-f 4nd colleatvely superwdas any and all prior nwtiatlans, correspondence, understandings and etjgeemarrp between the parties respecting the subject matter hereof. No p 8 Q Is relying an or shaY be deemed to have made any representations or prorni68S not expressly set forth or referred to in thls Agreement. .

S' . ' - '

your Own word.s, explain the following words and expxpresmns in i&in fro&' the clauses in Exercise 5.

i llabjbty lsr damages (dause 1) ~ ~ ~ Q P H I 2 within the sole ]ucj,,ent of Seller ( c W e 2) 3 delayror ~ I I ( a l % u s e 3) 4 prior written cansent (clause 4) S In the event Operator defaults in the Worrnq~cb ,.. fc!a#e,5) 6 abstatn from taklng action (clause 5) . 7 Saheduks and Wfis [clakse 8): . C

8 deemed (clause 6) . J

. - . - . a . .

NON-COMPETITION AGREEMENT OF SHAREHOLDER OF SELLER IN CONNECTION WITH SALE OF ASSETS I COVENANT NOT TO COMPETE I This COVENANT NOT TO COMPFTE (this "Cmenant"), dated of ,20, is made and entered into by and between ("Sharetwlder") and . a corporation ("Purchaser"), with reference to the following facts:

rLaA corporation ("Seler' I

purchase from Seller, and Seller agreed to s e ~ to ?ur&aser, certain assets of the -

business owned and operated by Seller located at ("the BwmcsS). Unless otherwise noted, capitalized terms used herein shall have the meamngs 050ibed to them in the Purchase I

k of the p ~ y m m s h w 4 ~ ~ ~ - dbyknq!?matthF-.

1 I

. - . - . r I I ' I ~ ,

---

'), bnd Purchaser are p a m to rnat certa~n Asset Purchase Agreement, dated as of , 20_ (as amended, supplemented or othewlse modified from trme to t~me, the "Purchase Agreement"), plrsuant tD wh~ch Purchaser agreed to

tand~ng caprtal sbck of Sdler

("the Clonng"), that Shareholder execute and dellver th~s Covenant and that Purchaser pay - Shareholder cemtn amounts at Uos~ng, all as more Mly described below.

from the'bate h e k , shareholder shall not have any controll~ng rest (of record or benef~ad) ~n, or have any ~nterest as a director, principal execut~ve

yee, agent or consultant m, arry fum, corporaDon, partnership, propr~etorshrp, ar other 1 busmess that engages In any of the fallovwng actmtles wrtlan a mile rad~us of the Bus~ness's current locat~on fdescnbel,

calve purchasers or lessees of tn , other than the

b subject to any obbgat~on to comply wlrh any law, rule, o~ iegubon of any governmental authority or other legal process to make lnformatron avarlable to h e penm ent~tkd thereto, keep conf~dentral and shall not use or permit h~s attorneys, accountants, or rqxsentatrves to use, UI any

Agreement, any confident~dl inforrnat~on of ~ur;haser which shareholder Bqured m the course of 1 the negobbon of the transaalons contemplated by the Purchase Agreement cont/ ,

I - - - 7 . -

U a i z - 3 b t m c a r ~ ~

Shaceholder, during the course of ownership and Geition,of the Business, has acquired numerous business contacts among the public, financial institutions and industry employees. Purchaser shall expend a considerable amourrt of time, money, and credit with respect to the purchase and operation of the Business.

e Purchaser does not desire to expend such time, money, and credit and then subsequently compete with Shareholder in the business of

1

F It is a condition precedent to the closing of the transactions contemplated by the Purchase Agreement

THEREFORE, h considemtion of the foregoing and for other good and valuable msideration, the receipi and sufficiency of whlch are hereby a&wowledned, the parties hereto agree as follows: I

2 Adcktiona#y, Shareholder sh'all: E'

manner other than for the purpck of evaluating the transactions contempbed by the Purchase . I t

-. 3 As consideration fm the agreements of Shareholder s& FMh in !&&& I .d.3.abeL Purchaser

- shall, at the Closing, deliver to Sharehob S b y . d m ~ . ~ a v a i l a b l e r funds in such mwt to a bank account designated by Sbw&- . , . . . . I J . - #

4 The term of this Agreement shaU be m o o t h s , ~ m a i i g ~ l ~ ~ ~ ~ ~ ~ . ..

5 In the event that any provision or any part of any provision ofthis ~pap@.&i@%ij vQid &: wnfmceable fol any reason whatsoever, then such pranbn Jldl hd,ek&&b @&g, "

effect However, unless such stricken provision goes to the essence of the twmb&m+*. by a party, the remaining provisims of this agreement shall cnntlnue in full ha aFd & & d w l k . exlent required, shall be modified to preserve their validity.

6 In'the event of any litigation or legal proceedings between the parIies hereto, the r r o n - p ~ e p r t y - shall pay the expenses, including reasonable attorneys' fees and court costs, of the prwahg p u t y ' i ~ cannmbon therewith.

* L I meed ta as of this - day of ,20 -.

9 Find the verbs, italicised In the text, which match these definitions (1-7).

3 givento 4 beginning --* 5 has bought 6 envisaged in W- 7 will spend p3.M

Speaking I: Paraphrasing cLawes

To paraphrase means to express svmething in yuur own words. The following phrases may help you to paraphrase:

This clause deals with . . . and says that . . . According to this clause, the parties agree to . . . This clause regulates . . . It simply says that . . . This is about what happens when . . . In such a case, . . . Here it says ... , which means that . .. This part basically just says that ...

Workhg with a partner, take turns paraphrasing the contents of each the clauses (1-6) in the agrement on pages 67-68. Explaln the contents of the clauses as if you were speaking to a client with little knowledge of the law.

Wrr mtmEt formation process typically involves negotiating the terms and conditions of :WY!

%r wement. Negotiating can be czlrrlcd out face to fate and/or in writing, with the use I

rfW centnet templates, as seen in Reading 2, and twm sheets.

. Wlr a great deal af the negotiating process takes place today via email. face-to-face ' ~@ating continues to play an important role. Undoubtedly, the ability to neptiate d b Lrrglish depends to a Large extent on experience, However, negotiating skllb can . ,t , k hnprwcd by learning about hew negotiations are generally corrductd and which

are employed by good negotiators.

4: Listen to the f rs t part d an excerpt ..,m a seminar held at a law firm for ; m e of the firm's recently hired young lawyers and tick the. topics that the

I ipeaker wlll cover. P- C* .kc*% ~ i . ... -3 ,.. !w 1 preparing for a negotiation 2 phrases and expressions for negotiators

i L -

3 using agreement templates and term sheets 4 classic 'tricks' used by negotiators p-

GI . n . 5 general negotiating techniques ' I3

6 dealing wlth objections from the other side 7 different types of agreements usually encountered 8 recognising a good deal 9 role-plays

B PI . Listen to the second part of the seminar and answer these ouestions.

a What do you think the speaker means by horse-trading.? 2 What does the speaker say about the purpose of a merger cle---

importance of an idea before it is presented. For example, the speaker in Listening 1 uses the following phrase to point directly to important information:

it's necessary to review the terms and conditions it contains carefully.

This phrase can be emphasised further by the use of such adverbs as particularly or especially.

J & q t I . ' , , ' . ..,

It's particularly / especially important to realise that negotiating with a contract template means . . .

longer and higher in pitch.

The beginning of the second part of the listening text contains several other examples of phrases that can be used to give emphasis to a point, in

. - > - - 8

U ~ o k at the first L o paragraphs of t k iransc;ipt ofdrs.presen<ation &rt-@ on page 267 and underline the phra9es used for giving emphasis to a point. Which of them can be made stronger by adding the adverbs mentioned above?

Writing: An informative memo A memo is a formal text type used, for example, to outline or clarify a pdnr of Isw er te I provide a brief opinion on a case. Memos can be external [e.g. to a c l l e ~ ] of intCnPI [e.g. to another lawyer in the same firm). In either case, a memo serves* information that requires the attention of its readers.

14 Match the halves of these SntenGB8 ed~nlng #f3 elmants d a m e w .

4 1 A heading I refers to ~ n y senteam9 grbvCd'n& backgrwm' WmMn am the proje@t In quastion (such 5 s a referafed to an went Or to & previous request f o r hVtmhMn).

2 The subject line c= h fndivtduat pci-rnts MwW be ~ g ~ e * t d In C l w g order of , Importa~e, i-e. mst inyaOrtdnt Ones-first, wbordinete or supparting pcrints rater.

3 The conW q c is a dear call to acMon - aa oxpl~mati0n of what should be done In whet way, by whom and by wMt date.

4 h the m l ~ rnessage,b d includes t h e ampamem Dut8, To, F r ~ m ahd Subject. 5 me aatkm close e states the main idea of the memo M less than teh words.

l.5 ldentk the elements from Exercise 14 m this int~rnal mmo. -

lMemorandlrrn

AIl members of the legal, staff of the Mergem & Acquisitions department A .. , * m m w-•

Fbml: JdkThornton ;'f$ 6'84% I a0 -

IO%~~ary20O6 " - - . .. a - , - a ,

In-company semjnar a ne~d;stiom N1 9< l I ~ & " ( r

As part of our in-company tkztbmg p m e focmiiog on professional - -z * i f communication skds, we have arranged for the.+- cornmunicadon trainer u-M 1

5 and pncridng lawyer, Mr Tom Boland, to hold a ki&f&by workshop on the topic of P-d SuccessGI Cormact Negotiations. u:' We would hke to invite al l members of the 1 4 s&in the dqatmeat to attend thls workshop, which will ah place on 27 February, 9-11-30 a . h , C16n-arefic;e

The w h o p consists d a theoretical part, f d o m d bg pattical t~fe-~lays offering, 4, R +,I q! a31 a~ortl3nit-y f ~ r negotiating &Us fminhg and penanal feedback &om the rxaiaer. -

Thus. it is impera& that you arrange pur~Eieddt3~ w t h o yarai~W;preki~for the ed* workshap.

Please let me b o w by 9 am. on M a d a y , r13 February 6 1'

fi.thom-rcod whether )ou can i t d .

- a

r! f f .

J. Thorntan g I

4

7 1

,.La &.?_ L _ L - - . \ - * - L A - - * .

I Mended the imcompany seminar on effective contract negotiations

! (Listening I), you have been asked by your superior to draft a memo for some of the junior colleagues who were not present at the talk. Your superior is particularly interested in the points made in connection with the careful use of

I contract templates and term sheets. He would like you to write a memo summarising the three most important points raised by the speaker. You should include: C a subject line; 0 an introductory statement of the reason for writing; 0 a brief discussion of the context or relevant background Information; C a short explanation of each of the three points; C a concluding remark pointing to the future; C and an offer to provide further information or assistance as needed.

lnclude some of the phrases for giving emphasis to points as discussed in Language use 1. Read the transcript on pages 266-267 again before you

I prepare the mem- -- - --

- _ - - - I ..-.A I . A . ~*i*jir* 'A-t~a' 1 "Listening 2: Contract negotiation d

m lawyers are commonly requested to conduct contract negotiations on behalf of cUenh puticularly in matters in which strong negotiating skills are required. In Listening 2, you I =-- will b a r Arthur Johansson, a junior Lawyer who attended the in-company seminar on

1 negotiating techniques, negotiating the terms of an agreement for a client with the other 's Lawyer, Ms Orvatz.

Listen to the negotiation. ...,,. kind of agreement are they talking about? Which clauses do they mention?

U 4: Listen again and decide whether these statements are true or false.

1 The clause they are discussing would not allow the franchisee to operate any - kind of restaurant within the prescribed area for a stipulated period of time.

2 The lawyer representlng the franchisor argues that the purpose of the clause i6 to guard her client's iegltimate business interests. f

3 The franchisee's lawyer believes that his client is in a strong p~sitlOn in the -k negotiation.

4 The franchisee's lawyer offers to strlke the arbltratlon clause in exchange for ,!,j ix,r,! a reduction in the nmber of years set forth in the non-competition clause. - - "'

1% What do you think of the way Arthur Johansson negotiated the agreement? Did he use any of the techniques presented at the negotiation seminar?

Language use 2: Negotiating expressions In addition to lrarninq about techniques employed by experienced negotiators, imprnving Bur mgotlrtinq ability in English can be achieved by becoming familiar with and using cmman phrases.

In one of the initial phases of a negotiation, the bidding phase, the two sides put forth proposals or suggestions. The phrases in Exercise 20 serve to introduce a proposal or suggestion, or to respond to such a proposal in a face-to-face negotiatinq session. (Note

I that these phrases w w l d aho be sultable for we in Informal written communication, ~wfi as an email, be@en parties with m established and friendty working nlationship.]

I b d a

wscaRim&--

20,1Z Listen to the negotiation in Listening 2 again and tick the expressions you hear the lawyers use.

r- - ... 1 I'm afraid we can't go along with ... I like ... C 2 I'm afraid that's out of the question. I o VVI at we're looking for is . . . 3 Our proposal is to ...

C L 9 1 think we could live with that. Ci;

4 That's certainly a step in the right direction. 5 10 We're not entirely happy with that. 5 We suggest ... @ 11 We'd be happy with that. 6 That would be difficult for us.

C El

YL Decide whether the phrases in Exercise 20 are used to a) make a proposal, b) respond favourably, or c) reject a proposal. Which phrase is the most forceful for rejecting a proposal?

L ..*, 3 ¶ -

Speaking 2: Negotiating 22 Role-play this situation with a partner. Use as many of the phrase$ for

negotiating from Exercise 20 as you can.

Student A: Turn to page 305. Student 6: Turn to page 306.

Reading 3: EE-contracts W t a o n p + g r r n d . . ~ o l r p r n n o n - d r a ~ d m k n t i e r n ~ W ~ ~ . ,.

~bCtQdkQ11(-Mmwmsiblc'.tk,aaaWIlrs)th--~ .-a CmtSWb, or' \t:: t7'7t1; e* 3 but' syr ;S* -4-

m d b - UL- W L ~ ~ s 4 - k

What do you know about e-contracts? Are they used often in your jurlsdlction? What other words do you know that begin wlth e (meaning electronic)?

24 Read through the text quickly and complete the spaces (1-5) using these sentences (a-e).

a Consumer advocates are concerned because the federal electronic signature law does not define an electronic signature or stipulate what technologies can or should be used to create an electronic signature.

b An electronic contract is an agreement created and "signed" in electronic form.

c The law also benefits business-to-business websites who need enforceable agreements for ordering supplies and services. For all of these companies, the new law is essential legislation because it helps them conduct business entirely on the Internet.

d Security experts currently favour the cryptographic signature method known as Public Key Infrastructure (PKI) as the most secure and reliable method of signing contracts online.

e The notice must also indicate whether your consent applies only to the particular transaction at hand, or whether the business has to get consent to use e-documents/signatures for each transaction.

New law makes e-signatures valid Contracts created online are now as legal as those on paper While contract basics generally apply to any contract, regardless of form, there are some new and emerging rules that apply specifically to contracts created online. Thanks to federal legislation recently signed into law, electronic contracts and electronic signatures are just as legal and enforceable as traditional paper contracts signed in ink. The law, known as the Electronic Signatures in Global and International Commerce Act, removes the uncertainty that previously accompanied e-contracts. However, consumer groups worry that the law doesn't adequately protect against online fraud and may create disadvantages and penalties for consumers who prefer printed agreements.

What are electronic contracts and electronic signatures? 1) . & . . . . . . An e-contract can also be a "Click to Agree" contract, commonly used with downloaded software; the user clicks an 'I Agree" button on a page containing the terms of the software license before the transaction can be completed. One of the more difficult electronic contract issues has been whether agreements made in a purely online environment were "signed" and therefore legally binding. Since a traditional ink signature isn't possible on an electronic contract, people have used several different ways to indicate their electronic signatures, including typing the signer's name into the signature area, pasting in a scanned version of the signer's signature, clicking an "I Accept" button, or using cryptographic "scrambling" technology. While the term "digital signature" is used for any of these methods, it is becoming standard to reserve the term for cryptographic signature methods, and to use "electronic signature" for other paperless signature methods.

Are e-signatures secure? 2) . . . . . . . . . . . PKI uses an algorithm to encrypt online documents so that they will be accessible only to authorized parties. The parties have "keys" to read and sign the document, thus ensuring that no one else will be able to sign fraudulently. Though its standards are still evolvin , it is expected that PKI technology will become widely accepted. -%=A- No paper needed The most significant legal effect of the new e-signature law is to make electronic contracts and signatures as legally valid as paper contracts. The fact that electronic contracts have been given solid legal support is great news for companies that conduct business online. Under the law, consumers can now buy almost any goods or services-from cars to home mortgages-without placing pen to paper. 3) ......... < Federal law versus state law h \ . u ~ * + - ? - ~ The federal electronic signature law won't ovemde any state laws on electronic transactions provided the state law is "substantially similar" to the federal law or the state has adopted the Uniform Electronic Transactions Act (UETA). This ensures that electronic contracts and electronic signatures will be valid in all states, regardless of where the parties live or where the contract is executed.

Do you want paper or electronic? If you prefer paper, the law provides a means for you to opt out of using electronic contracts. An online company must provide a notice indicating whether pacer contracts are available A . 1;.

/%

Unit 5 Contracts: contract fmnwion

and h b m g ym that if yau give yaw muem to me eleamic dpmbmh. 98y raa later change your mid. ' I f you witbdraw consent to we elecltronic comact~!, a e notice must explain what f e e or peMfktSlZ@M up@'@ ~~~~~ u 6 8 p a @ ~ r m @ n M h the barn-. 4) ........ L.,. Prior to obtainh~g y m cmwmt the bwbws must also prwide a stmrpeat rnthUng the hardware and SOPS~M~R? rquhnm' td rmd and sgve the buinee?('s e&ctronic.doments. If the hatdwa* ar'irchmre mqmmm& change -e you B m ' a . m m relatip- with me boeines9, mbM@sa mwt mt$~yu d m d m a p e y m L s opClmm revoke y m consent whg electronic d o m a

Although the e-signature law d m ' t force a o m to aecapt el-C: frm businesses, it poses a potential disadvantage fnr low-tgch ettbens by allowing businesses to collect additland he3 &om those whD Opt.fw paper. .

signaUmi in the legal sense, and leaves it up l o !m&waE cmapmiw and the frets market to 1

eat- wbkh electmnlC Pgnalure methocls will be d I mce e lemMl ,~~ t sdu lo logy jJ. evolvipg, maq hinds d e s i g m ~ ~ o ~ r little. 1 if any, m @ . U a m an bxmrme dgmtine mttrrod, .ideati9 thievw c m M ~ntercapt tt w e . w UB it for frau&~m~~oses. B is q m m cacwa mathads of eleca-oll3lcsQmMmw @be abptbd and become sb aamramplam Wasdit cards, H u w ~ ~ z , ~ ~ ~ W ~ W p ~ t o b ~ @ ~ ~ ~ b . * - ~ f a r *

( cammmce as aedi-4 s c a m and Wan passwords. C o ~ e r - p r ~ t e 4 i o n group suggest 1 caution before signing ~ ~ g - o n l i a e ,

I f

2 - .

28 Read the text agah and answer thele questlm~. 'I 1 WhBt is the dfference between a digital eignatwe ehd.an electronic

slgnatm? 2 What is the most impwtant result d the new IBW? 3 Why & Puxlslnessto-rxrsine86 &sites we1comtf ie .m law? 4 Whprt dd68 tha n6w.k~ stipulate cmcaming the uaa of paper conmcb7 5 A6cOrbing ID f i e lw, which kln& of ejectmalt 6 m e s . m - t o t# repard&

as legal @igm~turea?

Read thmugh the text once mme, notlng the acheantag#$ of The new law and my (pmsbie~ Ciisbd~tages that could arise as a result a? the new'~egi&rtoi.

Discuss these advantages and disadvantages with a partner. Do you think the 3 - disadvantages outweigh the advantages?

Why Qo you think the drafters of the law left 'electronic signatare' tMkf i~ed? Is thls an advantage ar disadvantage? mt is the status of electronic contracts in y w r own j~risdiction? b L '

W e use 3: Adverbs

i t j t k t e d in the text h Im,k),

. . . A. - . . . .

~ ~ o h ~ m a p a h ' f r o m th. twt (i-0) win ttleir ijl&s (68. a additional fees B M a € @ d optfor

J'w-I. To improve your web-based research s i s , visit www.cambridge.w$/elt/legalenglish, click on

i; Lanquage FOCL-

W W W , F -- abulary: distinguishing meaning Which word in each group is the odd one

out? You may need to consult a dictionary to distinguish the differences in

w*-4 1 agreement covenant contract 2 should in the event 3 consent authorisation i>* ~nju permission 4 withdraw CkTGa3i3 cancel rescind 5 deleted taken out( unwaha- removed 6-rn proposition proposal suggestion 7 valid efficacious enforceable C z f w t l en\ P~a'l

--7

2 Collocations ~ompl'&e the table below using these verbs, which all collocdte with the noun contract.

a+wm& cancel enter into execute modify rescind sign supplement terminate

form or make a contract valid To make a contract partly To change or add to a contract or wholly invalid - I

Verb forms Complete the sentences below using the correct form of the verbs in the box.

Dreacn 4mmfm rrwulry rene

1 Minors and the mentally incompetent lack the legal capacity to @M#W..:hk. contracts.

2 Courts generally rule that if the parties have as though there was a formal, written contract exists.

3 The lawsuit claimed that the defendant ......................... a confidentiality contract by attempting to sell trade secrets as his own inventions.

4 'Evergreen clauses' cause automatic renewal ............... unless the contract

5 While fixed-term corrtracts involve an agreement that the job wHI last for a provisions are often included to enable the contract

6 The committee shall have no authority to change or otherwise ......................... contract language.

Abstract noun

k;. '. I . rlplete 1 .table by filling the-correct aks;h& noun form,

stressed syllable in each word with more than one syllabk.

% Vocabulary: antonyms Write the opposite of each of the adjectives used to . describe a contract.

I enforceable / e . ~ n t r @ c t 2 implied /%l$&&o3ntract 3 binding / ................. contra& M@, *

........... 4 valid / 1 cbntract \-$ad I Prepositions Com:plete the contra&-eMw &law using the prebositions in the

box. M a t type of clause is it? wfl 4mvee.w by { X L ) for hereby het"ein In

This agreement constitutes the entire agreement 1) ~ ~ . ~ . . . the parties. No waiver, consent, modification or change of terms of this agreement shall bind either party unless in writing and signed 2) ...%.... both parties. Such waiver, consent, modification or change, if made, shall be effective only 3) !,hY ... the specific instance and 4) the specific purpose given. There are no understandings, agreements or representations, oral or written, not specified 5 ) k.!k&\q regarding this agreement. Contractor, by the signature below of its authorised representative, 6) G4.f%acknowledges that the Contractor has read t h~s agreement, understands it and agrees to be bound 7 ) %... its terms and conditions.

When there has been a breach of contract, the non-beaching party will often seek remedies available under the law. This area of the law, known as 'remedies', is a broad area, but can be summarised generally.

Most remedies involve money damages, but m-monetary relief is also available in some cases. The basic remedy for breach of contract in the Anglo-American legal system is pecuniary compensation to an injured party for the loss of the benefits that party would have received had the contract been performed. %me examples of this kind of remedy include expectation damages or 'benefit of the bargdn' damages. Certain damages are recoverable regardless of whether the loss was foreseeable, while the recovery of other damages hinges on foreseeMty. Where the damage is the direct and natural result of the breach, the breaching patty will be held liable to pay damages for such without regard to the issue of foreseeability, When lawyers plead these damages In court, they commonly refer to general damages. However, where the damage arises due to the special circumstances related to the transaction in question, da-mges are limited by the RreseeaMlity rule, which states that they are only recoverable when it can be established that the damage was foreseeable to the breaching party at the time the contract was entered into. When lawyers plead these damages in court, they commonly refer to special or consequential damages.

Where it is not possible to prove expectation damages, the non-breaching party can seek reliance damages, where the compensation is the amount of money necessary to compensate him for any expenses incurred in reasonable reliance on the contract. The non-breaching party is thus returned to the status quo ante with no profit or benefit from the contract.

\nother measure of damages is restitution damages, which compel the breaching party to give up any money benefit it obtained under the breached contract. Restitution damages are, for example, awarded when one party (the breaching party) completely fails to perform its obligations under the contract.

- r me rlme rney enrer lnro me conrracr rnar a nxea

sum of money shall be awarded in the event of a breach or to a formula for ascertaining the damages or for certain other remedies, e.g. right of repair. This type of damages is known as liquidated damages or stipulated damages.

In some cases, a party will be able to obtain punitive or exemplary damages through the court which are designed to punish the breaching party for conduct which is judged to be particularly reprehensible, e.g. fraud. This type of damages is normally only awarded where specifically provided by statute and where a tort in some way accompanies the breach of contract.

Where monetary damages would not be an adequate remedy, such as in a case where two parties enter into a real-estate contract and the seller decides to sell to a third party, the court may order specific performance. Specific performance involves an order by the court compelling the breaching party to perform the contract.

:inally, there are other remedies available; for example, if there has been a default by 01 the other party may rescind or cancel the contract. This constitutes an undoing of the c from the very beginning. In addition, legislation such as sale of goods legislation also a llarious remedies, including a right to reject goods in certain cases and a right to return . lemand re~a i r or re~lacement.

1 - 1 t m s : Typ'es 6f damages

d Match these types of damages (1-7) kith the~r

1 expectation damages / 'benefit of the bargain'

9

2 general/actual damages

I

4 mliance damages 9

5 restitut~on damages & - I

8 rpw&l,hmscguwk~~ darnkips . r . I&p! i-

9 mtw-lap3r m* I'

4 What types of damages are distlngurshed in ya~ equivalent names in the l ~ s t in Exercise 3.

3 liquldated/stipulated damages

deflnitions (a*.

damages a compensation agreed upon by the parties and set fwth in the contract that must be paid by one or the omer in the event that the contract is breached

b compensation determined by the amount of benefit unjustly received by the breacMng p a t y

c compensation for losses which are as a result of Opecid facts and circum6Ianceg relating to a particular transaction which were foreseeable by the breachng party at the time of contract

d Compensation whlch seeks to put the non-breaching party In the posktion he would have been had the contract been performed

e oompensation for a loss that is the natural and loglcel result of the breach of contract

f compensaion whlch is imposed by the court to deter mallclous conduct in the future

g cumpensation necessary to raimburse the ti0n-bre~t'iit-g parry for effprts expended or expan6es mcu'ned In the reasongbk

*--I -JJ bend tw ~IIB-VWTII~* perf-

dr jurisdiotion? Write the

Unit Q Cmtracb: m d i e s

Reading 2: Liquidated damages 1 k b l # l n ~ w i ~ ~ m ~ r p t f l o * r c c & f 9 m b ~ d r t y p l ~ ~ u u a u l t d b ~ l ~ whtn Wing a cmtran It is an I- ta the cwept of l4uWad d m m p k also provide3 infeftMtiar attaut the elements of a ltquWt4 dma@s &ism4 tSbw - d-tamhnubiUt)L.ndharWIImtradaNbfn*Irkbul.

9ead the first paragraph. How are liquidated damages clauses defined?

6 Read through the whole text quickly. Then match these headings (a-d) with the sections they belong to (1-4).

a Liquidated damages provisions distinguished from penalty clauses b Relationship between the stlpulated amount and the damages sustained c Components of a liquidated-damages clause d Definition of liquidated damages

w I

Contractual remedies: In many jiuisdictib-is, rhe courts will sever th Liquidated damages penalty ckust h ' h e contract, holding it to

be ~mnforceahlc ~t ap&alq The,result h that the non-breaching p w ' is forced to prove its loss in accordance with the general princiyJrs, of contractual remedies. Sn, h,& qf the -* 3 is crucial when draftmg a b g s clause &it it '

that there is a breach of contract by the other contains the elemena of an entbrceable

party. Provisions in a contract stipulating the anlount required to conlpensate an injured unenforceable penalty.

party in the event of a breach are referred to as 3) ........ .............

to prove;

damages in advance; and

considerably dsproportionate to the

a) the anticipated damages tiom the re lemt breach are uncertain in amount or d~fficult

the loss actt~ally incurred. Sueh clauses are enforceable where they are carefully drafted to compensate the non-breachng party for the b) an intent by the parties to determine the loss caused by the breach.

c) a stipulated amount whch is reasonable, not A contractual party may, in certain instances,

presumed loss or injury.'

for the non-breaching party. As such, the court

I' u - -

-

m

ver the ng it to It is that -ove its nciples above, it se that it

must assess whether the fixed amount is a reasonable prediction. Of course, the breachin realistic attempt to calculate tk actual danlages party has a very difficult argument to make which may result h m the breach, ar whether regarding unreasonableness where the predicted the amount represents a penalty the non- amount is dose to the actual 1oss.The Uniform breaching party is attempting to impose on the Co~nn~ercial Code in the United States, in breachmg party. contracts for the sale of goods, permits at A liquidated damages clauses which prescribe w j ....... ..- .......... '... The coum generally look to the time of ainounts re~onable considering the actual loss.

In rare cases, where the non-breaching party incurs no actual damages, the courts will not enforce a liquidated damages clause.

' . . . : . .

. . - - . 4 -g +.- ,.,,- 7- a.--fit r .i-

. d l&lZ*~ d?*-

,::,; -,-;!;,I{ . f

, .. .

u n i r r w - m

L,,

h g a d g e use r: Talking about courr p~tians and rulings

These phrases can be used for referring to the actions and rulings of the court.

1 The court u~he ld the decision. 4% 2 The court dismissed the suit on the grounds that . . . w 3 The court holds that . . . 4 The court is reluctant tq . . . M.

t'" -:a Decide which of these verbs can be used in ptace ofthe underlined words in the box on page 81. Is the meaning the same as the orlglnal phrase or does it change?

agrees ishesltantto overturned rejected reversed rules i6 unwilling to is- - The concept of liquidated damages can be found in jurisdictlonS all over the. world. However, the practice ~f the court striklng down a pendty pwlsion is an approach foltowed malnly m Anglo-American countries, and is not characteristic of every jurisdiction. What is the practice in your own JurisdicfJon? You may need to research this information.. , . , , ,=,: .,.; .-n- p ~ : . : K ~ L - . --

L); i isten to the first pait df the St~d&t's & ~adew-m-' Stemems are true or false. & w-fl

6mk4.h 1 Specific performance means that the breaching party is ordered to fulfil the 3

original obligations of the contract. 2 Specific perfarmance can be applied In all breach af contract cases. -

of cases where specific performance can be applied. - the talk and complete the notes abaut the five

situations where specific performance can be applted, using no mare than three words In each space.

....... 1 Goods already L@Zi% h p~~ 4 2 Goods procured from ....... %...% - 4 -5 3 Only a is needed . .

4 Involves +,%wf pledged security Q My4 5 When breaching party needs to be stopped from perbrming ......................... acts . Jn non-breaching party

Language use 2: Using npeWion to ald

The speaker in the previous listening exercise uses an effective technique for making information easier for her listeners to understand: repetition. People listening to complex information in a foreign language often have trouble understanding everything. In real-life speaking situations, listeners cannot go back to something they missed and listen to it again. Experienced speakers know this, and therefore repeat words and ideas (often in the form of a paraphrase) in order to aid understanding.

P l e a d this excerpt fmm the transcript of the law student's presentation. nderline important words that are repeated more than once, as well as any

Em g~araphrases of ideas which serve to repeat a prevlous idea.

#@h3M be granted. Of course, the .breaching m@t mo & wqb@Wdt?f. In other W ~ S , f R t ddauilhg. p4rr/&&*$ @@ih~ earnact or ha doesn't. If he doesn't, ~fi;~#&&d@m - --. mmmt (rgctrk. This judicial enforcement agent ,is ~ X T F ~ ! & ? $ ' ' ~

rl$&iiff'i~ s m m hw. F.te bas id ly fiiMLs the f Mtat the. &&ed has 10 do. -5 hbde;~21

Wnq I: Contract remedies C

b p a r e a brief talk on an dsbct of confram remedies in your jurisdiction. Make use of repetition and paraphrasing to reinf'orce important ideas and make them easier for your listener to understand and remember. You should structure your talk in three distinct sections and give e brief overview of the points you will cover.

db.wling 3: Understanding contract claws ~ s ~ ~ ~ d n r r k p l d t s f a ~ h ~ ~ t .

P *muah would tb wmr bG. efl.@. 0 &* w&'KWk:Wlt!: 1 ' ~ w t c m r o l 9 l f f l i f l , W ~ h a g M d . ~ - M l a b a r : ~ ~ B ~ . - # - *

bnbm' of lhls b ' i w m k p ~ # . ~ , m a y @ -

. - .a

. . -

For each of these words, find the italicised word or expressjon in the clause an page 83 that most closely matches its meaning.

1 in the form of 4 jointly I as stated above 2 specified in writing 5 is owed to 8 subtracted from 3 more than 6 including

~ f i t e n ~ n ~ 2: Remedies In the following dialogue, an attorney, Mrs Hayes, is consulted by a client, Mr Andenor& who has been having difficulties in connection with a contractual agreement. In order to establish the facts of the case, the attorney asks a number of questions. She also informs the client about the various remedies which may be available to him.

19 I E Listen to the f l rst parT ~f the lawyer-cllant interview. Why couldntt the fimnt deliver the website to the customer on time?

20 45'Listen to the second part of the interview. What Is the lawyer going ta do next?

22 ef Listen to both parts again and tick the questlans alked by the lawyer.

1 Did they not deliver on time or d ~ d they dellver something that didn't work? 2 What are some of tfw features of the webslte you deslgnecf? a 3 Dld you draft the contract yourselves or did you engage an atlwney? @ 4 Were yau able to deliver your website on time? 6 Did you get in touch with anyone besides your cousin, say,

0

anuthx +xqpammw In town? 6 How mcfl do prograinmar6 get paid per hour in New York?

w 7 Did they know what your deadline was?

153

$ Do you expect to lose the eus ther as a result of this? tsa- El

a Choose the correct answer to each af these questions.

1 What was wrong with the softsvard program delivered to the client? a It was campleted too tate to meet the deadline. b It didn't work on aU of the ferry company's PCs.

@lt wasn't designed in accordance with the specifications of the client.

2 According to the lawyer, what should her client have done 26 mitigate his damages? a He should have offered his customer less than a 10% discount. @I48 ekwld have twW for B cheaper local programmer. c He should have had an attorney draw up the contract.

3 Provided the contract doesn't walve the right to consequential damrsgm. under whloh damstam might We cI%M be entitled to receive smh dwmgmi? a 15 the reputdon 64 the ctiint In hls town sLFfims b If the quaMy of the wl7ware turn6 out to be unsuitable for the purposes

$$,"::??: customer and the necedslty to grant a di6Caw-t could have been foreseen

4 Why can't the ctient eve@ t9 be awatde-d punitive damages? a Mtght gain does nat qualify as emotbnal injury. W n l v e damages are not awarded in a breach of urnbatt ~ $ 9 of thls type. c The possiblllty of personat injury was not f o r e m in the contract.

25 Work in small groups and discuss the case. What do you think wo~lld be ttis likely outcome?

-I. ... . .-.. :.--. .,.......,.,, & ,... - . - . -,-..- , -- , Assessing the case 1 1 think that we have a good chance of convincing the court th

1 As 1 see it, we have good reason tr, be optimistic. I . I have to warn you that proving that .. . will be extremely difficlr

1 Let me tell you something about the legislation in such cases

Describing nexi moves : (examples from listening text) Let me go through the file and read through the contract. Ther

prepare the complaint, which I should be able to file at the of next week.

I'm going to research these matters in detail and then I'll get i to you. -

?

Referring to next contact --(F

1'11 call you"next wekk and let you kngw how hings look. . You'll hear from me in a few days.

Saying goodbye It was good seeing you.

Speaking 2: Initial interview with a client #I With a partner, take turns conducting a lawyer-client interview. Each

of you will play the role of lawyer and question the other about the facts of a case.

While in the role of lawyer, follow the outline of a lawyer-client interview in the table above and use the sample phrases provided whenever possible. Take notes on the information you receive from your client.

When playing the role of client, respond to the questions posed by the lawyer as best you can, inventing details when necessary. Do not give all of the information at once; your task is to give your partner practice in posing questions and gathering information.

Student A: Turn to page 305. Student B: Turn to page 306.

writing: Follow-up correspondence to a client Subsequent to an important meeting or phone call with a client, a lawyer wit1 generally make detailed notes on what was discussed and agreed upon. These notes m y then form the basis of a follow-up email or letter summarising the contents of the discussion.

26 Read the fol~owup emait on page 87, which was written after the interview you heard in Listening 2, and answer these questions.

1 What do you think is the purpose of this email? 2 Find one factual mistake and one additional plece of information in the

email. Read the transcript of the interview on page 268 to check your answers.

3 Underline the phrases which are used to ask the client to provide material to serve as evidence in the case.

4 Underline phrases referring to the actions and rulings of the court.

27 Match each of these functions (a-g) with the paraaraghs (1-7) in the emall.

a a summary of the facts of the case b an outline of actions to be undertaken next c a discussion of legal issues involved in the case d a closlng line referring to the next contact with the client e a reference to the day, location and general subject of the interview f a request for further information or evldence from the client g an assessment of how successful the case will likely be in court

Using the notes you have taken and the information included on your role card in Exercise 25, write an email to the client you interviewel'

Reading 4: Types of breach -&

#) This letter of advice deals with a case of anticipatory breach. Read the first paragraph and underline the sentence that expressly states the

Dear Dr .. Roballard

You have requested advice regarding your possibilities for collecting damages in a lawsuit regarding an agreement with Pat Turner Breweries Ltd to supply the breweries with hops. I will artline the law in this jurisdiction as it applies to the facts in the instant case.

According to the information my firm has received, you entered into several independent contracts for the sale of hops with Pat Turner Breweries Ltd. Pursuant to these contracts, the breweries would purchase a certain amount each crop year. The pnce of the hops went down, and the buyer used the occasion of your firm's recent financial difficulties to repudiate the

I contract. . .T-

- - F

However, you fin still attempted to make the delivedes un&r fheJpresent contract The buyer refusea to accept them, You are inquiring as to whether you can bring an action Tor anticipatory breach of the contracts for the remaining years.

I It appears that the issue in the instant case is whether a s&ix of goods may bring an act~on to recover damages for anticipatory breach of a contract when the buyer states that he will refuse to accept the>mobs under the contract, even though the date for dellvery has not yet arrived.

8 .

I ne law In tnis juti.&3Mion is quite clear: when a party announces his intention not to fulfil the contract, 'rhe non-breaching party has two options. Firstly, he may take the other party at his word and treat the notification of repudiation as releasing him from his contractual obligation to perform. We may then immediately bring an a c w for damages, subject to the requirement that he must take good-faith efforts to mitigate the damages. The second option would be for the non- breaching side to wait until the time when the performance was to take place, still holding the contract as prospectively brnding, so img as such wallrng is not harmful to the breaching side 4

I The courts here have reasoned that, under the reliance principle, an unqualified refusal by one side to perform should be treated as being In the same category of cases where the breaching party has put it beyond hs power to perform. The breaching party, once absdutely having

. .

I the day of performance, mak~ng - futile preparations, a d always keeping himself ready to perfom, @- - .% -. if the breaching side has left for more lucrative prospects? To require the non7breaching party td - . , . wait woukl be to violate the reliance pnciple.

. I Admittedly, there is a precedent stating that "to allow action before the date of perfomnm 1s to

- expand the scope of the contract beyond the parties' consideration: A prcrmise to perform i r l June does not pmfude changing position in May." In Wohl v. Wadmantn, the defense argued that the ann~unement of intent ts breach should be tre;rtd as an offer to r6scincl, not as a breach.

" Thus, the parties wodd keep the option to rescind until the date of pe r fmm, when it wM;IIG;: become a breach. But the breaching sick could r m k s the offer to r edd 'a t any time before .I " ?" " " then, if it is not acted upon by the other party. However, this W M mean that the plaintidf, to . recover anfllng, wuld have to remain ready and willing to perfom, because if it accepted the. "offer" to rescind, that would prevent any recovery. In a leading m e on this point, Judge M d i . stated that "a promise to perform in the future by ~mpl~cation includes an engagement not deliberateiy to compromise the p r W i w of performance. A promise is a ve&al.act deigned p :,.,. '-

a reliance to the promisee." In other words, if a party promises #mt he will do s~meihing in the future, he also c m ~ k himself to refrain from doing anything that might make it difficult Q him tb -. ' fui-fd his promise. This seems to be the majonty pos~tion In thls jur~sdction.

( Therefore, we feel that you have sdid grounds on which to p w a e an actrsn tp recover damages I : for anticipatory breach of contract. I suggest that you contact ny secretary in order to schedule

1 1 an appointment with me at your convenience in order to discuss ow future c m e of action. I ' I 1 ' Best regards

1 Susan Whiteman .'> - Attorney-at4aw .. . .. .. ,

8 I 4 .2

1 ' w , . ~ e a d the whola and.m$wer m e q u e s t l ~ . b , 1 ' 1 ' - . . . - \..-',.' , . 'l

1 Ilf.lrWJT.own WO*, ~ u r h m d s e the legal issue raised by the case re7er;ed to in the bbove 6t'ter by cmp&&ng:Vte~WMIng Mntence: 7XWIm.e iW&btaot .mQB is wheth&:.,. I '

2 InMyr own wmnh Surrimelbe the two ofions the client has.under the law by completlngt,@ fdj~ltg sentence$ The non-breaching party in this case has two options: *;DL, . . . --

Secondly, . .. 3 In your own words, say how the reliance principle relates to Cast,

Under the reliance principle, ,.. - - - -a Underline the sentences in the letter which riifgr to the actions and.bling5 o f fie c W -

- -~

. , m.5, " I

To impr i web-based research skj:lls, visit www.cambridge

( Pa-sarch Tasks and choose Task 6. - - - - 1 - -

a

uage Focus +

Vocabulary: distinguishing meaning Which word In each group is the odd one out? You may need to consult a dictionary to d~stlngulsh the differences in meanlng. ,+57+-~L-r

+* la repudiate ,' refuse reject --A ~ X G W S* %mitigate ~esseh relieve . @ips;Gl>

3 damages compensation (I= reparation 4 option e s i a choice alternative

I

punrtlve damages can be awarded In a

constrtuted a breach of the parties' agreement, as reflected in the privacy policy the company osted on its webslte, not to disclose such personal information. @&--the posting of such a pol~cy did not create an enforceable agreement between the parties.

Word formation Complete this table by fllling m the correct verb or abstract noun form. Underline the stressed syllable In each word with more than one

I . I I

remedy

intend reliance

I enforcement I I reverse Iv- & I

CoR---tions with dar.., - se 1 Match thc .>rb-noun collocations 1 all appeared in

a agree on

Reading 2.

1 2 stipulate damages q b get back 3 ascertain damages & c bring on

d expect e determin

verb + a clause 6 insert a clause h f dlsapply to c ~ ~ z w 4 * 9 t k 7 sever a clause g put into e"-' *a. 8 drafta clause '\ h add LM 9 enforce a c lauseq i write

I 2 fl Collocations with damages and a clause 2 The verbs in the box commonly

collocate with eithg damages or a clause. Match the verbs with the correct noun.

1 damages: d, .-* , u-s,@ \ * I

2 a clause ww . \-&

6 Vocabulary: word choice w~oose the correct word or phrase to complete each sentence in this liquidated damages clause.

I. - FOR DEL

:or understands and acknowledges that time shall be 1) on I@ in the essence i this contract and agrees that the damages that may 2) c a u s e ~ r e s u l t f i ~ l bring about any

delay in finishing the work or parts 3) t h e r e b m h e r e i n will be difficult, if not impassible, - to 4) change 1 a v o i ~ ~ h u s , Contractor agrees that if the work and all parts thereof are - - ot corn ' ted 5) the dates stipr

me manner owner as stipulated, agreedand liquidated ' -mages

dated for co ntractor

, and not as

nereof, l shoui ne amo

the cover sheet for each calendar day in whcrl the work or any purtion thereof remains;, lrrr uncompleted after such campletion date as so extended

rn 7 Vocabulary: adjective plus noun Look at the following adjective-noun

combinations from Reading 4 (1-6). Match each of the adjectives (in italics) with its synonym (a-f).

as extended in !d pay to ~unt stated 0 . 7 7 P.? .

1 instant case a profitable 2 contractual obligations b b in the agreement 3 categorical refusal k c useless =&ru 4 futile preparations c d sound =

I 5 lucrative prospects Q, '--- e present 6 solid grounds 4 f complete = eJLA$Qwfd

Reading The following text deals with a specific aspect of the law of contracts, explaining basic concepts associated with assignment and third-party rights.

Contracts: assignment and third-party rights

assignation

* Generallv, a contract omrates to confer rights and irmpose duties ontv on the oarties to the . . - contract and no other parties. The principle that follows ProFPthis is that third parties have no rights and, as such, cannot enforce contractual provisions. This contractual relationship is summad up in the term prtvity of contract. However, in many jurisdictions, there are two exceptions to this general rule: the first is when the original contract provides for rights to be conferred on a third party, and the second is when contractual rights and duties are transferred to a third party at a later date.

When speaking of the first type of situation, lawyers generally refer to third-party Reneficiasy cantrack. The most common form of this type of contract is where party A enters into a valid contract with party B which stipulates that party B shall render performance for the benefit of party C , i.e. the third-party bemflc'iy. No problems arise if party 8 performs. But what happens when party B fails to perform? Have rights been vested in party C such that C can enforce the &%act, or must party A do so? In many jurisdiLtionr, this problem is addressed through a determination of whether the contract expresses an intent to create a legally enforceable right in the third party. However, must the intent be from both parties to the agreement (A anddB) or just the recipient of the promise to t4e enforced, i.e. the p h e (A) as opposed to the pramtsor (B)? The courts usually look to t h intent of the promisee and ask the question: ~ccording to the contract, who was to receive the benefit of the promise, the promisee or a third rja?& direc'tly?

In deciding the promisee's intent, the courts look at the following factors; (1) is ttie third party identified in the contract?; (2) is performance to be made directly to the third party?; (3) does the third party have any rights (specific or general) under the contract?; and (4) is there any relationship between the promisee and the third party such that it could be inferr* that tbe promisee wished to enter into a contract for the benefrt of the third party? Of course, the greater the number of times the court answers 'yes' to the above questions, the more likely it is that the court will rule that the third party is an Intended beneficiary, and Vus entitled to enforce tfp contract, as opposed to an incMmW berMc18cy. v- In the second case mentioned above, rights and duties are transferred after the original contract has been signed. If in the original contraot the transferring party (A) is owed a right by the non- transferfig party (B), then A is known as the obligee and 8 is tOleabUgor. H m e r , if in the original contract A owes B a duty, then A is known as the obligor and 6 the obligee. Wen it is

I - lor speanea whemer rignrs or aur&s 8E beihg rransTerrea, me term a s q p r can tx? usea vho attempts to transfer his rights and/or duties under the contract to a third party (C, the wigwe). If a right is being transferred, C becomes the obligee in place of A. (Although thi tot necessarily release A from any obligations to B under the original contract.) If a duty is -

transferred, A is known as the delegator, while C is referred to as the delegaW. The term assignment of contract can mean several different things. This term is ambiguous, as it does not - indicate whether there is both an assignment of rights and a delegation of duties. In everyday usage, it generally means that both are applicable. However, in the interests of pr&ision, the term

--A - 'to assign' should really @ reserved specifically for the transfer of rights, and the term 'to delegate' should be used in connection with the transfer of duties (and therefore with petformance). This distinction is crucial because, while an o b l w can rid himself of a right merely by making an effective assignment, an obligor cannot rid himself of a duty by the s a w means. Generally, in order for the obligor to discharge his duties under the contract through assignment, the obligee must first release him from his obligations under the contract. When this takes place, there is a novatbn of the original contract, in which the obligor's position is taken on by a new party.

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

Contracts ,

2 Distinguishing assignment from novation Complete the text below using the words in the box.

l)%&!& is a means by which one party to a contract totally removes himself fvom the contract by transferring not oniy all of the 2j ..%eA.U&\

I conferred by that contract. but also all of the obligations. The 3) .%hd:.. I

*places the original party as a party to the contract. Follawing 4) the other conmcting party is left in the same position as he was in before it was carried out, except that there is a new obligor. A 5 ) the agreement of all three parties. In contrast, an 6) %.A.%, refers to transfer of

1 A not change. Most rlghts and obligations are capable of 9) 9 s ) ~ , but not all

a right (and sometimes, in general speak, obligations) of one person to another. 7) R l ~ ~ ~ d t f f e r s from novation in that the 8) .(+%%%&,!I, to the contract do

- -L ,. -,- -- are capable of 20) 3.1 !T3mI ;E 'JrErGfC!WY>-n' Z r l K bV&

1 7 . 1 , . i f , , . 1 7 l k b , -:, - . . A!. . &

3 Collocations Complete these verb-noun collocations as they appear in Beading 1. Then express the meening of each phrase in your own words.

5 ......... (paragraph fj: b ~ $ & * * ~ s

2 impose d ~9 '%..... (paragraph 1) % 843.- 3 anforce c *.7.,%%Q p f...%!.!&%~(~aragra~h 1)

4 render p d.!?!..~. (paragraph 2) k Q@8. &%a. 5 delegate d ..@.Y ..... (pamgtaph 4)

6 asslgn r ?.* ....... (paragraph 4)

ords ending in -or and -ee (such as promisor/promisee) are commonly und in legal texts of all kinds, but particularly in contracts. In these words, e -or ending indicates the person initiating the action, and the -ee ending

he one receiving it. Thus promisor refers to a person making a promise, whil the promisee is the recipient of the promise, or the person to whom something has been promised. Note that words of this type are also found in everyday English (for example employer, someone giving employment; employee, someone receiving employmerrtf.

'4 'Complete these pairs of -or/-ee words from Reading 1. Can you think of any others?

b&a l~tmduced assignment clauses, which govern the contracting parties' rights to

b:8wp.pnw 8

o # rfi* .as d: d. P &Me 6 -.to w. . ' . 1

I'

@~:rnernrn~BKBrcise?arlhhtfjl fiBtky$vmwm .2..tamch;ang,e. nalmr&l& :b B , W W '

Unit 7 Contracts: assignment and third-party rights

Listening I: Preparing a lawsuit and developing an argument When a lawyer is engaged to represent a client murt in g mtract-related lawsuit a good deal of time will be spent on the followin$ " JH h r l

0 gathering information about the case; is* -+r 0 collecting evidence; 3%!! 0 researching retevant legislation and legal precedent; C developing a strong line of argument.

The strength of the argument presented in court will significantly affect the outcome of the case. Generally speaking, the strength of such an argument depends on several factors: the clarity of the reasoning, the quality of the evidence presented to support it. and the lawyer's skill in using language to convey ideas.

The following dialogue deals with a lawyer's preparation of a contract-related lawsuit. In the first part of the dialogue, you will hear Ron, the lawyer preparing the case, talking with Sam. a senior partner in Ron's Law firm, about the facts of the case.

9 4Z Listen to the first part of the dialogue and tick the facts of the case Ron B P --..g mentions. .-..d

5 1 The Jones Corporation (the lessor) wanted to sell a restaurant to Keats (the Y

lessee). n . ;

2 Keats requires consent from the Jones Corporation to assign the lease to a third party.

3 Prior written consent to assignment is not necessary. i -

4 The Jones Corporation is not perrnltted to withhold consent unreasonably. + . 1 5 Keats could not provide the information about the buyer that Jones -

requested. f l

6 The prospective buyer wlthdrew his offer for the restaurant. 5- 7 The buyer is suing Keats for brea~h of contract. -

U) Discuss the case with a partner. What kind of argument would you make in this case? What would you have to prove in court?

fi.4C Listen to the second part of the diatogue, in which Ron mentions the arguments he plans to use in court. What are the three points of evidence Ron will use? -

Reading 3: Follow-up emall

a Read the mail and answer these questions.

1 What are the purposes of the email? 2 What would he like Sam to do for him?

S u b w ~ Keats case: update and closing argument

, hed! Drwft vorsion of closing argument: Keats v. Jones Corp

b p 9 . b around fw the last couple of days - I've been in c ~ u r t on the Keats cese. You asbd me to ppm posted on how things are going - I have to say, It's going prd ty woll. I'vefinished drafting my I I bkbward to hearing your suggestions.

L I.

Some vertxi in English are followed by another verb in the -ingform and I uthers are followed by the infinitive with to. The ernail above contains several a m p l e s of verbs that are followed by another verb in the -ing form. Look at

tis example from the text:

f Ve finished drafting my closing argument for tomorrow. r I It would be incorrect to write: I've finished to dralt my closing argument. >*I

I You have to learn which verbs can be followed by which form.

I I Lmk at tha ernail again and underline other examples of verbs + -ingform. 5: .-&#&ad the followini2 pairs of sentences and decide which one is correct.

I b Case prepamtion involves Interview witnesses.

4 @BY wthholdlng consent, Jones risks being sued by Keats. b By withholdlng consent, Jones risks to be sued by Keats.

5 @$am suggests ernphasising the ides that Jones withheld consent

2 a The client decided settling the contract dispute in court. he diem decided to settle the contact dispute in court.

1 8 @case preparation involves interviewing wltnesres.

- deliberately. b Sam sug&ests to emphasise the idea that Jones withheld consent

beliberately.

6 a The prospective buyer refused waitlng any Longer. @The prospective buyer refused to wait any longer.

7 O ~ h e client mentioned having had an argument with his landwd. b The client mentioned to have had an argument with his landlord.

8 he defendant delayed responding to the pleintii's request. b The defendant delayed to respond to the plaintiff's request.

W 7 t e n t n a r : a p ~ ~ W ~ ~

\

I S Complete the sentences below using the correct farm of the verbs in the box. -- -

argue breach -gather give hear re-draft sue tell 1 1 My client is considering ........... &.*.y ....... his landlord for breach of

contract. 2 The defendant delayed ... g'.Q .............. his appraval for the assignment

af the lease. 3 Jones risked .... bv..-.%.3. the assignment clause of the contract. 4 After reading his colleague's comments, the associate lawyer decided --q ................................ ....,... . . . . . .......... his closing argument.

5 Among other things, preparing a strorg case involves ..%-..... evidence.

6 I am looking forward to ... w . ~ . . . your closing argument when you present it in court. - 7 lVCy client refuses .% ........................................ us about the difficulties hs had with his tandlord.

8 The defendant's attorney suggested ...w.w that his client needed more information before he could

Reading 4: A closing argument T h ~ & U t o f R m o n ' r c l o s h q a n l ~ t w ~ a p r p r ~ S ; n ' r ~ - . r = m t r i(.t@t*r written In the margin.

ib Read the dosing argument and tick which kinds of iMorrnation about the prospective buyer the defsndant's lawyer requested.

1 blrth cert~ficate 2 university diploma

0

8 documents provlng experience in the restaurant business 4 a business plan 9 5 letter of rtconlmendation 6 completed commerc~al lease applicat~on # 7 cv a

17 Decrde whether these Statements are true of false.

Jdh Ron'6 argument states that the covn must decide whether consem to assgnrnent of the lease has been withheld wteasonably.

2 Ron rnalntains that it is justified for subjective cribria to play a mk In &dsP decld~ng whether to give appoval for ~ssign-ment.

Ron argues that delaying consent is not the same as wlthhddi~g consent.

l8 Match the words In italics (1-5) with their definrt~ons (8%).

1 arbitray considerations f a unsllccessful 2 credibl1,ty of wltrtesses d\ 4~ state somathmg is true 3 pmdicated on a dkpute Q c not based on reason, random 4 defendant asserts d can be k l i w e d 5 attempt IS unavailing e based on

-'-manRU "

J m & d a ( r @ ~

'

, a* c,

ha& ': f.

Draft version of closing argument: Keats v. Jones Corp

1 In determining whether a landlord has unreasonably refused to consent to an assignment, the court should consider only those factors that relate to the landlord's interest in preserving the value of the property, and the court must evaluate whether a reasonably prudent person in the landlord's position would have also refused to consent.

5 ""\- 2 Arbitrary considerations of personal taste, convenience or

sensibility are not proper criteria for withholding consent under such a lease provision. The court must determine the credibility of witnesses and the weight to be given to evidence and draw all justifiable inferences of fact from the evidence.

3 Here, when my client informed the defendant that he had a prospective buyer for his business, the defendant's lawyer requested that he provide personal and financial information on the buyer, as well as a business plan and evidence of the buyer's experience in operating a restaurant. The defendant's lawyer also provided my client with a commercial lease application for the buyer to complete. My client gave the defendant the completed application and information on the buyer and promptly responded to each of the defendant's requests for information.

4 As acknowledged by the defendant's lawyer, the proposed buyer had qperfect credit ratin& My client's expert on commercial

8 lease transactions, whom the court must find persuasive, testified that my client provided enough information for the defendant to make a decision and that its delay was unreasonable. Furthermore, there was-that the defendant's delay inapproving the assignment was not related to the buyer's qualifications, but was predicated on a dispute with my client involving a prior lawsuit between the parties.

5 Based on the evidence presented, the court must conclude that sufficient evidence supports a determination that the defendant unreasonably withheld consent to the assignment.

6 The defendant nevertheless asserts that it did not refuse consent, but merely delayed giving my client an answer until additional information was obtained. We reject this argument. The terms of the lease provided that the defendant could not unreasonably withhold consent, but this is exactly what it did. As defined in Webster's Third New International Dictionary, 'withholding' means 'not giving', while 'refusing' on the other hand may require some affirmative act or statement. Jones Corporation did not refuse consent, it is true. But Jones Corporation's decision to delay consent amounted to a withholding of consent, especially given my client's indication thaQime was of the essenc3 And, as noted above, the evidence supports the determination that this decision was unreasonable. Therefore, the defendant's attempt to distinguish between withholding consent and refusing consent is unavailing under the lease provision here.

WmCn ~efiFanal~sis: Persuasive writing i!& speamikj - -

L - - -. . - - -.

The closing argument presented above is an example of a p:rsuasive text. A lawyer will use persuasive language in many professional situations: when arguing in court, when negotiating a contract, when writing a memo proposing a course of action to a client, or when discussing the choice of candidate to fill a position at a law firm. In all these situations, the key elements of a strong argument are the same: @ a clear statement of the issue and your position on that issue; @j the presentation of evidence and reasoned arguments to support your

position; e the rebuttal (arguing against) of opposing standpoints or arguments.

tv~dence can take many forms, such as physical proof, expert testimony and documents. ,::!',p -- ' .> ?=:.:..., .,;. - J

iE) Read Ron's closing argument in Reading 4 again and match these functions (a-f) with the corresponding paragraph in the text (1-6).

,,4 a presenting the standpoint to be argued b drawing a concluslon from the evidence c rebutting the standpoint of the opposing side - d reviewing the evidence presented ""t-$q e identifying the legal issue involved f summarising the facts of the case

Writing: Memo giving advice 4 @on the basis of the notes written by Sam in the margin of Ron's closing s*n?u argument, write a memo to Ron, indlcatmg the changes he should make to 11ISWR BBp.*9* strengthen his argument. You should: 0

..Q begin the memo by referring to your previous contact; @ state the reason for writing; 0 present the points you want to make in the form of a list; E) close the memo with an offer to provide further help if needed.

Remember which verbs are followed by the -inghrm rather than the Infinitive.

Listening 2: A closing argume Ron has ma& the chanqes'i"hL dod~p argument .yhlth to tisttn to &HI as he presents hts c16sing argumod In cer

a 4C Listen and dlseuss Ron's closing argument wlrn a partner. Do you thlnk it's

--- - I . .

8 . 1 t- '. , l

-, - . +

8 L

convincing?

by giving more emphasis to ke- emphatic stress. Within a sentence in spoken English, some words carry stress in accordance with the natural rhythm of the language.

mportance, e.g. It is imperative that ... or Emphatic stress, however, involves stressing It is im~ortant to realise that . . .

- 1 certain words more than is natural to convey the importance of a point or a particular meaning. 1

I

1-- u-hn w ~ e ~ Ih. Ulowlng se , Bde i9l~Bssi@ t h ~ ~Md8tMd. m- +- .;? the meaning crf the sentence ohm@??

1. . . .

~ I ' M W I ~ ~ - M n w c h n t OR

XP mng thP new on MOM&. M.m4stmg n u cllm On M,* b h e flew G M ~ X on ~uhw. . r :

the new dlerrt on Monday.

In ta !ha 1- seam sf Ponr clgelng, ?rgmgnt Om Butted . . , : .m - . .) and miid .the tramctipt m'.pege 27-0. AS y q ~ ~~st(lri, unckifnn

W.+?E which ate g k n ernphaUc strem. 5 . -

uage use 3: Phrases rerernng co evlaence

a to arrive at conclusions about evidence

from evidenc* b the evidence provldes a basis

a,.. A $Match these phrases from Reading 4 (1-3) with their paraphrases (a-c). Y N w

.- 3 the evidence supports a determination k, c to conslder evidence irr@ort;lnt -w2-Ls

&on wins the case against the Jones Corporation on behalf of his client.

facts based

for a jwdiclal

the

cision

Using the phrases referring to evldeence in Exercise 26, write three sentences abocrt the outoome of Keats v. Jones Corp.

~ 7 - ~ a n d ~ ~ m

- -. - I I , - - -! *

Reading 5: Keeping informed : i c ~ t , ~ ? r ~ ~ ~ m It is essential for lawyers to keep informed about trends and recent developments in the law. Lawyers are obliged to update their knowledge continually, both in the interest of their own work and in the interest of their clients.

The text below is an excerpt from a capital markets report published periodically (ry$ large law firm. The aim of this newsletter is to 'help our clients and friends und- trends and Legal developments in various areas of the law'.

'@)Read the text quickly. What Is Its subject?

@Read the text again, then match each of these headlnjgs (a-8) with the paragraph it summarises (1-5).

a Other means of g rant ig rights remain effective b Extending thircCparty rights under certain circumstances c The new law and when Ft takes effect d A change in the principle related to contractual relationships e Corrtract writers must consider third-party rights

- . - - - - - . - - - - - -

UK enacts third-party rights statute

1) ........ c.. ........... contract purport to confer a benefit On 11 November, 1999, the Contracts on the non-party, unless on a proper (Rights of Third Parties) Act 1999 construction of the contract, i t became law in England, Walcs and appears that the parties did nor Northern Ireland. T h e act applies to intend the term to be enforceable by contracts governed by English law or the nan-party. the law of Northern Ireland entered <, into beginning 11 May, 2000. It a l s ~ 4) ......................... applies to each English law contract Therefore it becomes important that entered into beginning 11 November, contract drafters take into account 1999 w h c h expressly provides for its whether any third party has been applicatian. given rights under a contract. T h t -

parties may agree in the contract to 2) ......... 0 ........ exclude the application of the The new statute has a significant statute. If this is so t done, one or effect on a variety of contiacts, and, more of the parties may be exposed as contracts are at the heart of to unexpected claims by third business transactions, on business in parties who were not intended to be general. It fundamentally alters t he beneficiaries of the contract. English law principle of priviq of contract that permits only parties to 5 ) ..........A ........ a contract to enforce i v terms, even The new act does not affect rights if the contract clearlypurport,s to @-anted to third parties by means confer a benefit on a third party. othei than the act itself. Therefore, m'Q-- if the parties to a contract wish to 3) ............ a ........ grant third-party rights under it, The $ m u t e enables a person that is they may continue to do so through .

not a party to a contract to enforce the use of collateral contracts, y e . ------

its terms if the contract expressly novations, assignments, deed polls, provides that the non-party may do trust relationships and other so, or if one or more terms of the established English law mechanisms. I I

br- 3 benef i t

I a p rope r t, i t I no t ceable by

tant t h a t ccoun t been

t . The t r ac t t o I e n e or xposed d rd to be

er these questions.

ich contracts does the new law apply to? to the new law, under which circumstances may a person who is

not a party to a contract enforce its terms? 3 What advice is given in the article to drafters of contracts? . .-

131 Match these words from the text (1-5) with their definitions (a-e).

1 enacts 2. ,,.~~&e*-" '. " a writers 1 2 constructron F b leave out

I 3 drafters q c ~nterpretat~on 4 take into account P d makes into law 5 exclude & e think about

32 How does this new statute compare to the laws governing third-party rights in our own jurisdiction?

maat u&t? me mhwns fckfiur aHdICBg-

. - - . . . . . . . . . . . . . - . . . . . . . . . . . . . . .

i@sammn & , p d b B t i p ~ ~ [in pepev t4rrnf .'m lemnals - #I w m y mwnw QT W I T 5

w -Bs #m ,mmt w44x.ites &:w-~s

To improve your web-based research skilts, visit www.cambridge.org/elt/legalenglish, click Research Tasks and choose Task 7.

.-v--:L.&...I v*- . ;~crc.- . i~. - - . ' , r :~.-~s --.*..%wmm-:;*+ &nit 7 Contracts: assignment and third-party rights

Languaqe Focus m

m ' Vocabulary distinguishing meaning Which wora In each group is the odd one

out? You may need to consult a dictionary to distinguish the differences in meaning.

1 duty @ responsibility obligatior~ 2 intent objective intention @!sit3 de I @udS 3 compose draft write - 4 convince - induce persuade I-- I

- $-'aGea~> elect select choose -- -

2 Vocabulary: word choice These sentences are from a tenant's Right of Assignment document. In each case, choose the correct word or phrase to complete them.

1 Notwithstanding anything to the contrast @/ opposition contained in the lease, Tenant can / may @illhave the following rights with respect to assignment, transfer or sub-lease (referre@ in / as hereinafter as a 'Transfer') of the der%ed premises. ,

2 Landlord agrees that it will not unreasonably withdraw / rebut / withhol its approval to any Transfer of the demised premises or any pa thereo

--

a thereafter/ thereunder, provided such Transfer shall be subject to all of the terms and circumstances Q o n d l t i o a inclusions of the lease. Tenant shall waive / k9/ own the right to perform any of the following acts without the necessity to request or obtain Landlord's refusal / withdrawal /:g&& therefor.

1 -

4 Transfer the demised premlses or any partion t h e r e o f w r o m / at any 'affiliate company'. An affiliate company shall mean, for purposes of this Article 49, any corporation, partnership or other business entirety/ entreaty/ e n t c ~ n d e r common control and ownership with the Tenant, or with the L -

or any subsidiary of the Tenant.

3 Prepositions with contract 1 Complete the phrases below using the correct preposition in the box. You may need to consult a dictionary.

& 1 the parties .......................... a contract 2 pursuant ..-...... fg ..... the contract 3 to have rights and obligations ... %&.. a contract 4 to benefit ..{. L.%-. the contract.

+6a 5 to assign rights or delegate duties ......................... a third party 6 enforce a contract ~@.>.ksomeone 7 a third-party beneficiary ..-?dl a contract 8 in reliance .."..'b;.lah... . the contract

1 Employment law entails contracts between employers and employees which are normally -- controlled by specific legislation. In the UK, certain laws have been enacted regulating the areas of sex discrimination, race relations, disability, health and safety, and employee rights in general. Also, certain aspects of employment contracts are cwered by the Trade Union and Labour Relations Act 1992.

a Termlnetion of tmplbyinemt e Labour lew I

B Entp4oyment tribunals f Pr~tecting the disabled c Terms of employment g Recruitment d Employment legislation

r\ . , -. - n . . .n-r C-CSYM

(US) labor union

2 In the recruiting processes, employers must take into consideration that it is unlawful to discriminate between applicants for employment on the basis of gender, marital status, colour, race, nationality, or ethnic or national origins. It is also unlawful to publish job advertisements which might be construed as dis$iminatory. It is unlawful for a person to discriminate against another based on sex or marital status in the hiring process and in respect of the terms and conditions of employment. However, there are exceptions to this rule, such as where sex or

-> marital status is a genuine occupational qualification (GOQ).

1 3 The law protects disabled persons by making it unlavful to discriminate against such persons in _- -- the interviewing and hiring process and regarding the terms of the offer of employment. Employers are required to make reasonabie adjustments in the place of work to accommodate disabled persons. ~ 0 - i cost may be taken into account M e n determining what is reasonable.

I 1 4 After the employee is hired, protection is provided generally under the Employment Rights Act

1996. In particular, this Act requires the employer to provide the employee with a document containing the terms and conditions of employment. The statement must include the following: identities of the parties, the date of em+hyment, a statement of whether there has been oontinuation of employment, the amount and frequency of pay, hours of work, holiday entitlement, job title and work location. *Q & -4 - y a * d -

5 Matters related to termination of employment, such as unfair dismissal, disctiminatory dismissal or redundancy1 dsmhsail, are governed by the Employment Rights Act 1996. Also, certain aspects of termination of employment are governed by the Trade Union and Labour Relations Act 1992 when the decision to terminate em~loyment is in some way related to the activities of a trade union2.

mally ing the Yee rights I Union and

isements ,

re sex or

ersons in . Employers iabled e.

tights Act wment : following: been

6 The protections mentioned above are largely enforced through complaints to an employment tribunal. The tribunal has the power to render decisions and issue orders in respect of the parties' rights in relation to complaints. It may also order compensation for loss of prospective earnings and injured feelings.

7 Employment law relates to the areas covered above, while labour law3 refers to the negotiation, .coll_ectiv~rgain& and arbitration processes. Labour laws primarily deal with the relationship between employers and trade unions. These laws grant employees the right to unionise and allow employers and employees to engage in certain activities (e.g. strikes, - picketing, seeking injunctions, lockouts) so as to have their demands fulfilled.

:ory 36. Also, .abour ed to the

.d Unit a ~ r n p i Y m e n f t i ~

Reading 2: EU directives on. employment llwWWltgt~)~f,whkh a p p w e d l n a n o n t O n e ~ ~ ~ & a b W ~ ~ ~ that wodd lkdy rcdt fm fh h n p l a n i m of P l a g d ElJ &Wkrea en 9*at* I I .

0 Look at the title and read the first paragraph of 'the-text. What do you think case bonanza means? Why will there be a case bonanza?

7 Read the first two paragrmhs. What does each of the three planned directives deal with?

We whole text and decide whether these statements are true or false.

ifectlve concerning entitlement to parentaf Leave will soon be made intb - ~Ckburn thinks the discrimination Industry will expand over the next FS because so many new laws have been passed. -

I ' pawed, EU directives apply immediately to member states. - ' &Q&@eth Adams Minks that the directives will make it easier for employees

')*.W a complaint against an employer. 3.- 5- these words or phrases from the text (2-4) wltn their synonyms (a-d).

k. .

a a person asserting a legal r i a t which has been violated against someone c\ b a right to benefits speWled by law or contract

c to make something illegal to have been vlolated

ng I: An employment tribunal c u m

w a t r ~ d w W l m ~ * ~ ~ ~

isten and tick the actions that Gwen will take following the phone sonversation.

, 1 attend a managers' meeting - 2 contact the employment tribunal personatly

El" 3 irdorm the management about the status of the case 4 send an emall with the requested document

8 5 drscuss the case w~th the dismrssed employee

El 0

6 write an exact account of the circumstances leading to the dlsmjssal

Unit 8 Ernploymant law 6

l 2 l Choose the correct answer to each of these questions.

1 What does Jane want Gwen to do with the draft entry of appearance? a submit i t to the employment tribunal for the pre-hearing assessment b'review it, make any necessary changes and send i t back to her c decide on the basis of i t whether they want to proceed with the case

2 According to Jane, when would a lawyer make an application for a pre- hearing assessment? a yhen the defendant believes the claimant's case is weak b when the defendant wants to present all of the evidence at the full

hearing c when the defendant wishes to inform the court who will be representing

him/her

3 Why does Jane think it will be better for her client if the case does not go to

- final hearing? a) because i t would save the parties involved time, effort and money b because she thinks her client could lose the case c because she thinks the good faith between employer and employee would

be lost

4 What does the client state is her f irm's top priority in the case? a finding out exactly what the dismissed employee did with the confidential

,information b resolving the dispute successfully and getting back to work , , c avoiding the expense of having the case go to a full hearing

12 This email was sent by Gwen to Jane as promised in the telephone conversation. What documents are attached to the email? Underline the sentences she uses to refer to them.

Subject: Myers dismissal case ' .

Attached: entry of appearance.pdf; reasons for dismissal-Myers.doc

Dear Jane

Further to our phone conversation this morning, I attach the revised entry of appearance form which you requested. In addition, please find attached a document providing a complete factual account of the circumstances of the theft. Kindly let me know if anything needs to be changed or if you require further information.

I'd appreciate it if you could let me know as soon as possible whether the case can be handled solely on the basis of a written submission as you mentioned.

Many thanks for your assistance in this matter.

Sincerely

Gwen Hill

an$,6wen have a Mendly w o w relationship and are on a first- & em% aFhm, me sty&! of Gwen's email to Ja* is polite and formal. k@&q~ C FM~,T%P&B & the palltenass and formalily of the email?

3-1 b$m+sPp$f (1-10) from ttle emf1 on page 110 with their -- &mmm ( e l .

v+m a lHere4-tktp 3 . pt *(rPhom c d m r s a t i ~ ttks mcunlng b wlth all the fa&8 &$ p&pm JatM cnem e If ym ~ e d ~ m o p iqhmetion 8 .

d 7811 me 4 e As mentjoned on the phom thh morning 2

pielo faohlal accomt of the f Thaw a tat 4

g PIMS~P tell me asqp c 0 h you asked for 5

M h e r information P for helping me out with this 'j it if you could let me know as soan ] Best wishes

h@mWedthe entry of appearanca and the application for the p r e h m e r r t to the employMwlt tribunalb S b has also mde a written &$ efthe case to the tribunal, and requested that the case. be '

!@Yw~y m the hasis of this written submhdon;

e ah Wtt from Jane to Gwen, Informing her of the steps she\h;as %ken d plovl$ng her with copies of Me documents submitted to the tribunal. Write

inhrtnp- about the actions she has W e n in the case stnce their i i t dloi t o the documents attached; wm tr, what Jane believes will be the outcome af the case;

llna ohring Elasistanae if needed.

ng 3: A sex discrimination case

most appropriate badline.

LAWYERS FINED BY TRIBUNAL FOR DIEH2RIMJNATaRY BEHAVlQUR

£!400,000. The employees successfully claimed In consequence, the tribunal imposed £3,000 that they were victims of sex discrimination and, in extra aggravated damages. Such awards

\ particular, that the discriminatory culture pervading encourage caution in the way in which ' the h pxevented women from becoming senior proceedings are defended.

L W ~ , + ? - - &Ye- - -1 . .%- . .

--.I -A- .A A - -- - 1 Who do you think the text was writtenmbf7-, ,

1 1 4 . 2 What was the case about? Who were the claimants; i n d vrho were fhe

defendants? 3 What is a 'landmark case'? 4 According to the claimants, what re vented them from becoming senim

partners at their firm? 5 Why were extra damages imposed tJe defendants? Pgw erw +

6 What does the text say about the effect that the award of extra aggravated damages would likely have on future proceedings of this kind?

7 Explain h a t you think is meant by a discriminatory culture at a law firm.

Lawyen often advise their clients how to avoid claims arising from work-re?kiil'&rputer, . such as the one discussed in Reading 3, by informlng them of potential r i s k

%!I& "' .'.

In the following interview, a lawyer [Ms Brewer) tells her clients [Mr and Mn ~oward), who are business owners and employers, about the liability risk associated with drug

i ; ld ., -=' Wting in the warkpb. "t q - 5 ~ - r a r r e m v q

U 4f Listen to the interview Gd-diiEkfe w h e t h e f ~ a t e ~ e ~ s ' 2 ~ 3 S 6 r

1 Mr Howard says that the drug problem at his company is affecting business. 2 Ms Brewer informs her clients that the issue of employee drug testing is an

unsettled area of the law.

related drug use. 5 Ms Brewer recommends layng off the workers suspected of consuming

illegal drugs in the workplace.

se: Expressing an opinion,

he LRterviaw in Ekenise 18, the lawyer and her clients veral points. words md . rase (1-12) b its Qnctipn?

agreement, but addrig an ophsing view

k at what the law says. m rkk vvahng untll they haw had a chance to Wok their e* -

we need to act an now.

I

s In Exmcke 19 do you think express agreement ~rangly?

phrefe6 for dsagredng and tiu% the ones whlchyou Wink would for B Lawyer to me with a client, ,I . > J I I : ~ , - > : - - , .! - , , r l r f J T l I

ttrely agree with you nn that, 4

the phrases for agreeing and disagreeing presented above, discuss statements with a partner.

discrimination cases will decline as women are now enjoying more equblity In the workplace. Drug testing in the workplace is an infringement of an indwldual's right to privacy, a right which the courts should continue to protect.

3 It is an employer's responsib~lity to help its employees overcome problems with addictimor substance abuse. 3,. ' *

4 Wamen should be able to resume their careers where they left off after

4 . - . -

'Reading 4: Unfair dismissal ?he article below and on page 115 presents an alternative means of dealing with employment rights disputes. It appeared on a website offering news and analysis on European industrial relations, . .

g3 The article is dlvlded into three parts. Read the three headings. Which of t k three sections do you think primarily contains opinions and attitudes?

2rl Look at the first section of the text. Underline the explanation of how employment tribunds work, a s well a s the four adjectives describing the new hitration Scheme.

25 Read the whole text. Whose opinions of the arbitration procedure are reported? Why does the writer describe the introduction of the new scheme a s ironic?

Determining unfair dismissal cases by arbitration Since 21 May 2001, a voluntaxy arbitration procedure in unfair dismissal cases has been available to employers and employees in England and Wales as an alternative to the traditional way of resolving such cases via employment tribunals.

Compared with a public hearing in front of a three-member emplayment tribunal, with a legally qualified chairperson, involving the cross-examination of witnesses and, in the vast majority of cases, the involvement of legal representatives, the new arbitration scheme, administered by the Advisory, Conciliation and Arbitration Service (ACAS), is intended to be 'speedy, informal, confidential [and] non-legalistic'.

-- . -- -- '. - Key h a r e s of the achme

- ' %here m signi6cant difirence8 between the new arbitration schm and the Conventional empbyTnentdbunal p r o m TI& kyfeature of the AChS idrkadon s & a e are as fallows: The scheme is en t idy voluntary (md is ami4bk only Ln mpe& of unfair dismissal claims. It can be used only where bath parties agree to it and wdua tdcain nghts they would have at a1

" whpIoyment tribunal. I!! I - 6 H d n g will be held in private in such pluel as A M o f i h or a hoid and will normait I be campIeud within half a day. Written statemem oftheir case may be submitted by the i k partien in advance.

The m e will be hemd by an experienced afiaamr, &osen by ACM, not the partie3 themselves. Legal representative3 may be used by the parties. There is rro set fomat far the hearing. Arbitmtot~ h m a g e n d duty t c ~ ack fairly and imp bewee0 the parties, giving each pauty a reasonable opportuaity to p h d his or her case and respond to that of rbe other party, The proms ishuended o he 'inquisitorial' or 'inve$tigatme rat&= hnhdversarial a3 in uibunaI hearings - no rrb$s-ah&athm a v. Each party covers their arn costs in atr~ndiq rhe&isnq. l -bwev~t if a d W .is found B be unfair, the ahitrator call include in the calculation of any aqmu.satina r wm to mver the c a ~ s incurred by the employee in a t t e n d q the hearing. hrbttram are required to apply EC l aw and the %urnan Nghm Ada 1938 (on which h legal advim may be appoinud ra p r d d e guidance), bur o h e , i m t d of npplybg $Itit3 leg tests and case law, tb a ~ W & ~ r ' s decision will haw regvd ~b ' p m d pmdplm d%enr and good mndua in emplrrgmmt m l m ' . An with unfair dismhd mad demmined by an empwment tribunal, rebtafamm, re-

1 engagement and cornpensarion are the available remedie3 if h e &midis not upla&$. , Unlike tribunal cases, h~wmer, the d is c~n6dential bg A& and @e pMa8 w$the arbitrator's decision will be final and binding. lhm is only very limited scope for appsrJmg or chuEltm@ng the arbitfator's awad.2 wC

:II available way of

with a 1 vast

t

d to be

4 .. . . - In @sWirr, an Wtmbr is ob tiged 10 qgply cew IBW and leml -

'I- 6

Match the verbs (1-6) with the nouns in the box that they collocate with in the article. Some of the nouns go with more than one verb.

an award a lad a case rights

JL l > l i ' - f . I

1 to hear s 4 to apply q U-J 2 to waive A 5 to appeal Q-+A ) 9 LO.)Lq 3 to plead e-dk 6 to challenge Q C=D..Q,

1 & P I C h I 9 Q - c Can you add any more?

30 How does the arbrtration procedure described In the text compare with the afbltration system used for handling employment disputes in your j~risdi~tion?

whs-aW&Jpcspbt& o n a ~ ~ . f R 1 ~ t t e P ~ C e r

Read this ernall, written in response to the above request. Some of the information it contains is incorrect. Find three factual mistakes and correct them.

i 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. 7

lfiscrimination dismissal redundancy layoff 2-w prohibit forbid 3 solely

2 Adjective formation Add the prefixes in-, non- or un- to each of these words to form its opposite. The words marked with * have more than one possible form.

1 amactive ww&Wlk 2 certain . W Q 3 confidential i - - ~ \ & & ~ k 4 conventional* u * ~ ~ ~ > u Q Q . - & e- 5 discriminatory ~ O V \

7

6 fair w h 7 lawful --wk 8 necessary LA " 9 reasonable LA q

10 specific* r-- uq 11 voluntary \

3 Word choice These sentences are part of the UK Employment Rights Act 1996. In each case, choose the correct word or phrase to complete them.

1 An employee who waives @/ submits to return to work earlier than the end of her maternity leave period shall givcto her employer not less than seven days' information / provision ,( 6 t i c e h the date on which she

- intends to return.

to / relying on subsection 1, her postpone her return to a date such as will secure, subject to subsection 3, that he has seven days' notice of he eturn.

3 An employer is not entitled to under in subsection 2 to postpone an

period.

0 employee's return to work to a date after the end of her maternity leave

I Use of prepositions Complete the sentences be1 using the prepositions in the box. The sentences are taken from the texts in this unit.

via wit1

- - fmm in

crlmlna - hnother based on sex or SF and i n ' r e w c t of the terms and

employee is h M , protscliori is generally p m v ~ w o ".d~,.. the

re Fh upfair dimissal cases is Mlabk d-zGp - s as, an allernative . &9 .-,,,.., the

I ...... h msee 3% mpioyment UibunaJs. a

. ampfm&t law sama M n g brought 1 - I ' - ,-a . - "..'( +wj-

5 s successfully claimed that they wee viOClMs ...... 4 ............ sex .. - .. and that the dtscrihnatory culture pervaairig the firm

......... 5 discrimitxhbn induGy ill . 'dike. .A . t . , @&,, ,, , ,... ibthe nat.four or five ..... ........... e of so mwh legislation r.& the pipeline.

........ would .deal with o b t l ~ ~ r i g ' ~ ~ r i m 1 f l d i m 7$&Afk.:, thai gmUlldit -"

.c*.rd,% Qy+, ... " .

1 1 1 - - . goes heard includes

red lssue pay resembles J

k you have b g u n f a i r l y i) & ~ k ~ P k f r o m your job, you can . a claim for your case to be 3) ..h-d. by an employment

I Scibunal. A tribunal 4)>?k8,!!Wh court, although it is more informal. It hears d@remt types of complaints from employees. If your complaint 5 ) @4b ......... to g+ baring, it will be heard by a panel of three people, which typically &!&&&QM~ chair, who is a qualified legal practitioner, and two non-legally qualified members, who may have experience as. mpl yers or union A IF represdntatives, for example. The tribunal wiH 7 ) ..?.+ .............. whether yaur dismissal was unfair or not. If your case is the tribunal will also decide whether compensation should be 8)93% ......... , and if so, Row much. The tribunal may 9)\&&.u.k.. a cost order, requiring the claimant or the respondent (employer) to 10) ..'p4k\ . the costs 11) \.%.W,?!.d by the other

I 4

I Reading I: Introduction tcik$al$!kf goods legislation

I The following text gives an ovwview of the area of law which relates to the sale of goods. This can relate to a wide variety of transactions, from buying something tangible in a shop or on the Internet to paying for a service, such as repairs.

1 Read through the text quickly and complete the sentences below uslng the words in the box.

- contracts disclaimers exclusions title transfer warranties

The sale of goods entails a broad area of the law which is largely governed by legislation. Where an aspect of the law is not regulated by legislation, it is governed by the common law or often by general principles of law in non-common law jurisdictions.

The applicable legislation sets forth the nature of what is involved in the sale of goods. Naturally, I this includes definitions of what constitutes a sale and goodsl. A sale entails the transfer of titk in

a good from the seller to the buyer. Goods can be defined broadly as some type of tangible chattel. -- I Application of the legislation depends upon: the type of sale; whether the seller is a merchant or

not; and, if the seller is a merchant, whether he is trading in the course of his usual business.

The aspects of sale of goods governed by legislation include such things as contract formation, ?rice, passage of ti*, warranties of title, implied warranties, express warranties, disclaimers >f warranties, remedies for breach of warranty, delivery and acceptance of goods, and the 3zvssilr$; d risk. The principal relevant legislation in the UK is the Sale of Goods Act 1979 including its amendments).

;ontract formation in this context includes the requirements applied to contracts in general with some added details such as agreements implied by conduct of the parties. The price to be paid for he gods is usually set forth in the agreement, but in some instances relevant legislation will jetermine the price if this term is left out. A t the very least, the buyer is generally required to pay a .easonable price. Contractual provisions concerning t@- transfer of title dictate when good title is .ransferred, for example bebeen a person who has possession but not title to a third-party buyer. knerally, good title cannot be transferred to a third party from a person not authorised to do so by he hokkr of title. Naturally, aspects faith and apparent authority come into play in this :ontext. -- -- lifferent warranties play a major role in the sale of goods. Implied warranties are such warranties which do mot need to be expressed but which the law implies. Some of these types of warranties would include warranties of title, fitness for a particular purpose, and quality or

I. Where often by

turally, l f title in ! chattel. mt or SS.

lation, imers e I

iith aid for 'I

pay a e is Jyer.

so by is

tch thase types of warranties and concepts rdid!ed to wvfarrtieq O) -, , - m w

e a warranty that the good$ b e i ~ a d d rpce ~~ for the purpose for which the buy& is p m t u a m them

b a warranty t h t t h a Wkr ~f the? gmd6 owns them @.g. the have not been W m ar already SQM t~ somahe else]

uf fitness q c a violstIan of a wrrmrrty when good& da n61 cornpky h m e regard wtth an &press i r mplBd ptornise at h e 'tfrhe a t 9 ~ k

of merchsntabillt# d B qpoLn or wnDefi pmrnlse mads by s6ller abeut tks qualky, pertormaom or other wns&ratlans cmcedng the goods covered by the contract whlch wbuld d e c t thm bbyerk dPclsidn to purehakc

e a nagat16n or restWPh of the rlgbtti mdw a wrahrrty @VIM by a seller ta 61 huyw

d warranty t a wartantY tt-usl tha gp* being sald, grq ~f a qmllty that @rigrally conf~rrFtS to ordinary standards of s~miIar goode sold under similar

tallUity. wiany trmes tne appllcarron OT tne latter rwo types OT warranty aepenas upon tne ale (for example sahx by sample) and whether the seller is a merchant acting On the

sf business. Express warranties are warranties which are specifically stated either in or orally, as the case may be. Under many statutory provisions, an express warranty Regate an implied warranty of the relevant legislation. A common feature of legislation

thg the sale of goods is to restrict the ability to limit warranty liability through exclusfons or me& In the contract.

-general aspect of this type of legislation is to regulate performance between the parties. covered in this area would include delivery and acceptance, inspection by the buyer, the

$ right to refuse acceptance and return of goods.

ernational convention which should be particularly mentioned in this context is the United ns Canrention on Contracts for the Internatfond Sale of Goods Act (C IS ) . The ntion sets forth rules that govern contracts for the international sale of goods and takes onsideration different social, economic and legal systems to remove legal barriers and r the develo~mnt of international trade.

wares in a market or on the more to promote their word ending: -ware street, but not usually wares overseas. . - .

hardware, tableware, in a shop; or, a kitchen ware company's products Also: warehouse '

merchandise (formal style) goods Being allowed to used / damaged / retail / 1 that are bought return or exchange wholesale merchandise and sold merchandise is a merchandising: products tied in

privilege, not a to popular film, etc. legal right.

1 What do you think of the way vocabulary is recorded in the excerpt above? 2 How do you record vocabulary?

- 1

5 Choose me sect)on of the table in Exe~ise 3, such as 'wards for g d s ' , and bok up each word in a dictmnary. How do the meanings differ? Find out If a word is used in some contexts but not in others.

Language use I: Terms and conditions of sale Lawyers often assist suppliers of goods in drawing up standard terms and conditions of sale. These terms and conditions may be incorporated into contracts for the sale of goods or may be relied on as the Legal framework of consumer sales. Legal counsel ensures that the terms and conditions are relevant t o the specific circumstances of the seller in his particular trade, and that they provide adequate protection of the seller's rights. I

6 These clauses are typically included in a company's general terms and conditions of sale. MatCl clause types (1-10) with their descriptions (a-j).

1 claims and credit a Contains provisions governing the payment of the monetary consideration for the goods. It may Include, m o n g other t h q terms governing the manner and time of payment, as well a8' modification of the amounts charged for the goods. -

2 changes or cancellation b Corrtains, among other things, provlsions governing the owns of the goods and exactly when the peril of loss is shifted fro@ vendor.

3 delivery e- c Provides that, despite the fact that the purchaser has taken possesslon of the goods, the vendor maintains ownership t& -

1 until some condition (usualfy payment) is fulfilled. 'r

4 indemnification of vendor \ d Contains provisions governing the manner in which orden for goods are submitted by the buyer and accepted by the ve

5 limitation of remedies \I\ e Contains, among other things, provlsbna regarding the Me,

becomes complete and final if payment has been made. limitations and manner of which the sale of the relevant good

6 orders & f Contains provisions governing the time end manner of my complaints by the purchasw regarding the goods.

r a lik

te and ri

&: O\ g contains, stin-.ottm odag~.the*~M,--q,$+&~ b sny MrMtiWt mrn imm:prm- . . I I

F~pactlon of a e gondr $/ the sell= BR m&f, O ~ W ' &ti& jcdC MabA: bf & related ts'nbtt'a i f ~ 4 c c u . wd d h l a

II FaNEkIn9 prwwonr mhq+i~ vm MY demsesdrrrs e 6 , ~ ~ ' - . a q r + * ~ e : in ns- pmml- m a h y m . e . ~ , ~ p q ! * ~ ve* br such r)llrtgq: - a

i PMIS t ~ t ~JX p ~ ~ : ~ W , & r n r : ~ TO&:

8 . . ~ r I ( i ~~gh i naui abnniS& MfI'Cly c l * m h , ~ , ' $ - .- viohtlbn of My intat'laf~&-~rbp&& H*.

P f Cantaim provisions &~~mbg rond&~ms h y ~ ' prch&iet --mmw ~ e f . ~ ~ @ m m k r w ' ~ m which tha.pooda.#mm-h'm d - m m l c i t m d them and tarltlirr8tiun Harry m&m I

- . ' - + I . ~ d c i w s e each of the ae.ntdfies 1-1 MIOW ~ ~ J - r n d l ~ k 8 . . -

; m L n w i p M n t h m i n ~ : W n & . . . . r -

. 'r

and miemme oomslnmt wlth me usuatm* p m a ~ ~ ~ n as jhg maser. &lw&y rrgrak m IndamQ rraclhdd h m m l ~ $ b M g t w ~ r n \,&,*+i- 1

arpenses,'otaini suits and fwd tearhha, % 'J t ~ e desigh. l ~ ~ l l a ~ h , m~~lr t i ia~me or apyatim . , , i.2 I,,f'.! ,:>r 4. -, .,;I [

5 ~ e a ~ ~ ~ ~ r ~ ~ . ~ ~ ~ ~ c ~ ~ ~ a ~ ~ a r -.,-*!<Qd

h order to protect t d interests of a cli* 11 try to anticipate we dlsputes arisinq from contracts entered into by the client. Careful drafting of mtmt chuses can provide protection for the contracting parties in the case of a breach. Ibe fdlewing listening text is an excerpt from a legal writing seminar on drafting

I twtbcts, attended by both junior and senior members of a taw firm. This part of the amirrar deals with the drafting of retention of title [ROT] ctauses In contracts of sale.

8 45 Listen to the first part of the presentation. According to the speaker, why is it a problem if the ROT clause is interpreted as a charge?

9 4: Listen to the second part and take notes as if you were attending the seminar yourself. What are the five tips .for drafting effective retention of title clauses? Compare your notes with a partner.

U) Choose the best answer to each of these questions.

1 What is the main pupose of a retention of title clause? to prevent the liquidation of the buyer

b to protect the seller in the event of the insolvency of the buyer 0 c to enable the seller tb profit from the manufacture of the goods sold to

the buyer

buyer due in full premises recover seller solvency supplied value

The ownership of the goods l)*b\kkto the buyer shall remain with the 2) &t\k ..... until payment 3)\k.\& .... for all the goods shall have been

UK, a charge must, in mos' cases, be registered w ~ t i Companies House to be effective

2 Why don't sellers reglster every ROT clause as a charge? a It would be too expensive to register every one. b It is not permitted to register every one.

& t would be too timeconsuming to register every one.

3 Why does the speaker advise putting a serial number on all the goods sold? 3 so the seller can prove to a liquidator which goods belong to him b so the seller can keep a record of which buyer has bought his goods c so the seller knows exactly how many goods he has sold

4 Why should an ROT clause say that the buyer has a right of entry to recover 9 the goods? a so that the buyer will not claim additional property that does not belong to

him b so that the goods are not used to produce a product, thus becoming

imgossiblc to recover so that the buyer will have eccess to the place where h e goods are stored

ll Complete the retention of title clause bebw using Me words in the b0x~i11 I ..: 2 . . -1 - I

received by the seller in accordance with the terms of thls contract or until such time as the 4) h d ~ * / sells the goods to its customers by way of bona-fide sale at full market 5 ) ... . If such paymerrt is overdue in - ., whole or in.pat, the seller may 6) fk.&.W.. or resell the goods or any part of

.

it and may enter upon the buyer's 7 ) . @ c Q . ~ . % that purpose. Such payment shall become 8) ... h..~....... immediately upon the commencement of any act or proceeding in which the buyer's 9)$@5e*~ IS involved.

- --4 12 Does the clause above have the five characteristics of a well-drafted ROT

clause mentioned by the speaker? 111-

,N+; , - I I I

(US) secutlty interest

I

I

I

I I

I 1 'I I, ,[ I 4 4

I K Text B

k l h r s 11- -

rdtheir rG$ . w v i d e ~ ~ ~ I en the pa.@

Le basis Y dent p@

w . b r l e f . What wdy Is the product hvalved Tn me b.opntd leg81 issue in the wae7

ms Dovn mldtha the ssles contract war b ~ n g mci ww Cwtt of Apppals, the purchaser could have returned

the tern Md tonditiorts. +&v& @md bbyihg shrlnk-wtapped sofMm with b w an & r h

lihnme p&ment bsfm #thn terms of sak am fully b w n b 4~ *

: A case brief

a d S f M : W n t a l ~ Web Sefvicts. UtxblUnelche smafctit.@@a an wervbw hkj Mef. Ths s p a h r

~ ~ ~ d ~ ~ w w e ~

on, Me apWMr usre ~ ~ p c u l d r dBui4 Or d m Underline %.We+ emnplfs.

- - - - r - 3 c r y i

Preparing a case brief

Although individuals or law firms usually have their own preferred ways of structuring a case br a typical one will include the following elements:

A The name of the case, the names of the parties Cases acquire their names from the parties involved, with the name of the party who initiat the action appearing first. ~ s e f u ~ terms e 9 9 s - e c> d~ plaintiff: the party who files a complaint in a civil suit in a trial court defendant: the party being sued appellanf: the party who appeals the judgment of a lower court respondent? the responding party in an appeal

B A summary of the facts of the case The circumstances leading to the dispute should be described briefly, but in all necessary detail. The history of th,e case, including the ruling of the lower courts, should also be mentioned. Useful phrases The facts of the case are as follows: ... 1) .................................................. The lower court held that ... 2)

1 ...................................................

C The legal issws) lnrolved in the case The point of law around which the case revolves or the legal issue it raises should be identified. This issue is often stated in the form of a question that can be answered with yes or no, or in the form of an indirect question b~eginning with whether. Useful phrases The questjon raised by this case is whether ... 3) ................................................... 4) ...................................................

D The ruling or hdding of tile court The decision of the court in the case should be stated. This statement can take the form of

' an answer to the legal question raised by the case. , UsefulpJlrases The court held/ruled that ...

1 5 ) .................................................. 6) ...................... ., ................ -. ....... 7 ) ...................................................

E The reawning of the court Here, an account of the reasons leading to the decision of the court is given, usually making reference to previous cases and established principles of law. useful p h r w s The court argued/reasoned that ... 8) ................................................... 9) ..................... ., ..................

- (US) also petitioner (US) also a p p w -. +:. ,..I C

,

lo initiates

sssary 38

I

e with

form of

rl ltlaktng

1iu ~ollowin~.th$&dlnes for presenting a case brief given on page 128, prepare a case bri . i f ,#ang with qn Issue related to the sale of @ads. (You will have to r e s e a m losue first.)

Make an o&M6antatlon .MTi-ie brief.

,,than match these phrases (w) with the ~arnipiphs (Z-Q t h y

!we 1~ m w

m r y r o f the.H&h Court holding *.ha Mlura of'- &l&s appeal Fofqhe ROT c l a w b g the Mgh Cwrt rejeoted the rut- Ofthe M two CO&

iwtt M i i d n @ 7f legal m h h s h i p kxswem the pe12ke -. ,

rn

m q w n and answarthese QreSlians,

&.We ot the ankle in.ydur w n words. i t by the. p6rrase 'the..Court noted tha.efkct W. to k #vm 4x1

Sp the wtrtLea had 6wrtorPd Into' in.pmgr8pll Sf the 3sllerb B p m l dlsmi$sW?

~ a p h of Ohe ertluk In y w r &MI

- h:- -- b h r in (6) Into (x2) of wer to ' I

........ W&the new life .\h%% #&IF ....". %c9 ....,.... -one majority -.,.-..,% sale

........ ......... &: IJaPt. of e praaeeds trust

.......‘ ....... a pmprletary interest 1.m the pmceads d

.......... qmstion B ~ W T W ..!IS.%?- a legal relationship

Retention of title &use . -. . .. . . . a 1 'the Mlgh COUK Of A&& k ' . ~ b r ~ & g d ' ~ 4.

ilk into retenticm of title ('RCJT) &&; l3y.a .

b u r q m e maprrty, h e Cawt ha$ upheld the efkctivmess of an apem-wtt p r o w d i fnrthe . proceeds af sale af mnufbctured ~ o d s to b$ held in trust, i k e b y securing the rnanuktuei's indebtecks ra the rek. lk fact that the ROT c l a w treated s trwf rather than a charge, meant it was effecty? desplte

ce, and the Court e clause insofar a:

not being wistwed under the Australian wivalent of the Companies A c t

2 tn the use of Associated Alloys v ACN 001 452 186, ~ ,oc ia ted A!loys ('5cJer') sdd rtecl to a tmxmr r&vefl subiect to a ROT &use. The that. bask the bff .h&i'tbf . , , - . , qitiat puviijioh in rrhe clause rtated:

- ,..I .I - .- -rm

In the went thst the [Buyef] uses he amd *heBWn& p&bfpr&ct in some marwfsctwing or rcducetk wmm.&m ~ i c n ~ a f t o v v s l o r a f s m e t h i

6 i n h e n d , a n d d e s p l e s u b s s r & l y ~ h e SelWs a l p u m m as tn 'h efhtt -d!h &use, the Court d i m i ~ f e d tha ~s~

,Q w on euidcnlw' gmortd. me ~ i i ' h a d 'hi

S atWt~:eb evidence tv how a link bebe&% 8\r ad w he p n 4 4 a e d ed M and .the psvmwr(s:fl

M ~ s ~ ~ h ~ ~ of & gmmbth: , p d & supplied to the third pawilkis gbp in1 the emhm meant mst ?he 5cller's .app '

rn h L @ . ~ : i m I T h *- rq-rt ot faild, .. . ws, m&-

,-$hi@ . thc w s &cision sh-eqthens a seller's .pwbn md. mfwkq~mtly could a h the

% + m ~ m . - . . & . , &hi lee hem s e k and s m d creditors

introduce these components.

= para. 1: the Court has

at' the facts of the case 8 ~ 4 s ) involved in the case

the cese, and the names and roles of the parties ng of the court

ies in italics in the text which match these definitions.

qse it was not registered received from producing a product ence as proof rty or assets are held by one party for the benefit of another

F as

lbout corresponding

.agrclpri of Reaa~rrg L cwt?ir;rs--the:'~&tmce 7rw fact the ROI g ted a trust, rather thdn a'harge, meant it Ws'effective despite Wered under the..A@stfalian ecyuivabnt of the Companies Ac

kinbold refers tb a law in Australia whi6h:rnore or less k &, or is comparable 10, a Faw in the UK. This phrase and th,e ones bn be used to refer to laws of dl kinds as. weH'as to

.,and thus are .useful for comparing.one's.'own legal system to t Eo,uhtry or ahothe? j~isdict ion. Look .- a1 the examples:.

6 BIs the Australian sq#iv&nt of the Companies Act. ~~ to the German law .on . . . . ba t we in France would call ... &I; we have sonetlring si- =ailed the ,. . .

the Companies Act C8mpi3nies Muse the Uniform Commercial Code

I TO improve your webbased research skills, visit www.cambridge.org/elt/legalenglish, c l i c k n -

Language Focus

1 Vocabulary: distinguishing meaning Which word in each group is the odd one out? You may need to sult a dictionary to distinguish the differences in meaning.

1 purchaser -2 buyer consumer 2 comparable 7 a l n i corresponding equivalent 3 plaintiff amllan?~fendar&\, petitioner 4 postpone '&= d k Y - 7 E d e r 5 void non-binding

financial of result from

Q. Word formation Complete these tables by filling in the correct forms. Underline the stressed syllable in each word with more than one syllable.

l . l + ~ Q & t . ~ X C ~ U $ ~ I I indemnify - ,,a@ W&&\PO~&?-,

acceptable

-Y implied

'a Prepositlons Complete ? sales contract clause below with the prepositions in the box.

Governing Law Anderson County, Texas, shalt be the proper place of venue 1) .....,.&.... suit on or in respect 2) ........ .......... the Agreement. The Agreement and all 04 the rights and obligations of the parties hereto and all of thy terms and conditions

...... \..k ......... accordance , 4) .... and enforced 6) .%*. the laws -

Lions in

. suit the ditions nce laws

&&rnplete this paragraph about consumer rights by choosing the tv ee'ah case.

iy=y,gso& from any seller, you have the right to expect certain fk UK Sale of Goods Act 197.9 states that the gods must be in sarisfactory quality 2) in cQmparison to / by virtue o f f i n &---'I s appearance and finish of the goods, their -durability, &m from defects - except where they have been pointed out to urharn. They must also be 3) special m ) m a d e for their ,

cular pur e 5.e obliged

'P' 'cj

7

~ e n t i o n e d w ~ u to the e- /=ply / , sale doe!

required to reject

I @

s not r it and

& neet get -

f back. You have' a/an 7) reaS(EZ?iT& acceptable !-exclusive time htty goods, after which you are 8) requested & & / implied to

ld the goods and their faults, although you may still be able to Fincur / charge damages.

_ presslorn Match each of the words and phrases used in sales 5-7) with the phrase that best expresses its meaning (a-g).

g competently

expressions Match the words in italics in the text (1-9) with the rase below (a-I) that has a similar meaning.

I

@are is provided 1) 'as is' without warranty of any hind. [The Company] further bclaims all implied warranties including without limitation any implied warranties of

harrtability or of 4) fitness for a particular purpose. The entire risk 5 ) arising out of the performance of the software and documentation remains with you. r

no event shall [the Company], its authors or anyone else involved in the creation, ? -

ptian, ar delivery of the software'be liable for any damages whatsoever (including, without Ition, damages for loss of business profits, business interruption, loss of business nation or other 7 ) pecuniary loss) arising out of the use of or inability to use the software or mentatlon, even if [the Company] has been 8) advised ofthe possibility of such damages. Llse some states/countries do not allow the exclusion or 9) limitation of liability for

j~equential or incidental damages, the a w e limitation may not apply to you.

financial told about

@

suitability

@I

IBl la restriction

before receiving to retain an entitlemer at the time of delivery to secure against lass may be changed to be in agreement wil

mage in

1 follow I

the future

precise description

I

' Contract law

I your law . r ~ has asked you ~~m~*- .~dbhi$&&i t ra t t &'h at dw documents in preparation for a meeting with a client.

a Read the facts of the case, Why is this type of case referred to as a 'battle of I

, r - - , k t ;

1 1' Colonial Incornorated units that contain steel nhin. su~olied bv - -- - - - -- - o - - r c --- , Steel Incorporated. Each year, Colonial sends a purchase order to Lehigh for the tubing Colonial will for the year. During the p a r , Colonial sends out release orders to receive parts of the year's order fn Lehi~h. In return, L e h i ~ sends acknowledgement f m s in remonse to the release orders to Color& - - L r 1 thenvshlns the tubing.

u

Lehigh's acknowledgement form disclaims a11 liability far consequential damages (such as lost p~ and limits Lehigh's liability for defects. These terms are different from ColoniaYs purchase order aIll course, are not contained in it.

I ' Unfortunately, some of the tubing supplied by Lehigh, which Colonial incorporated into a cool in^

was defective and burst. causing considerable damage and lnsc: ro one of Colonial's customers. Best . - " - - - - - -- - - - - - - - - - -. - -- - - -- - . - - , - - -

Produce Corporation. Best Produce Corporation is claiming damages against Colonial, including conseauential damages. In turn, Colonial has claimed remverv from Lehi~h in response, LehiRh am - - 7 that ithas disclaimed all liabiliq for any damages in accordance with the terms set out on its , acknowledgement form. I

4 d I

Task I: Speaking 1 Work with a partner. Follow steps 1-3 below for each role-play.

Role-play 1 Role-play 2 Student A: You are the client, a representative Student A: You are the lawyer.

from Lehlgh Steel. Student B: You are the client, a represen8 Student B: You are the lawyer. from Colonial.

I 1 If you are the client, prepare for the meeting by becomtng familiar with the facts of the case. If you are the lawyer, prepare for the meeting by: C identifying the legal issues of the case and determining arguments for your side C listing the strengths and weaknesses of your side of the case Q deciding which parts of the relevant legal documents most strongly support your case ar

used to argue against the other party's case making notes for the meeting: What course of action do you thlnk your client should tala

2 Lawyers: pair up with your client to explain the legal issue involved and review the relevant ia Remember to paraphrase their contents so that they are easy to understand. Advise your clil course of action.

n' 3 Report the results to the group, focusing on the client's willingness or unwillingness to setUr

I j 1 Task 2: Writing I

You are an assoclate at the law f~ rm representing Colonial Incorporated. The senior lawyer hand case needs assistance regarding Colonial Incorporated's legal argument. Write a memo to the e

,,ljirwyer based on all the information you have. "f m,

-

.c -

documents.yjj J y t ) e u nted on Lehigh's form

17 <!7. : t i : ,. ,.,If!. &3#',8

Lehigh steel lnc.3 acceptance of purchaserg o& "" Offer to Purchase is hereby expressty made - b 3

- -- .--*

Reading I: Introduction to property law ~ h c fot~arinp tat u r n s Ir an't~~&uAon to mmpa tmia u ~ d in mi proprrtylaw,manyofwhkh h a v c b t a n i n u u f w ~ o f ~

1 Read the text and decide whether these statements are true or false.

I 1 English-speakingjurlsdlctions generally dlstingulsh between real property and psrsanal psoperty. Real property is a general term for land, tenements and hereditaments. On t P other hand, personal property refers to everything which does not fall under the heading I

1 The term of years of a freehold estate is not fixed. e+ 2 The term reversion refers to the passing of real property to the State when

the owner of the property has died and has no legal h irs. 3 A licence grants exclusive ~ossession of a property. $9.Jc 4 The Statute of Frauds pwrnits oral contracts in the case of leases if the @4, ,,

duration is more than a certaln number of stipulated years. ( ) UIY-.l

1 real property. This brief summary addresses key terms in relation to real property.

2 Real property can be divided into freehol a-%*%k estates an aseholds. Freehold estates are L,

whose duration is not determined. By contrast, the duration of a leasehold is fixed or c a d of k i n g fixed. Essentially, there are four types of freehold estate: the b e dmpk, the fee the life estate and the estate pur autm vie. 1

I

3 As Its name suggests, a fee simple refers to a whole interest in a piece of real property af may pass through sale, Inheritance or reversion, i.e. when the owner dies and there are nc persons alive who have the right of inheritance, the property reverts to the State. Reversioi also referred to as an escheat. A fee tail is an inheritabte estate which lasts as long as th original grantee or any of his descendants live. A life estate is an estate granted only ford life of the grantee. When the life tenant dies, the remindermen take possession, or the Ii reverts (see above). An estate pur autre vie is similar to a life estate, except that the estal granted for the life of someone other than the grantee.

4 A leasehold is generally created through what is referred to as a k-, which is a contract for exciusive possession, generally for a term of years, usually for a specified rent or compensal A leasehold should nut be confused with a licence. The crucial test for determining whether a lease or a licence has been created is whether there is exclusive possession. If there is no exclusive possession, there is M) leasehold. A good example of this is where the propetty remains in the control of the grantor, Such as in the case of a hotel room or dormitory. 6~

5 Generally speaking, the Statute of Frauds requires that agreements regarding the sale of ( interests in land must be in writing to be enforceable. In respect of leases, the Statute of Frauds for a particular Jurisdiction will specify that leases for more than a certain number ( years must be in writing to be enforceable, e.g. three years in England. For land sales, the Statute of Frauds requires a formal writing.

6 There are numerous other areas of real property law which commercial lawyers deal with o day-to-day basis. Real property law includes such things as easements, usufructs, m t g q and other fmaming meastires.

ties referred to in real

eir, grantee and tenant all appear in the text on page fete list of parties named in legal documents deallng ..,.,, .,,, tch each pair (1-3) with its explanatlon (a-c). hi-

134. Thi ~ ~ l i t h P a s 1

8 a person who transfers property / a person to whom property is transferred (in real property law synonymous with assignor/assignee)

b a person (usually the owner) who gives another person a lease in return for rent / a person to whom a lease is given in return for rent

.- (in real property law synonymous with lessor/lessee) ak c a person who has died / a person who is entitled to inherit property

...--. "- ...., . --".. ".. .-. ...- ..".-.-. ..

nd and anything permanently attached property refers to all other property.

nrnnartn, rsfarr

-. --. -.. ...- -" .... -. use is at the beginning of reci,,,,, ,.,.

rtnnt mattnr in a A a n r i onntraot nr nthr

h to amend certain terms of the Sales

Atmcteri with each nther ~rcinn the wnrris wherenc 2nd I , ,-, -w- -. .-

to the land, psonal @. On the

a t the beginning of the sentence as well:

PI vp=r r err =, a to land and anything permanently personal property refers to all other property.

at whereas is used in Legal English in two distinct ways. htss meaninn nf 'hl~t nn the ~nntrary' (as in the present

+-Ie the setting forth

-, CLIIIC .,, UUbU, IUUUL VI legal document. r i 4 b p W h ?,I:. 1

-1 1 9 sed terms not otherwise defined herein are defined

M

term *hv

C b k s are those pd or capable g, the fee tail, L !

property and here are no

Reversion is [long as the

Con

only for the 0 I ' "

F , or the land the estate is

U Q ~ use 21 Ctassifying .and distinguishins -A . - .- .

6MOn is an effective way to structure complex information so that it

h, divided, fall under the heading of; includes, is a general term for,

&qe key terms using whereas or while. You may need b conku4t the & ,- c t k ' b -- mlB m* t ip$Me / leasehold 3 I m e J licerlce hm &I& e-s.

m p l 9 ] / fee tail 4 easement / usufruct W .L

number of sales, the

eai with on a t b m a =

. . . . . - . . . - . . - - - - . . - . - . -

re.qore easily understood by listeners. Paragraphs 1, 2 and 6 of the text $134 contain verbs and phrases for classifying ideas and

Complete these sentences using the classification words and phrases in the second box on page 113.

1 English-speaking jurisdictions generally .h!.#h*,.%... / make a

2 Real and hereditaments which, upon the death of the owner, pass to his heirs.

3 Personal roperty .... ~..P.&..L .... ......... everything which does not + * . . % b . ~ ~ + e a , p rope3 4 Real property can be d.~!X!k *...I uk~.... / classified / categorised /

grouped into freehold estates and leaseholds. 5 Essentially, there are four .... ~ ~ . ~ h ..................... / kinds / classes / categories

of freehold estate: the fee simple, the fee tail, the life estate and the estate pur autre vie.

6 Real property law ~ s . k & . A ~ ........... / encompasses such things as easements, usufructs, mortgages and other financing measures.

6 Rewrite sentence 4 from Exercise 4 in fow different ways, each using a different classifying phrase. Make changes in sentence muctwe or add words as necessary.

$ Before you listen, discuss this question.

What other legal issues might an estate agent need to be informed about?

'I 42 Listen and answer these questions. - 1 What is the purpose of a temporary easement? 2 Explain what is meant by open, notorious and continuous use. 3 What does an easement by necessity refer to?

8 Complete these sentences, in which the speaker classifies information. Use no more than three words for each space. &&A*" woou 1 Generally s p e a k i n g , w . . ~ ................ two fundamen al types of

easements: temporary and permanent. &P&&@QJ~I*o 2 Permanent easements can be .&~~l~Q$k...~..%h?.... three common types.

3 his^',?^ those easements which are given to a quasi-public corporation, such as the electric or phone company.

4 k * \ . w ~ % t ! ! % f an easement appurtenant is called an easement oy necessity. -4$$?

ion Should begin with a clear statement of the topic. You should guage for classifying ideas to help you structure your talk. For

on will deal with the topic of X. 1 will discuss the three most es of X in my jurisdiction. o explain X in my jurisdiction. In our country, we distinguish

t wo main classes of X . . . , 'I1 structure of the presentation wilt be determined by the elements

--&ificatko scheme, i.e. a three-part classification will lead to a Olon which includes an introduction, three main points and a 313.

2king the transition from one point to another, it is common to signal J :to t new point by using phrases such as the following:

to my second point, . . . me to mv next ooint. "

:ID / Turning to the second tvoe of X. . . . -

again or read the transcript on page 272. How does the speaker change to a new point? Add the signals to the list above.

I r: An aspect of real property law pic related to real property law in your jurisdiction which lends itself

ring by means of classification. Prepare a short presentation, making gfthe phrases for classifying, structuring and signalling presented above.

s possible top~cs are: of tenancy agreements

vpes of concurrent ownersh~p of property Q Types of estates

0 hblord's rights

A n g ., 2: A law firm's practice areas

te pmpctkr+ cknts. This kind of mt, lu! cmqemq ~~ ia ~ c ~ ~ ' a n d ~ n e r a l t y ~ d r c ( ~ ~ o f t h e w i C I ~ i c h t k a t k a r

sc~cd~sfully and the & vrh~th staff m e m h ham msst m e h. - --@?ad tne competency statement of a large Amerlcan law firm on page 138.

What area of the law does the firm handle in addition to real property? What two types of disputes are explicitly named in the text?

O+J firm has dealt with a wide range of natural resource matters, including endant - species, forestry/tirnber, grazing, irrigation, mining claims, oil and gas, water, and y!

We have assisted clients in various property matters, including federal, public, statf' private lands, communication sites,-condemnation, easements, land exchanges, p ~ . boundary disputes, ownership disputes, and rights of way.

In addition, our lawyers have handled a broa-ropet-ty/re'iiIestate transactions, including commercial, residentiat, agricultural, and conservation easel

l 2 DecW whether Jbhnmr~, M i a n and P u w is the right f i i for theee pia~deti (1-4) to consult f0r tegal u s i s W .

1 Mr 9hmons is engaged in a &put8 with Mr.Bwnd mcsrniag repair6 that must be mede to a pipe be&q Wu@ W43urne' prdpsfFy tr, Mr Shmns' house. Mr h s f-sim?~ tD aUow tqB wRm acaess to his prop*.

2 Mr Wyatt produces a natural i n d c ' a fmm the 8e.cxi.s of a Qpe 07 Indian tree which grows an his propern Ond fiw b v n sarnmg'it t# orgk~lc farmers in his region. A pherrnsceuttcal compihnb is sul@ him far itTfring8mdrit of patent rigt'fts.

3 W F4rkeCs Mghbaur operates a private childearn centre wlthin k r prwrty. . Duringthe surnqr, the children spend a lot of Ume CH~TSCH, md.the wise level h m e m d y hgh, Mr Perk# md hIg neighhuf %teed to jnstnll a :j h c e , but dlsegres the M u n W between their properties and abDuE who stmild pey far the fence.

4 Mr Tamb Is a tsndsc8pe arnhmzt w~tk'hg undar subcontract with a oonstruzion company an the slte af p p r i m bins. 7be leal, c~rrMIctrn has filed fm bankruptcy protemn, Mr ~ane~ce k t s t~ know

51

whether he can s t ~ p &k, pads w h)s gear and walk df ~ o b sk: Ht: . 1 m

atsa warts to knOw whether hexan mFime MS m b W Hen r t g b 4 t3gairsl tyle W.prom owner,

13 Read the text agah and answer these questions.

1 What err, tho phrases in italics used to Wress? 2 UrrderUns tha mb t e n s In tho W L Whlch mas Is ueed most often?

Why? B Fidd two words in 'tha text that am sytlbnyrne 05 tJbe wad Ww- 4 Which smtbme of the twct expresses what me firm o m do?

art lawyers are Real Estate law S rities and

g endangered r, and wildlife.

biic, state and

on easements.

firm can atters affecting

an ers '

uibing a firm's practice areas W I U P ~ In the text, write 8 Short descriptian of the prac$ice

brtant features of such a statement; fiM perwn plural (the 'we' par~pectlve); v ,

tense is wed to refer to what tho f ~ r n bas done; with a reference to the firm's tlMory and may combude

Understanding a lease or tenancy

6 v cleuses you would expect to ?hd in a 1mse teoarrcy.

1 r,. & d . n # f k%-y ad-%r~~A;~WU-k~....hlf,~

d any othw ctrruses and sections that are generi%kIy included h

of the text on page 140. What m stiitfuto~y oondifl~nsi? Cm Wnds of thing that might came undm statutory mndlt!om in a

ih8 lease. dead it and complete the spacw (1-79 u ~ & g these sab &'

. . , fi : r r w r t -8% - - -. - -* -----*-J.q-9i

- STATUTORY CONDITIONS F L

The following statutory condlhdns apply: 1 . & w--

The landlord shall keep the prermses in a good sue drepair and fit far habiuncm during the tenancy and shall comply with any statutory enactment or law

I I rvspecting standards of health, saftty or housing. 2 (a) . seu~J-%

Where the landlord pmvides a service or fadty ID the tenant that IS reasonddy related to the tenant's conrrnued ux and enjoyment of the premises allcb as, but not as to restrict the generality of the foregoing, heat, water, dectnc pomr. gas, appliances, garbage collection, sewers or elevators, the landlord shall not chscontinue providing that service.

2 (b) G.d.-cL-/

ordinary cleanliness of the interior of the used by wd6.11 or neghgent act ofrhe tenant

The tenant may assign, sub-let or otherwise part with possession of the p ~ m e a subject to the consent of the landlord whch consent will not arbitrarily or unreasonably be withheld or charged for d e s s the landlord has actually incurred expense in respect of the grant of consent.

' + 5 A h d R * - d - & - - 7 .-: If the tenant abandons the premses or ternnates the tenancy othenvlse than in the

I ' I manner permitted the landlord shall mitigate any damages that may be caused by the abandonnlent or termination to the extent that a party to a contract is required

I

3 - by law to mitigate damages. "'6 %-L/u.* pd- ., , Except in the case ef an emergency, the landlord shall not enter the premes

without the consmt of the tenant unless: (a) notice of the termination of the tenancy has been given and the entry is at a reasonable hour for the purposes of exhibiting the premises to prospective tenants or purchasers; 3r

ib) the entry is made durrng dqlight hours and written notice of the nme of the I

cntry has been g v m to the tenant at least twenty-four hours in advmce of the

Except by l l l u ~ l l consent, the kndlord or the tenant shall not during occupancy by the tmant under the tenancy alter or cause to be altered d ~ c lock ur locking system on any door that gives entry to the prtmises.

- . ...a L ' -- - - - . a

1 - - -

Reading 4: Case review +--A - a b - Em#T

l e a w ~ a n o f ~ t o ~ W s r & t m d m r n & e . T h t d ~ m indicate kow courts in a jw&&tian tend ta rule in real pmperty cases, and wtul%r pardn when pmpttibq a court case. kc folltwbu) rmunt of published in r taw R R ~ wmIei~. ""IU 'O *' f f p m

Read the report and answer these questions. &'-&>&fi&h 1 Which buslness sector is lnvolved in the case? Is the case in questio

relevant for other sectors of buslness as well? 2 The concept of quiet enjoyment is central to the case. What does the term '-

mean? Is there e comparable ' m a ~ l l l . 1 I i l P

1 1 I , - . - 3'

- -- ' ilk

Quiet e"nj oyrnent Goldmile Properties Ltd v. Lechouritis

What steps must landlords take, in deference to their covenants of quiet enjoyment, when complying with their repairing obligations under a lease? Is it enough for a landlord to take all reasonable precautions - or is the landlord required to take all possible precautions - to avoid disturbing its tenant?

The landlord brought in contractors to repair and clean the exterior of a building, which was let as a restaurant. The contractors erected scaffolding and futed sheeting to the exterior of the premises. The interior of the premises became dusty and dark, and the restaurant appeared closed.

The Appeal Court said that, where the provisions of any conuact come into conflict, they are to be interpreted and applied to give

-r proper effect, where possible, to each. TL landlord's obligation to keep the building in repair had to co-exist with the tenant's right to quiet enjoyment and vice versa. Neither obligation should take priority over the other. I It would have been possible to restrict thew to the days on which the restaurant was close but this would have been costly and impractical. The landlord had sent the tenant copy of the estimate for, and had agreed to spread the cost of, the work. It had also postponed the start of the work to avoid interfering with the tenant's busiest period an had arranged the work to meet the tenant's requirements in so far as it could.

The landlord was under an obligation to take all reasonable steps - but not all possible precautions - to avoid disturbing the tenant, and had done so.

1 An agreement that the lessee oan dlstu rbed c .w!s..%& q s \k ...... e .*

2 Something done in advance to p p - a c s ) .

3 S o m t y e who mers into an agreement to pe provlck e Ceftain praduct; (here) a company or trader y@i&,gt&e@& tcj

c .*?%Aad J a

provlde o m w q n work z liLt.

4 The expected cost of work to be done e W.*..% - . G ,-, ,+ .J;--..

5 To put off or delay until a later time p v .- .

,discussion in small groups.

' hetween reasonable p w u t i o n s andpossible

s of any co be Merprgted and applied to glve proper effect. where

How Ls thI8 stabrnent to 13e understood? the COurt'~ ruling in this case? the outcome Of such a case wauld be h your ]urisdicti0n?

lying a house in Spain

u

p m * ) '

. . . , .I w .fl

- .-7

m b

p l s h lewyqrm cpmpkte n-wy whm the ccasm 16 not in Spah.

~ f O T t h r W c v i W 1 7 ~ w i H b e w ~ I n b o t h E n @ i s t 7 + n d I& *

&t% ErrIfllSh hvryer d m not vvqrnt to lo& at the.cmmZ, oh& ~:mtthsz wtfi be ~ b g it up end nas ~ n s l w wkh G U C ~

m. h nuut be prmmt for the find sigrlh'Q so that toe u3rl hand over the

Unit 10 Real property law C

Reading 5: Reference email In the previous listening exercise, Ms Blackwell discusses the steps to be taken by Mr Watson and his Spanish solicitor, Seiior Martinez, when purchasing a house in Spain. The following email. written by Seiior Hartinez, is referred to by Ms Blackwel in the dialogue. In the email, Seiior Martinez provides an account of his professional experience as a lawyer.

~ r i : i 2: aummarising and requesting It-dhiPdM ptlrasee can be wsed for rnaklng mqu-:

b ~ w e your mdhg me . . . d l . .. b's~firn hhftlneis ernall slgtah slnd tlnd M o more p h t w s ro add,to the r

@-8h levvyw Ms Blackwell, wants to respond t~ toe ewll and to inform m-63 sf the Mattera she has dlswssed d t h thsir mk1l clierrt

t ' m n to M b r Matthez in -oh you shoutd: &m .far his einell;

1 &fbmwke the content of Ihtetvim with the d l w t Qw may m d the iptervtow again or read the mnacflpt of It on pq$a

gx31: !&copies of all dwrrmarrts 9eflot MartfRer d w @.In r:mm

S% bOhDUM ~Urehase; your assistance, tf needed; r ~ r n for his etfam.

qg fbr the copies of documents, use some of these phrases from as. ; .+, . . . - ' > - .

4 .'.Z .,-, 1 . .-' hliartfnez's emad as a model, write a brief a~cquqt af yquy owrl

mlexpedance as a lawya to send tu a prmpectliieddlf&d ' '

. To improve your web-based research skills, visit www.cambridge.org/eIt/legalengti 1 Research Tasks and choose J@.k.,&O..

sh, click on 1

-

Language Focus

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 to rent to lease to let 2 lessee grantee <heir,- tenant 3 to fulfil to compl with ( to set forth-\ to satisfy 4 capability &pSence ability

2 Word formation Complete this table by filling in the correct adjectival form of the nouns listed. Underline the stressed syllable in each word with more than one syllable.

omplete the cfauses below from a tenancy agreement using the words in the box.

2 INDEMNIFICATION. Lessor shall not be -....for any damage or injury of or to t* Lessee's family, guests,.invitees, agents w employees or to any person entering the P d the building of which the Premises are a part or to goods or equipment, or in the stM equipment of the structure of which the Premises are a part. a n d d n w ... hereby 4 indemnify, defend and hold lessor \rJb,y'..-\..!Q+$rom any and all claims or assertions of@

QUIET ENjOYMEM. Lessee, upon payment of aH of the urn referred to ..w %.y$ payable by Lessee an Lessee's observance b e , hold, and q o y

he na~ing any

t simple or p r e s d perfect Choose the correct verb form for

ers and tenants in a wide range of real-estate and real-estate

our f i r e has won an important suit involving property

tl was founded, our firm advised,f*hasid+clients on the full ~f property issues. i- _

- definitions.

1 exclusive right granted to authorsvf creative works to control the use of their original works a ~ e d g b j ,

2 exclusive right granted by a government to an inventor which prqvents others from making, using or selling his or her rnvention

3 distinctive registered mark used by a business to identify itself and its . . products or services to consumers "+&%@A u+hiK

4 offlcral order from a court that stops someone from doing something -u\&u&s I

formulation, usage and commerc~al exploitation of original creative works. A majority of the

and wh~ch of those rights are afforded legal protection. The abstract quality of the property rights

occurring in this field raise topical debates over such things as gene patenting, genetically modified food and peer-to-peer networking (e.g. music piracy on the Internet).

Traditionally, intellectual property rights are broken down into three main areas: patents, trade marks1 and copyrights. Other areas which warrant mentioning are trade secrets, design rights and the concept of passing off.

A patent is a monopoly right in an invention. Patent law is regulated in various jurisdictions through legislation. A patent must be granted pursuarrt to the relevant legislation in order to create the monopoly in the invention. Once the patent is granted, the protection remains in force for a statutory period of years, e.g. 20 years in the UK. Most patent legislation requires that a

industrial application; and 4) is an invention or, in the US, non-obvims. Many things are excluded

A registered trade mark is similar to a patent in that it provides the holder with an exclusive right to use a 'distinctive' mark in relatlon to a product or a service. A common aspect of applicable legislation is that the mark must be distinctive. ln other words, it must be capable of functioning as an identifier of the origin of the good and thereby avoid confusion, deception or mistake. Deception has been deemed to include, fo,r example, the use by another of a domain name that is substantially similar to the trade mark, so-called cybersquatting.

Copyright is a right subsisting in original literary, dramatic, musical and artistic works and in sound recordings, films, broadcasts and cable programmes, as well as the typography of nl l h l i ~ h ~ d erliti~ns. Copyright holders possess economic rights associated with their wnrks

(US) tiadefn8r)t~

iith the ' the rty rigbts erty rights lges

C gictians bder to pins in force ies that a !e of !re excluded / I

PMve m of capable of eption or

domain

and in 1 of wrks,

e works. The most

= COI a& copyright protection are that the work must be in material form (i.e. not just an

~Sbe original in the sense that the work 'originates' from the relevant author. Brovides a partial manopdy in a work, as various rules provide exceptions by hay be copied without infringing on the rights of the author. A good example of

~ited States2.

At in enforcement i

$RB~ the infringing party. As part of these actions, remedies might include damages, 1 b; mount of profits, depending on the right infringed and the extent and nature of

r deali-re ~ e ~ l i ' i k h h t h VS &cbi~+~e in o d m m Lo brr. -awl, Wi rn'heb W MI Into one of b h W USA It is opewended.)

41vm gi cMse definrtim of key terms M V T ~ Z ~ X L ~onait l t b a r %

:r,!g??t rdem to a t?gM .% h ~ . r ~ w : t s . the prmtice 15:

F'cam.r~f~o to gn w i e r i w e a by e mmi ijb-- -

~ ~ a f f R K m W ! 3 to the intdl.utubll property d e b - ~ .!% a ure w y i n g an b r i ~ a ~ , n o ~ ~ ~ r n n ~ ~ w c CIM d the htrgudori OT a produot

a specmc action from being canled out In order to +yBvent 9j-j w. d i i an the reputation of another. Co~ppny . ~ ~ r e ; s o n t h g it$ Stvlcetk 88 bsmg Zhwe of the other Company. M arot went others to know about.

w3ng.e trade m f k as a ddmah nave wW the intentidrl of leker $tothe m t f u t m e r . - 0 . .

Wt is meant by the8e.terns related 'KO intetktual g r m right@ h

b in ing I: Training of junior lawyers werally provide training for young lawyers entering the firm in the form of uction and practical work experience. Seminars are held by experienced

a theoretical framework for understanding the legal, business, ethical I issues that junior lawyers are likely to encounter. On the practical side, the

oknauvn as 'shadowing' gives junior lawyers a chance to observe senior lawyers at Rdt Shadawing may include anything from attending meetings with a client and other ws, to participating in negotiations with opposing counsel to attending a tr ial or b i n q the closing of a transaction, ,,, , . - - . - . - - - - - - > ; -A--..---..-.

& YL-,C

y bllowing listening exercise presents an extract from a seminar heid for junioilawiyers

Unit H lrttekctual pmpm

1 ; - - 4 4s Listen to the extract and answer these questions. d

1 What is the topic of the seminar? 2 The speaker says that her listeners will be shadowing a senior lawyer on a new case. What does the case involve?

3 How many requirements does the speaker mention?

8 45 Listen agarn and complete this extract from the outline of the speaker's notes for this part of the seminar. Use no more than three words for eech space.

Notes for seminar --"am General remarks: Area which is changing rapldly; impor& Overview: Topics to be covered in seminar: b a l c concepts, 2) ...................... - ................... presented by particlpsnts, r t x ~ t ..

@ Requirements for patentabitity of an invention ' ' ' . * t n l ' ..... - Flrst requirement: must be useful: 2)

- '. ' " , ,,- Invention must provide a 3)

- Seand requirement: must be new: novelty requirement Third reauiment: must not be obvious to Dersan with skiR 4) ..................... .. ........ .-. ......

- Fourth requirement must be patentable 5 ) ........................... - . ...,......... . Example processes, machines, a composition of matter [sttch as a synfhesised chemical compound) Subject matters traditionally 6) ................................ .,.. patentability: abstract Ideas

business methods]

I

8 Decide whether these s are true or false. 1

1 The question of whether an invention is patentable is generafly decided by I the courts. -- .I

2 In order for an invention to qualify as novel, the Idea behind it should not already have been patented in another device. =-y

3 A process, such as the idea for a machine, is not patentable. J 4 Today, business methods we no bnger au tma

patentability.

Reading 2: The State Street case The junior Lawyers who are attending the seminar on business method patents are asked to research relevant cases on the topic. One has been assigned the Landmark case known as the 'State Street' me, In his research, he came across the summary of the case shown on page 151

7 Read the title and first three paragraphs of the summary and answer these questions.

1 What effect has the court's decision had an the patent system in general? 2 What does the business method in question involve? I

1 1 ~h, '3.l~ ~ t r e e ~ car= method exception. The court reasoned

invatid under 'the long-esta-blished prin- ciple that business "plans" and "sys- tems" are not patentable:

The lower court held that the invention

.- . .

- " -- - .q . . - - .--

#' 6 -> - ' . - -7 .1

Writing: Notes for a case brief 10 As part of the preparation of a case which your firm will soon argue in court,

you have been asked to submit a memorandum on cases and rulings related to the patentability of business software, including the State Street case.

Using the information from the text on page 151, write notes for your memorandum. Refer to Unit 9 to review typical expressions used in case briefs. Order your notes under these headings:

Facts of the case

C Legal issue in question 0 Holdings and reasoning of the courts

\C General legal significance of the case

Reading 3: Bus~ness method patents The legal opinion an page ~ 5 3 ~ ~ b y ~ ~ n i a r ~ h ~ b w ~ bwkhthl seminar on business me&d patents utm W. il Read the text and answer these questions. Ignore the missing sentences (1-5)

for now.

1 Which paragraph of the text refers to the fact that patent law has undergone much change in recent years?

2 In which paragraph does the writer suggest an alternative to registering the business method as a patent?

11 Read the text again and complete the spaces (1-5) using these sentences (a-e).

a Unless the Supreme Court opts to review future business method patent controversies, I believe it is unlikely that lower courts will break from this

6;line of cases. T6' Traditionally, inventors of business methGW ave relied upon trade-secret

rotection because such inventions were regarded as unpatentable. Itimately, the validity of any patent claim depends upon satisfying the other

for patentability, including those of novelty and non- (3;~iousness.

~bris has developed a system called "Express Lane" through which a consumer may complete an online purchase on the Libris website using a single action - one click of a mouse button.

e Consequently, the success of any patent application for "Express Lane" will primarily depend on whether "Express Lane" comprises a patentable invention.

113 Match these words or phrases (1-4) with their definitions (a-d).

1 to state uneq>vocally C a to be freely available to all and to no1 -k~+k\$-n, U intellectual property rights

2 to be within the public domain?. b taking something from someone else your own benefit

mcel.aing business method patents

atatable as a metbod d doing busines.

&cussed brim d w g our conference, this is an usethd areaof lbe lm, ad there has ,

debate about the p a t a g of business methods, particularly with regard to the

methods are eligible fof U.S. patent protection, subject to the other requirements of the

recent business rneaod pateat case law emphasizes at all patented iuvntioas remain @e reqvirements of the Patent Act. This means that simply fuZfC1Eing tbe patentabIe

@ma w@reme~~t_jS @ot enough to jusw €he gcmtbg of a patea, . I., . , , .-.. -....... ~ & d w y , b r k must conr~l1lerwhther h wention claimed ih " I ? x p s Lane" eady within the public domain, ihus r e n d ~ i n g it obvious and therefore not patentable.

k Text analysis: Discourse markers as sentence openers

I The text on page 153 makes use of discourse markers to indicate how ideas 1

I interrelate. When placed at the beginning of a sentence, these openers point to a relationship between ideas or highlight individual ideas. Look at the following sentence from Reading 3, in which the discourse marker as a ~ s u l t signals a cause and effect relationship:

@- 1 1 -1 As a result, business methods are eligible for U.S. patent protection, subject to the other requirements of the Patent Act.

In the next example, the word notably, which here means 'it should be noted that', serves to emphasise the idea expressed in the sentence:

Notably, the Supreme Court has declined to review these business method patent decisions.

There are a number of discourse markers expressing a variety of meanings. One meaning already covered in previous units is that of contrast, which can be expressed using words like whereas or in contrast.

The table below lists eight functions. Decide which one each of the words or expressions In the box fulfils and add it to the table. You may need to consult a dictionary. L

As a next step, Besides, Finally, Fm ~f I For example, For instance, Formerly, In addition, In contrast,, - In fact, In particular, In short, On the other hand, Previously, Secondly, Specifically, Summing up, Therefore, Thus, To begin with, To conclude,

-w t h e i d trade-(a infrurqrr

The tdlr Cornmu Artitb 1 be cm4

mark statutes all matters relating to trade marks, including advising on

marks and trade names, registering trade marks and renewing reparing licence agreements, identifying trade-mark tihg plaintiffs and defendants in Litigation, to name a@

Artide 47 of the Council Regulation [EC] No. 40194 on the

k f k . A ClM is a trade mark registered in the European Union. The b o r e s s of renewing a Community Trade Mark, and would have to

assisting a client with the renewal of a registrat& ,- informs the owner of the trade mark when that trade

A '

ngon the Last day m. hffng'rhh,

F i i d s or expressions (1-i'), itali~ised in ihe article, with t M r daflnttirms (a*].

a will nc3 k the fault of b the date m e t h i n g stops being vdid or en& c if this has not been done d If 6 given the legal power to do something

involve the responsibility o f q f wlll tell h is c g owner

thi6 simplified i3ccount of the pracedue described in Artlcle 47 using ,..)uns In the b x . - - v TmF- --I

Writing and Speaking: Paraphtasing. in' plabr Language

Lawyers often need to explain the contents of a legal text to a client in plain language the client can understand.

Generally, when paraphrasing complex sentences written in formal language, it is helpful to do the following: 3 Break long sentences down into shorter sentences. 6 Make passive sentences into active ones:

The request may be submitted -+ You can submit the request j Replace shall constructions with other verbs, depending on the meaning: - future forms: Registration shall be renewed for those goods or services only -. Registration will only be renewed . . . or You will only be able to renew registration . . . - verbs of necessity: The fees shall also be paid -. You have to / must / are required to pay the costs.

P Replace formal vocabulary with more common, everyday words. I 28 .Read this paraphrase of paragraph 1 of Reading 4. What kinds of changes

have been made?

The owner of the Community trade mark can renew the registration of the trade mark himself. Another person can also renew the registration if the owner has given him the authority to do so. The owner can only renew the registration if he has paid the costs of registration. I Paraphrase paragraphs 2-4 in plain language. Write down your paraphrase first and then read it aloud. Does it sound natural?

Read this email from a client of yours. What information is she requesting? ., I - ' . -uz F-

to Ms Fax's email Sng the information in Reading 4; mation in your own words. YOU should:

dlacourse markers for

Seistance with the renwal of registratlm.

B%: Discussing issues - copyright and

h:t~ the dlecmslon and ~nsw these que6tlons.

k h m a s and R e b a a dssalba the concept ol fair u8e b American

BEg to PWtck whnt Is the objmive of copyright lahn !&IRB~- think is in the stmrrger posttian now, coyyrl#t holdr)rs a

!-? mtb' h t ~ c k , how marry factors need to he taken Into acaaunt when yhg.br liw? Mether thmt statments we true or false.

hfr use' daclrine anly applks b thg use ofcopyrighted r n ~ a l s in fwl fBceteface Cbssroom situations.

hm a b&tc rmdel.glisndlng of what di&3nce karnhg 11% ~ n d io id om of the IntelLachral property is- that it raises. Miit w e 3 that in the future It is likely that a W h w ' s rim to use @titd mabrlal without patmission wN1 betme -rmxeeshgly restrioted PUr&ctOr anf3lysla helps determine wl7eThar ehb.use of 00pyrighlud & falls under the 'falr use' doctrine. .a polrrta out that the hr-faator analpls is subjmlm i n 4 tt~er&re '

e& *biem

Faking: Phrases for discussions b*ng part in discussions, it is necessary to know how to express your own ideas ms in English [see Unit 3 for phrases for expressing your opinion]. It is equally &my to know how to react to the statements of others [see Unit 8 for phrases for Wmg and disagreeing]. The table on page 158 provides further useful phmes for mg and responding to ideas.

a8 Complete the table below using these phrases, taken from Listening 2.

fn what way? So, In other words, ... Yes, you have a point there. Yes, but you can look at it another way, too. That may well be true, but you have to see the bigger picture. Welt, from a legal palnt ~f view, the debate is about ... Sorry, can I just finish my point? As I was saying, ... And what's more, . . . Yes, but that's only one side of the problem. I thlnk the important issue here is . .. Let me give you an exampla. It seems to me that the real issue Is . . .

nissed filec ttle

ruled R,,

*--w Nh.-?q%U$ P

L . -

rt upheld the decision of the trial court whlch .. . that q commercial phatagrapher was dlte ~ayment of

up of instructors left their employer, who had de~loped a special

The factsqt~e-c%e

r

Flenihg Co. ('Fleming') was a Bloomland. One of its respo departure. In order # carry cornpans to develop a sys developing the software, support website-based

The contract beme regarding own software to another had in the sohare, if any, Although not eqxasly WS&Q kg s@uId be hpBed whereby Linxus signs &e q@@km F1 s u b - h w the software to third par?&s.

L

Divlde &to two p u p a , with om g r ~ u p t ~ p ~ m ~ . ~ n g ' em one goup repmsenthg C i m .

1 Prepare .ibr negc@atiPas Wb t h e t3be-1 party, You. sho4d: I~~ Usa'Iegal iwbes of the wse and @termhe aguents.&r yBur dde;

Q li&t the stref@Wt and w6aMr@aess d - p ~ . 41de @.the aase: deal& whih p6wt~ bftM:Wm &cumg114~ rnM.?itrdofly smrt

:,y~ur apm and can be w d * . a t @ t a @ l m t . ~ ~ W p 3 r t y f r s . c a a e ; m&e nW fer the m i o n : What aM y0w.r gOa18? Wfmt are y W w)lIhg.b

; Q i ? Wat.i~e yw 'ribi MlIfig &?

2 up wtth a representative of the e t k r party gnd attam(X to W O ~ B o i3wemmt.

3 Report me msms of your negotlatims to kb dam.

I R@wltn! th~? Bblltnsct Mwen .bfillnS Md Lbm w?th your p m 6 r fm the dher side in ~ F d g r td . ihwrp~m y o u ?e@&Ud ou@me.,

2 Wrlm.mr, sf advice to w e of me. pW'w (y&r ~ k e ) ; whldr you outline the bgal. lasues ml& by t h ~ &se? refer t6 relevant ~~ ar rebteda~ei arrd prwkk your opriian ea .ta the fiWy crirtcomt of the c m .

. .

:pression; and r a press term of the contract. .

efficacy purposes) for luld only be likely ' ? the iires the right to

~rk and

Neaotiable instru

-.. Reading I: introduction to negotiable inst rum-1

h w ~ 0 ~ d w 3 t k 1 ~ t k b b a i m t ~ w n c n f f ~ s t r r ~ w l t h ~ ~ 1 ReadThe text and decide whethef ihese Statements are trOe bu false.

1 The possession of a negotiable instrument can be freely transferred physically 'I or through signature.

2 An endorsement refers to a signature which serves to transfer ownership of the instrument to another party.

3 The nemo det rule is strictly applied to the use of negotiable instr'ments. 4 If an instrument is 'payable to the order of' a certain person, this means mat

the holder of the instrument is entltled to payment. 5 Negotiable instruments are used to obtain credit or to pay financial obligations.

I

Negotiable instruments1 are aocuments wnlcn represent an lntangnble ngnt ot payment. h - Example-s Incl_ude -. promissory .--- notes, certificates of deposit and cheques2. When drafted USIII~

the correct and very particular language prescribed by common law or statute, a document I becomes negotiable, which means that it can be freely transferred by endorsement3 (usually by

signature) or delivery. One of the most important features of negotiable instruments is that the are generally not subject to the nemo dat rule. This general principle of law states that 'he who hath not cannot give', i.e. a transferor who does not hold title cannot transfer title to a transferee. In the realm of negotiable instruments, that rule is sacrificed in order to facilitate th

I free alienability of negotiable instruments, which aids commerce in general. ' A further explanation of 'negotiability' can be illustrated by a common type of negotiable

instrument, a promissory note. A promissory note is a formal written document which contains an unconditional promise and is signed by the person making the note, the maker, to pay a certain sum of money to or to the order of a named person or to the bearer of the document. Payable 'to the order of' means that the sum of money is payable to the certain person and 'to the bearer of' means that the sum of money is payable to the holder of the instrument.

I Therefore, if a promissory note is eventually held by someone who is unconnected with the underlying transaction, but who holds the note in good faith and knows of no problems with the instrument, that person can become a bona-fide purchaser for value or hdder in due coursn (HDC). Specifically, the HDC takes good title to the instrument, even where the person transferring the instrument to him did not hold title. Thus, in a lawsuit between the HDC and thl maker, the HDC still gets paid because he is immune from the normal defences to payment.

Negotiable instruments serve two different functions in commercial transactions: a credit function and a payment function. The credit function allows negotiable instruments to be used. obtain credit now, to be repaid out of future income. Common examples include promissory iotes, certificates of deposit and debentures4.

(US) also commercial paper (US) bond or secured debenture (both are secured debt Instrumehts). A d e b m r e (US) checks the USA is a debt instrument which may be secured or unsecweci, wkrms tn the U (US) indorsement a debenture is usuaHy a secured debt instrument evidenced by a document under s '

(a deed) and protects the rlghts of the debenture hdder. '1 I

referred to aS.8 n h k e ~ d e e = .

oti:i~1&.ir;l;$twrne1i$8:to,.be us$dlhi liaeir:'i3T0oash payments which ntent (or rEsCo/j to tibnsfer:.~cily:Cp;mmon examptes are cheques '&id b i i of

nge is a thm-party irrstfuicnient KriTfttsr, Snd signed by the first party (the drawer), party (the drawee) to pq:a third party (the-payee) 'a sum of money on

Me future ti&. A cheque is a more specific term for a bill of

@ which shckUJd-be m&j~me,d here is the IetW of nt ilssued by a bank (the issuer) ,to a third party (the icant, instuuctilyg the Wnk ta pay a certain specified amount ain mndiiions that are stated on the document are met.

an ofken used in the ircterrmtlonal import and export Msimss, as they provide ng for tW transaction

-. -

b e -new wna m a f ~ r n Reading 1, - 7 d..-..- is a rec~rd crf a- deposit with a Plxed tLnb pcnod d Intarest. a wrnpany which pays a fixed rate of inte

~,Hi+asset6 & a cmgiany in t h ~ UK Is aalled e I& 4~gcrtIab)e b ~ n k 1RsVUm~t whlch fs p&yaIstww c&fnmtY

a bank to pay the d m indimbd to f h ~ l S r Q an

-a-

: Negotiable instruments ., ,.

from funds hdd on &pgsTk. itlonglly pimisea in w r h g to pay a sum of money to a nd cr at a tlms h tha W r a IS Wwfi as a p.%N&.!+@

of 8..* {most o b n rahrrad to as e d d ~ k ..... in tha yMqh ard~r wHch dir~cls 6rw pa@ to pay a certain sum Of

tip 5J5 dl hudved In the use a7 negotiable hstruments. Match h s 11-7) with t h ~ j definitlw~ (a-g).

3

a pa* who signs a note, cheque w other negotiable In$trtrmant md.wha promlws to pay an obligation when due

b party who has acqlrired pbssesslon of a negotiable h!&mment lhMu$j proper ncgotiatlon far value, in good falttt, and without n&&m &any defences to it

c party who I; in possession of a negotleble instrument papiget0 bearer or endorsed In blank

d ~ r t y who issues or signs a bill of exchange or drdR as e pqrty ordering payment

Po 5 holder in due course e party to whom a cheque, draft or note is payable. The payee's na!

follows the words: 'Pay to the order of'. 6 make, P f party on whom a bill of exchange or draft is drawn, and thus who

required to make payment

7 P a Y e e- g party to whom a negotiable instrument Is transferred by the act c endorsement

-*I, -*+* , Reading z Pmmisrory note fthbwh~trn~ an ,exterptm S ' U ~ ~mm;smyiot+, whk!i a WW w e m

mpay a debt at a certain time through a series of payments or on demand. Generally, a ptomissory note states the parties involved, the amount to be repaid and the terms d npayment (when the payments are to be made and how much interest is charged]. Additionally, some promissory notes include a k inbf l i le ra t ion clause', stating unde which circumstances the entire a

DEMAND PROMISSO Prinapal 110,000 ~ ! 2 Date ~ s u d March 31, 2006 ' '*'-

interest rate: 6% per amlm

For value rece~ved, the unders~g Soderton National Bank ("Payee") at its offices at 99 Hartsctale Avenue, Soderron, New Yock, the principal sum of ten thousand dollars ($1 0,000), together with intwest at the rate

I ' 1 and in the manner hereinafter provided for on the outstanding principal hereof horn time

to time until paid in full. -Q.b -%\ * -a

Interest shall accrue on the outstanding principal balance of this note commencing on the date h e r e o f a n d n ~ i n ~ until repayment of ttus note in full at a rate per annurn equal to 6Va Interest-only payments shall be made by Maker to Payee on or before the 1 st day of each rnonrh.

Maker shaH make all payments hereunder to Payee in US doll C The maturity of ttns note may be accelerated by Payee in the went Maker is in breach or

A-. --.--

1 When does the maker of this promissory note have repay the pdncipal? 2 When are interest-only payments due 3 What happens in the event that the maker defaults on the payment of an

instalrnemt'?

5 Explain these phrases from the note in your own words.

1 for value rec ?d 2 the undersig I 3 on demand 4 to be in default of the terms of an agreement

sing the words in the

i f iahent @tQP& .matgnty outstanding I I

s not ye been repmLd dale Is maohed inoraases, it Is said3

R B debt bmmes due wde at hterals wet &

said tu b mu% be .a!! ar mymw period of

n f i Describing the legal situation: usury I ,1&s, private individuals are required to charge a lower interest rate thdn

@ m s , The charging of an unlmfully high interest rate is known as uwy. &diii$ms, u w y Is a criminal offence.

n kl your jtlribtl;ction? What is the limit on 1n-g mt!$s for BPe the pmalti86 b r LIWtf?

rafting a promissory note usist their clients in drawing up negotiable instruments or In dealing

&ins that arise in connection with their use. The following dialogue blbw@, Hs Benton, and her client, Mr Carter, cmcerns a poady drafted ls+ dtbkb the c o f r v e t ~ n and tick w k h of these formel requinrnents for

bllty of an instrument Ms Bentan rnentkns.

umertt must Be in w ~ W n form. D lumertt must he signed. m n t must stae that It Is 'payable to . . . I .

a urnem must state a sum m a i n In money

u u must stare mder which condltkns it doc8 not apply. a

want mrlef W d e the n m e af a finantist in2dt@m, 0 hslmment must cvntaln an unconcMlgn@t order or pm'tdgfl ta p ~ y .

hhwhent must &ate that lt Is payable on demand Qr 161 b ~~ F

El ps-th6m qlrcsfions.

b a n the two requMmefTts Which the client9 p m r r d s q note dBes npt

w thpt omdition dW the borrower make regarding repayment?

-- ideas so that the client can understand them:

There are certain formal requirements that have to be met [by a promissory note] for it to be negotiable, that is, to be enforceable by you as a holder in

The note has to mention wha; is known as a 'sum certain'. That is to say, . . . Allow me to explain. 'Unconditional' means that . . .

Other phrases that can be used after an unfamiliar word or a difficult concept to introduce an explanation are:

In other words . . .

. - - - - - - - - - -- - .

Work with a partner, with one of you playing the role of a lawyer, Ms Chang, and the other the role of a client, Mr West Mr West shows his lawyer the xomissory note below and wants to know if it is valid.

Ms Chang should discuss whether the following promissory note meets all of the six requirements for negotiability referred to in Exercise 8, explaining each requirement in plain language to Mr West. Mr West should ask Ms Charg to explain any special terms.

These phrases for talking about requirements may be useful:

I don't think it meets the requirement about ... There is also a requirement concerning . . . It certainly fulfils that requirement. It doesn't satisfy the requirement dealing with . . .

PROMISSORY NOTE Mach 3 1,2006

$30 00

FOR VALUE RECEIVED, and which must be received pursuant to parties dated February 17, 2006, 3 months frwn the date of this Note, I promise tr, gay @ Keih the sum d thirty thousand dollars (30,000) with interest in an ankuqt be

r Dear

Thanl realis corre in thc this t

1, ri; Keitl

writ info exP iettc

4

4

i I

Rea n=g

I p t i a i i s i n g requirements ,,,GI; inttl VISW about the poorly drafted promissory note, the lawyer, ;. receives the fo l lowl4gWr ~TQQ her ClientML WeSt

-

Ms Chana - lhar lu for snarlng your time ana expertise with me last I nursc

ewhat too late, I'm afraid) that promissory notes have

Legislation instru,ments

jay. I now to be drafted

to be legally binding. In order to avoid such regrettable situations arising nth future, I would ask you to provide the six requirements for me once more -

.-'e In writing. t U 1nl.s in advance. I look forward to hearing from you. n.

MI her cUentb request, MLT Chang wiH need to summarise the ,., requirqnents she exptained to him in their interview. How do you think the informdon dould be organised in her response? What can Ms Chang do to make the information easier for her client to understand?

Write a htter in response to Mr West's request, in which you provide the informdon he has asked for. When stating the requirements for negotiability, explain cFfficdt legal expressions in easy to understand plaln language. In your letter, yeu should:

refer to the previous contact with Mr West; ; provide the desired information In a clearly structured format-

explaln ideas in simple terms; offer further assistance and explain the importance of having lawyer to r a w the wording to ensure enforceability and negotiability.

I of the Internet wd 6t c-Emmerct has Led to far-reaching dm* in the way buiness 1% conducted. It should come as no surprise that mgotiabb instruments can now

I be exchanged In sleclronic form. The text on page 170 deals with US legistation governing electron~c ncgotiabh Instruments and looks specifically at a nmly created form et electrorljlc negotSabk instrument.

I l&!$urn the text quickly. What is this instrument called?

13i;~pead the text. and match these headings (a-e) with the paragraphs (1-5).

s A new kill" df instrument b Provisions ~ncluded in the act c The purpose of the act

/ d Some possible effects e Llmlts to applicability

~a~~ 1

4

"agents" and acceptance of electronic records and signatures bl

gnqfuded from the statute's affect.

. , . . . . . . . . . . . . . . . . . . . . . . cantalns provisions fwvision or transmission

automated ele

m M ! r w M r r i . W O W Y L I I Q Y ' r * H b Kq7.5d b scmhr d l b r t ! 3 ~ 6- h

, ~ I L - FIllF:

I \IYRh A d CompIete each of the sentences below describing what

b ' u s l n g the verbs In the box. t P--.

k contains creates defines provide

*he terms 'record'

.. transactions hetw

', 'electi

een par

ronic I

ties M

- and '

~e cor jt business transectians elecfrmlcally: p@%e of the Act is tb .'..-........-...... a uhiform national framework which

and apptjcation of 3roviSions governi :ctronic form. as form of electran

i ic tra lnforr

tlaw

~nsactic nation

lnshw

widtd

whioh

k,.thbbe txpresslonS, whiah folhw their definitl6rls. r- ~~~d from a requirement: to be e - ...,_.-.....,. from (paragrqph 2) gut into effect in many cases: to have broad a (paragraph 2) & m t ~ h whlch one of other ~ a r t v can l e ~ l k force the other mrtv to

& kgislstion been enacted in your jurisdiction govefning the m i a n &b Mectronic negotiable instruments? If so, describe which amects bf

rbgatiable Instruments it governs.

,dvice from 1 encountering problems with a case, it is common for junior lawyers to request l e f m senior partners in a law firm. A senior partner may have experience with grases, may be aware of relevant legislation or court decisions, or may be able to Be junior colleague to other colleagues who are experienced in the matter at hand.

W n g dialogue between two lawyers [Ms Turner and Ms Wadman] involves a real- g tfansaction and a promissory note.

m ths first p~ of the dtelowe. W h q ~EI tly p-n? why dogu @'& is a pmblert??

ht mnlor pwtn8r $u@gm that the document eoulg be s w d by fa& wnicv partner r e c m m d s tFat tbe lewyer brlpg Use d~cyrrr#iit ta the

q&m md have it sened the~q. pn* $W . . rPnlm pMnor stater that revislops to the UCC make it dctwhle far @

to be smed by the agent m behalf of th t pVLGm -- !W sq&p&h made by tha senior partner Is t h ~ t the document could he

j electr~nicalb- b : q ! n i o r piitrtnm suggests signlng the rfbcmerrt in a few month.

'..% ~~ partner actvlses he^ cotleague that the docuwnt could lxa ;&Wmxi by c w H ~ , signed md then retlmbcd by COW r'

l,9 45 Listen to both parts of the dialogue again and choose the best answer to each of these questions.

1 Why does the senior lawyer advise her colleague to make sure the promissory note is signed by all of the principals? a So that the r e a h t a t e deal can go through on time b So that the client can sue on the promissory note against all of them c So that the client does not have to bother locating all of the principals

2 Why is Ness vs. Gre8ter Arizona Realty, Inc. discussed in this context? a Because it Indicates that an agent can be liable on a note when he fails

to disclose his representative capacity b Because it indicates that several people can be liable for a single

instrument c Because it Indicates what the previous law was regarding Ws issue

3 What does the senior lawyer say about signatures by fax? a That they are legal in their jurisdiction b That the junior lawyer should ask a colleague how they work c That they canna be used for realestate deals

. - ' Y I

\ A Language use: Making suggestions apd 6 recommendations

I - .

Look at some of the expressions used by the senior lawyer in the previous dialogue when making suggestions to her colleague.

I suggest that you tell your client to refuse to accept the note until it has been signed by all of the principals. I recommend that you advise the buyer that there are ways to get his business partners to sign the promissory note. Why don't you propose that option? I would advlse you to look into e-signatures. One other way of getting the signatures of all of the principals would be to send the document by courier and have it signed.

. Both suggest and recommend can also be followed by a verb + -ingform (see 1 unit 7):

1 ; I s u e s t tell ing~our client .. . 1 recommend advising the boyer that . . . ->- 2 '2 . - , . r,

20 These phrases can be used to make suggestions and recommendations. For each pair of phrases, decide which one is more formal (F) and which is more informal (1). The formal phrases are more suitable for use in a letter to or in an Interview with a cllent or colleague who you don't know well, while the informal ones are more appropriate for conversations with (or emails to) a client or colleague with whom you have a friendly working relationship.

EXAMPLE: Why don't YOU .. . a I would advise YOU to . . .

1 I propose that you ... 17 Why not ... ? 2 Try ... 0 Perhaps you could ... C] 3 1 recommend that .. . r] How about ... ? El

you are prov~dlng advice to a chent and suggest ways of gettlng the e of the person who is on a boat rn the Caribbean. Decrde rf your

tlon9hrp w ~ t h your cl~ent is formal or informal and use appropnate esslons for maklng suggestions.

ding advice and making

er, Ms Wadman, wants to write an email her client, Mr

t on the property if fl has only been slgned by one of the

use of the phrases for making suggestions, write an email in

provide further assrstance, if necessary.

--

Language Focus

8 Vocabulary: distinguishing meaning Wh~ch word in each group IS the odd one out? You may need to consult a dictionary to distinguish the differences in meaning.

expressions in the box.

1 Our firm can assist you in the drawing up of all ~orms uf negotiable instruments and other paper that is negotiable by mere delivery ( ..... R:%. .... bearer checks, drafts or notes) or by delivery and endorsement (........ .... order checks, drafts or notes).

2 An instrument is a document used for making some payment and it is negotiable, .hi, ..-. its ownership can be easily transferred.

3 The note, payable in monthly instalments of $100 or more, bears interest at 20 per cent W~YV~%% penalty for late payments. b w

4 The company engages in lending of all kmds, i n c ~ u d i n ~ ~ l ~ ~ q c o n s u m e r credit, mortgage credit and the financing of commercial transactions.

3 Word formation Complete this table by filling in the correct adjectival or adverbial forms of the words Ilsted. Underline the stressed syllable in each word with more than one syllable.

I cipal -

specifically *

jtrict

! text'below is an excerpt from the ~nifdrm'Electronic discussed in Reading 3. Complete it using prepositions in the

SECTION 16: TRANSFERABLE RI a) In this section, "transfer;,.,

( I ) would be a note 1) ....@ Code or a document under the electronic record were 1

(2) the issuer of the elearo

--hw~tat~ve cqy 7 ) 4 the trim -.-. I

que, ~dentrfiable, and, excepi otherwise pr a~agraphs (4), (51, and (61, lrnakeral I

I

\ @.m word choice Complete this excerpt from a promissory note by @g the correct word in each case.

e entire balame of this Note together increased /-ereon shall be

7 full on the 27th day of February, 2OC -

with

2) 0 18.

BL.7 INTEREST: After 3) demand, or failure to make g,@3ymmt any unpaid tM rate of eighteen m u m rate allowed by law, whichever is less, during suah period of Maker's Mtt under this Note. n *

6) ~ o ~ e r / N a p e may prep ay all of the balance ~d undw thk Note a t any time without penalty.

CY: AU principal and interest payments shall be made in 7 ) actual / current money of the United Sates.

- Secured transactions

Readiiig i: Introduction to secured transactions The following text introduces concepts and terminology related to the area of the law mfernd to as ' ~ c w c d transactions: These offer a measure of security for anyone lending mmethhrq uf mtue (usually money].

& I a 1 Read the text, then choose the correct word to complete each of these I - definitions. You may need to consult the gloss~y.

1 A loan / pledge / lien IS an arrangement in wh~ch a lender gwes money to a borrower, who agrees to repay the money, usually wrth Interest, at same time In the future.

2 A loan / mortgage / pledge IS a debt ~nstrument by which t(7e ~ Q ~ ~ ' . Q Q \ N W ~ V S

the lender a lien on real property as security for a loan. 3 The deposrting of personal property by a debtor wlth a creditor as secur~ty

for a debt 16 referred to as a loan / mortgage / pledge. 4 A cla~m whlch a credltor has on the property of the debtor to ensure

payment (often for goods for whlch payment is outstanchng) IS known as a loen / ple@e / Ilen.

' '1

=

*(US) semty intest in specific assets ( a h sO& rnartgngs Wt te tCIF CLhWm bmmwrAt Gb&j (US) usllally referred to as a floatrng //en and not often used, though posslbte, uncter the lh~forin

Commercel Code

4 - d =?F- d

The purpose of secured transactions is to provider%dii for the borrower and security for the J lender. 'Credit' refers to the provis_ion of a benefit or which rnone;tary payment is to be made to the beneficiary of the security interest (the lender) at some time in the future. The most obvious example of this is a loan.

Security (in the context of the law of secured transactions) differs from other arrangements securing payment or performance because it gives the lender a right In rem which binds third parties, so that anyone interested in buying the securlty from the borrower cannot freely do so. These other w-. rrangements are smetimes referred to as q ~ ~ r i t y . (It should be a noted that Gtgage re a form of wcurity in land and are usually addressed within the scope of real-property law.)

There are two types of security interests, possessory and non-possessory. With a possessory interest, the creditor takes possession of the property which is the security interest (the pledge). The debtor (pledger) transfers personal property to the creditor (pledgee) in order to secure a e n t or performance of the underlying obligatton. An example of this would be pawning 3 personal property to raise money. The most commonly encountered nonpossessory securky interests are the fixed chargel and the floating charw. A fixed charge creates a security interest in specific property and affords the creditor control over its alienation. This means that the debtor cannot deal in the property without first satisfying the indebtedness secured by the property or receiving the creditor's consent. A floating charge creates a security Interest in the assets of the debtor at any given time, which means that the debtor may freely deal with tkrn in the ordinary course of business. It is only when there is a default or a similar event that the charge 'crystallises' and becomes fixed. -

-

Itr = 1 state of g safe a@ inn v: %thing

1 as a 3ntee that , '~dertaking N? fulfllkd 'oan repaid

interests m e n t i b ~ N awe %t'e c-1,;sincd ?bey are created through dl I 1 r nt whereby the debtor grants to the creditor an intkest in debtor propertyL -

' Hens, w k r e a seller has a lien m r goods in his possession for which he has not

urity interest must take pSam. Perfection ts the action which gMes the certain OW creditors in the enforcement of the securl'ty interest. Perfection

in three ways: by registration of the securilty agreement, by possession of the by attachment of the security interest. the undedyng purpose of perfectfon is to

'Comparing and contrasting concepts

Fixed charge / floating charge: While a fixed charge 6) the

4 Underl~ne the words and expresslons in the paragraphs In Exercise 2 which are typ~cally used to compare and contrast ideas.

4 Match the nouns in the box with the verbs (1-4) with which they can collocate.

collateral Fredit indebtedness aloan payment performance

4 to secure TQL- 5 to provide a,& 4 , \ e w , ~h w&!+

-\+, I - 6 to-errForce \*&

i 1 4 wwiTt I i~ Q.A?+QJQJ~ % n w 4 i y

Unit 13 kt& transactions

--

I- - I

. Reading 2: A security agreement

a- A security agreement ir a lqa l instrument signed by a d&&. It grants a sccurlty interest to a tender in personal property which i~ pledged as t & t d to secure the toan. lawytrs

assist clients in drawing up and fillng thcK instruments, as well as in handtinq disputes arising fmm matters connected with them.

6 Read the excerpts from a security agreement below and answer these auestions.

1 Which kinds of property are pledged as collateral for tlle I--*9

2 What happens upon defaul&,qf,-w agreement?

I SECURITY AGREEMENT 1

I This SECURITY AGREEMENT is made on this 1 lth day of May, 2005, bem Appleby Designs Ltd ("Debtor"), and Richard J. Cross ("Secured Party"). 1

1 SECURITY INTEREST. Debtor grants to Secured Party a security interest in all inventory, equipment, appliances, furnishings and fixtures now or hereafter placed upon the premises located at 99 Appleby Road, Baltimore, MD (the "Premises") or used in connection therewith and in which Debtor now has or hereafter acquires any right and the proceeds therefrom. As additional collateral, Debtor assigns to Secured Party a security interest in all of its right, title and interest to any trademarks, trade names and contract rights which Debtor now has or hereafter acquires. The Security Interest shall secure the payment and performance of Debtor's promissory note of even date herewith in the principal amount of twenty thousand ($20,000) Dollars and the payment and performance of all other liabilities and obligations of Debtor to Secured Party of every kind and description, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

f happening of any of the following: (a) any misrepresentation in connection with this Agreement on the part of the Debtor; @) any non-compliance with

4. or non-performance of the Debtor's obligations under the Note or this 8 . I Agreement; (c) if Debtor is involved in any financial difficulty as evidenced ,,iC by (i) an assignanent for the benefit of creditors, or (ii) an g t t achen t ar

receivership of assets not dissolved within thirty (30) days, or (iii) them . . institution of bankruptcy proceedings, whether voluntary or involuntary -. B - - which is not dismissed within thirty (30) days from the date on which it is

filed. Upon default and at any time thereafter, Secured Partv rnav declare all I

Whe will con1 This mer are Loo

AS i

all (

righ

The ass the

&mediately due and payable a i d shall have the

h-

and answer the38 questions.

avai la~e to the Secured Patty in the case of defauM

and phrases froin the text (1-5) with thelr dafinitbns (a+).

a failure ctr rahsal to fulffl contractual4y agceed WQn w m s or &ions b depending on wme(hirrg aba in the future in order to ttappefl c The sltuarr0n in *&I, during bankruptcy procledirg6 of an imdvent

corpamim or person, the court appoints B person m t* cha$e of alt assets m order to preserve then, fot ~~@dttor$,

d a false smernent, often in order to obtah an advantage e written on the same date

9, i.e. to deal in advance with eventsthat may or may not accur. by wording the text in such a way that these possible events are

title, and interest to any trademarks, trade names, and contract

Reading 3: Seminar on revised legislation When Legislation is revised, it is important for lawyers to find out what changes will take place m d it is therefore cemmon for them to attend intensive seminars focruinp directly on the revised legislation and its practical implications.

The following advertisement is for an upcoming seminar concerning the Uniform Commercial Code (OCC), which is a code of lam regulating legal aspects of business and financial transactions in the United States.

10 Look at the advertisement and answer these questions.

1 Where mtght you expect to see me advertisement? 2 What is the subject of the seminar?

f

The Shuttleworth Institute of Continuing Educ.ation for the Legal Profession a

llderstandh.rg Revlsed Mcb 9 of the Uniform CommerW Cod What you need to know August 19-20 A selection of bpics to be covered

F;ihgs and perPecrlons under Reu)sed UCC Article 9 Creating a se~wed interest Wensteps to follow, Lictuding draftin S w r e d transactbns: rulw governing trandtlon frpm Prior AfWe new Revised Article 9 ~f the K C Special rules applying to consumer secured trmsactians in Revls

4 htetl@cW property as collateral Security intemts tn p a w l property

Target audience This two-day seminar is intended f o r attorneys and paralegals. loan v~c~ws , vice presidents, cbmmarcial loan okers, credit and orhctiwn mahag-, branch managers, loan department personnel, eccwntanti, and auditors.

Featured speaker John 7, Kellogg (Partner), Knowleq Kellogg, and Granger Mr. Kelbgg has substantial expeience in all aspects.of busifless tiligation mphasizlng 1 areditors' tights, secured transactlom, and real-estate matters; bankruptcy and businass 4 r t r~rg~ izat ion; loan documentation and'loan mtrudurlng hlk. K&gg has repesentml secured and unsecured creditors, bankruptcy trustees, creditor's committees, and bwlness d W r o far the past 30 years.

Maerials - Participants WIN nx$e a manual which h s Me Institute @eMjcdly tor \

this seminar, The semiha will be recorded; regis&afhn congtitutw consent to such recording. if a registered partidpant camst attend, he or she may orchsr a set of the II digitally recwded CDs and the accompanying manual h-om this progm.

Corriact the Shuttfepva#h for ha&d/'lswninar ind6rmrtion ai(555) 4568046 lpIstae W Mtef for acoc)mmoda#um or dAvcbbnE wily).

CancrllBW~ H you GI? siw rn rn bmimw d&ys in -8, wfll receiver Mt &U, k e $20 dWlice charpc. If yw. cancet wrihln Re bus/ness ria*, yoo srs not cruh rrlunrY.

\c

'tfmt igahmnd &dde whether these statements are true

hk many back if he cancels one day before the

perknce representing both sides in a secured &&

gonthuta$, 4egsl educanon samiaars of the type WS th Lapk Qf.ae sernlnar7'Da pu think Itk art

nk %at the mcipient~ aholdd attend the ~ w d w ?

lday mrd Sil&yamd woddgtrorrgly mdvl~e 1k-t all d the ~ b t ~ & f ~ # t l o l r s team a n q d t f t k s . m ~ d d y t w n L t h s 6smkna-r

14 The email was wrltten by a senior partner to her subordinates. Discuss hese questions.

1 What is the level of formality the m a i l - is It friendly or respectful, familiar or distanced, irdorrnai or format?

2 What language femres of the text contribute to create this impression? 3 When would it be appropriab for you to use this level of formality?

' h f*rzcII

Text analysie Fornarw 1 Ad&-verb I"a"l

collocations

ib Complete this table using the more formal equivalents from the email.

l$ The m a l l contains examples of adverbverb collocations commonly used In professlanal cwrespandence, as well as m more formd speaking situations. . Underline the three adverb-verb dlocations.

the box with the adverbs (1-6) to make all posslbls

belleve hope object to recommend regret '1' '-w ' wt understand

4 sincerely w, ?A&- -.s S W O ~ ~ dx\ap.,kb~~)'I--, . . 8 wholeheartedly ' QU-sb)

-%!~,WQ- ,\hE3C*gr [p.dite refusal

>

r & w o n ' e email and would Ilke to reepond ~tnd tell h s it for yew to ettend the seminar, a$ you will be in couR that

mare thkt other members of the secured U a n d o n team &pppointrnerrb.J In your emeil, you should; Lmil tQ NU; Basm you m wrltiM; w.agraemeht with the Idea of attending a =miner on the tnplc; r pw c a m attend on that dote; t a~rndtiyt3 to artsndlng the seminar in question; lk m&ments for such an alternativa

from Jennifer Sampson to make k less fermal, s4 lthat it m i a t e for a lawyer to send to a Gdleague ~ 4 t h whom he or she

~ ~ ~ r e l a t b f f i l i p . Do pot change Ure content of the email. 3- .

bening I: Creating a security interest $the-pics covered in the continuing education seminar advertised in the flyer on

of creating a security interest. You wi l l hear an excerpt from the seminar, peaker outllnes seven steps in creating a security interest in the USA.

-...,..... : Identify the debtor.

. : Petfect the security interest by filing a fiMncing statement.

..+h ........ : C~nflrm that secured party ha$ given value. E* - %: ....... : ldentrfy the collateral, sf th by-a list af.$pecific property

/ ' .,: or by a categorioal de~~rigtlon. I ;.%! ;;I,,. .., ............ : Conflrm that the det ibr 'h~s rights in ttte coHatemi. Ash 6 .., fOr bills of sale, invoiee6, etc. '.f

;,$.,: ....... : Authenticate the ecurity a@&mnt 8 1 t h ~ by slg.rirrg or:

F Usten and check your answers. . , . ... , . , I . - .

- 7

dG Listen again and answer these questions.

1 According to the speaker, why is it important to identify precisely the party granting a security interest?

2 When would a security agreement describe property with the phrase now .my

owned or later acquired? 3 What is meant by authenticating a security agreement?

23 How is a security interest created in your jurisdiction? What are the most common problems or issues arising from a security interest?

Reading 5: An unsettled area of the Law Lawyen need to inform themselves of recent developments and rulings in unsettles areas of the law. Generally speaking, an unsettted area of the law is one in which the law is ope&, to interpretation, due to the fact that case Law decisions are Inconsistent with each other or (

with legislation. Often such areas are new. growing and with ~ittl2~recedent. ctpce 4 'dl luck% I

The text on page 185 deals with an unsettled area of the law in which two of the key terms introduced in this unit, fixed charges and floating charges, play an important rok.

24 Read the first paragraph. What Is the issue In question? Who is affected by this issue?

2s Read the whole text. It discusses the court rulings in two important cases and explains their general significance. Complete the ruling(s) and a summary of its significance (1-5) for each case using the sentences below (a-e).

Siebe Gorman & Go. Ltd v. Barclays Bank Limited Ruling: 1) ........ .c ............. Significance: 2) ...... e .............. National Westminster Bank PIC v. Spectrum Plus Limited First ruling: 3) ..... 3 ........... Ruling on appeal: 4) .... 4 ........... Significance: 5 ) ... b , ................ a The court held that €the bank only had a floating charge over book debts. b Since the specific wording of debentures had created a fixed charge for 25

years, this wording was reasoned to have acquired that meaning by customary usage.

c The court held that the charge on book debts was a valid fixed charge. d The decision was reversed by the Court of Appeal; it held that restrictions

imposed by debentures on book debt meant the bank had a fixed charge. e This resulted in banks and creditors taking fixed charges on book debts.

28 Compkte these definitions of words or expressions from the article.

1 B.& .............. d...&k$ ...... are the debts owed to a business, as recorded in the business's accounting records. They are also known as 'accounts receivable'. (paragraph 1)

2 An unsecured debt obligatio which is issued against the general credit of a corporation is known as a f . . h U u 6 c . . . ~ . $ . . . (paragraph 3)

3 A promise given by a bank that it will repay the debt of another person if that person does not p8y the debt is called a b.U& ........ g%X.%?%(paragraph 4)

4 A p . ~ . ~ \ & e d i t o r is a creditor who has the right to receive payments distributed by a liquidator before other unsecured creditor. (paragraph 5)

27 Which unsettled areas of the law in your jurisdiction are you aware of?

Listening 2: in secured transactions -- m~?mHsd

. . - - -

recent yturs, lawyers and lenders have wen a siqnificant increase in the inpertame of IP as collateral. However, in the US, as in many other countries, rulings in this area remab . inconsistent, while the applicability of statutes is not yet always clear.

The continuing legill education seminar on the revised UCC in Listening I included a presentation called 'tnteilcctual property as collateral'. You will hear two lawywr who attended the session. Peter and lack telling a colleague, Tina, about it.

28 45 Listen to the discussion and choose the correct answer to each of these questions.

1 What did Peter like about Mr KeRog's presentation style? a tt was professional and factual.

@ It was funny and personal. c It was complex and international.

2 Why is Jack happy that the topic of lnteltectual Property was covered in the seminar? a because it is an area of the law he knew nothing about previously b because it is an area of the law which is so unsettled a because it is an area of the law that is growing in importance

3 What does Jack say that he learned about perfecttng security interests Internationally? a He says it would be better to wait until the law has become more settled

before filing. b He says that the main issue is knowing where something should be filed

each country. '3 He says it's best to have the help of local lawyers in the countries in

question.

4 -What does Tina ask to be told more about? (aperfecting security interests In copyrights b trade marks in Hong Kong specifically c the Revised Article 9

29 45 Listen again and decide whether these statements ere true or fatse.

1 Both Jack and Peter wauld probably recommend the seminar held by IWr && Kellogg to others.

2 Due to the revisions of Artlcte 9 of the Uniform Commercial Code, the area

the United States. 3 Only registered copyrights are considered 'general intangibles' under the

4 Jack tells Tina to Look on the Web for more information on what was covered

age Focus

'T. . . r 5 ~ocabuiar~: disfinguishing meaning Which word in each group is the odd one

out? You may need to consult a dictionary to distinguish the differences in

security interest charge lien - 2 indebtedness - obligation Q&,. - Id - 3 t'o pawn to pledge to give as security 4 contingent on' conditional 3 subject to K-0 after this hereafter in future

2 Prepositions used with expressions of time Complete the expressions of time below from the security agreement in this unit using the prepositions in the box.

. - - -

mi - -*- W , h 1 :his 11th day ......... ....,.. ... Mag ' %-

2 promissory note ...% ........... even date herewith 3 the happening of any of the following 4 assets not thirty (30) days 5 thirty (30) days .... h . which it is filed 6 la,-... default and any time thereafter

'8' Collocations Match the pairs of words as they appear in this unit.

1 bankruptcy

i-\ a debts

2 debenture b description 3 security @ - c proceeding 4 categorical d holder 5 book O; e interest

4 Expressions with take Complete the sentences below using the words in the hnx. They come from the reading texts in this unit

. . . ..... .

I @see i x s e s k f preceden . . . . ...... I I IL.

1 With a possessory interest, the creditor takes ~ . ~ h l . of the property which is the security interest.

2 In order to invoke consensual security interests against third parties, perfection of the security interest must take ..Y$~&u.

3 Receivership is the situation in which, during bankruptcy proceedings of an - 'nsolvent corporation or person, the court appoints a person to take

" n . ~ .. of ail assets in order to preserve them for creditors. 4 1 really think you should take ..*. in the seminar. 5 I'm sure you will agree that this court appearance takes v.,-

seminar. 6 Identify the debtor. Take .$&%.@to identify precisely which person or

entity will be granting a security interest.

~ w r a e ~ m such I s legslat~n, agreements md legal ? ~ $ r l s e d by the. use of.f~rmat verbs not ,t$~ng~rbHy pee& Many 6fBese wbs are of Latihale origln.:.MM

wit6 their. more. informal coummperts .(a+). 41..

red, inform (x2

vise, fir., ,,, hnlin\fr

~ a ~ . d f ~ c w p o r a t e clients hotd the rights to valuable intellectual pcopeFty & & h e y have asked if we could help them with matters concerning

ctions and these assets.That's why I really think it's important e sure that our knowledge in this area is up-to-date. . A I

II ting to tell you that I've ar~anged an in-company seminar on . , , 9 trio IP assets as securit[j$$ests. we'll have the seminar on M o n d m F@ f . r 0 ~ ~ 9 : ~ ~ ~ ; ~ ~ , ~ : ~ ~ ~ ~ ~ . \ ; " e r ~ important expert will ' ' ' - ' , e semirikk n&e: it s t a r t s ! $ t ; g i q l ~ ~ - ~ > ~ ~ .- . . ,

>.'< 7; Ilttac,he,d a list of tZg!ks f d r h seminar. Please look thr,,,kfl:.

,..> L

byy think you:sh~N~~:;t.2ke~Part .,. -arc in the seminar. So I suggest that you make ~ e y o u h ~ : ~ n o ' o t l i , ~ - r . ~ ~ , ~ ~ n f m e ~ s that,day. I really h q g you can corns, Let.

' . ' . L 1 . . . . . . - - ,

+

. .

Debtor-creditor is the area of the law which relates to the rights and obligations of debtors a creditors. The law outlines what happens when the debtor is unable or unwilling to make payments and what remedies are available to the creditor in this situation. It does not focus o the creation of the debtor-creditor relationship but, rather, on the collapse of the debtor-creditor relationship.

With this in mind, debtor-creditor law largely involves how creditors get paid when the debtor do not have the resources to make payment. This question is determined by whether the creditor has some type of 'favoured status'. Broaaly speaking, creditors get favoured status by two means, either by lien or by priority.

1

There are three different types of liens: consensual, judicial and statutory. A consensual lien is '

one which is created upon agreement between the debtor and creditor. Usually, this type of lien must be perfected through some type of registration process in order to be invoked against third parties (e.g. other creditors seeking payment from the debtor from the same property). Examples of these types of liens would be mortgages and registered security interests. Mortgages are liens created in land, whereas security interests are generally related to other types of property. Judicial liens arise as a result of some sort of judicial proceedings brought by the creditor to secure an interest in the debtor's property. Examples of this type of lien include attachment Hens, garnishment, judgment liens and execution liens. These liens generally entail seizure of the debtor's property by a public official (such as a bailiff-) to enforce the obligations of the debtor. Statutory lkns are liens created by legislation due to the economic relationship between the debtor and creditor. Common examples of this type of lien are tax liens and mechanic's liens. In (1 some cases, pertection of this type of lien is required in order to be valid against third parties. ,

Priority becomes an issue when the debtor is unable to make payment of his debts when they become due and a group of creditors take action to secure payment of their particular claim. Most commonly, creditors bring some form of action or claim during the course of insolvent liquidation1 proceedings. In such a ctrcumstance, the usual procedure is to gather the debtor's property and to distribute it among the creditors. When there is not enough property to go around, the law has a system of priorities under which certain creditors are paid before others.

I Most of the rules that apply in this situation are first-in-time rules related to different classes of creditors. Examples of priority creditors would bewage-earners, IandIor_d~ and tax collectors. Other creditors are usually subject to first-in-time rules to determine their prlorrty.

btors and : ike i

t focus on ulor-creditor

pe debtor does he creditor

I by -O

bual lien is type of lien 'against third ty). Examples gages are liens lperty. Judicial ) secure an ms, re of the he debtor. men the ~ k ' s tiens. In

I ~rd parties.

when they I

lar claim. lsolvent he debtor's I to go fore others.

:ollectors.

crealrors WIII not have any favourea srarus, ermer q Iten or prlorlry. ~nese often referred to as general creditors. In the context of group actions, thest erally end up receiving nothing upon distribution of the debtor's property. In order fc i s to secure thelr claims to some degree, they will have to bring an action t o a_ttain

T- I

b e s of Liens

i ~ a n 1 a a 13laim against property which secures payment for taws owed to the government

b a mrn Imposed on a person agshtst Whom a judgment has been entered but rernalns unsatisfied

o a jegd i m which creates a dalm rrpan real em9te in order to , sewre the payment uf a debt . . ,

d a claim @inst reat property which sawrea pqyment fgr work ~r services mfied out on that proper&

tjen 4 e s elaim resulting from a legd P~OE-Q in M I C ~ B u a k w requests a couFt to oraer s Wcd my W&ig p r o m of of owing money (84. wages) to the debtor to release the relevant pfaperTy/rnoney to the credm

C a p r e ~ ~ t tntems in asset6 fesuthglrern a mrt arder w writ to maize such assets

st G\ g a @ht created by a caqn OW or w-rit dMing the iekmra of assets of a debtar In order to enforce a judgment

h a le@1 riaht to propefty an owner @ma to a qb,Qt,or a% cdletanl for I

8 8 tkns (f-8) mentioned in the text with their explanations @ ~ s e d to consult the glatsery.

-R

I-t dnct mswr these questions.

the Qxk Mer to the weditor? And the debtor? of pPOi17t9 1 4 (section 61.002) and p o r n 1-8 (section IjI.QO2)

b t h e $ d eXprssSion& In italics in the Wt, in yOw o w word&

-me a? proputy with the Intent to defraud twf3Utrs propmy umef fatse p m t m a s

(21 the machmEnt Is not sought for the purpose of injurJng or h-ing h e d@ndazc

(3) the plain.d€F wiW pmbabb Iose hia debt unless tbt writ of arrrrhmas is iaswct; and

(4) specifk grounds for the writ exist under Section 61.002.

61.002 SHXlFlC GROUNDS Attachment i s availabie if:

(a W defendant b noc a resident af rhb m t e or is a foreign caxpdraticln or is acting as such;

(2) the ddefidant b about to mow h

+ y &Kd m pay or mure tb. debt d

@I the defendem L h id& BO &at thq"0.d- maw Of?€uwf~lnnrnBe 7 1 timed an him; > .

('8) the Wdmt is ahuut r.u m~~tt.efl at pan.13h.i~ prom Im money for The p p of pkdq 1t.3%qkmd.*m'F,& 'idhis &tobi w.

5 We& H m s k w t b ~ 6 (141, i- the mOtBn? gmntl3.n p&#&apl 61.402 d MsWte which d a m It. . .-

I The detendmt le &ingWmm a h a d and hm i k t he 4l.not pmy4he pl@intiff.vhaT be owes him.

2 fne ddendmt &.a h n c h firm wlth ah afke h f k n t ~ ~ ! y , wWm ttw dult h brought

3 t~ eietmcimt pmha8Bd several wpensiua mom vemh ~ t k e plZtkRHf WIVI a bau ctwqus.

4 The defendant has left his known address md cBnn&'be QbBnd.

B#& for informing his clients about what they can do to legally I( ef toss from the hazards of business and personal liability. This is mction. You will hear a lawyer speaking to a group of clients who are nbrg about asset protection.

mu nent

the car ' ssdw

R'ln acmtmt dapuks involvlr~g money

mew after the case Is decided by the cam a &t d&ldes in h a w of the pleintlff ml mtrate In ydUr name mhd all it~cwnts

different irm a mortgage El 61

'1I]CIe g~cal7d part d the prtewtatbn, in whLCh h e spealim

r . .a;xEtmp&s of two clients, and answer these questions. L lawyer's firm do to protect Ed's assets?

W.amet protection plan irPlp~ove Ed's posttlon In nw-hs with b I:&. prejudgment attachment nen unsucoessfui In the second case

ng 3: A career as an insolvency h o n e r L hey practitioner advises insolvent entities about how to deal with their P.difficulties and assists with bankruptcy and liquidation procedures. The excerpt ~ j t p r l from a career guide provides information about the profession in general. it hew one can become a licensed insolvency practltloner in the UK, describes mi professional bodies and outlines the routes to qualification.

d the excerpt and answer these questions.

b l a i n what you think this sentence from the text means: Insolvency work is ars much about people as it is about figures. What role do professional bodies play in the making of a career as an insolvency practitioner?

Jdde whether these statements are true or false.

I 1 The insolvency practitioner profession is rapidly expanding, with many new practitioners being Licensed every year.

2 Beth revised legislation and a change in the way people think have led to the

I trend of rescuing businesses. 3 Once a practitioner has been licensed by one of the recognised professional

bodies, this license cannot be cancelled.

'"I,

Insolvency e possibly the mxt demawjing .caw certainly one of the most chalfeng~ng, Invofvirg and one of 'he smallest -there are fewer than 2,000 tic

lnsolvency practitioners can find themselves runnhq b deals, or investigating and adusing on the vlabilrty of a somet~mes, the rntegnty of its directors).

The work of the lnsolvency practit~oner affects the I~ves, prbspmis m credrtors and debtors Insolvency work is as much about Insolvency practitioners need the psrsonallty a d Skills b directors, distraught employees and, amongst others, harcl-Men a bargdfi

The Insolvency scene is always changing. In particular, tk effects of thg lty%bemy &$ .If&$. ?

and the attitudes of banks and other creditors mean W, m than ever, h e w

hdvency prmdures.

Where an insolvenCy practRfmer is appointed in a formal ~rasolvency, the most oomon prmxl~lres are the IqwWron of companies by a variety of routes and bankruptcies of irdviduals. Even in these cases, often regarded as the 'end of the line' for businesses, FmaS,Micn and dstermhatim are still needed to preserve as much of the bwshess (and its

I

associa€& ]@xi) 88 possible, or, as a last r e s x t , to get the best possible price for its assets. I

I t Even where a f6rmd insohlency procedure is necessary, in many cases a positive approach to the rescue of bu&W%m md jobs dan t3e taken through the appliatlon of admnish-ations, admncllstratwe receWr@@ps a n d A a u W at?af?&pnwlts

I 1

I 1

, trushe8 k.l banlouptcy cw I ~ W S of 2ETmQement

and trust deeds.

i If you have decided to make your career m thrs area of msolvency, ycu wit flht rp$d - , to &oose a route to becoming a licensed nsoh/ency practitioner.

1,;

An a

win.

I

b&fini€lono by ~hoosing the correct word ar phrase.

~ ~ ~ e r 7s an insolvency praC(ltloner who is appdnhd by ~~ Wh*& is vested / entfihd / s e m d by a floamg 5 property, whose function is to reallse the value of the

$ @ I f / benefit / behold of the debenture holder. Is3'Ppointed by the cam to deal in f for / with the a5sets r

~ w a pHson who died wtthout a. legal& / legal / leg81i$Uc valid

h r y atrangement' refers to a plan for repaying debts as an whlch is and mar

usually fifed / iltored by a SI

kWWil?ted to wlrrd down / up / over a company, i.e. to de@L ,..ti&in llsbilitles of me company.

c,*w uiscussing insdbency work

r, explain these phrases (Italicised in the text) in your own onary if you are not sure what individual words mean.

way these concepts relate to the woh of an insolvency

of a business ~rdhh businessmen with an eye for a bargain

a business

. .midwed practising in this area of the law? Why / Why not?

4: Job opportunities in insolvency '?

khool graduates and young lawyers with a few years' working experience its in tf of job

ie hope of find advertisemen1

ling intere :s are you

!sting and well familiar with?

-paid career Which do yo1

!.A d'a @dvmTise~ehts and ded& far whhh jab (A w B):

!Wl hwe Wb apportunb tyto travel.

m, p l - & d no previous experience. will W a cha@r;e t6 speclahse in iriformmtlon twhndogy law. miid tO wrok.cn~m t b a om rwrguage. Meed tu ~ ~ ~ ~ c I s .qsrtlWr aseociatbn.

he f3dVg-rt.km~nW agair) Bnd msww #ese questlans.

bpke Ae clescriptlon c4 the law fvm tn tne second edwn rulth t f~st [n Uk p How do the two firms. diffaT? In what my me they elmlhr? Mb dlhe &LO jab advert6 Look13 more ' ~ o ~ h g to ym?

'vacancy vpe: Private practice lawyer Location: based in 1 Practice Areas: BankingIFinance, 4nsolvency PQE: 2 4 years

O u r B m , W n 8 ~ I t r ~ f ~ t h s m s r g w d J o b r P ) o n m d # r l l I n ~ Y ~ w o p e O ~ d P l o k t t l , ~ 1 n d ~ o b l n # m ~ U t e 9 8 . T h e r ~ n t 0 l l d ~ o o m p r i ~ o w ~ p o p l o i n 2 8 o m # s ~ t f ~ a r w n d t h s ~ Q ~ k t r r k ~ d t h a t o p M ~ ~ b w A m # , ~ ~ ~ v a l u e s , w h i c h l n o k r d e h ~ n g I n o u r s m p f o y . # , o r a ~ u c d t h s ~

As an associate in the Restructuring and Insolvency team, you wiU act for insolvent practitioners, creditors, debtors, investors and regulators on corporate restructurlryl rescues, formal insolvency procedures and invest!gations. You will gain internationai experience which may include cross-border co-operation activities. As our clbnts' t becomes increasingly global, you wiH be worklng to tind creative commercial sofutic reconcile the often differing requirements of several domestic law regimes.

1 / Your general rote as an associate wiil comprise three main components:

Pure legal work Managing the client relationship Raislng your personal pmfile within the practice by participating in client events a

1 contributing to training sessions and the production of know-how

I / Professional requiroments/quatific8tiom Keen interest and relevant experience in restructuring and insolvency work Current membership in a recognised lnsolvency Practitioners Association Strong analytical sklfls Fluency in spoken and written English and preferably another European language WiUingness to travel Excellent interpersonal and mmmunlcation skins AbHlty to work effective& in a multi-ethnio and multicultwal environment

I I Applicants may send their application to i.hall~ljohnson.corn I

I I

B

Vacancy Type: Private practice lawyer Location: south-wo Practice Areas: Company/Commercial, PQE: NQ-I year 11

tnsolvency Y

in the UK.

1 leading, forward-thinking firm. Appl~cants may send their application to harokl~ackson@jacksonreeves.com Y

'I

I

I

~sed in London 1rs

sir: A covering letter i s an important part of a job application. Submitted along with a tV2,

serves as an applicant's introduction to a potentiat employer. As such, unity for you to communicate a few key facts about yourself and

e position in question. It also gives you a chance to demonstrate re a clear and well-structured business document in English. Thus it is

ring letter below, then match these functions (a-f) with the sentences In the letter (1-10) which express them. Each function more than once.

., any relevant work experience you have in the field

J your current status ing to future contact ning how you found out about the position nstrating an interest in the firm to which you are applying

blighting partlcular skills, qualifications or accomplishments ,

Jackson I Would like to apply for the post of a Company Commercid Soficito~ ia your firm ibs advertise& on the Ite www.legalpositions.com. 2) As a recent law-school graduate, I was particularly happy to see that

@$o$ition you are offering is open to newly qnalified lawyers.

k ~ o u will see From my enclosed CV that I completed my law studies in Rome witb honours, and spent Be year studying law in Edinbiwgh. 4) 1 am especially interested m the position you are offering, since I

x a ~ relevant wqrk experience in the field d insolvency, 5) 1 spent three simmers working as a clerk in a @-sized commercial law firm in Manchester. 6) W e assisting with the insolvency work carried out here, I developed a keen interest in becoming an insolvency practitioner. 7) In addition, 1 am a student

I hemher of [he Tnsolvenq Practitioners Association in the UK, and two atides I wrote in l b g h h were

published in their newsletter. 8) I may also add that I achieved a high score on the International Legal lhgbsh Certificate Examination.

I

9) Iwould welcome the opportunity to work as part of your successful team, to benefit horn you extensive experience, and to put my training, experience and enthusiasm inta practice f ~ r your h. I

C r0) I look fmard to hearing from you.

&cerely . . I

Writing I: A covering letter A7 Write an application & k r of your own in response to one of the job

advertlsements on page 196 or to one you have found. You should: 0 structure yow l&r in three parts; 0 include the funotions listed in Exercise 16; 0 write your letter in an appropriate .sty$

, I , . !w - - - T 0 proofread the text carefully. . :: 6; :$. ' , # , . .. ,?id .kn;;; I

When you have finlshed writing, exchange wters with a partner and proofr his or her letter. Circle any mistakes --. . .. . .. A , . T . . ,

. . 1 L i

Listening 2 : ~ j c i b ' interview The job intanicw gives an employer m opportunity to form an Impression af person and to decide whether you muld be suited to join the firm. An inten typically pose questlonlr which lnvlte a wide range of possible responses and discussion.

JB Read these questions, typically posed in an interview for a legal position. Which do you think would be most difficult for you to answer?

1 What can you tell me about yourself? 2 What are your greatest strengths/weaknesses? 3 Why did you decide to study law? 4 What was the most valuable experience you had in law school? 5 What qualities do you think a good lawyer needs to have? 6 Which accomplishment are you most proud of? 7 What do you know about this firm? 8 Why do you want to work for this firm? 9 Why should we hire you?

10 How would you describe yow ideal job / boss / taw firm? Xl. What can you tell me about your work experience?

4: You will hear a mndidate, Mr Berger, being interviewed for one of the positions described in the job adverts on page 196. Listen to the interview. Which position has he applied for"

20 4: Listen again and tick the questions in Exercise 18 the interviewer asks.

a Answer these questions.

1 Why does Mr Berger want to work for the firm? 2 Why is Mr Berger already familiar with London? 3 What kind of work does Mr Berger do in his present job? 4 What dues Mr Berger ask the interviewer about the firm?

Speaking 2: A job interview 22 Uslng one of the jab advertlsernents pn page 1% or one yau have found In a

newspaper or on the web, prepare to be interviewed for the job. Think about how your education, skills and work experience relate to what Is required of the applicant. Your partner should play the role of the interviewer and should ask you some of the questions from Exercise 18. When the interview is finlshed, discuss which of your answers were good and which need improvement. Then switch roles and interview your partner for the job he or she has found.

Writi Followillc intervlen posrtion ernphasil som~th~r

, 23 Real p h r ~

i$ thank-you note

a p s k h iolpage ef youmelf. hrthis mwn, i€< is m m e n b llgur stmg po)nos ma agak while refeRinpRinpqwck&y ta thE C O W of tht ifwrview.

you note below, then domplete the spaces (1-5) usin$ t h e s ~

dunng our conversation

:y hactiti~ of your sl

I especially enjoyed hearing about your firm's plans for expansion.

3) . . ........ , interests, and skills are compatible with the goals of your firm 4) ..,.... q .....-. .... , the -espe~ienc~ I gathered in my previous employment has prepared me well for corporate insolvency work. 5) .,.,. k .,....... supervise a case from cammenceaent of liquidation to closure will be -of vdue ta pnr firm.

I look forward to hearing from you.

Yours sincerely

Julia Reg ton

. .

mtt of the mmkysu w P3fdrB'bfLttrn mm*: . -.

wt+you eota rmm h r ~ a . g p a MP MII :M.& ~11mv=up..te w

W W t~ t~Pi.r;s:dkOWMd In.- IMWVIW~I am gr two m. &oat the iqphwt% bmh@W MI&- -

U in w krtcnrlw; ?,.b iM ~rPtBn&Wghhh@WddIrr the fpadf+l *m :*v (0 mrwt.crmtbCG

- - *, . '

. * .-

Reading 5: Making a case 334 I In the job interview in Listening 2, Mr Berger states that he welcomes the challenges posed by cross-border insolvencies in Europe. The writers of the following excerpt from an article from a financial law journal identify what they believe to be a serious weakness in the European legislation governing insolvencies and argue for its reform.

26 Look at the title of the article. What is mearrt by the word case in thls oontext? 1 27 Read the first two paragraphs of the excerpt. What is the weakness the wtitcrs

p_oi_nt tg? Which system do t.h,eyY,poQGse7.g- a m ..

- . .. . - n h - The ca- 2 for unifying the

4 .

. . . . ' ' I ' " EU's insolvency laws -$+id I - -

?ZL*(, \ter the I& five years. 1 ihet-e havc been The I c y provis~oris operating t o mlnimlse a number of b ~ g irisolvencles m c l debt destruction o f value In llquldatlon are:

h 'kstlr~jcturings ,lcross Europe. It rnusl be eat-ly protection - a colnp,lny is able io obvlous t o all objective commcntatot-s that fiie for Chupter- I I protection voiuntarlly EUI-ope s~t~ip ly does not have ,in effective, o r and, ~mpor-tantly, car) do so I-egal-dless 9f

incleeo any, iegol iegli?je to idppol-t court- whether t can show that it is. o r 1s iikely

I superv~seri ~-estr~~ic;:(r-~ng, as opposed TO to he. ~nsolvent: bankruptces 01- I ~ q i ~ ~ d ? ~ t ~ o n s It I S astonlshlng the autoniat~c stay, which prevcnts bolh [hat there 1s sln~ply no legal rrlddle ground secured and unsecured creditors from between out of-cour-t I-estl-ucturings, with all taklng proceedings agalnst the company o f the~t- uncel tainties and differences of (also leading t o a senslble ~ n d practlcai dppro<~ch, dncl I~c lu~d,~ t~o~ ls . Why does Eul-ope appro<~ch to handling secut-ed claims); not h,~ve ,rn equtvalerit t o the pract~ce o f so called debtol--in-~jossessron powers, coul-t-super-vised deut I-esrl-uctur-llig? whch pel-mt exstlng management to

Thc pr.rnciple th,i: t 1s pr-efcl-able for- cor7t;nue running the company: ~nsolvcrt coniparl~es (as w c l as theit- ?I-01-ily for- dcbtor-I~I-possession (DIF') creditors dncl othel- stal<eholdrt-s) to be fin,lnc~ng - t l~ is super-pnority slatus h,a reot-ganised t athct- than liqi~iddted has lorlg reiultcd ~ r \ the evolutior) of a speclallsed been recognised in [he US mcl is ~now i,rl-keL pl,lce wliere the DIP cdn borl-ow accepled ~n rnosi European J U I - I S ~ I ~ I ~ I ~ S . f i s h lrlntls to contintie its busrinesi dmng Howevec while the US Uanl<r-clprry ~od<.'s?" ' rhe r-cstl.ucn~r-~ng, arid Chapter- I 1 11rovidcs a cle,ir f~-dnlevvori< Tot- ' 4 I~rn,r,it~ons on rnli:t-act~~al tei-rnlnat~orl

ch I-eot-gan~sattons, the eclu,\/a!ent 5;ahtory pl O V I ~ O : : ~ .

I-egrmes I ~ I Europe i lo no:. In ,~dci~tior., two iets of pr-o\/~siors that Chaptec I I vrov~sions cigr~lfic~lntiy p,~rticulat.ly help nsolver~t tompanles to

, , improve companies prospects of . rcstructul-e ~ l l o w thc US t3,lnkl-uptcy Court to restructuring their balance sheets and ! k: rcor-gnse the i i p i y of an nsolvell~ company avoidlng ~nsolvency.Thcse provisions <ire not w~thout a vote of tile shatrnoicle~-s ancl pi ovicie perfect, but after more than 20 years of for the Cour-t. ro enforce a real-gailsa~ton piar:. appllcatlon In the (IS, riiost comnientatoi-s despite objec~lons fi-or;] solne C I P ~ I T O I . ~ itn no\^^? woulcl pr-obably agr-ee that Chapter 1 1 as 'CI-an:iiov/n pi-ovisons') provides a co~nprehensive and wot.k;ible The ,ibsencc of ?I-ovis~ons equiv,llerlt to

mechanism for del~vel.~ng ,a restructuring somc o r all o f Lhe above ~n Europe both

complexity ancl tr,lnsdctlorl I-lsk.

4- LUob and decide whether these statements are..tme or fabe.

that while re~rganisatlons of insolvent eompanias an carried our In Europe, the leglstation in Europe does not

w ~ k for these re~rganisatlons. try to save bankrupt cornpatlies rather than wind them up. ptotecdon provision, it is necessary for a company to show

before it can file for proteation under We IOW. that DIP powen are an advantege tfo insolvent companies,

it ar! insolvent campany to contjriue functlonlng during

not allow the court to implement actions agalnet the will of

.- b.wrds or phta6ts (1-5) (ltalicised in the text) with their definitions

W a new loans - .mpbr LL b assets of a company less its liabllities

l@ c difficult d statutory framework e to declare bankruptcy

3: Discussion on restructuring at these counter-arguments to the standpoint presented in the article and

vhether you agree or disagree with them.

my opinion, court restructuring of an insolvent business can result in k live oublicitv. This could have a bad effect on the business bv reducing B m e r confidence.'

I see it, out-of-court restructuring is faster and cheaper, as it involves paperwork (official forms, schedules and procedures). I'm convinced the time and effort spent on court restructuring can be better spent on uing the business.'

c. '

odd

- *hut? You may need to consult a dictionary to distinguish the differences in . meaning. q @'t%arl% \.Q+ r / -- - < ? 7 M glt DY;hd'

1 precedehce L$%@%%%% priority favoured s w 2 confiscate seize take possession o w 3 "

onerous --- difficult . r 4 legislation lega regime ~!udici$revieQ statutory framework

$ Word formation Complete this table by filling in the abstract noun form of each 7 of the verbs. Underline the stressed syllable in each word with more than one

wra ~ ~ s t r a c t noun . 1 seize b

II 1 I execute secure

. , - -- liquidate

: --a Vocabulary: classes of creditors Complete this text about classes of creditors by choosing the correct verb in each case.

In every bankruptcy, there are generally three classes of creditors. These 1) contain /a/ consist secured or lien creditors. priority creditors. and unsecured or general creditors. Generally, if a secured creditor has wad2 improved / submitted its li prior to the bankruptcy filing, the

' I secured creditor must be 3) entitled /&wed in order for the debtor to keep his or her property after the bankruptcy is discharged. A secured creditor

F can be personal or real property that was by the debtor to secure the debt. Priority

of their debt before the unsecured and administrative

are usually classified as priority creditors. Unsecured creditors are creditors who do not have any security. Some examples of unsecured debts are credit-card bills, medical bills and personal loans.

I

;? .-

a'. 'O d.

qestions in an interview Decide which sentence beginning (A or 6) !ed to form questions that an applicant might ask in a job interview. Wes, both sentence beginnings can be used to f0rm.a question.

u tell me something about ... ; ... t y ~ u are looking for in an associate-? A

atmosphere in the firm like? \c, management structure of the firm? A % attorneys are trained in your firm? "A most important clients? R firm's attitude toward pro bono work and community service? -

Jcd caseload of an associate Ilke? \ associates are rotated through the departments of the firm? & area of expertise? w-'3 y: types of trustees Reading 3 mentions several different trustee Can be carried out by an insolvency practitioner. A trustee can be i a person who controls property and/or money for the benefit of ?rson ar an organisation. Insolvency practitioners can serve in various les. Complete the explanations of types of trustees below using the he box.

ment, the trustee may sell the property.

Reading r: introduction to competition - , law r e t o l l m g mt piws a -16~ ef witiA ,* rn- c s n d ~ R f l i s ~ w ~ e f h h a s ~ ~ y c e ~ p & e t s h kcemc msn, g M qd lntametlorwl mqm and Ukmms 111~td ammi 1 Read the text and match the words in the box wlth their definltions (1-4).

cartel merjjer mo I

d I I 1 a market situation in which a small number of firms compete with each

other 2 an organisation or group that has complete control of an area of business

so that others have no share 3 a group of similar independent companies who agree to join together to

4 control prices and limit competition

?. ; 4 the joining together of two or more companies .-, - -- Competition law1 concerns itself with the regulation of business activities which are anti- competitive2. This area of the law is very complex, as it combines economics and law.

The legal English used is also complex and is made even more so by the differences in the language and law employed by the two major actors in competition regulation, the European Union and the United States. EC competition law is rooted in the creation of the single Eurofl market and, as such, pfoh~biting private undertakings3 from partitioning the Community mar along national lines is a fundamental goal. The origins of competition law in the United Stat on the other hand, can be found in the term 'antitrust'. In the late 19th century, enormous amounts of wealth were amassed in some important national industries such as railways, st

lled these industries artfully created trusts to shield their fortunes and business empires. Those who fought against these practices came to be called '1 trustbusters. Their efforts cu[minated in the Sherman Act, which was enacted to put an end these practices. The overall purposes of competition law are often the subject of debate and 1

ion. However, on the whole, it is accepted that competitive markets enhance economic efftciency because they maximise consumer benefit and optimisq

is good for market ecoinamks.

competition law regulates car-, monopo8es, ~~ and mrgem. A cartel is a type of ' agreement among undertakings which would normally compete with each other to reduce their output to agreed levels or sell at an agreed price. One of the key ingredients in sustaining a mrtt Is a defined relevant market with high barfirs to entry so that new undertakings cannot penetfi the market. The classic tool used by the cartel to gain monopoly profits is price-fixing. In broad

: (US) An Amer~czln antitrust lawyer would descrtbe such behaviour as 'restrain4 of trade' (from one of the governing a d t Sherman Act))

This rs the term used In Article 81 of the EC Treaty. In the US, arg/ number of terms could be used here, includtng busn lirm or enterprise.

w* p ~ ' k \ X [ L ) ~ - w

dy is an undertaking or inter-related group of undertakings which either control the erefore the price) of a product or service or exclude competition for that product or

poly is a market with only a small number of market actors, who are able to adopt in relation to price-setting or output decisions. Common aspects of enactments

nting antkompetitive activities include restrictions on abuse of adomhant position4 Instruments as predatory pricing and tie-in arrangements, among others. The United

ibits behwiour which attempts to gain a monopoly position.

is another common aspect of legislation aimed at limiting anti-competitive context, it is also important to discuss the terms

nd verhd. 'Horizontal' denotes the joining of undertakings which are at the same Ghomic supply chain; 'vertical' denotes the joining of un&r~aklngs at different

eonomic supply chain.

s: Anti-competitive activity @terms (1-4) wlth the examplas ut ~ ~ p ~ W actMy they

w; a A mamh~tr l r~r of cornputs oarnponmtq W ' i p m Mat 0-3

purchasa other eqobpment ma* by Um ffh h. ar9ff w l+sp the werrsrrty verllcl.

C The meor petmlgwn c a r p ~ r a t i m in a country dl 8@e la r $ l h

i% the prlces d prmd and ~er~mieurn prbWt3~~ @*.pr:ldng, a. c A cm'p8r'y interesWd in clnklrtg fhe . ~ ~ u n i c a t i o n s &kt

@ In e partidat coulltfy t@s to ddp1 WCth ~ a t r h t i $CN&mmelFt

t 1icens.W pr;actlCes and comptex b u r r r r ~ r a t T c ' p r m ~ p s ~ whlch blepprapria~y mowr ttmestic q p ~ e r q before ii oevl . . bffer .. ' b ~ service&.

~.armngsment d A new Internet pravide~ emwe 4l-m mM, and ttw maih psaviw 'n t h ~ w o n tmpumrity ~ - t b @ eoet gf ~ ~ ~ ~ d r a m r t t k a I l y .

2: Anti-com~etitive activities and measures in the EU

'#the main areas of the competition policy of the European Union is antitrust and els. I& aim is to eliminate agreements restricting competition, as well as abuses by

dominant position on the market.

b4 on page 206 is an excerpt from an antitrust newsletter published by a Large Law d d i n g regular updates on antitrust measures taken in EU member states.

h at.Bble 1 quickly and answer these questions.

ou think would be >u think the table

t interested in readw is set up the way it

mation?

! A lawyer writing a report comparing antkcompetitive activities in the pleeomrnunicati~ns sector with other sectors in the EU is looking for hfofmrrtion. Wlll this table be of use to him?

Table 2: Member Sates and MeaeuCcs 7akm

on the market tor fixed network tstemmu~icaMms s e

findlng that the GSffl operator Eumtd Praha (Eurotd)

parties in the shrimpfishing industry participated In an ifl

Rwubllc imposed f i e on the W I ~ r n m u n k d m aom

#*table quicWy and answer these qw5tions. 8. . .

p? was at the centre of a priceflxing cartel in Latvia? H t h e Competition Authority flne oil companks In Swecfen? kdd the lblian Campetltlbn Cbunoil fine Telecorn ltalla 152

mes were h v o l v d in m Illegal shrimpfishing cartel h the R

A.

rucmdlngs t a h agausstfive gas utility companies ln Gmmr

Un$ the report mentioned in' Exercise 3 has decided to ! informdon on the basis of induatry rather than mumy. Use m Wk i oh pagb 206 to complete the spacus In Table 2

Country Measure taken Violation Authority

0 proceedings

Writing I: Using passive constructions 7 A client has asked you to inform him of recent anti-competitive activities in the

P L ~ telecommunicatlons sector in the EU and the measures taken against the AHSWER nP.soz offending oompanies. Look at the relevant three cases in Table 2 on page 207. a

Have similar violations been committed in each case? In what way do the ,,,, violations differ? Using the information in Table 2, write a short email to your client in which you compare the antkcompetitive activities in the three telecomrnunlcations cases. Where appropriate, use passive constructior - '-

focus on the receiver of the action and the action taken.

Listening I: Advising on ~orngetjtbff[@w . ., .,- * , ri fligh-pr&e ms lnvoiving cornpettiion taw vfoldtions miftd by large companies often appear in the news. However, undertakings of all sizes an the economy are equally bound by the laws prohibiting anti-competitive activities. this reason, Lawyers must advise their business clients about tho competition taw associatad with certain business practices and warn them of the possible canscque of such itlegal behaviwr. The following dialogue takes place between a US lawyer, Mt Lanqston, and his diet& Mr Greene, the owner of a taxi company,

8 1s Listen to the discussion and tick the terms mentioned by the Iavyer

1 anticompetitive behaviour 2 bid-rigging 3 price-fixing

fJ D

4 per se violation 5 tie-in arrangement 6 territoria! aliocation M 7 predatory pricing !El 8 vertical agreement 9 abusing a dominant position

9 df Listen again and decide whether these statements are true or false.

1 Mr Greene is worried that the entry of a new competitor into the market will adversely affect his business. -A-

2 His competitor has suggested a tie-in arrangement that wo make enterin{ the market more difficult for the new taxi undertaking. -

3 Mr Greene thinks that small businesses should operate under different rule= from large corporations. %

4 The lawyer warns his client that anti-competitive activities always result ill

% -m

criminal prosecution. -

11 Read the letter. What is the client's problem? What solution does the lawyer propose?

l 2 Match these functions (a-f) wlth the paragraphs of the letter (14) which serve these functions. - a Benefits of the solution b Closing c Proposed solution d Reason for writing e Implementation of the solutlon f Description of the problem

Dear Mr Richardson rn

1 As a follow-up to our telephone conversation last week in which we discusseu sc the tendering difficulties your construction company has been having recently, : would like to make a few recommendations.

2 You described in detail the sudden and marked drop in the number of contracts awarded to your company in the last 12 months, particularly in the commercial property sector, which has traditionally been one of the principal areas of activii your firm. You also told me about several recent calls for tender in which your company participated; your very competitively priced bids were all rejected, an( contracts in every case were awarded to two of your competitors.

3 After consulting with my colleague David Fisher of our Antitrust and Competitic f Department, I have come to the conclusion that it would be wise to look into thc possibility that anti-competitive agreements have been concluded by your competitors. As you are surely aware, behaviour of this kind is not unusual in a market situation such as the present one. It could certainly account for the dran decrease in business you have been experiencing.

e 4 In the event that your competitors are found to have been engaging in activities this kind, the benefits for your own company would be considerable. These benc would range from a likely increase in market share to more intangible, but nonetheless valuable, benefits such as a reputation for honest dealings.

I 5 Should you be interested in pursuing this course of action, David Fisher would 1

happy to assist you. Mr Fisher has a great deal of experience in investigating cis this kind. At your request, he couM begin an enquiry into the matter, which, in i early stages, would involve idormation-gathering in the broadest sense (includj analysis of relevant tendering processes). Such an enquiry could take a substant amount of time to conduct. Should this enquiry uncover information confirmin suspicions, then our firm is well prepared to assist you.

I

I 6 Please let me or David Fisher know if you would be interested in having us unde such an enquiry on your behalf, or if you have any other questions about the mc

I look forward to hearing from you.

l'&u%jn Stockwell I

the managing director of a large oornpany in the servlce sector.

to protect your client agalnst the risks of enticampetitlve mommend that he set up guidelines for his employees to help

itiva behaviour. In your letter, you should:

problem and warn your Jient of the risks of antkampetitive ectiGkhs; recommendation as a solution to this problem;

how such guidelines can be developed and implamanted with

* : A high-profile antitrust case I-3.

CY 4

and the first paragraph of tlle text, then answer these questions. W -L.

of tmt Is this? Who was it written bt? panies are invdved? What sector of the economy are they in?

IYegal activities were the flrms engaged In?

saw its former chairman auctions. But it also involved said it had anticipated the fine, which would be reflected as a

-said Sotheby's and Christie's, which stand trial for the collusion. He chapter in the history of the art hold 90 per cent of the market, had cannot be extradited from Britain on market closer to a conclusion.'

l S Read the whole text and answer these questions.

1 Why wasn't a fine imposed on the second auction house involved in the

illegal activity? 2 What did the collusive agreement between the auction houses entail? 3 What was the attltude of the firm towards the flne it had to pay as

expressed in the official statement of the chief executive?

16 Complete these phrases from the text using prepositions. Then explain what each phrase means in your own words.

1 to stand trial . . ~ ~ . . collusion 2 to be jailed . . . . p k f r aud 3 to be extradited .............. D4 antitrust charges y- -Or, if Discuss these que tlons.

1 What is your opinion on the case? Do you think the fines were particularly severe, lenient or just? Do you think fines deter others from engaging in such activity3

2 This text first appeared In a daily newspaper written for a non-specialist audience. Which features of the text helped you to recognise its source? In what ways would e text about this case written solely tor iawyers differ from this text?

3 Think about how you would tell another lawyer who is not farnlliar with this case about it. Reduce the information to a few key points. Then present the information to anofher student. Do you agree on what the most important points are?

Listening 2: Merger control Another important area of anti-competitive policy is merger control. Lawyers working for governmental institutions are involved in the inveW#Mn of proposed mergers. Their work is aimed at preventing the creation of structures that.wlll lead to anti-competitive activi*

You will hear an excerpt from a speech on the evaluation of rnergen given by a representative of the South African CornpeWm Tribunal to an anttiarwte of busin-

'I people and lawyers. The purpose of Competftien Tribunal is to atiwkate competiWm matters in accordance with the South Africa

T steps taken in the evaluation of mergers

l@ 45 Listen to the excerpt and decide which of these phrases best expresses the mejn purpose of this part of the y3eech.

a to compare South African merger regulation wrth that of Other cowltrles b to convince the listeners of the importance of merger control

@ to help cmparlies plamhg to merge to formulate their arguments in favour of meglng more efkctively

d to expleln the r a m s for renewing the Competition Act

29 4Z Listen agaln and choose the best answer to each of these questlons.

I Accordingto the speaker, what is the first step in the evaluation of a merger7 a determining whether the herger wiH lead to the company having a small

or a large market share ($ analyslng the effect of the merger on competition

c defining the state of international trade In the product

m,~cmmmends that when a company argues that a merger will 6 dfkrerscy, the company should ;k&a to support thls cla'un. L-W economies of scale idea. k a n the advantages that Cad be expectad to rssuk

&.the speaker, the third end final step In the evaluation process

ib$.U~s Meet of me m g e r on plnbllc int'mst @.public bpinltm mgardlm Ow? merger. 1 whather the merger cm be acSmlnbtrated effectively

q@r mnfrdl carried out h your ]urisclctjm? Whch'authority i$ a fw it?

b f k i n k the speaker m a n s when he q y s 'Mclenoy~gainsfmm f? Can you identlf'y soma of ~e gefna d~ucted tb? HOW are W,SB

kly6e'd end wclgheci In your jwisdlction? Am bendfie td consumers, p~li3wetr prices, included in thls 81tlllysis7 Snwld they be7

g 4: Report on changes in merger

bst their corporate clients in the EU in getting clearance from the European I or a Member State[s] on the competition law aspects of a merger or

bn. Naturally, they need to be aware of any changes in the procedures to follow b&dlines which appty. The text on page 214 is an excerpt from a report on pWl t ing from the reform of the European Community Merger Regulation (ECMR]. qtdm published on the website of a law firm serving large corporations.

pwwapt'r of ~tl)~qftpm sflcf ZWWNW these -on+, ,

the tern m e w strop ywei~y &T to, and whbt-d . i t . ' ~ r c i . .

tt~resbaM~ w h a a p p ~ ? ~ ~ miml t L n a here U tha m w e r . Explain W ~ M O T ahr~SjhOld In ywr d m hmk

V U r fhs tw pmposas of s prmtXlfica(im r s q u m @~ m me axt, weat am the ~ f i ~ - s @ d ) a y ~ id- Mth the p ~ o t i f i w d o ~ pro$-?

@ h u e wards (1.41, iWWclsed h . b . m with W. .def in lW [W;.

- N d

Ah-

law

&g - wens: - a competition .-, . . .

ent suggests/implies that .. . hcroft maintains/claims that . . . C

-isagree by saying:

view).

hi divergmg oplnions on the Meet of Mimwft's mmopoly pmon at yw think. H a s Mlcro~ort's ~petltion and consumers?

rney General John AshCr~ft, on the settlement imposing ~wtrictfons behaviour:

ui#aru&y cmpetltive software industry is vital to ow economy, and tivc antitrust errforcement is crucial to preserving cornpetltirm in this

e n t l y evalvhg Mgbtech arena. This historic settlement will brlng ptfective rellef to the market and ensure that cofleumt!fs will hme more 6

Ezhbicss in meet)= their computer negds.'

Vice Prwldent Bob Herbold in a letter to Ralph Nader, activist nd consumer right$ advo~ale:

pternlse that MkrosoR has been a disincentive to cornpetrtldn and

.: tion is simply wrong. As an AT&T e~cutlue &smved bs t year, the ~ a s t of mmputing has fallen XI milli~wfold since the mlorop~ceseor was InvenWd in 1971 ... Meamwhile, Americarl wfhmre companies pmlcie w q

-WO,~QO dlrect American jabs aw gew at seven times t t~e rate the US leaow from 1987 to 1994. Thars certainly not a partrait of an indbstry In deelirte~due to lack uf competition. In f ~ c t , the growth in jobs and dedne in We cost of computing has been helped by the opewlng system tech logy k Mlcmoft Windows, which has enabled software developers and harchue mlhcturers to develop thousands of c o ~ t l b i e pmcluct~.'

Language Focus

Vocabulary: distinguishing meaning Which word in each group is the odd one out? You may need to consult a dictronary to distinguish the differences in meaning.

1 undertaking enterprise firm

A/" 2 w n threshold level limit w

4 secret agreement 0- collusion 5 to misuse C f G G to abuse to use improperly

I

2 Word formation Complete this table by filling in the correct word forms. Underline the stressed syllable in each word w~th more than one syllable.

V-L f lq 3 practices .$fi&cea activities beh I *

I

.&a- abuse : . - , , I . . u ~ i . .

. . competitive 7 - . - . ? 1' ' discriminate

;..,

allocate - ad- . . . .

fine - - A b4-

the box.

i to initiate m? against a campany 2 to suepeet a company of ebusi wing ..+.@..3.??%

4 to a~lfucie on _d.~.. k 3 to abuse i t s domln nt .I... F...

6 to participate 6 to file a fine .. 7 to limit to a market 8 to impose ....@* OQ company 9 to lodge a .=.Mgalnst a cmpany

Competition Authority f led a fine petition 1) . .. !! ...... 1 February 2005 eusing FabNet Corporation 2) .*....-. having abused ns dominant position ... ..... the telecommunications market 4) . %.. .. applyin business f nditions that discriminated 5) v d t t r e r campanie9 6) .... .... sh ........ order irmit their access 7 ) ....- . h e market. The Cbmpetitidn Authority also posed fines 8) ....%. ... the tefecommunications companies Chicha

ion and LinTel Corporation 9) ...... @ ........ concluding a vertical nt restricting corr$etition.

Complete each:of the collocations in these a fo rd of a woid'fiom Th6 phrases in Exercrse 3.

Authority fined 20 construction companies over 6230 m~llion

ow truck service providers who practices in breach of Article 81 of the

r infringement of the Competition Act between the b q k s and abuse of a

drug companies for colluding to fix the

agreed to fix the prices of

oration for anti-competitive practices.

e investigate lodge reject

lary: irregular plural forms Choose the correct plural form (a or b) for

b memorandums

a prospectors

itlons Complete the sentences below using the prepositions In the box.

" . - r"r' 6 A claim

luesti~,,, ead the fo 11 eac ?/OW.

-+- - - ... - - _ _ _ - > -- - - .___.--- --.+- -.._.- -.* --I- _ _ _ >

. ... out below are based upon your account of m e

sale, which you have refused to complete because you k k e the view that the d you from any personal liability. You stated that M. Little was made

aware of the fact that Goodwright Tools Ltd was in the process of being formed signing the contract and the contract contains p~"c?vMcf~ evincing that fact

b f o r e is a standard farm agreement (4) ......................... by the Latk Wales, anbthe or@ e o n which is relevant for present (5 ) ........................ re& is section , ..... 0 ....... tk@t..fm Pnd an agreements, covenants, and w ~ m t i e s &dl be being made with tho company provided Wt a lncwporation thereof is a or before (the completian ~l8tur.

Fdm [SQ C kept D p d -

terminate C Wmtence D register B remit C e h m D amend 0 obvim~ty C wldely D expressly O eppmvad C remanded D concluded 4 B slt~tbns C pdtlts D questions B suggasis C Indicates D provides

extract from a rental contract. bn 7-'f2, chobse the be3t word to f i l l m% gap h r n A, 8, I= QF t)

~ I ~ I ~ I : ~ % ! - - I I" ohg ;is360 01: OI btirn. W' Ir

i s .(9) ....... b.. ........ to be void, th Agreement so as noc t

. .+- uld dorrrd ,@d& &el$$&& .......... .......

Part 2 What you have to do This part of the examination consists of a single law-related text. The task rs ~ I I

open cloze; you have to supply one word for each of the 12 gaps. The text alsn includes an example.

What is being tested The task mainly tests your knowledge of grammatical words and structwes and , , -

text cohesion, which refers to the flow of a text and the interrelationship of ideas . , . - The kinds of items that may be tested in this task include prepositions, auxiliary . I ,

~erbs, pronouns, conjunctions and linkers.

eneral meanin n read each sentence

ay only become clear when you have understood the meaning of the sentence as t s in the previous task, it is a good idea to look carefully at the words preceding ant llowing the gap as they may serve as clues. You may recognise words that collocat e correct answer or grammatical structures that go with it. read the whole text with your answers in place, to check it makes sense. eck your spelling, as every word must be spelled correctly.

Questions 13-24 Read the following extract from pt~vlsbns regulating the capltnllsatim of a corporation. Think of the best word to fill each gap. For each question 13-24, write one word in CAPITAL LETTERS in each gap. There is an example at the beginning (0).

.-..---. . - - . -- Upon dissolution, (0) m ' ~ o l v n t a t y or involuntary, the holders o f prefe r~~ shall f irst be entitled to receive, (13) . . b.... o f the ne t assets o f the Corporati01

the holders o f the preferred shares shall have n o vot ing power and n o holde

continuance o f any default in the payment o f such dividends, but n o longer, th

. ..-, ally. There are six gaps In each text. You have to fill these gaps by as3 e word supplied on the right into a suitable related form of that - pte is given at the beginning.

I ta

~ U F knowledge of vocabulary and, in particular, affixation and

. - . I

g extract from Article 81 of the EC Treaty bken from the website

2530, use the worde in the box to the right at the &mt tb form n the seme numbered gap In the text. Wrtts the new warel b

Questions 31-36 Read the following news item from a legal journal. For each question 31-36, use the words in the box to ihe right of the text to farm one word that fits in the same numbered gap in the text. Write the new word in CAPITAL LETTERS in the gap.

This Act fundamentally reforms contract law by allowing (31) ....................... parties to confer (32) .- rights on third partles. For (33) ......................... , the Act presents a new way of allocating risk in complex deals, and a way to protect the custoiner

Before the Act, the doctrine of privity of contract p r e m e d a pereon who was not a pally to a contract from enforcing a term of that contraot. This meant that even i f a contract affecled other people, only the parties to it had rights and (35) .......................... under It. Untll now, !he only answer for English law contracts was to create either a comptex web of trusts or back-to-back conkaCts or to allow end-

Part 4 What you have to do This part of the examinatkan usually consists of a single law-related text which is divided into four sections. Alternatively, it can consist of four short texts which are thematically linked. It is a multiple-matching task; you have to match each of the six statements provided to the section of the text to which it corresponds. An example is given at the beginning.

What is bdng tested The task tests your ability to scan a text for specific information and to understand the main ideas. It also tests your understanding of the Item and your ability to relate it to a part of the text which is expressed in different language.

Questtons 37-42 Read the questions and the extract on the opposite page from a Journal article about the partnershlp structure of law fi rrns. For each questlon 37-42, declck which section (A, 6, C br D) the questlon refers to. You will need to use some of these letters more than once. There is an example at the beginning (0). .*

Ity for adon6 I e h on behalf of clients.

socia& who is not a lawyer.

s has been the extraordinary America along with the law firms. In 1980, the 250 Law itself. American firms in the country averaged notion that lawyers she

awyers. By 2001, the 20 largest s in the US averaged 1,920 lawyers, there were 12 firms in the country with

ed governance and management has, hawever, placed increasing

D In order to enhance the status

organisation of law firms as

barrister as the 'personal tative' of his client. To assure the

oaths Lo the courts to conduct themselvee non-lawyers.; prohibited from 'objectively and in the best interests of their partnerships with non-lavers clients, without any conflicts of interest wh~ts,oever. A s a consequence, barristers were required to operate as inindividuals which a non-lawyer has any ownerslug and were not permitted to be in interest, is a director or officer, or has q partnership with others. They were right to direct or control the lawyen' personal representatives of their clients, professional judgment

What you have to do lam This part of the examination consists of a single Law-related text, from which six sentences have been removed. You have to read the text and then identify the correct sentence to fill each gap. Eight sentences are provided, which are marked A-h. Sentence H is always the example, and one other sentence is a 'distractor', whlch does not fit any of b e gaps. -"q What Is being tested v.,&&irtk7 . ?-- ..A * - -L -

The task tests your understanding of the meaning,& the text, as well as of the way it is structured, including the way discourse markers can be used to enhance the structure.

text more carefully to find out where they bekng.

Read the following extract from an entrepreneur's guide to venture capita negotiations. For each gap 43-48, choose the best sentence A-H to fill it. Do not use any letter more than once. There is one extra sentence which you do not need to use. There is an example at the beginning (01

money valuation than pre-money valuation. For example, If an assigned to Or included in the pre-mbney valuati dilute the equity interest received by the venture

investor receives me-hlrd of the company's equity for a $1 one point nceotiat'lOn shdUItr be

To determine the v b e of the emerging business, venture capitatists Mi c~nduct an in-depth financial analysis. (45) ......-.., For many early-stage businesses, financial proiections are so uncertain that Current conditions in the At times, valuation negotiations may reach an impasse. I venture market may be the most important single factor in order to bridge a gap between the entrepreneur and inv detarminlng valuation. For example, if most start-up perfomlance-based adjustment mechanisms may be MsjnMes in the somare industry an recefving first-round employed. (48) Q....... The practical effect of th prcmoney vdutltrons ~f ~pproximaely $2 minion at a given mechanisms is afkn to shift investment risk from the time, the rrego€k&ion for a particular investment may focus not capitalist to me entrepreneur.

inclt.de wxperience and depth c4 the managernant y nature of the technology, competitive environment

adJust the number of recekied by the Lnvestor mvwslon plSae aqubents a rrth& meens],

e aompeny achhves (or to achle*) a preeet f inadd

ne solely by the ~~, and In the I&t

ion to invest In en emr#glng Ae term of the i m t m n t .

has 500,OOG shares of r

e IrmPsimerrt, the ventwe caipltdisl: wUf pqy ivdant Mtm and reoeive 250,000 s h a m for b $1

the company's past ~perating hiHorp my) and ih future projectbna as dklosed In the camperry'a

the prim investors, the greater the Improttent it Is f'r h e venturn

t4Iistgt13 invesfmafit In tha canpimy.

Part 6 What you have to do This part of the examination consists of a single, Long, law-related text. It is followed by six multiple-choice questions, each with four options. The multiple choice may take the form of a question about an idea or an opinion expressed in the text, about a word or phrase used in the text, or about the meaning of a paragraph in the text. A question may consist of an incompkte Sentence which you have to complete by selecting the correct option.

What is being tested The task tests your ability to read a text for detail. It requires you to be able to recognise and understand implication and oplnion, and to be able to i d e n t i the detailed meaning of a paragraph, as well as what individual words refer to.

@ As with the other longer exam tasks, it is advisable to skim the text first in order tc yourself, and then to read through the questions quickly. When reading the text car second time, you should pay attention to detail.

2 Remember that when you are asked about opinions or viewpoints expressed in the should answer according to the information contained in the text, and not accordin1 own opinions or knowledge.

@ The function of a paragraph can often be determined more easily by identifying the topic sentence of that paragraph. -

Questions 49-54

Read the article on page 227 about European mergers and acquisitions from a law firm's website. For each question 49-54, choose one letter (A, B, C or D).

49 What is the main point in the first paragraph? A Many people In the press and government would welcome the end of

'golden shares'. B Three decisions have been reached with regard to a special shareholders' 0

rights issue. C Three decisions were issued which allow governments to keep control over

former state industries. D New European High Court decisions will increase the tights of shareholders

of privatised enterprises.

50 What does the writer say about golden-share schemes in the second paragraph? A The French and the Portuguese laws concerning golden shares were

approved, despite the fact that they restrict the movement of capital. B The Court will only tolerate golden-share schemes if the governments

safeguard shareholders' rights. . C olden shares will be permitted under certain carefully defined 0

circumstances, subject to judicial review. D Golden-share schemes which are based on objective criteria will be lawful if

they can be shown to be necessary.

51 In the writer's view, the main reason the proposed French law was not approved was because A it could not trdy guarantee that petroleum products would always be

available. F1 B the objective was not justifled, and the proposed measures cannot be

considered necessary. 4-q - . -

C it ultimately served to increase the power of the petroleum companies @he prwisi6m were excessive, giving the government too much influence

over the company.

52 According to the writer, the foremost reason why the Court rejected the Portuguese scheme is that

- @ placed unfair constraints on investment by other Europeans. - B it enabled citizens of other member states to purchase shares.

C it led to investors discriminating against shareholders from other states. D there were no sound economic reasons for it.

53 What does the phrase such concerns refer to in the third last line? A the German government's valid histancal reasons for maintainrng a

share of Volkswagen AG Court's Insistence on objechve dteria for justifyvlg continued

overnmental control e Court's position that a member state can only relain control over 2

If it is in the public interest D the interest of the government of Lower Saxony in preventing

takeovers of key industries

54 What is the main point made by the writer in the sixth paragraph? A Economic interests are a valid justification for restrictions on the free

of capital throughout the European Union. rulings may also be applied to shareholders' rlghts Issues related

in other EU countries. C The Volkswagen Act will most likely be uphejd due to the over

iqterest. D Jhe Court is certain to strike down similar schemes in other member states.

such as Germanv

tww cyOur ability tp organlw the csmnt of a letter, to use language

rig consists of two parts, which are weghted dlffmntly. Part 1 the marks, and Pert 2, whlch requires a longer answer, carries 60%.

Ing task. You have to w r b a letter of 12&180 words !n a

dhlch are written In the form of notes on the I m r provided.

Bppropristely, and to carry aut various language functions, such as ng, correcting, presentin$/developlng arguments, suggesting, etc.

of this letter. In the event that Lumber Products fih to make payment in €dl within this period, I we intend to have our lawyers file an action against your company for breach ofconhact.

We havP attempted to settle thjs matter with you on an amicable &i.These atteqm have been

- -

e sure you include all of the conteht points from Che handwritkn notes in a logical or& lumak a plan before you start so that you don't forget mything.. k.ta avoid using the sems l a n g ~ g e as in the ootes,which rogy &.top infofnal. $@IntaIn an appmpriete level of forrnalirty, ueing a o a ~ t wnjg~ d a 4 i ~ Redb the word limit in mind while wrltin~. Yeu will b e . m k e c t 1f ~ ~ u ~ w c R e ' t b o few words. 1 r - . - . . . . . . . - .

paragraphng to organise your IeUer clearly.

nswer this question.

Lumber Products, Inc., contracted with Computer Analysts, !nc. fa- the e program to manage a camputerised ordering system. The system pleted on time, and it failed to perform the functions Intended.

nt of Computer Analysts, Erlc Vollbreckt, has now sent a letter to your nt. from the Mr Vollbreckt, on which you have made some notes,

i~slng all the Information in the notes, write a letter to Mr Vollbreckt on of your client.

1. ! PLaducr~ has waived anv riebt m claim lneach due & dela-d d no otlmek&i has been I &.-

' EricVollbceckt 1

u m - ,. Pmident, Computer Analysts, Inc. w e i a c a b i o t p

a letter of between 720 and 180 words in an appropriate style. Do not write mtal addresses.

Part 2 What you have to do This part of the examination involves the writing 01 a memorandum. Based url iricL -

information provided in the rubric, you should write 200-250 words in a consistently appropriate style, covering all four content points mentioned.

What Is being tested Tfre task tests your abillty to organise lrrformation in a memorandum, to present and develop arguments, express and support opinions, and evaluate ideas. Furthermore, the task presents an opportunity to demonstrate your range of structures and vocabulary, as well as your ability to use language correctly and appropriately, and to carry out various language functions in writing, such as describing, summarising, recommending, persuading, explaining, apologising, reassuring, com@aining, etc.

,@ Structure your memorandum carefuliy - it may hdp to make a plan befo @ Include an introductory statement of purpose at the beginning, as well

statement at the end. @ Whenever possible, [ink and signal ideas using discourse markers. 0 When arguing in favour of an idea, support your minions with evidence.

II

Q Use 8 variety of language, including appropriate legs1 expressjons. - , 7 - 7 . --

. - 1 -.: 2 - .L I . # . .

You must answer this question. - . . .. & . ' ..-",

You work in the Real Estate Department of your law firm, a large international firm with clients around the world. Your superior has asked you to write a memorandum addressed to the director of Human Resources outlining and explaining your suggestions for improvlng the continued training of the members of your department.

Write a memorandum to the director of Human Resources. Your memorandum should: 0 outline the current situation in the department C suggest ways to improve the methods and content of training courses 0 recommend legal English language training 0 summarise the benefits for the department

Write your answer in 200-250 words in an approprlate style.

brnination consists of three short monologues or dialogues set L They are not linked thematically. For each extract, there are two fpk-cholce questions. The recordings wilkbe played twice.

:)OUT ability to listen both for main points and specific details. They pll yau are able to re~ognise the function or topic of a text, and to , ..

rpose of a speaker, as well as a speaker's attitude, feelin@ or . , . . 8.4.

pressed In the extract Finally, the tasks measure your ability to draw W the speaken say.

p.he$inning of each sectlon of the recording, time is provided to allow you to b ~ k $h the questions. Read each question and all thee options carefully and thoroughly in

b e . otherwise p u may rnlss important information. 1 many of these questions deal with attitudes, feelings and opmiong, pay pftrticubr

I b o p tP the verb, aaecectives and adverbs that express V I e q e - . . .a wr three different extracts. Ins 14, choose the answer (A, 6 or C) which fits best according to

mar. There are two que.*onsfor e a a a t r a c t & & t extractillh.~

kar a conversation between a lawyer and his client. l V m %

h e client come to speak wlth her lawyer? mm

i6 king sued by her neighbour over property rights. ,' * -

bis contemplating taking legat action agalnst the seller of her house. W be wolrld like to create an easement on her property.

it does the lawyer say about the next step in the client's case? B believes that more information needs to be gathered. lf e suggests beginning negotiations with the neighbour. e wants to file a suit against the former owner of the property.

I

b~ 2 MII hear an associate lawyer who works for a large law firm talking about her , sr at the firm.

ie purpose of the speaker is @report to one of the senior partners about her first year at the firm. G tell junior colleagues what they can expect in their first year at the

partment. inform her supervisor at the depxtment why she would llke to remain there.

e feels that her first year was a valuable experience because e was able to make many social contacts. e learned how to carry out research. e was continually exposed to new things.

You will hear two partners discussing the performance of two young lawyers at their firm.

5 What impresses the male partner about the Lawyer called Marcus? (RVis intelligent understanding of the subject matter B his ability to work independently of others C his willingness to help colleagues with their work

6 The female partner thinks that the lawyer caUed John A should spend more time researching his cases. seeds to review some essential concepts. C ought to be more careful with routine paperwork.

What you have to do Thls part d the exarnmat3on consists of a chalbgue &at in the c o n m of, for

*bxarnple, dn ldwvlmp a W h g , a hearing, a coaawltatlon, a nagc&m or a sbcisr Isbuatiocr. The dial~gut3 irnrbtves two w M~RI people. YOU .am r W k d bJ B ~ ~ ~ ~ o T B E hme-aptlon rnutttphxhob questions. the rem- wjli be'phyxitxm. t 1s LWlllg tasted 1 1

e task t&s yaw ability to tisten for specific informatior) as well as fw gisl meaning. Mu must atso be able to idendfy the opinion or miwde d the spaalsets. r" -

the time at the start of the recording to read the questions and the three options sb'4 know what key points to listen out for. 4 r Q Be aware that an option is not necessarily the correct answer just becau6e it contam from the recording. Often the incorrect options will contain words from the recording$ distractors. Choose your answer by trying to understand the llnderlying meaning of speakers are saying.

*

Questions 7-1 4 You will hear a conversation between a senior insolvency lawyer, Mr Sanderson, an and a young trainee, Thomas. For questions 7-11, choose the best answer, A, 6 or C. The recording wlll be played twice. d

7 What does Mr Sanderson say about being an insolvency lawyer? A It is suitable work for people who are not shy.

E t is the ideal profession for people who want to get ahead.

is the right work for people who like to think.

8 According to Mr Sanderson, what does the R3 organisation offer its members? xam preparation and mentoring

B urther education and spwiallst publications 0 C job opportunities and professional advice

9 What advice does Mr Sanderson give about preparing tor rne examinarron I A He suggests Thomas takes a course to improve hls professional writing skills.

e recommends observing carefully how insofvency work is carried out. advises studying the relevant legislation in detail.

Part 4 What you have to do In this part of the exmination, you will hear flve short monologues on a theme spoken by five different speakers. There are two multiple-matching tasks, each with a discrete focus, wlth each task consisting of six options. The recordings will be played twice.

What is being tested This task tests your ability to understand gist or global meaning, as well as to be able to recognise the attitude, feeling or opinion of the speakers. You may also be rquired to identify the speakers or the topic, or draw inferences from what the speakers say.

Don't choose an option simply by matching a word you hear with the same word ii the word may . . be thew to distract you from . . the real answer.

. - w - - - - . . . - -=

Questions 21-30 You will hear five short extracts in which various employees of a law firm speciallsing in intellectual property are talking about their work. 1 TASK ONE TASK NlfO I

For questions 21-25, choose from the For questions 26-30, choose from the list list A-F the disadvantage of his or her A-F the future aim whlch each speaker .

work which each speaker mentions, talks about.

The recording will be played twice. While you listen, you must complete both tasks.

I

'A-not being able to /

3 to argue cases in select projects , court

I B not having rnuch Speaker 1 .... o..... (21) k t 0 remain in Present contact with clients I I position [ $having to research I Speaker 2 , $ r.19, 1 k to have sole complex matters

. . . . . . . \--J vyruarv. L . ' hesponsibi~it~ for a

I p having to conduct case searches for clients'

Speaker 3 . ....... (23) to assist a partner Speaker 3 .

papers in court %having to get Speaker 4 . E.-. (24) E to be involved with Speaker 4 ..R ...., 2

testimonies from another area of I? dlfflcult people Speaker 5 ..... 4 ...... (25) Speaker 5 ..... E ..,,

F bearing financtal Ernprove own responsibility , , ' leadership qualities

Exam Focw @

Ask candidates who have not practised law one further question, as appropriate. . 0 Could you tell us in which area of the IBW would like to practise? 0 Could you briefly describe what you are studying? 0 What have you found difficult about studying law?

Ask each candidate one further question, as appropriate.

I 0 In your opinion, how could universities in your country improve the study of law? 0 What opportunities are there for newly quailfied lawyers in your country?

I 0 What opinion do people in your country have of those who work in the legal professi

Part 2 .I..- -a&--

What have to dcr . ..:' " 4 . 8 0 b . . 4A. u t ltmlldid- I:!-

In this part of the Test of Speaking, you and your partner both give a dlfferent one minute talk. The interlocutor hands each of you, in turn, two written topics, and you have one minute to choose one from the set of two and prepare to talk about it. Both topics include three prompts, which you may use if you wish.

1 gfter you have given your talk, your partner will ask you a question. This questiok '1 land-answer section also lasts about one minute.

What is being tested Not your legal knowledge, but your ability to give a short, informative talk on a law- related topic. You are assessed on how well you can organise information and ideas, use vocabulary appropriately. express and justrfy opinions, and convey a clear message. This part of the test lasts seven minutes.

- - - - - - -

hen preparing your talk, organise your thoughts around a few key ideas. 3 Begin your talk by picking up on the topic and developing different aspects of i t 1

prompts if you wlsh. I 2 Don't worry if you don't have time to cover all the prompts given. I

C Speak coherently and avoid pausing for too long.

I Try to link ideas and sections of the talk with connecting words and phrases (& markers). /

2 Try to use a range of grammar and vocabulary to show the examiners what you 3 Listen to the other candidate's talk carefully so that you will be able to ask an 4

question.

' Marketing legal servlcer I 0 recent devetapments in rnarkeung legal services

0 marketing by lawyers I

0 problems raised by marketing legal services

Interlocutor: Now, in this part of the test, you are going to discuss something together, but please speak so that we can hear you.

A senior associate has asked you to write a report on the effect the lnternet has had on the way lawyers work. Talk together about what to say in the report.

There are some discussion points to help you.

You will have about three minutes to discuss this. Is that clear?

Please start your discussion now.

The effect of the lnternet

A senior associate has asked you to write a report on the effect the Internet has had on the way lawyers work. Talk together about what to say in the report.

Discussion points The advantages and disadvantages of the lnternet for lawyers

0 The problems assoclated with intellectual property rights 0 Whether the Internet has reduced the cost of legal services to client:

' ' - - . 1 - - 7 - . - -7 - I

Part 4 What you have to do In this part of the Test of Speaking, you and your partner take p W in a discussion with the interlocutor, who asks you questions related to the task in Part 3.

What Is W n g tested Your ability to respond to questions and comments appropriately, develop topics, exchange information, express and justify opinions, and agree and/or disagree.

This part of the test lasts about four minutes.

I

undue hesitation. So if you have no opinion, invent one quickly.

2 If you find it difficult to think of something to say, try to relate the question to your o experience.

-. - - - -- - -

s - l l r ,:' 'I' a-L -A-- - < . - - . . - - Interlocutor Select any of the followhg questiohs as appropriate:

0 What role sttould governments play in protecting intellectual property rights of material available over the Internet?

CS. How can organisations prevent personal information about clients becoming public knowledge?

0 What effect has the Internet had on legal research? " a What problems do you think might occur in the future regardlng

the Internet? 0 Besides the Internet, what other things have changed the way

- 4 layers work nowadays?

of1 p . # k a l (UK) situation that occurs .rtldw d m (UK) document that defines a company's internal organisation (US bylaws)

:.w6t any property that is owned and has value .d prebatlen method of minimising the risk of loss

of one's property from business and personal liabilities

ted to transfer (rights) to another

s transfer of rights to another person such that the person to whom the rights have been

pany that has been merged transferred receives full benefits under the contract is therefore no longer in asdgmf person who transfers his/her rights or duties to

another s control over another -junior lawyer in a law firm

dhchmt seizure or taking into custody by virtue of a legal process - h prejudgment lien, provisional in nature, created in assets seized in accordance with a court

purchase of shares order or a writ of attachment ve a controlling interest ulCb#lrd aham total amount of stock a

company may offer to its shareholders. It is also known as nominal capital. (US authorized shares)

bolllCl (UK) an officer of the sheriff who makes arrests and serves writs; (US) a court officer who keeps order during court proceedings

which might be used as proof b a h ~ ~ sheet financial statement showing a company's assets, liabilities and equity on a given date

th. Bsr (US) legal profession; (UK) the profession of barristers

&r m k n organisation of lawyers which may regulate the profession

exaninrtkn (US) written examination taken by prospective lawyers in order to qualify to practise law

.ILr Csww (UK) required course to be taken

s an immediate breach and sue for business to enter into a market. Some examples

(UK) describes conduct that harms the include patents, customer loyalty, research and development, distributor or supplier agreements, and government regulations.

barrl.tsr (UK) lawyer admitted to plead at the bar and in kets, especially agreements and superior courts; a member of one of the Inns of Court t competition (UK competition law) benhtsrr' offices of barristers or a group of power which an agent appears to barristers

'MI formal proposal for legislation blll d ex- (UK) negotiable instrument for a

court of appeal, appeals court) specified sum of money which is written and signed by judgments held by lower courts three parties: the drawer (the person paying), the

drawee (the person who will conduct payment) and the payee (the person who receives the payment)

arbitrators, chosen by the parties to the dispute

group of individuals elected by QI*I). (UK) body of law that regulates sriarenoluers ro make the major decisions of the business acr~v~ties and markets, especially company agreements and practices that limit competition (US

Lol pwl lktvrlw someone who holds a antitrust law) negorlable lnsrrument in good faith e#npkld first pleading filed on behalf of a plaintiff

b u m payment above what was due or expected which initiates a lawsuit, setting forth the facts on firm law firm that specialises in a specific area which the claim is based (civil law)

of I; WIIIPYJIDtY (UK) liquidation of a company M of -failure to perform a contractual after a petition to the court, usually by a creditor (US

obligation or interference with another party's involuntary bankruptcy) performance which incurs a right for the other party to c d w to grant, to bestow claim damages cmfklct el clash between a person's personal

Wd document or set of documents containing the interests and their public or fiduciary responsibilities details of a court case eOnsntllli agreed to by all parties

byJm (UK) municipal law (US ordinance) oomamd li# security interest created by agreement b y b s (US) document that defines a company's internal between the debtor and creditor

organisation (UK articles of association) ,--ill see special damages -something of value given by one party to

br Bw (UK) granting of permission to practise another in order to induce the other to contract. In as a barrister (US admission to the Bar) common law, consideration is a necessary element for

a . d rtructun distribution of a company's debt and an enforceable contract. stock w combining of two companies to form an

cmpbDMlecr act of providing capital for a company enrln lew company through the issuance of securities d lrvl -change in a company's name

a @ m h t h l m m process whereby a company's capital or objects I money is converted into capital and then distributed to --model agreement with particular shareholders as new shares items to be filled in

group of similar independent companies who -exclusive right to reproduce and control an agree to join together to control prices and limit original work of art (music, visual art, film, literature, competition etc.) tr (also common law, judge-made law) body of law --separation between the corporation and

formed through judicial/court decisions, as opposed to its shareholders such that the shareholders will not be law formed through statutes or written legislation held personally liable for corporate debts

d "I certificate issued by the bank a new offer with new terms made as a reply acknowledging receipt of money and promising to pay to an offer received it back; a promissory note issued by a bank Oaut at (lrrS see lower court'

al haupa&m document issued by a person or company who is owed a financial governmental authority granting a company status as a obligation legal entity cr)nLYI Ir (also penal law) area of law that deals with

C u U b b d ~ a r ~ o t R m m ( U K ) crime, punishment or penalties certificate issued by Companies House when a #aMI W f U K ) higher court of first instance for company wishes to change its name. A copy of the criminal cases in England and Wales. Together with special resolution of the company authorising a the High Court of Justice and the Court of Appeal, it change of name must be submitted to Companies forms the Supreme Court of Judicature. Appeals from House along with a fee. the Crown Court go to the criminal division of the

dd &r 1) legal system developed from Roman codified Court of Appeal and then to the House of Lords. law, established by a state for its regulation; 2) area of -practice of registering Internet domain the law concerned with noncriminal matters, rights names that are associated with another company and and remedies then demanding payment from that company through

ddmmt (UK) person who brings a civil action (US) the sale or licensing of that domain name plaintiff

dwk (UK) court employee who takes records, files ((1n1C loss or harm as a result of injury papers and issues processes; (US) also a law student money awarded by a court in compensation for who assists a lawyer or a judge with legal work such loss or injury as research or writing W o .I day on which a person's

cdlr tml property pledged as security for repayment of employment begins a debt obligation dm C.OD) (Latin) in fact

oalkttlvs process of negotiation between (UK) instrument issued under seal which trade unions (or labor unions) and employers, usually evidences a debt or security for a loan of a fixed sum regarding the terms and conditions of employment of money; a long-term debt not secured by any

r (also case law, judge-made law) body of law particular asset, but rather by the general earning formed through judicial/court decisions, as opposed to capacity of the company (US secured debt law formed through statutes or written legislation instrument); (US) unsecured debt

Corrpdw (UK) institution where all limited #Qr someone who owes a financial obligation to companies in the UK must be registered. It is an another Executive Agency of the UK government Department of Trade and Industries (DTI).

U failure to perform a duty, whether legal or contractual; failure to pay a sum that is due

tbkndmt (also respondent) person against whom an action is brought in court. Defendant is generally used when referring to the answering party to a civil complaint; respondent is generally used when referring to the answering party to a petition for a court order.

delegat0 to give (duties) to another, to entrust another (with duties)

ddegah (UK) third party in a delegation to whom the duties have been transferred (US delegatee)

dekgatfon ol dutloa transfer of responsibilities to be performed under a contract to another

dakgah person who transfers his duties to another ldhnry formal act of transferring something or passing

possession on to someone else dadm rlpm legally protected interest in the form of

appearance, style or texture of a particular item dhctlve order from a central authority, for example, the

European Community. A European Community Directive is binding as to the result, but each Member State may choose how to implement it.

M l t y condition of being unable to do something due to a physical or mental impairment

gcbpr (US) to declare a person unable to practise law. In the UK, the barrister is expelled from his or her Inn of Court and is no longer allowed to represent in court.

dhcharge to release a person from an obligation dkcklnm repudiation or denial of a legal right or claim ddainw d mrmlk. statement which limits the

liability of the seller for any defects of their goods dknJIIsl termination of an employee's

employment contract based on a prejudice or bias dlvtrlsnd distribution of company profits to its

shareholders draft to produce a piece of writing or a plan that you

intend to change later drarm person in a bill of exchange who conducts

payment or is directed to make payment; often a bank drmmr person in a bill of exchange who pays the sum of

money duress unlawful threat or coercion used to force

someone to enter into a contract duty obligation owed or due to another by law duty d cam obligation of a person to act with

reasonable caution or prudence, the violation of which results in liability at law

right enjoyed by a person other than the owner of a piece of land to use or control that land, or a part of that land. No property rights are conferred upon the person using the land of another. An example of an easement is crossing a part of another's land in order to access a public road.

.I mnk #Ichcy economics term that refers to the optimal production and consumption of goods and services

thymmt tllknrrl judicial body that resolves disputes between employers and employees

wdommmt (UK) writing, including signature, on the back of a document which allows for the transfer of the instrument (US indorsement)

.nlorceab!e capable of being made effective. In the case of an agreement, i t is one in which one party can legally compel the performance of the other party.

r)ldrt interest the law gives effect or force to ubtry d- written notice of appearance during

a hearing which provides the respondent's full name and contact details, as well as a statement of opposition to the claim, including the grounds upon which it is opposed

escheat reversion of land to the state if the land owner dies without a will or without any heirs

-la1 term provision required for a contract to exist et a (at al.) (Latin) and others a orq# (m.) (Latin) and other things of the same kind ~ c l h p s a s s h sole use and benefit of a property vrckviva sole power or privilege under the law

kn lien created when a debtor's assets are seized for the purposes of enforcing a judgment

utea@ grat& (04) (Latin) for example see punitive damages

a x p a d a h dPmagem (also benefit of the bargain damages) compensation for the loss of benefits that a person would have received had the contract been performed

ex- witma@ person who the court considers to possess specialised knowledge or skill and who is allowed to offer an opinion as testimony in court

express contract contract whose terms have been specifically outlined, either in writing or orally

ucpreer wPrmnty guarantee that is created by the seller, whether oral or written

mrr#l (WM) (UK) any meeting of the shareholders of a company other than the annual general meeting which is called to discuss certain special issues of a company (US special meeting)

m- (UK) see right of fair use; (US) duty of full disclosure imposed on corporate directors, officers and parties to a contract

UI urs (US) see right of fair use II whole interest in a piece of real property; the

broadest interest in property allowed by common law h e ta# estate which lasts as long as the original

grantee or any of his descendants live .(lduclary duty obligation to act solely in the best

interests of another #a wrth to officially record (e.g. in a court of law) Inanclne measurea methods of securing funds or money Ikat-Intlme rule which distinguishes which creditor has

first claim over a debtor's assets 8ttm.m for a particular purpose if a buyer is buying

property for a certain reason and the seller knows this, then this warranty exists by law to guarantee that the property is suitable for that certain reason. Sometimes referred to as warranty of fitness.

f ixd (UK) grant of security for a loan on a specific asset or on specific assets whereby the creditor has first claim to recover upon default by the debtor (US security interest in specific assets; (prior to UCC) chattel mortgage)

fbathlg charge (UK) form of security interest over the debtor's assets which may change on a daily basis, such as stock; a grant of security for a loan on the company's assets in general, and not on any specific asset (US floating lien)

Csrar#.MHty reasonable anticipation of possible results of an action

rvlr rule that states that damages are only recoverable when it can be established that the damage was reasonably anticipated by the breaching

,, party at the time the contract was entered into brcr model document or agreement with blank spaces

to be filled in act of bringing a contract into existence

Allrd deliberate misrepresentation or concealment of a material fact to gain an advantage

W h tkr act of misrepresenting or misleading someone so as to entice them to enter into a contract or agreement

hehold asWe property whose duration of ownership or occupation is not determined

M a d l y takmmw situation where a company attempts to buy another company with approval of the board of directors of the company that is being bought

gain & to obtain the power to direct or have influence over the management of a company

IclmWn#nt 1) claim or interest resulting from a legal proceeding in which party A (creditor) requests a court to issue an order or writ against party B (garnishee) holding property of or owing money (e.g. bank account or wages) to party C (debtor) to release the relevant property or money to the creditor; 2) the whole process involved in the legal proceedings described in 1) above

gmmd clrditor creditor who has no lien or security for payment against the debtor's assets (also known as an unsecured creditor)

wrd drmqw (also actual damages) compensation for proven injury or loss

(gwrub# oucuprfkrl- limited circumstances where sex or marital status may be used as a job requirement

Illlls law firm that employs hundreds of attorneys from all over the world

gad faRh state of mind whereby a person has an honest conviction that they are observing reasonable commercial standards of fair dealing

good tb title that is valid and free from defects such as liens, litigation or other encumbrances

Good. items of personal property other than money (US good can be used in the singular)

person to whom a grant of property is made

hendlfmsnt property which can be inherited; also refers to land in general

high court (UK) court which hears serious civil cases and appeals from county courts; (US supreme court)

holdsr person that haslegal possession of a trade mark haldsr In Bw cambe (HDC) person who acquires a

negotiable instrument in good faith W a# tltk person who owns the right to control and

dispose of a particular piece of property holldy wtWment right of an employee to take paid

time off from his/her employment hdzmW mer#m combining of two or more firms which

are at the same level in the economic supply chain horW. Wm0v.r situation where a company attempts to

buy another company against its wishes

Id wt (La) (Latin) that is MqfdRy d th. wbject mmRm when the matter under

7 consideration in the contract is unlawful and therefore unenforceable in a court of law

brmtrlrl bwrh breach of contract after which the non-breaching party is still required to perform its contractual obligations and may be entitled to damages

bnpllsd contract contract whose terms have not been specifically outlined, but rather are presumed

kplwl wnaRty guarantee that is implied by law rather than promised by the seller

h ram (Latin) against a piece of property (rather than a person)

1 k ths mume d business regular mode of conduct or

routine of a trade bkhfa l knelld.ry person who was not planned to

benefit from a contract and is also not party to that contract. This person does not gain any rights under the contract.

lrdeffnlte vague, not certain, not determined Mnngemamt unauthorised use of material protected 4y

copyright, patent or trademark law bksjltncs property which is transferred upon death b

a person designated as an heir official order from a court for a person to do

or stop doing something Yured party that has suffered a violation of its

legal rights m of Court (UK) one of four institutions that barristers

must join in order to practise law as a barrister unable to pay one's debts

stnmsnt written formal legal document tsnO#. rlgk legal interest or claim in things which cannot be touched or felt

led bmefkby person who was planned to ben from a contract but is not party to that contract. As result of this, this person obtains rights to enforce contract.

M.nt mental desire/willingness to act in a certain hCll .I* (Latin) among other things 1p.o koto (Latin) by that very fact itself Issue to produce or provide something official kund rhar shares of a company that are he1

by shareholders

public official who hears and decides cases in court

fid8wnJl lrrr (also case law, common law) body formed through judicial/court decisions, as oppos law formed through statutes or written legislation

lkll lien imposed on a person against whom judgment has been entered but remains unsatisfied

#sn security interests arising as a result of co proceedings brought by the creditor to secure an interest in the debtor's property

@#is t k t m (10) (US) law degree (UK LLB) #wdk court court that hears cases involving children

under a certain age I

b k d absence of ability of a person to enter into contractual relations, sue or be sued

lrrn (US) graduate school offering courses in law leading to a law degree

bma contract for which the use and occupation of a property is conveyed to another, usually in exchange for a sum of money (rent)

-property whose duration of ownership or occupation is fixed or capable of being fixed

to do

IF its

risters

Ill way

re held

iy of law msed to Dn whom a M e d of court n

iildren

or organ~sation that can enter into

ogal a ificial entity created by law and given legal rights a duties, for example a corporation

Pmcth n* (LPC) (UK) course that must be completed bef re a person can be qualified as a solicitor. It is t e first step to becoming a solicitor (the second being orking as a trainee solicitor, and the last being succ ssful completion of the Professional Skills Course).

kewa (UK) per ission or authority to do something vhich would ot erwise be illegal. No interest is transferred in t is case. (US license)

Y.n interest or a achment in another's property as security for pa \ ment of an obligation

Ikn cr#mor creditor whose claim is secured by a lien YI. mtate estate granted only for the life of the grantee Ilk tennt person who holds a life estate or an estate

pur autre vie, or for the benefit of another Uquldmtnl -61 (also stipulated damages)

compensation that is agreed to in the contract Hpultlatkn dissolution of a company whereby all assets

are sold and the proceeds used to pay off debts LLH (Lefum -) (UK) Bachelor of Laws, law

degree (US JD Uuris doctor)) ban c8pltai form of long-term borrowing lockout preventing people from entering a building by

locking it, such that employees cannot work bwor mrt (also court of first instance) court whose

decisions may be appealed to a higher court

M.drtr8tma' court (UK) court that has very limited powers

mrksr person who makes a promissory note mwkd .oono~y economic system which permits the

open exchange of goods and services between producers and consumers. In a market economy, prices and production are largely determined by supply and demand. The contrasting model to a market economy is central planning and a non-market economy.

.,- breach breach of contract which is so fundamental or significant that the non-breaching party is excused from its contractual obligations and may recover damages

I Rlschsnk Men (also mechanic's lien) lien to secure payment for labour or materials used in constructing or repairing buildings or other structures

rmnrrrrLn d (UK) legal document that sets out the important elements of the corporation, including its name, address, objects and powers. It is one of the two fundamental documents upon which registration of a company is based. (US articles of incorporation)

memhmt person who is engaged in the buying and selling of goods for profit

-rty warranty implied by law that something is fit for the ordinary purposes for which it is used

acquisition of one company by another resulting in dissolution of one and survival of the other

merger rsQuktlon legislation aimed at limiting anticompetitive concentration of market power. Law that seeks to ensure that the combination of companies will not have any anticompetitive effects.

dnwtty rl#n(l6YW shareholder who holds less than half the total shares outstanding and is therefore unable to control the business of the company

dnuba notes or records of business conducted at a meeting

rmmopoly organisation or group that has complete control of an area of business so that others have no share

rYnoOoly exclusive right to make, use or sell an invention

Rwt court fictitious court where law students argue hypothetical cases

AWtt*L, transfer of legal title of a property, often land, to another as security for payment of a debt

Ilrotbm application to a court to obtain an order, ruling, or decision

Wid (UK) unsecured debt (US debenture) able to be transferred by endorsement or

delivery mgoUabb (UK) written and signed

documents which represent an intangible right of payment for a specified sum of money on demand or at a defined time. Some examples are bills of exchange, promissory notes, bank cheques or certificates of deposit. (US commercial paper)

rwk&tlak principle that states that one cannot give away more than one possesses. If one does not possess title to something, then one cannot transfer title of that thing to another.

rmnld c a p W (also authorised capital) total amount of stock a company may offer to its shareholders

lrrrbresohlry party party to the contract that has not violated its contractual obligations

L).monnnwl not agreed to or formed by agreement of all parties

rmmrocratry dld remedy that is not money, but rather something else such as an injunction, a declaratory judgment, specific performance or modification of a contract

Rorrokkrr quality of an invention being unexpected or surprising or sufficiently different from other existing things. It is often a requirement for obtaining a patent.

type of security interest whereby the debtor retains control over the property but is limited in what he or she may do with it

notlee document providing notification of a fact, claim, or proceeding

substitution of an obligation with a new one, thereby cancelling the old obligation

goals or purposes of a company section of a company's memorandum of

association that outlines the company's objects OblW person to whom a right is owed d @ w person who owes a right a t indication of willingness to enter into a contract on

specified terms, whereby, if accepted by the other person, a binding contract would result

party to whom an offer is made &rw party that displays a willingness to enter into a

contract on specified terms ollsopoly market situation in which only a small number

of firms compete with each other

rn lllbY d th Irrlnm3 where a security interest exists between a certain creditor and debtor. It occurs on perfection of a security interest.

(US) municipal law (UK by-law) w h w y cotma d h m b a regular mode of conduct or

routine of a trade adleimy msdUUOII (UK) resolution passed by a simple

majority of members at the annual general meeting udin8ry rhnr (UK) shares that carry voting rights and

dividend entitlements and which are the most common form of shares (US common shares)

pabgd person who assists a lawyer with legal work, but is not a lawyer

betdour acting in a similar way to another; for example, setting prices at the same level as a competitor or producing a similar level of output as another in the same business

P a d Evhnca the rule that evidence, apart from the actual contract itself, cannot modify, explain, vary or contradict the written terms of a contract

person or entity involved in an agreement of tltla exchange of ownership in a property

clrk d rkk the point at which the risk (e.g. of damage) passes from one party to another (and therefore also the responsibility, for example, for insuring goods)

p8dng off illegal type of unfair competition whereby a business does something that the public would reasonably believe to be related to the activities of a different business such that this second business suffers damages as a result

pOknt grant from the government giving exclusive rights to an inventor to make, use or sell an invention for a specified period of time

~ . r w person who is being paid in a bill of exchange p a u d w y remedy that involves

compensating through money p m d Isw (also criminal law) area of law that deals with

crime, punishment or penalties )rrYlrats ib market to enter into a market p u lurrrm (Latin) per year pr (Latin) by itself pdktd when the appropriate f~ling or registering or

other formal action of a security interest has been done to protect one's security interest in another's property against all other creditors

pwh#&h appropriate filing or registering or other formal action of a security interest in order to protect one's security interest in another's property against all other creditors

completion of obligations required by contract

pmmal JWJII state of being legally obliged out of one's own personal assets

m o l pmperty (also chattels in common law) things that are moveable (as opposed to real property) and capable of being owned

ptlthw (US) person who brings a petition to a court, especially on appeal

Pkhthg demonstration outside a place of work in which people congregate to dissuade others from entering the building, usually done in attempt to persuade another party to meet certain demands. It is often done during a strike.

pkrllfbg formal written statement setting forth the cause of action or the defence in a case

pk4B. property which is security for a debt or obligati pledfb. person who receives a pledge, or the creditor

a secured transaction pbdgw person who gives a pledge, or the debtor in a

secured transaction p#orrrorl type of security interest whereby the credi

has the right to control the property p d a b q pr(tinC pricing a product so low - for exami

below its production cost - as to eliminate competii pmmptbn d&ts (UK) rights of shareholders to

maintain their proportionate ownership in a compan by purchasing newly issued stock before it is offerer to the public (US preemptive rights)

pmhmma thuer (UK) shares that are given preferen in dividend entitlements over ordinary shares, but usually do not carry any voting rights (US preferred shares)

pddW# conduct of setting a price for a product which is contrary to workings of supply and demand and therefore contrary to the free market

prkritr right to enforce a claim before others prkrSty ctbdltor creditor who is given priority over 0th

creditors, or has first claim over the debtor's assets prMtr of contract relationship between parties to a

contract pro k*rra (Latin) as a matter of form pm nb (Latin) proportionally pdt- (UK) statement summarising z

company's revenues and expenses over a period of time (US profit-and-loss statement or income statement)

promhe person to whom a promise, or an assurena that something will or will not be done, is made

promkor person who makes a promise or an a s s m that they will or will not do something

pmds8wy nat. formal unconditional written note ma and signed by a person obligating him or her to pay specified sum of money to another specified persor; to the bearer of the document

(also exemplary damages) compensation designed to punish the breaching pal for conduct found to be reprehensible, e.g. fraud

lw0114, (UK) one year of apprenticeship to become r barrister, which follows the completion of the Bar Vocational Course

pw u t m rk estate granted only for the life of some0 other than the grantee

similar to security, except the creditor P actual ownership over the property while the debtor only has possession. In case of default, the crediq can simply take back possession of the property. Serves the same purpose as security, but is not recognised by the law as such.

qurrYm number of shareholders or directors who ha% be present at a board meeting so that it can be vali conducted

m nlrtlanrr social, political or personal connectiom with and between people with different distinguishifl physical characteristics

red pto(r#ty land, including anything attached to i t mmombh r d h c e dependence on a contract which

considered fair, sound thinking or common sense neroRa#y prudent person (also reasonable person)

fictitious person used as a standard for legal reasoning in negligence cases

1 . . mm (UK) termination of an employee's employment contract because their position ceases to exist (US layoff)

:Rmgktrn d Canp.ni+r (UK) officer in charge of keeping

1 the list of limited companies registered at the Companies House

) :- order controlling through rules or restrictions i- refusal to accept an offer 1 ,- to discharge a person from an obligation wvant nrarka area in which effective competitive

I constraints may be imposed. There may be two relevant markets in anticompetitive analyses: the product market and the geographic market. It is determined by examining in which market an

I undertaking can raise prices above the competitive level without being unprofitable.

,@aes compensation for losses incurred by the plaintiff due to his dependence on the contract

I being performed ramdndarnmn person who is entitled to what is left of an

estate after the life tenant dies and the parts of the estate that are handed down in his will are carved out

.bmsdy means of preventing, redressing or compensating a violation of a right

see defendant ' .E- compensation which is equal to the

amount of money the breaching party received under the breached contract

interest that is recognised and protected by law of klr 11.s (US) defence to a claim of copyright

infringement whereby permission from the artist is 1 not required so long as usage of that artist's work is

1 reasonable and limited (UK The concept of fair dealing is the closest equivalent; however, fair dealing is more restrictive than the US doctrine of fair use

[ and in order to be protected, the use has to fall in . one of several categories.) '-.*offer to existing shareholders to purchase

additional new shares in the company

.-&$ erson who is a member of the law firm ': 1 '. partnershiis and is paid by regular salary payments r -&m ol M &t (UK) Act governing the sale of goods ' , .' in the United Kingdom

. d .ubrtaWdy JI r+*t. form of acquisition

. , whereby all or almost all assets and liabilities of a company are sold

,.IYl&m sale by which the seller provides an m p l B . 6 f the goods to the buyer which then leads to an understanding that the rest of the goods will be of the same.standard as the example

lscurtty property pledged in order to secure the fulfilment of a promise or loan

sacdty agreement whereby a person grants - interest in his or her property to another as collateral

in order to guarantee performance of an obligation e l m any interest in property acquired by

eP'eernent or operation of law for the purpose of securing payment or performance of an obligation

Ynlor prtrnr person who has been a partner of a law firm for many years (the exact number of years may differ in each firm); in some law firms, an official title given to some partners

serve (a doc- on ronrsa#) to deliver a legal document to someone (which usually demands they go to a court of law or obey an order)

. . .ull e h h d d b m different treatment, usually awarding

privileges to some and denying privileges to others, based on gender

sham (UK) proportional exchange of existing shares in the corporation for a fewer number of shares, each with greater value (US reverse stock split)

.hrr uJllMdbn (UK) exchange of a multiple of new shares for each old share such that shareholdings are in the same proportion afterwards (US stock split)

Uwnm k t (US) US federal statute which was passed in 1890 and which prohibits interference with free competition and aims to limit monopolies and trusts. Any agreement or combination which has the effect of restraining trade is prohibited under this statute.

&fink-wrap cantrmct licence agreement or contractual terms and conditions that appear on the outside packaging of an item. Acceptance by the consumer is confirmed by the opening of the package. Often used in the software industry.

sic (Latin) thus dngb Europsn established under the Single

European Act, came into effect on 1 January 1993; the core of the process of European economic integration, involving the removal of obstacles to the free movement of goods, services, people and capital between member states of the European Union

.malCdaiarr Gwrt court that handles civil claims for limited amounts of money

soh pmWroMI lawyer who practises on his/her own UIWW (UK) lawyer who is qualified to give legal advice

and prepare legal documents law practice with only one lawyer

mhl t able to pay one's debts rq#lal dffnagl# (also consequential damages)

damages that are awarded due to a particular wrong or particular circumstances

rp.d.l mrktkA resolution on major decisions of a company (such as changing the company's articles or reducing its share capital) at a general meeting that must be passed by a certain majority, usually 75%

19#llle when a court orders the breaching party to perform its part of a contract

rbbrk formal written law created by a legislative body such as a parliament, as opposed to a law created through the courts

Watub d M piece of legislation which declares that certain kinds of contracts, for example those regarding land, marriage and the sale of goods worth over a certain amount of money, will be invalid unless put into writing and signed by both parties. The original statute was enacted in England in 1677 and serves as a basis for the US statutes.

at&ubq kmm forms required by law Ikn security interest created by legislation due

to the economic relationship between the debtor and the creditor

8t Ipddpd d.mqlZ1I see liquidated damages wlJ+et mattw thing under consideration in a contract 8ubmt to deliver a document formally for a decision to

be made by others Umatbr person. who has purchased stock in the

company by an agreement wl Jurk (Latin) of one's own right; able to exercise one's

own legal rights

tlllvem Y1 (UK) offer by one company to purchase at CrrrCv h person appointed to handle the minimum a controlling number of voting shares of affairs of a bankrupt party another company (US tender offer) trwtm In rsqrnrtnHon person appointed to handle W

dPW.I property other than land that is capable property of another person until the court determine9 of being touched or felt the ownership of that property

company that is the object of a takeover attempt trmtee under a deed d person tau hi lien on property arising from unpaid taxes determined by contract to handle the property and

property which is the subject of tenure (a affairs of an insolvent person while debts are being mode of occupying land whereby possession is held paid and creditors' claims are being settled by a tenant, but absolute ownership lies in another trurt.s und.r a trurt d d#d person who holds legal person), i.e. land titte for real property of another person who has

$am d ywn fixed period of time for which an estate is pledged that property as collateral for a loan granted -(US) person who fights against

PC end of the work term or anticompetitive trusts, often a federal officer employment

nl e#dltkrr.lll- fixed period of Ylbr dm0 (Latin) unauthorised, beyond a person's legal time for which one is employed and the provisions power under which employment is held tmwthhd m sale, licensing or otherwise dealing,

person who is not party to a especially with a view to profit, of a copyright that is contract, but still benefits from it and has legal rights done without the authority of the person who to enforce it possesses the copyright

)#wlldry contract that provides mmbrbkh~@ (UK) enterprise, a company or a group of for rights and duties to be conferred on a person who companies (US business, firm or enterprise) is not party to the contract unfair dknl.ul unjust termination of an employee's

(also tying arrangement, tied employment contract. The question is whether the a r r a x r e e m e n t which forces the buyer to employer acted reasonably in dismissing the purchase a second product when the buyer purchases employee. the first product. The product that the buyer originally Wkrm - (W) (US) act harmonising wants to purchase is called a tying product and the the law of sales and commercial transactions in all second product he or she is forced to purchase with states in the US the first is called a tied product. These arrangements U n W N.tknr Cammtkn on tho k Um may also be applied to services. I- 8rk of aood, k t (CISU) convention of

t#l right to control and dispose of property or the right the United Nations which sets forth rules governing to ownership in property contracts for the international sale of goods

k the kar d expression designating that the sum of mkLte right to use another person's property for a money of a note or cheque is payable to whomever period of time, to be later restored to the owner with holds the document only ordinary wear and tear

to tlw e&r el expression designating the person to whom the sum of money on a note/cheque is payable nrWl (vs. or v.) (Latin) against

tui wrong committed between private individuals for rvtld combining of two or more firms who arc which the law provides a remedy at different levels in the economic supply chain, for td. Allr (UK) word, phrase or symbol used by a example producer and distributor

manufacturer, seller or dealer to distinguish their uwt 1) to give full title to a property to a person; 2) to goods apart from the goods of others (US trademark) give a person an immediate fixed right

formula, technique, process or the like which vWJort (viz.) (Latin) as follows is kept confidential and used by only one business in *dmtny IlqukWcm (UK) termination of a company's attempt to maintain a competitive advantage business that is supported by company shareholders td. wd# (UK) association of employees formed to (US dissolution or winding-up)

further their mutual interests with respect to their employment, for example working hours, wages, w m d y d t#. guarantee that the seller has title to conditions, etc. (US labor union) the property being sold, that there are no liens or

irdmm dlQmw (UK) position of one who is completing encumbrances on the property other than those that the practical apprenticeship required for a person to have been disclosed, and that the transfer of propert) qualify as a solicitor. It is the second step to is valid becoming a solicitor (follows the completion of the -process of ending the carrying on of a Legal Practice Course and is followed by the business through the settlement of liabilities and the Professional Skills Course). distribution or liquidation of assets

trmlk to convey or to pass property or a right to d t document informing someone that they will be another by any method involved in a legal process and instructing them what

body with either judicial or quasi-judicial they must do functions n#htkn written expression of an intention or

tfmt legal device used to set aside money or property of opinion decided at a meeting one person or company for the benefit of another person or company. In the US, trusts are business combinations with the aims of a monopoly.

h m h m person who holds something in trust for someone else