The Lawyer's English Language PDF

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1 fr
Catherine Mason
GLOBAL 1.FGAI. ENGLISII LTD

Published in England by Global Legal English Ltd.
The Pine Tree Centre
Durham Road
Birtley
County Durham
DH3 2TD
England
Email: info@toles.co.uk
www.toles.co.uk
ISBN: 978-0-9540714-6-2
© 2011 Catherine Mason
Catherine Mason is identified as the author of this work in accordance with the Copyright, Designs and
Patents Act 1988
AlI rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or
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copyíng in the United Kingdom issued by the Copyright Licensing Agency Ltd, of 90 Tottenham Court Road,
London, W1T 41-P
British Library Cataloguing-in-Puhlication Data
A catalogue record for this book is available from the British Library
Printed in England
CONTENTS
lA The Legal Profession 9 3A The Language ot Contract Law 73
Working in aw 9 A contract case 73

Making a claim in the civil court 10 More about precedent 75
Areas of law 13 The elements of a contract 78
Vocabulary check 19 lhe end of an offer 80
loles Foundation exam practice 20 What is consideration? 81
Contract and statute 82
Reading contract law 85
1B The Legal Profession 23
Going to court 87
lhe importance of coliocations 23
Vocahulary check 89
lhe importance of prepositions 24
TOLES Foundation exam practice 90
Solicitors and barristers 25
Areas of Iaw 29
lhe register of Ietter writing 31
3B The Language of Contract Law 93
Using your knowledge 34 Where does contract Iaw come from? 93

IOLES Higher exam practice 36 Reading a statute 96
lhe elements of a contract 99
Reading a contract case 100
2A The Language of Banking 41
Offer and acceptance 102
A new bank account 41
Consideration 104
Workrng in a bank 46
Contract Iaw in practice 107
Loans 48
Starting a claim for hreach of contract 110
Vocabulary check 51
Using your knowledge 112
IOLES Foundation exam practice 52
IOLES Higher exam practice 114
213 The Language of Banking 55

4A The Language of Employment Law 119
A bank account 55
Being an ernployer 119
An email from the hank 58
An employment contract 122
The language of contract 60
How can an employment contract end? 126
lhe register of Ietter writing 63
Acting for an employee 128
Acting for an employer 130
IOLES Higher exam praclice 67
An employment case 132
Vocabulary check 133
IOLES Foundation exaim practice 134
Global Legal Enghsh

4B The Language of Employment Law 137 6B Understanding Contracts (1) 215
rincin a oh 137 lhe dfferen parts af a aritten ccu7a. 215

Workln6 in empioyment iaw 140 Parties and recitais 216
Some clauses from an empioyment Defined terms 219
contract 144 lhe operative provisions 223
An empioyment tribunal 147 Dehvery of goods or services 230
An employment ciaim 151 Using your knowledge 235
Using your knowledge 155 TOLES Higher exam practice 237
TOLES Higher exam practice 157
7A The Language of Business Law 239

5A The Language of the Law of Tort 161
Solo traders 239
What is thc av of tort? 161 Partnerships 242
Types of tort 163 A partnership agreement 246
The duty of care 165 Limited Iiability partnerships 248
More about neghgence 167 Companies 249
A famous case in Enghsh Iaw 168 Pubhc and private hmited companies 253
Vocabulari check 170 incorporating a company 256
TOLES Foundation exam practice 171 Vocabulary check 259
TOLES FoLindation exam practice 260
5B The Language of the Law of Tort 175
An introduction to the law of tort 175 7B The Language of Business Law 263
What is tortious hability? 177 lncorporated and unincorporated businesses 263

Some categories of tort 180 Sole traders 265
lhe tort of negligence 182 Partnerships 266
lhe most famous tort case 184 lhe language of drafting 268
Using your knowiedge 186 lhe register aí letter wnting 272
TOLES Higher exam practice 188 Companies 274
incorporating a company 276
6A Understanding Contracts (1) 193 Paperwork 278

Shares and share capital 282
lhe style of written contracts 193
Limited iiabihty partnerships 283
Understanding formal expressions 195
lhe ianguage of drafting 284
Understanding technical words 199
Using your knowiedge 286
Understanding archaic terms 201
Understanding some common words 204
lhe structure of a contract 207
GOuai Legal Englisli

8 Modern Letter Writing 293 lOA Understanding Contracts (2) 371
The layout ot a letter 293 Some more typical contract. clauses 371
Dates 295 Some important commercial vocabulary 373
Salutations 296 Termination clauses 375

Complimentary dose 298 Inteilectual property clauses 377
References 299 Retention of titie clauses 379
Subject lines 300 Warranty, indemnity and force

majeure clauses 380
The body of a lelter 302
More about force majeure clauses 382
Putting a Ietter together 303
The register of Ietter writing 304
The content of the Ietter 308
Typical sentences iri legal Ietters 309
Letter writing clinic 311 1OB Understanding Contracts (2) 389
Correcting common mistakes in
Risk and titIa 389
letter writing 315
lntellect.ual property and confidential
information 394
Warranties and indemnities 399
9A The Language of Company Law 327 Term and termination 404
Force majeure 408
Who runs a company? 327
Areas of company law 329
Directors 331
Cornpany meetings 333
Company finance a case study 337 Answer Key 415
Closing a cornpany 339
Answers 415
lnsolvent cnmpanies 342
Audio transcripts 443
TOLES FoLindation Exam Practíce 345
9B The Language of Company Law 349
People conriected with a company 349

Working in company law 350
Directors 352
Company meetings 356
lrisolvency 359
Who gets the assets? 362
Usíng your knowledge 364
Global Legol English

Acknowledgements
The publisher and author would like to thank the Empioyment Tribunais Service for permission to
reproduce the Claims Process Summary.
Publisher's note
The foliowing forms are Crown copyright:
Form 10: First directors and secretary and intended situation of registered office
Ni Claim form (CPR Part7)
Contracts (Rights of Third Parties) Act 1999
The Unfair Contract Terms Act 1977
Balfour v Baifour (1919) Court of Appeai
Ali images © Getty Images
Cover image
Martin Barraud/200154574-002/Getty images
Interior images
Peter Sherrard/AB23988/Getty images
Photodisc/E000159/Getty 1 mages
Simon Battensby/2003763911Getty Images
Suzanne & Nick Geary/13C9729-001/Getty Images
John Fox)ç'71019301/Getty Images
John Fox/71042734/Getty Images
Antonio M Rosario/72 797 149/Getty Images
Robert Clare/200368565-001/Getty Images
Lambert/Archive Photos/J K723 7-001/Getty 1 mages
72724417/Getty Images
While every care has been taken to estabhsh and acknowledge copyright and to contact the copyright
owners, the pubhsher tenders its apologies for any accidental infringement.
This book is an Enghsh language teaching and studying resource. It is not intended to be used as a source
of legal information or advice.
Please note that the Companies Act 2006 significantiy changed the law and the documentation relating to
companies. However, working legal professionais need to be familiar with the ianguage of the oid
documentation as well as the new. For this reason, this book contains examples of both.
PREFACE
We know that as a legal professional today, you need up-to-date and accurate legal
English in order to rneet the challenges of work. This is hecause:
you have to deal with English-speaking clients and lawyers more than any
previous generation of lawyers
you are often expected to interpret or amend long commercial contracts

drafted in English
you receive letters and emails written in English on a daily basis
Legal English is a different language from general English. Just as la'ers in your own
country write in a different language from other people, so do English-speaking lawyers.
Sentences are often structured differently in legal English. The words lawyers use are
often centuries old and no longer commonly used in general English. New prepositions
need to be learned. When you read a commercial contract or read a letter there is new,
technical vocabulary to understand on every page.
The Lawyer's English Language Coursebook was written for legal professionals such as
you, with your needs at the heart of the book, and it gives you the material you need
to study in an efficient and effective way. It is based upon our many years' experience
of teaching and working with Iawyers, Iaw students and legal translators from around
the world. We are convinced that this book is the best study material available to you if
you want to be professional and accurate in ali you do in English at work.
This coursebook is intended to be a complete course of preparation for the TOLES

Foundation and Higher exams in legal English. We recommend that anyone planning
to take the TOLES Advanced exam should use this book too, as the material in it is
fundamental to any lawyer's English language skills. Even ifyou do not intend to take a
legal English exam, you can use this book as a complete course of self-study for legal
English and it is recommended to anyone who needs to use legal English at work.
Each of the ten units is divided into section A (Foundation) and section B (Higher). We
recommend that everyone shouid complete section A of each unit, to be sure from the
start that you are familiar with the legal vocabulary it contains and are accurate in
what you are doing. When you are confident that you know the material contained in
section A of each unit, you can proceed to build on your skills by completing the more
complex exercises in section B. Each unit also contains some practice exercises for the
TOLES exams.
You will see that the book contains boxes, clearly marked with a symbol . These
boxes or 'banks' of information contain language that you will need to memorise.
Please do not be tempted to ignore these boxes. We assure you that if you memorise
this information you will see a spectacular improvement in your legal English. We
believe that no particular hook or computer programme can ever be a substitute for
old-fashioned hard work.
We hope that you enjoy using this book and we are confident that it will add quality
and accuracy to your legal English skills.
Catherine Mason
Cambridge 2011
Giodi Legal Ergiii

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THE LEGAL PROFESSION =
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WORKING IN LAW DI
Exercise 1
Look at this list af legal occupations. Ali of these pea pie work ia law. We cail ali of the people wha work
ia these jobs the legal pra fession'. Match the bbs with ane af the descriptions.
Solicitor Attorney Barrister Lawyer
a This person is a lavyer who gives legal advice and opinions to solicitors. He ar she passed the
exams aí The Bar Cauncil at the end aí his ar her studies.
b This person is a lawyer who gives legal advice ta individuais and companies. He ar she passed his
or her exams in the USA at the end aí his or her studies and is usually a member of the American
Bar Assaciation.
c This persan is a lawyer who gives legal advice to individuais and companies. He or she passed the
exams of The Law Society of England & Wales at the end of his ar her studies.
d This is the general job title that we use for people who work as a solicitar, barrister or attorney.
Exercise 2
Read this text about working ia law. The mast important words are in the key vocabulary below. Decide if
the statements ao the next page are true ar false.
Key vocabulary
lawyer practise barristers law firm
attorney judge training contract acting for
qualified legal practice partnership represent
litigation advocacy pleading a case specialise
right of audience appear solicitors clients
There are two types af lawyer who practise in wha work together. Salicitars practise in many areas
England. They are called barristers and solicitors aí law, althaugh each salicitar usually chaases ta
In the USA and mast ather cauntries, lawyers don't specialise in ane particular area. They represent
make this distinctian - a lawyer is sirnply known as their clients hoth in and aut af court. We often
an attorney-at-law, ar an attorney. describe this as acting for a client. The pracess aí
making a claim in the civil caurt is called litigation.
In both England and the USA, it is not passible to
take a special exam to be a judge. lí yau decide Barristers are usually selí-emplayed lawyers but can
that yau want ta be a judge, yau must get a lat aí wark in partnerships in the way that salicitors do.
experience as a lawyer íirst, then apply ta be a They are specialists in advocacy, which is the skill
judge and wait ta see if yau are chasen. af speaking for someane in court. We calI this
pleading a case. They also give opinions an areas
Mast law students in England become solicitors.
of law to solicitors and the sahcitars' clients. It is
When they finish their university studies they do a
natjust barristers wha have the right of audience
ane-year legal practice caurse and then a twa-year
in caurt. Solicitars are alsa allawed ta represent
training contract with a law firm. After that, they are
their clients in caurt and many salicitors appear in
qualified solicitors. Many salicitars wark for a legal
caurt every day. It is nat true ta say that a client
practice, which is usually a partnership aí salicitars
always needs a barrister in caurt.
GobI Lega' Engiis 9

=o
cv a There are two types of lawyer practising in England. True False
=o
b Last year 1 finished my training contract and 1 started working for a True False
large international law firm. 1 am now a qualified solicitor.
=
c OnIy barristers can speak on behalf of clients in court. True False
d Both solicitors and barristers can work together in partnerships. True False
e In the USA and England lawyers can take a special exam to be a judge. True False
MAKING A CLAIM IN THE CIVIL COURT

In the English and American legal systems we divide the law into two main areas. These are criminal Iaw
and civil law.
This means that everything that is not a criminal matter is a civil matter.
Exerclse 1
Look at these situa tions and decide if the person needs a criminal /awyer or a civil lawyer.
In other words, is it a criminal matter or a civil matter?
a Mr Belierby is opening a new factory. He d Mr Flynn owns a restaurant. He has a

needs to visit a lawyer to get a contract for contract with a company to deliver fruit and
ali of his empioyees to sign. vegetables to his restaurant. The company
didnt deliver them on the agreed date, so
criminal civil
Mr Fiynn iost money because he could not
b Mrs Robson is thinking about what she wants open his restaurant that day. Mr Flynn needs
to happen to her house and possessions after to see a iawyer about asking the delivery
her death. She needs to visit a iawyer to get company to give him the money he lost.
the correct document, which is cailed a 'wili'.
criminal civil
criminal civil
e Mr Alien is a bank manager. The bank is
c The police are taking Mr Dean to the police saying that some money is missing. Mr Aflen
station because they say he stole a car. He has a new car and expensive clothes. The
needs a iawyer to come and visit him there pohce are coming to ask Mr Aflen some
to te!! him what to do. questions. He needs a !awyer immediate!y,
criminal civil criminal civil
Help desk
What do these words mean?
criminal law - the law that punishes acts a matter - a subject or situation, e.g. a criminal
against a person or against property that people matter, a civil matter.
consider to be harmful to the whole community.
a will - a legal document in which a person gives
The state prosecutes criminais.
detaiis of what they want to happen to their
civil law - the law concerning the rights and property after their death.
duties of private individuais and companies
to steal (stole) - to take something that helongs
other than criminal matters.
to someone else with the intention of keeping it.
10
=
Exercise 2
Read thc ir?forrnatiorl below. It is about startiog a claim ia the civil court. Dec/de if the statements that o
follow are true or false. =
e
=
Starting a claim in the civil court Why might a claimant start a claim? There are a lot
When you are in dispute with another person aí reasons, for example:
sometimes it is necessary to start a ciaim in the
someone refuses to pay you money that they
civil court. We sometimes cail this process filing a
owe to you
ciaim ar issuing a claim'. Law'ers also say starting
proceedings. We do not use the verb to prosecute' someone does a job for you, but they do it
in civil iaw because that verb is oniy used in criminal badly. We cali this bad workmanship
iaw. in England most civil claims are filed in the something that you paid for is not supplied to you
County Court. There are over 200 County Courts in
something that you bought is not working properly.
England and Wales. Most cities and large towns
have a County Court.
The ciaimant has to pay a sum of money, cafled a
The person who starts the claim is cailed the court fee, for the court to issue proceedings. In the
claimant in the UK. This person was calied the ciaim form, the claimant must state the amount of
piaintiff until 1999, when there were new court his or her claim and request the defendant to pay
ruies in England to make everything easier for ali of the legal costs of the case.
people to understand. However, in the USA the
Sometimes people talk about the smafl claims
claimant is still called the plaintiff. in both England
court'. They reafly mean the special procedure that
and the USA the other party is called the defendant
exists at the County Court for smafl claims. A small
A ciaim form is the document that a claimant uses claim is a claim for Iess than £5000. This amount
to start legal action against the defendant. wiH probably increase in the future.
a Starting a claim means the sarne as starting proceedings. True False
b You can prosecute' someone in the civil court. True False
c There are more than 200 County Courts in England and Wales. True False
d The word plaintiff' is not used in England any more but it is used True False
in the USA.
e It is free to start a claim in the County Court. True False
f There is a speciai court in a separate building for making small claims. True False
Help desk
to be in dispute - to have a serious legal costs - the court fees and payment for
disagreement with another person. the lawyers who are acting for the parties.
a party to a court case the claimant or the a procedure - a decided way aí doing
defendant. something.
to owe money to someone - to have to pay to prosecute - to take legal action against
someone for something that they have done for someone in the criminal court.
you ar given to you.
c (iobdI Lp,aI English 11

== Exercise 3
o Here are some important expressions which Iawyers use wheri they taik about startirlg a claim in the civil
-4 court. Complete the sentences by matching the first half of each sentence with the correct endirig.
(*) To issue a claim means tu.. • .confirm that you have received the claim and
to say what you will do next. (1)
a To pay a fee means to... • .start a claim ri the civil court.
• . .Iisten to the details of the claim and listen to

b To serve a claim upon someone means to. what the claimant and the defendant say about
their dispute. (2)
c lo respond to a claim means to... pay the court an amount of money for issuing
the claim. (3)
d To hear a case means to... .can legaily take a persons property when that
person does not pay money that he or she
owes. (4)
e lo find in favour of sorneone means to...
.officially announce the result of the case. The
judge may give the reasons for the decision. (5)
f lo give a judgment means to...
.send the claim to the defendants address
and make sure that he or she receives it. (6)
g lo make an order means to...
• . .decide that this person has won the case. (7)
h A bailiff is a person who... .officially state what someone has to do, and
how and when he or she must do it. (8)
Exercise 4
Here are the steps in which a claím goes through the County Court. Fui the gaps with a word from Exercise 3.
a The claimant a claim in the County Court.
b The claimant will have to pay a The amount depends on the amount of money that
the claimant is claiming.
c lhe court or the claimant's solicitor the claim upon the defendant. This means that
they send it to the detendant's address and make sure that the defendant receives it.
d lhe defendant has 14 days from the day he or she receives the claim to to it. lhe
defendant can admit the claim, which means to agree that the claim is right, and pay the money that
the claimant wants, or the deÍendant can defend the claim.
e If the defendant decides to defend the claim, a judge will the case in the County Court.
f lhe judge will give his or herjudgment. Thejudge will in favour of the claimant or
the defendant.
g lhe parties must follow the terms of the that the judge makes and they must make
sure that they obey any instructions about time Iimits.
h If the order says that the defendant must pay money to the claimant, then the claimant can use the
services of a to collect that money if the defendant does not pay.
12
AREAS OF LAW =
Exercise 1
e
Iri Eng/arid and the USA there is an area of law cal/ed 'the law oftort. It is the /aw of civil responsibiiity ==
e.
It is an area of civil law. Read this text about the law of tort. The most important words are in the key
e
vocabu/ary below. Answer the questions that follow using a fui! sentence. =
Key vocabulary
Iaw of tort carelessness tort damages
duty of care committed to sue grounds
aliegations negligence no win no fee breach
The Iaw of tort says that everyone has a civil duty Negligence is when someone is not careful enough
to be careful and not to hurt or harm another and this person's carelessness hurts another
person. Lawyers cail this civil duty the duty of person as a result. The person who is hurt is called
care. Sometimes people breach this duty of care. the injured person.
To breach means to break. Very often they breach
When someone hurts you as a result of his or her
the duty of care by accident but sometimes they do
actions, you need to consult a lawyer who
it deliberately. if someone hurts or harms another
speciahses in the right area of tort. The lawyer wifl
person because of a breach, we cali this harmtul
try to get you money from the careless person. This
action a tort. This means that some things that
money is cailed com pensation' or, more correctly,
might be criminal in your legal system are a tort in
damages'. Sometimes the lawyers can't agree on
England and the USA.
the amount of damages. When this happens, the
Look at the hst of harmful actions below. In England injured person may decide to sue the person who
and the USA they are usually torts. has hurt them. Suing someone is a more informal
way of saying starting proceedings against someone
Leaving the floor of a shop in a dangerous
in a civil court. The claim form will state the
condition so that a customer falis and hurts
claimant's aliegations against the defendant.
her leg.
An aliegation is like an accusation. The claimant
Saying something that is bad about someone, is stating that something happened, but the
which isn't true. defendant has the opportunity to say that this is not
Writing a negative story in a newspaper about true. The reasons for going to court are called 'the
someone, which isnt true. grounds'. lhe grou nds for an action in tort are that
the defendant committed a tort.
Playing loud music late every night, which
disturbs your neighbours. Sometimes a lawyer who specialises in the tort of
negligence makes an agreement with a client. The
This area of Iaw is easier to understand by thinking agreement is that if the client does not win the case
of a tort as being a type of civil wrong. Each of the then he or she does not have to pay for the lawyer's
torts hsted above has a special name. The tort that services. This is called a no win no fee'
happens rnost often is cafled negligence. arrangement. It is allowed in the UK and the USA.
Example question: What is the duty of care?

Example answer: The dLity of cure is the obligation lo be careful and not lo hurt anyone.
a How do lawyers say lo break' a duty of care?
Answer:
b In England and the USA, is the Iaw of tort an arca of criminal or civil law?
Answer:
c There are different types of tort. In general, what is a tort?
Answer:
GIo Lcp,l hngllsh 13

d What is the name of the tort that a person commits because he or she is careless and hurts someone
else as a result of this carelessness?
Answer:
e What does suing mean?
Answer:
f What is the correct name for the money that an injured person gets from the defendant in a successful
action in tort?
Answer:
g What is the correct name for an arrangement where a client does not have to pay his or her lawyer if
the client loses his or her action in tort?
Answer:
Exercise 2
Put a word from the key vocabula,y lo Exercise t loto the following sentences.
a 1 am -- the owner of the shop because there was water on the floor and 1 felI and
hurt my back.
b 1 am a Iawyer who specialises in the tort of . People are just not careful enough!
At the moment 1 am acting for the injured person in more than 20 different cases.
c lhe machines in the clothing factory were old and dangerous and one of the employees injured his
hand. lhe employee sued the factory owners and got £5000 in
d ln your claim form you accuse us of breaching our duty of care. We do not accept that your
are true and we will defend your claim in court.
e Do you have a good reason for suing the owner of the hotel? What exactly are your ________ for
starting legal action?
Exerclse 3
Here is a list of some important areas of law. Read what the lawyers say on the next page. They are ta/king
about the work they do. Match the /awyer with the correct area of Iaw.
a Iaw of contract f employment law
b company law g family law
c land law h immigration law
d lawoftort i inteilectual property law
e law of equity and trusts j criminal law
14
David 1 work in New York. 1 deal with clients from other countries who want to come and live here. 1 help
them to get permission from the government to make their dream of living in the USA a reality.'
Tom 1 am with a law firm in Manchester. 1 am now in the second year of my training contract. o
==
At the moment 1 deal with clients who are buying or selling their house. it is my job to make o.
sure everything is correct and that the saie is valid. o

=
Jennifer 1 work in a very exciting area of law here in Los Angeles. 1 meet a lot of writers and musicians
and sometimes even people from movie studios! 1 protect their rights and make sure that
no one can copy their work and make money from it without their permission.
Alistair •When 1 write the story of my life 1 will cali my book, Robbers, Murderers and Other Friends of
Mine! 1 work in Newcastle, which is in the north of England. 1 defend people who are in trouble
with the poiice. They may even go to prison! It is myjob to help them.'
Sunitta 1 work in Sydney, Australia. 1 give advice to people who are unhappy living together and they
want a divorce. Sometimes people argue about money or the care of the children. It's a difficult
area of law and 1 feel very sympathetic towards my clients.'
Cory '1 work in Chicago. l'm quite famous on TV here in the USA. That's because Channel 10 show
my advertisement five times every day! 1 ask people to cail me if they were hurt or were in an
accident because somebody else wasn't careful enough. If people are not careful, then l'm
afraid they will have to pay damages!'
Kayleigh 1 work in Christchurch, New Zealand. Most of my clients have problems at work. 1 saw a lady
this morning who is going to have a baby. When she told her boss that she was pregnant, he fired
her from her job. That is not legal in New Zealand and 1 will help her to do something about it.'
Michael 1 work for a very big London law firm. Our clients are banks and other big businesses. Today
1 am working on a merger agreement, which means that two companies are joining together to
become one. Yesterday 1 advised a new client who wants to start an internet company on the
different ways he can do it.'
Mary 1 am based in Dublin, the capital city of Ireland. 1 see people or companies who want to make a
legal agreement with another person or company. Today 1 am dealing with an agreement to
deliver goods from Ireland to the USA. 1 have to check every word very carefully!'
Polly 1 work in a very old and interesting area of law. Today 1 met a client who is 70 years old and
has no family. When she dies, she wants to put ali of her money into a special fund. Her twa
friends will use this money to help pay for a training schooi for actors and actresses from her
home City here in Liverpool. 1 explained to her how to do that and 1 will draft the necessary legal
documents for her.
Help desk
to deal with someone or something - to do a divorce the legal ending af a marriage.

business with sorneone or to take the correct
to merge - (in company law) when twa
action in an area of work.
companies join together to form one,
legal allowed by the law.
to be based somewhere to be established
valid legally correct and acceptabie. sornewhere as the maio place where you work
ar live.
to draft a document to write a document.
goods - things that are produced so that they
to have a right lin intellectual property law) to
can be sold.
have a legal interest in something; it is yours.
fund - an amount of money that a person ar
robber a person who steals money or property
organisation keeps to pay for something
while using ar threatening to use violence.
in particular.
L_ 15
o
Exercise 4
=o
L. Choose a word or phrase from the box to complete tbe sentences.
= drafting criminal law goods the law of tort

the law of equity valid inteliectual family law
and trusts property law
based in merged
a A iawyer who deais with clients who are in troubie with the police is a speciaiist in
b Last year my bank with a big German bank and they are now caiied EuropBank.
1 think they are the biggest bank in Europe now!
c A iawyer who deais with clients who create new inventions such as medicines, machines or new
artistic works such as books or music, is a speciaiist in
d 1 spent three hours this morning a contract for my new client. 1 think the contract is
ready for him to read and sign now.
e 1 want to put some of my money into a fund for the benefit of my grandchiidren, which they wili have
when they reach the age of 18. 1 need to see a iaer who is a specialist in
f Well, i am from London but 1 am Amsterdam at the moment beca use 1 am working
for a Dutch com pany.
g A lawyer who deals with clients who are divorcing or who have probiems over the care of their
chiidren is a speciahst in
h The company dehvers ali over the United States by rail and by truck.
i A lawyer who deals with peopie who breach their civil duty of care is a speciahst in
j That contract is not because your client has not signed it.
E.xercise 5
Look at the words and phrases in the box. Ali of the words are connected with specific areas of law. Put
the words into the correct scntcncc to complete thc dcfinitions,
unfair dismissal landlord capital redundancy
lease of land and maternity leave sick pay partnership

buildings discriminate insolvent merger
formation of a tenant conveyancing real estate
business
a lo he -- - - means not having enough money to pay your debts.
bA -- - is the joining together of two or more things, such as companies, to

form one singie thing or company.
c A is a person who pays rent to the owner of a house, a fiat or an office in

return for living there, or for using the buiiding for business purposes.
16
d is the legal process involved in transferririg Lhe ownership of a house or land
from the seller to the buyer.
-n
o
e lo against someone rTleans to behave differently towards that person, =o.
usually iri the workplace, because of their age, sex or Lhe colour of their skin.
o
f is a situation where someone loses his or herjob for a reason that is not valid.
g ________________________ is money that an employer must pay to an employee when that employee
is iii and cannot work.
hA is an agreement to allow someone to use land or buildings for a fixed

penod of time in return for a payment of rent.
i The is the establishment of a new business in a speciflc way.
j A is a business which a minimum of two people own and control.
k is the time penod when a woman is not at work before and after the birth
of her baby. Her employer usually pays her for part or ali of the time that she is away.
- is Lhe total amount of money, property and other assets that a business has.
m is a situation where someone loses his or her job because an employer no

ionger needs so many employees.
nA is a person who owns a house, a fiat or office and receives rent from
someone for aliowing them to live there, or use the buiiding for business purposes.
o is a more formal way of saying land and buildings.
HeIp desk
ownership - to have ownership of a property rent - the money that someone pays, usuaily
means that the property belongs to you. You are every month, to use a flat, a house or an office
the owner of the property. that belongs to someone else.
assets - things that a person or company owns. fixed something that is fixed is certain and
debts sums of money that you owe. cannot be changed.
Exercise 6
AI) of the words and phrases in Exercise 5 belong to either ernploymerit Iaw, business Iaw or Iand Iaw.
Put each word or phrase under the correct area of Iaw.
Employment Iaw Business Iaw Land Iaw
17
=
= Exercise 7
Complete the foliowing sentences by using the words from the employment Iaw section.
a My baby will arrive at the end of March so 1 will take six months' startingon 1 March.
b He sued his employer on the grounds of because the reason his employer gave for
firing him was not valid.
c If you are fli and not able to work you should look at your contract to see if you can get
d It is against the law in England for an emp!oyer to against an ernployee because of

his or her age.
e Many employees are worried aboul because a iot of husinesses are closing in this
area at the moment.
Exercise 8
Complete the fo//owing sentences by usirig the words from the business !aw section,
a The is the formal way of saying the way in which a new business is created.
b The total of the husiness is valued at approximately £32 mílilon.
c The business does not have enough money to pay its debts and is
d There will be a next year between two major British chemical companies.
e My friend and 1 want to start a cleaning husiness together and we decided that the best thing to do is to
create a
Exercise 9
Complete the following seritcrices by using the words from the land Iaw sec'tion.
a He is a very good He always pays the rent on time!
b Mv sister works in the property department of her IAw f!rm. She act.s for peop!e who are buyng and
selling houses. She is a specialist in
c We dont own our house; we rent it. The - ends in three months so we will have to find
somewhere else to live.
d He is the - offive houses in this area. He makes a lot of money every rnonth from the rent.
e The price of in this part of the country increased a lot last year. It is very expensive to
buy a house.
18
UNIT LA VOCABULARY CHECK land law
and lord
These are the important words that you have Iaw firm '1
o
=
studied in Unit lA. You should make sure that the law of contract
you know these words before you go on to the law of equity and trusts o
=
Unit 1113. the Iaw of tort
laer
act for
lease
advocacy
legal
allegation
legal costs
appear
legal practice
attorney
1 itigation
bailifl
maternity Icave
barrister
m atte r
to be based somewhere
rn erge
hreach
negligence
capital
no win no fee
care lessness
obligation
case
owe
civil law
to have ownership
claimant
client partnership
company law party
conveyancing plaintiff
criminal law plead a case
practise
damages
procedure
deal with
proceedings
debt
defendant to he qualified
discriminate real estate
dispute redundancy
divorce represent
draft respond
duty of care to have a right
employment law right ot audience
family law serve

formation of a business sick pay
sol icitor
goocis
specialise
groLinds
sue
harm
tenant
hear
tort
immigration Iaw
training contract
insolvent
unfair dismissal
inteliectual property law
issue valid
judgrnent will
19
TOLES FOUNDATION EXAM PRACTICE
Exercise 1
«
Look at the sentences below. Each sentence contains a mistake. The mistake is either an incorrect word
or a word that should not be there. Put a circle around the word. Do not circle more than one word for
each sentence. There is an example at the beginning (*).
Example
(*) in the United Status they do notrence between two separate kinds of lawyer because ali
iawyers are known as attorneys.
1 When a student finishes his or her legal studies he or she has to make a two-year training
contract with a iaw firm.
2 The law of tort says that everyone must to be careful and not harm other peopie.
3 1 wifl start my training contract with the Taylor Waflis in September.
4 If we issue a claim against you we wifl ask for a very high damages.
5 He breached the contract and 1 wifl prosecute him in the civil court.
Exercise 2
Read the following article and decide if the statements under it are true or false. Write your answers in the
box below. There is an example at the beginning (*).
Sanjay Pritam is a partner with a law firm in Southampton in the south of England. Sanjay is a speciahst
in maritime law. He chose this area of iaw because of his family history. His father owns a ship. Sanjay's
father worked on this ship for his whole life. Sanjay worked with him for two years and then he started his
legal studies. Sanjay thinks this practical experience on a ship was very useful.
English law influences most of the law that governs international maritime cases. For this reason. lawyers
from ali over the world contact Sanjay's office to ask him for his opinion, which he gives by phone or email.
When maritime Iawyers are speaking informally they divide cases into two categories. They cail them dry
cases and wet' cases. Dry cases involve problems with shipping contracts and wet cases involve problems
at sea, such as ships that have accidents. Most of the cases that Sanjay deals with cannot be negotiated
and end in litigation.
Example
(*) Sanjay Pritam works in a farnily iaw pmctice.
1 Sanjay's father is also a lawyer.
2 Sanjay thinks it is good that he worked on a ship before he was a lawyer.
3 Sanjay usualiy travels to other countries to help lawyers who have questions about maritime law.
4 A martrne case invoiving a breach of contract is informa!Iy called a dr,' case'.
5 Most of Sanjay's cases go to court because the parties cannot agree upon a solution.
(*) FALSE (1) (2) (3) (4) (5)
20
=
Exercise 3
Here is a conversa tion between a lawyer and his client. The conversation is mixed up. Put the conversation •'I
o
in the correct order. Write your answers in the boxes numbered 2-9 beiow. There is an exam pie at the o.
beginning (*), which is the start of the conversation. o

o
(*) Good Morning Mr Rodriguez. Thank you for coming to see me. 1 understand that you would like to issue
a claim in the County Court?
a Three months is a long time. 1 agree that you shouid issue a claim. 1 will explain to you how it ali works.
The first thing that we must do is to complete a claim form and file it at the County Court.
b Yes, you will have to pay a fee. But if you wn, the judge will usually order the defendant to pay back the
fee. The next thing that happens after we file the claim is that the court will serve the claim form upon
the defendant.
c Yes, that is correct. 1 think going to court is the only thing that 1 can do. 1 supply food to restaurants and
cafés mn Chatsworth. 1 have a contract with ali of my customers. The contract states that a customer
has 14 days to pay me from the date they receive a dehvery. A customer who owns a café in town is
three months late in paying me. 1 would like to start proceedings against him.
d 1 see. What information do you need to complete the ciaim form?
e He has 14 days to respond. In this case 1 hope your customer agrees that your claim is correct and that
he will pay the money he owes you when he receives the claim. That is the best thing that can happen.
f 1 need the name and address of your customer. When we file the claim your customer will be called the
defendant. 1 also need the details of your claim. 1 need to know wben the defendant received the
delivery from you and when he was supposed to pay you. Please bring me a copy of the contract so
that 1 can check the part of it that talks about payment. How much money does he owe you?
g And when he receives the claim how many days does he have to respond to it?
h £430. 1 can bring a copy of the contract to your office this afternoon. What happens when we file the
claim? Do 1 have to pay a court fee?
(1) (*) (2) (3) (4) (5) (6) (7) (8) (9)
t Global Legal Eng'sh 21

AL
1! _
I i
:f.-.
•l.
THE LEGAL PROFESSION =
1
THE IMPORTANCE OF COLLOCATIONS

Coliocations are words that form natural partnerships in English. For example, we say,
Merry Christmas!' but •Happy New Year!'
Wliy cant we say Merry New Year'? lts because a native English speaker wouldn't expect these words
to go together. They do not form a good coliocation. Legal English is fuli of coilocations. They might be:
verb+noun adjective + noun

Do you accept Iiability? She made a fatal error.
noun+verb adverb + adjective

The gap has widened hetween them. This is a highly contentious dispute.
verb + adverb
Could we please discuss this matter rationaily?
The key to learning accurate legal English is to have a good familiarity with coilocation. Some nouns form
good coilocations with more than one verb. Some nouns form a good coilocation with just one verb. The
important thing is to start to notice accurate coilocatrons and memorise them. For example:
to draft a contract to write a contract
Good coilocation: to honour a contract Bad coilocation: to respect a contract
to breach a contract to infringe a contract
As you work through this book you will see many collocations. To help you notice and remember accurate
coilocations they have been put into a coliocation bank for you. The symbol means memorise.
Coilocation bank 0
to draft a contract to honour a contract to breach a contract
Exercise 1
Look at these sentences. They contain co//ocations that are in Uriit lA. Complete the sentences with the
correct co/loca tion from Lhe four choices on the next page.
a Solicitors are allowed to clients in court.
b 1 am afraid 1 cant help you. 1 am a commercial lawyer and this is a criminal
c What are the for your case?
d 1 will my final law exams in June of next year.
e My client is a new factory and he needs advice about the relevant health and
safety regulations.
[r 23
a A represent B work for C stand for D advocate
b A issue B matter C subject D point
c A grounds B reasons C motives D basis
d A pass B make C prepare D take
e A starting B launching C opening D initiating
THE IMPORTANCE OF PREPOSITIONS

As you work through this book you will see many prepositions. To help you notice and remember accurate
prepositions in a legal context they have been put into a preposition bank for you. The symbol means
memorise'.
Preposition bank
an attorney at law to send a cheque for an amount of money

My daughter is an attorney at law in Atlanta.' 'Please send a cheque for £2000.'
to work on something subject to something

l'm currently working on a merger agreement.' The goods are for saie at this price subject
to availability.'
Eirercise 1
Complete these sentences with a preposition that you saw in Unit lA.
a The judge awarded my client £20000 d Stephen works for a law firm
damages. Manhattan.
b Suing someone is a more informal way of saying e When you are - dispute with someone
starting proceedings someone. you can start a claim in the civil court.
c A smaii cíaim is a ciaim a maximum f (2ould 1 take a look your

of £5000. employment contract?
Exercise 2
Using the knowledge that you have about collocations and prepositions correct thc language below.
'My name is Luigi and 1 am a lawyer (a) at Milan. 1 work (b) into a big Iaw firm. Today 1 am very busy. 1 am
(c) writing a contract (d) to a new client. This afternoon 1 am (e) speaking for a different client in court. it
is a (f) disrespect of contract case. 1 think we will win the case because our () reasons are very strong.'
My name is Luigi and 1 am a lawyer (a) Milan. 1 work (b) a big law lirm. Today 1
am very busy. 1 am (c) a contract (d) ________ a new client. This afternoon 1 am
(e) a different client in court. It is a (f) of contract case. 1 think
we will win the case because our () are very strong.'
24
SOLICITORS AND BARRISTERS
Exercise 1
Diana Williams is a lawyer. Today she is going to visit a school in her town to taik to the students about a
career in law. Here are some of Diana's notes for her taik. In this section she is taiking about the two
separate professions that exist in England, solicitors and barris ters. FiU in the gaps in the text with the
correct word frorn the box below.
partner judge client audience

qualify practices solicitor associate
partnerships court attorney issued
My notes for careers taik at Chatsworth Hill School

In England we have two different types of lawyer. One is known as a (a) and the
other is a barrister. Both are called lawiers'. This can be a little confusing because in the
USA every lawyer is usually known as an (b) . An English law student has to
decide at some time during their university studies which type of lawyer they would like to
(c) as.
Most English law students decide to become a solicitor. These are the lawyers that a
(d) the person who pays for the services of a Iawyer, will usually meet first.
Often the solicitor can help the client without the need for a barrister.
Most solicitors work in small private businesses, known as (e) . in what are
called High Street firms. This phrase High Street Íirm' refers to a typical, small group of
solicitors working together in the type of offices that you can find on the major streets of any
English town or city. Many law firms are set up as (f) . A new lawyer will
usually work first as an () of the firm and gain some experience while being
paid a fixed salary before being offered the opportunity to become a (h)
A typical High Street solicitor usually specialises in a particular area of law, such as family,
employment or cornmercial law. Many people believe that solicitors cannot act for their
clients in (i) but this is untrue. Thousands of solicitors appear in court every
day, especially in the County Courts where most claims are (j)
The second type of lawyer found in England is known as a barrister. Barristers are usually
specialists in a very particular area of law. They give advice and opinions to solicitors and
their clients. Barristers have the right of (k) (the right to he heard by a
judge) in ali of the courts in the land. Barristers often share offices, known by the traditional
name of chambers, although they usually work alone as individuais rather than in
partnerships.
Alter several years of experience, members of either profession may apply to preside over cases
and sit as a (1) . Within the English legal system a law student cannot take an
exam to be a judge hut has to wait to be appointed atter some years of experience as a lawyer.
G bl Legal EngLs 25
a,
Èj
= Coilocation bank
to qualify as a Iawyer to sit as a judge to issue a claim

to act for a client to gain some experience to take an exam
Preposition bank
to be known as something to specialise in something

They are known as barristers. Tom specialises in cornmercial litigation.
to qualify as something to work in/for a business

She qualified as a lawyer two years ago. He worlKs in a law firm but she works for a bank.
to go into partnershíp with sorneone to preside over a case

He is going to go into partnership with The insurance case has started and Judge
his brother.' Mortimer is presiding over it.'
Exercise 2
Look at the solicitors' advertisernents on the opposite page. Give the narne and the telephone number of
the firm of solicitors that 1 should cal! if / have the foliowing legal problems.
a 1 have reached the age of 50 and 1 arn thinking about what 1 want to happen to my property after
my death.
b 1 want to begin a business irnporling electrical goods from one European Union country into another
and 1 want to know what the rules are.
c 1 am a woman who is angry that a man doing the sarne job in the factory where 1 work is paid more
than 1 am.
d 1 am a visitor to England from the USA. 1 carne to work in London 18 months ago, with the permission
of the British authorities. However, 1 only had permission to be here for a year and now 1 am afraid
because 1 have broken the law.
Firm of solicitors Telephone number
Kt-
=
ACCIDENT? Judy Barclay iD
Solicitor
INJUREDO? NUMBER ONE FOR EMPLOYMENT LAW
Someone been careless? If you have a problem in any of the foliowing areas
NO WIN NO FEE cali today for first class advice
(Home and hospital visits) UNFAIR DISMISSAL / REDUNDANCY

FREEPHONE 0500 652 1112 BULLYING / DISABILITY RIGHTS
Swanhouse Place, Chatsworth EQUAL PAY / DISCRIMINATION
BREACH OF CONTRACT
1• — — — — — — — — — — — — 1 www.judybarclay.co.uk 0771 3339989

25 Haymarket Lane, Chatsworth.
MARION KAYE
Solici!ors
Patcl & Co, Solicitors
Pn?/èssíona/, J'riendlj', eJj'ectire. SPECIALISTS IN IMMI(;RATI0N LAW
1 1 Including
• Business Law
• Commercial Property BUSINESS IMMIGRATION LAW
:
i • Commercial Litigation i & Work Permits
1 •EULaw i [mau: Pauline PatelOx law.corn
1 1 lei: 0771 333 2323
• Insolvency () Rovai Cresccnt, Charsvorth.
• Inteliectual Property Cali today!
• Landiord and Tenant

Telephone: 0771 777 5454
( )fti:u, in I.inIn. Oxhtrtl and Chatswttrth
McCarthy Kyle & Co
yoI R u)(:AI. E1)1'(VIION I.AW SPI(.ItI.IS is is (.li.1 SW()K1Ii
iTt til tic:t ti Edt.cation i.av mc iticimng:
spt ci ti. IDrICALION NFFDS I)YSiEXIA A1)MISSIONS

ANI) FX(i.I SIONS and NF(;I.I(;ErS(;E (;LUMS
iiI4l*4
i Iicicdciu ( raiduri.
1 Suffered from 1
' SOLICITORS' NEGLIGENCE? 1
1 Contact LIS flOW 1
1 FREE initial consultation *NO WIN NO FEE u
FREEPHONE 0500 542 542
i i
lst cali for action
1 Matthew Morrison Solicitors
1 51 Queen Anne Square, Chatsworth 1
1 stibjer:t tu ssmu;srier?
1
Eng]is 27
=
Exercise 3
Find a word in the advertisernents that matches the fo//owing definitions.
=
a Not taking enough care over something that d An organisation that exists in order to collect
you are responsible for with the result that money, food or goods and give them to people
mistakes are made or someone is hurt. who need them.
The word is The word is
b The process of legaily transferring the ownership e The state of a business not having enough
of land or buildings from one person to another. money to pay what it owes.
c A situation where someone has to leave their f A person ar company which pays rent to
job beca use they are no longer needed by another person to allow them to live in ar use
their employer. and ar buildings.
Exercise 4
Say whether the fo/lowing statements about the advertisernents are true or false.
a If 1 invent a new type of water heater that 1 don't want anyone else True False
to be able to copy, 1 should cail 0771 777 5454.
b If 1 want to study law, 1 should cali McCarthy Kyle & Co. True Fase
c Matthew Morrison will always accept any client on a True False

no win no íee basis.
d The lst Cali Accident Centre specialises in the law of tort. True False
e Matthew Morrison deals with complaints about other solicitors. True False
Coilocation bank
to make a will a breach aí contract to be made redundant
Preposítion bank
to import gaads from another country to take care over/with something

She imported her car from Beígium. Please take care over/with that document
because it is very impartant.'
to import goods into a country
to deal with something or someone
•She imported her car into England.
Could you please deal with Mr Jones for me
as 1 am busy this morning?'
28 Frgiish
AREAS OF LAW
Exercise 1
Look at the words in the box anci decide if tflvy come from civil Iaw or criminal law.
a robbery criminal civil e litigation criminal civil
b contract criminal civil f sue criminal civil
c partnership criminal civil g business criminal civil
d prison criminal civil h prosecute criminal civil
Exercise 2
Look at the categories of civil /aw and match thern with the siniple definitions provided below.
Maritime law IT law
The Iaw of tort Inteliectual property law
Business and company law Family law
Contract Iaw Employment/Iabour Iaw
The law of equity & trusts The law of real property/conveyancing
a The law that deals with the protection of the f lhe law that doaIs with private agreements
rights of inventors (who might invent a new between people or companies and tries to
drug or machine) or artistes (who might write make sure that no one suffers a loss if an
a book ora song). agreement is broken.
b The law that deals with situations where g The law that deals with every citizens
someone has control of property for a period responsibility not to harm other people in
of time and must 100k after it for the benefit any way, even if it is not a contractual or
of someone else. criminal situation.
c The Iaw that deals with events such as h lhe Iaw that deals with people's rights, pay
divorce and the custody of (the right to look ar conditions in the workplace.
after) children.
i lhe law that deals with the way businesses
d The law that deals wtth everything connected are set up (created) and run (operated) and
with information and how it is passed how they must work in relation to each other
between people, especially by means of and the general puhlic.
the Internet.
j lhe Iaw that deals with everything connected
e The Iaw that deals with land, including with the sea ar ships.
transferring the ownership of buildings or
land from one person to another,
29
u
Exercise 3
Look at lhe situa tions below and decide which area of civil law is re/evarlt.
=
a Anna agreed to pay Paul £4000 to landscape e Bili has been married to Ruth for 14 years.
the garden at her new house. Paul has now However, he now wishes to leave Ruth and live
finished the work but Anna says she is not with Jane. Bili and Ruth cannot decide how to
satisfied with it and she has refused to pay him. share their property between them.
The area of law is The area aí law is
b Caroline and Susan want to start a business f Phillip has received an otíer to buy his house,
together. They need a solicitar to draft an but there is a problem with the exact position of
agreement for them about how they will share the boundary. The buyers solicitar must check
ali the responsibilities aí the business. this before the contract is signed.
The area of law is The area of Iaw is
c Daniel wants his two-year oid grandson, Wayne, g Elisabeth's cornpany transports goads from
to have his house when he dies. However, if South America to England by ship. However,
Daniel dies before Wayne is 21 years old Daniel there was a bad storm at sea last week and
wants his friend, Harry, to look after the house the ship carrying the goods sank off the coast
until Wayne reaches 21 years old. aí France.
The area of law is The area aí law is
d Emily has been in hospital and has been very h David has been using the Internet to send a lot
II after an operation. She thinks that the of private emalls at work and his boss says that
doctor was negligent and that he has made this is an abuse of the time for which he is paid.
her illness worse by his actians. She wants to David has been sent home from work on fulI pay
claim damages. because his boss is investigating the situation.
The area aí law is The area aí law is
Coliocation bank
to pass information to suifer a loss to set up a business
1 to run a business to draft an agreement to claim damages
Preposition bank
to pass information between twa people ar to be married to someone

among a group aí people She has been married to Peter for
Once the confidential information had seven years.
passed between the two of them, it was
known among the whole group in the office to be on fuli pay
in just a few days.' The company suspended him from work
on fuli pay.'
30
THE REGISTER OF LETTER WRITING
Exercise 1 ID
Diana Williams lias received this letter from a student at thc school whcre she gave her taik.
The words tfiat have been underlined are too informal. Complete the sarne letter on the next page by
choosing a better word or phrase from those in the blue box.
6 The Gate
Chatsworth
CH152MM
Miss Diana Williams 24 April 20XX
Chester and Pelton, Solicitors
227 Gallowgate
Chatsworth
CH1 4NG
Dear Miss Williams
Your taik at Chatsworth Hill School Iast week
Thank you very rnuch for the talk that you gave to our class on Tuesday. It was very
interesting. 1 am thinking very seriously about becoming a lawyer and 1 hope that you
can answer some questions about one or two things that were not included in your talk.
(a) In the first place, 1 am a little worried about the process of (b) using the civil court to
start off a legal process. 1 am thinking of getting a claim form and some leaflets to try to
find out more. If 1 go to the County Court in Chatsworth. will 1 be allowed to pick up a
claim form just to look at? Also, could you tell me a little more about (c) writing more
cornplicated legal docurnents such as contracts? 1 am very nervous about this part of
the work. My mother and father bought a new house recently and the solicitar who did
the (d) re estate transfer of ownership seemed to do a lot of very difficult paperwork.
What happens if 1 make a mistake? Can the client (e) start a casein the court if 1 give
them (f) wrong advice?
Also, you said that in the future there is gaing to be a lot of (g) discussing problems
with sorneone who can help find an agreement between clients instead of going to
court so often. This worries me a little. Does it mean that there will be less work for
lawyers and some firms may think about making peaple (h) outof work?
(i) Last, you said that lawyers usually work in partnership and are rarely (j) lawyers who
work alone. What will happen if 1 join a partnership about (k) getting the usual pay from
my law firm when 1 am ili, ar when 1 have a baby and 1 need to take (1) sarne time away
from work ta look after him ar her?
Thank yau in advance for yaur help.
Yaurs sincerely
Ernrna Soam e
Global Legal L'pFi 31

mediation sick pay Firstly redundant
drafting Finaily negligent issuing a claim
=
maternity leave conveyancing sue sole practitioners
6 The Gate
Chatsworth
CH15 2MM
24 April 20XX
Miss DianaWilliams
Chester and Pelton, Solicitors
227 Gallowgate
Chatsworth
CH1 4NG
Dear Miss Williams
Your taik at Chatsworth Hill School Ias! week
Thank you very much for the talk that you gave to our class on Tuesday. It was very
interesting. 1 am thinking very seriously about becoming a lawyer and 1 hope that you
can answer some questions about one or two things that were not included in your taik.
(a) 1 am a little worried about the process of (b)

1 am thinking of getting a claim form and some leaflets to try to find out more. If 1 go
to the County Court in Chatsworth, will 1 be allowed to pick up a claim form just to
look at? Also, could you tell me a little more about (c) more
complicated legal documents such as contracts? 1 am very nervous about this part
of the work. My mother and father bought a new house recently and the solicitor who
did the (d) seemed to do a lot of very difficult paperwork. What
happens if 1 make a mistake? Can the client (e) if 1 give them
(f) advice?
Also, you said that in the future there is going to be a lot of (g)
between clients instead of going to court so often. This worries me a little. Does it
mean that there will be less work for lawyers and some firms may think about making
people (h) ?
you said that lawyers usually work in partnership and are rarely
What will happen if 1 join a partnership about
(k) or when 1 have a baby and 1 need to take (1) ?
Thank you in advance for your help.
Yours sincerely
Emma Soame
32
LISTENING
u
Exercise 1
L/stcn to tíis trainee Iawyer speakirig about his experience of working for a major law firrn in London.
Some words are missirig from the text. Listen carefully and write the missing words in the box below.
My name is Rob Jones and Im a trainee with a iaw firm. Ive always wanted to be a
(a) and 1 can't imagine doing any other job. 1 started working here at Taylor Waihs a
year ago. Taylor Walhs is a global law firm with its headquarters in the City of London. 1 studied law
at Manchester University but 1 wanted to do my training contract in London because Im interested
in (b) law and banking and 1 think the best positions with the top law firms are here.
1 think my parents were disappointed that 1 didnt become a (c) __________ and work in chambers
and wear a wig in court, but 1 wasn't interested in that at ali!
With this law firm the two-year training contract is divided into four periods. Each six-month period
is caHed a seat. My first seat was in the (d) department. That really just means
deahng with companies and businesses. 1 was involved in meeting clients, (e)
documents and took part in some very high value deals. Of course, 1 had lots of support from the
experienced people working on my team (we cali them the principais) but 1 was surprised at how
much responsibility they gave me.
My second seat was in the property department. This involved (f) for clients who were
buying and selling domestic and commercial property, much of it office buildings here in London.
1 was able to get some experience of () as well as a little landiord and (h)
law when we dealt with rentais.
Next 1 will be moving into the (1) property department. Im really pleased about that as
it covers quite a few different areas of law and can involve famous clients. At the moment the
department is dealing with a breach of copyright case for a famous musician.
1 hope to stay with Taylor Wailis when 1 (j) as a lawVer next year. ln fact, Im
looking forward to being based in London for most of my legal career.
a f
b g
c h
rei
(b L 33
USING YOUR KNOWLEDGE
Coliocation review
Complete these sentences with a collocation that you have seen.
a You are 50 years old now Mr Johnson, you should really think about a will.
b If you do not honour your side of the agreement that you have signed, Im afraid 1 will have to sue
you for of contract.
c 1 have spent the Iast few hours a business partnership agreement for two new clients.
d 1 finished my training contract and started work two years ago, so l'm fairly new to the legal
profession. When did you as a lawyer?
e 1 am thinking of a new business and 1 need some advice about how to start.
f She has been her own business for several years now and she has heen very
successful.
g There are two separate professions who are allowed to law in England but in the
USA they don't make this distinction.
h I'm afraid my client a very serious Ioss due to your client's actions.
i We are starting proceedings immediately and we will be claiming of £10000.
j 1 am going to my law exams in June next year.
Vocabulary review
Complete these sentences with a word that you have seen.
a A person who pays rent to a landlord is a ________ -
b He has worked for that company for 20 years but business isn't good at the moment and they rnight
have to make him
c They went into last year, which means they own and run the business together.
d She is an expert in procedures. She deals with companies that don't have enough
money to pay their debts.
e She deals with ___________. It concerns the buying and selling of and and houses and making
sure the ownership of them is legally transferred.
f The process of two people taiking about their legal problem with an independent person to help
them agree on a solution is called
g If you want to sue someone who hasn't been careful enough, the grounds for your case would
probably be
34 C,i ú:. 1 L,i lisfl

h The type of laver who works in chambers and pleads cases (usually in the higher courts) is knowri =
=
asa
i Things that are produced in order to be sold are called (o
A Iawyer in the USA is usually known by the general name of
Preposition review
Complete these sentences with the correct preposition.
a 1 am working a very interesting merger project at the moment.
b A landiord is a person who receives rent someone.
c Im afraid that this firrn does not deal criminal law.
d 1 am based Stockholm at the moment.
e In your claim form you have made some very serious allegations my client.
f She imports goods Germany from China.
g Which judge is presiding this case?
h We will lend you the money subject confirmation of the amount of your salary.
1 Please send a cheque £20 to this address.
j Have you heard the news? Jennifer and Steven have gone pa rtnersh i p.
Glctd L:p ISI 35

TOLES HIGHER EXAM PRACTICE
Exercise 1
There is a word or phrase rnissing frorn thc fo/lowing sentences. For each sentence circle the word or
phrase which best fits loto the space from the optioris provided. Do not mark more than one answcr for
each sentence. There is ao example at the beginning (*).
Example If a person loses his or her job for a reason that is not valid it is called unfair
1 Solicitors are allowed to (1) clients in court.
2 This is a criminal (2) 50 1 will have to refer you to a colleague who deals with criminal law.
3 1 studied some landlord and (3) law when 1 was at university but 1 don't remember it now.
4 It is legal in England and America for some lawyers to work on a no win no (4) basis.
5 1 don't think 1 will ever want to (5) as a judge because 1 enjoy myjob as a solicitor.
6 1 thrnk it is fair that everyone gets (6) __________ pay for doing the sarne job.
7 1 have decided to specialise in land law so 1 expect to be doing a lot of (7)
8 My law firm has a good reputation for handling (8) ______ property cases, especially if computer
software is copied without the designers permission,
9 If a lawyer is allowed to be heard in a particular court we say that he or she has right of (9)
10 It you want the judge to award yOu damages from the defendant you will have to prove to the court that
you have (10) - a loss.
(*) A firing B redundancy C D release
(1) A talk for B act for C represent for D advocate for
(2) A problem B topio C subject D matter
(3) A renter B occupier C tenant D resident
(4) A payment B fee C salary D money
(5) A sit B practise C arbitrate D rule
(6) A sarne B equivalent C alike D equal
(7) A transferring B assigning C relocating D conveyancing
(8) A invention B creative C intellectual D original
(9) A speaking B consultation C hearing D audience
(10) A suffered B experienced C had D endured
36
Exercise 2 -
Read tIe text be/ow and tiink of the word that best fits each space. Use on/y one word in each space.
Write your answers in the box be/ow. There is an exarn pie ar file beginning (*).
Barristers at work
Life as a barrister is prestigious but it can also be extremely stressful. Julia de Burca is a barrister in
London. The first difficulty Julia had was to (') as a barrister at ali. Only 1200 or 50 law
students manage to pass the Bar Professional Training Course in England and Wales every year. OnIy
around 500 are awarded tenancy. In an average year approximately 1,500 students begin the course, so
many do not make it.
The Bar Professional Training Course is described as a bridge between the academic study of iaw and
having to actuafly (1) Iaw in the real world. Julia passed the course three years ago.
In a typical day Juha leaves her flat at 7.30am and arrives at (2) the special name for a
barrister's office, at 8.30am. Julia shares a building with 14 other barristers. However, they are not
partners. Barristers are allowed to share office accommodation but they do not usually form
(3) . Most barristers are self-(4)
If she is representing a client that day Juha traveis directly to court. Speaking on behalf of a client in court
is called (5) a case. As a barrister, Julia has the right of audience in court at every levei. She
is a confident (6) , which means that she is skilled at speaking in court. Julia is very
successful in court, as she ioves public speaking. She is also required to do a lot of research and a lot of
(7) , which means writing legal documents. On days when Julia is not in court she spends her
time preparing cases and writing opinions. She usually leaves work at around 7.30pm, taking any work
that is not finished with her. Julia otten works long hours over the weekend.
Julia is a specialist in insolvency, so she advises clients who (8) money but for some reason
they cannot pay. Ali of Julia's clients are companies. When a company has financial problems, Julia will
advise the company if it can legally continue trading. She sometimes has to defend clients in court when
legal (9) __________ have been issued against them. If her client loses the case and the judge awards
(10) to the claimant then Julia wili advise her client on what to do next.
Example qLialifv
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
37
.4 Listening
Exercise 3
Listen to the conversa tion between a /awyer and some students. Answer the questions below.
1 How long has Helen Reay been working as a solicitor?
2 What is the subject of Helen Reay's university degree?
3 How long a period of study is the Post-Graduate Diploma in Law?
4 What reason does Helen Reay give for law firms employing lawyers whose first degree is not in Iaw?
5 What is the LLB?
6 What is advocacy?
7 When Helen Reay speaks about the Legal Practice Course she mentions four skills that are taught on
the course. Two of the skills are drafting documents and advocacy. What are the other two?
8 One oÍ the students names an area of study that she is not very good at. What is it?
9 Helen Reay says that getting a training contract with a law firm after university is a competitive
business. What reason does she give for that?
10 What is the roIl oÍ solicitors?
38 1
,
The Langulo
- ___-
THE LANGUAGE OF BANKING
'1
o
o
=o-
A NEW BANK ACCOUNT
o
=
Exercise 1
Look at this advertisemeot. It is for a baok that would like to f7rtci new cL/stumers. Look at the words that
are highlighted lo the advertisemerit. Without using a dictionary decide if eacli word is a verb, a nouri or
ao adjective.
Keyfeatures and benefits ofoiir
GOLD ACCOUNT
lor ai! eligible applicaii t
1r d;i l)jI1lII1i tIO Ou ( ( ) ) currcnt

I1 o nuni ll\ ii(> charges
ult ItU..11IH.I O iSSUC tcquc, itt withdrav tIt tint tio. \ 1 \i to. - (\' ri
II) Ti 1,1 11 >11 1.1 1 lmN Ii 111 (' 1)! 1 II( (1 \ 1 .1 iii0iiiIiIN stateinent.
1 iu1hcnii l.tiikiiti.
()uuiL uiit.l ti uitIuiItti"jíd SvStcfli w (1C1)OSit (:iIi ln(I tI1(tII'

Fio) (ILIcueiig F1CCC.l r\
.
o lii o 1.1 13,iiikino, 1 )o vour 1)a nkin lo I\' \ 10 \\ Iii t ItI o. Ii \ 111
itt 1ransfer \lur cah. Iit L ttur halaiice. ii t

(TI ItO 1 TI Tt\ \ ,, ,ii bilis III 11 1 i
.01 LT I__ ITT TI fec .01 ovcrdraft .,
Ii .1111 1 1 1 O 11111 ti l\
Verb Noun Adjective
1
41
=
o
•0
Exercise 2
1
o Here are the definitiors of the words lo Exercise 1. Put the correct word loto each sentence to
« complete the definition.
eligible charges withdraw deposit

balance fee current issue
statement transfer bilI overdraft
a Your is the amount of money that you have got in your bnk account.
b To money means to put it into a bank account.
cA account is a bank account that you can use at any time. It is

called a checking account in the USA.
d Ifyou a cheque it means you give a cheque to someone and you

validate it by signing it.
e An is the amount of money you can take out of the bank even
though your account does not have that rnuch money in it.
fA is a demand for payment for goods or services you have received.
gA is a payment that you have to make to a professional person to

do something for you.
h To money means to take money out of a bank account.
i Ifyou cash you move it electronically from one bank account to

another.
j If you are for something it means that you are the right kind of person
to have sornething, for example, because ycu arc thc right age
or you have enough money.
k Bank are payments that you have to make to the bank for using your
barik account.
1 Abank is a document that your bank sends to you. It teus you when
-
you deposited money, when you withdrew money and how much
you have in the account at the moment.
42
HeIp desk
What do these words mean? o
an applicant a person who wants to ask for straightforward - srnple and easy to o
somethirig lke a joh or a bank account. =
unclerstand.
an ATM machine/the ATM network the subject to status - depending on your age ar
machines that give rnoney to hank customers how much money you have, for example.
(Automated Telling Machines). lo the UK an
chip and PIN - the system of security for using
ATM is called a cashpoint.
cards which contain a microchip. You have to
an automated payment - a payment that put your card into a machine and then enter
your bank will make every week ar every your secret Personal Identification Number (PIN).
month without needing your permission to
to validate something to make something
do it each time.
legally acceptable.
Exercise 3
A/isori Go/dsmith wants to open ao account with the bank. Here is part ai' a conversation she has ao the
telephone with one of the bank s employees. Put the conversatiori in the correct arder. There is ao
examp/e which is the start of the conversa tion.
a rïiight be interested in that. What benefits e That sounds very good. Im busy, sa it wouid
does the GOLD account have? be very handy to be able to do my banking
on the Internet. 1 dont issue many cheques
b Hi. My name is Alison Goldsmith and Im these days but 1 withdraw cash almost every
interested in apening a current account. day so doing that for free will save me quite a
lot in bank charges.
C Well, you can check your balance anime
24 hours a day. And it has free telephone f Certainly madam. We have a few different
bankmng. Another good thing is you will pay types of current account. Shail 1 give you some
no charges to issue cheques ar withdraw details about our GOLD account? And then we
cash. can check to see if you are eligible for it.
d Helio, Royal Chatsworth Bank. Cana
g OK Ms Goldsmith. 1 need to ask you some
king, haw may 1 help you?*
spea
questions. it want take too long...
Id 2 3 4 5 6 7
Exercise 4
Jumbled words. Look at tbe dcfioitioris below. The fetters of the words that bc'Ioog with each defin)tion
are mixed up. Put the letters in the correct arder to spell the words. The first Ietter ai' each ward is
there for you.
Example: An amonnt o) mofley Pari lato a barik accourit. CREDI (DRICET)
a An amount af money that goes out of a bank account. D (TEBDI)
b A word for ali the money that you receive fram your salary ar from other thmngs. it could he every
month ar every year. 1 (MIENOC)
43
o c A word for ali of the money you spend. It could be every month or every year.
-o
O (GSONGUIOT)
o
1
d A verb which means that you give something (often money) to someone else for a period of time.
=
They must give it back to you. L (DELN)
e A verb which means that you take something (often money) from someone else for a period ot
time. You must give it back to them. B (ROBWOR)
f To have to pay some money to someone else. O (WOE)
g A general word for money which you owe to someone else. (BETD)
h The colour we say your bank account is in if you spend more money from your account than you
have in it. R (EDR)
i The colour we say your hank account is in if it has some money in it. B (CLKBA)
Exercise 5
PLJt the correct word from Exercise 4 into these sentences.
a 1 have an overdraft facility of £200 on my bank account. It means 1 can go £200 into
the
b My account shows two for yesterday. One is for a pair of shoes that 1 bought when 1
was shopping in London and the other one is for paying for a repair to my car. A total of £445 went out
of my account.
c 1 need to some money because 1 want to buy a new computer and 1 don't have
enough money of my own.
d 1 will ask the bank to me £2000 so 1 can buy that com puter.
e lhave which add up to £500, beca use 1 have to pay back £200 to my parents and
£300 to the bank.
f 1 £500 in total, £200 to my parents and £300 to the bank.
g 1 receive a salary of £975 each month. 1 also teach a French evening class twice a week, for £20 every
class. My total monthly is £1135.
h There are just two _________ showing on my bank statement. One is my salary and the other is
some money that my mum paid into my account for my birthday.
1 did some extra work last month and yesterday they paid me for it. My bank account is finally in the
l'm very pleased that 1 dont have an overdraft any more.
To own a car is very expensive as you have to pay for petrol, insurance and road tax. 1 am trying to
reduce my total so 1 decided to selI my car.
44
Exerclse 6
Alison Gol dsrnith opened ao account yesterday with the F?oyal Chatsworth Barik. This morning she o
I1
==
rcccived th,s Ietter from the bank. Read the lctter and decide which is the correct prepositiorJ from the
two possibilities. Writc your answers in the spaces below. o
=
The Royal Chatsworth Bank

1 St Joseph's Square
Chatsworth
CH1 2DD
20 January 20XX
Ms Alison Goldsmith
22 BluebelI Crescent
Chatsworth
CH3 7FL
Dear Ms Goldsmith
Your GOLD ACCOUNT with The Royal Chatsworth Bank
Thank you for opening an account :* with, in the Royal Chatsworth Bank. Your GOLD
account number is 0008786598. You will receive a debit card and a PIN number
(a) at'within the next three days. You can change this PIN number (b) from/at any
ATM machine.
As a GOLD account customer you are eligible (c) for/to a wide range of services.
These include;
• Cali into your local branch (address above) for free and friendly
advice 9am - 5pm Monday to Friday
• Larger branches open Saturday mornings (see website for details)
• Check and print off your balance (d) to/at any of our ATMs
• View and print off your current statement online
• Make bank transfers online
• Order foreign currency (e) from/for any hranch
• Very competitive overdrafts and louns with 10w interest.
We hope you will be very happy f) for/with your new GOLD account. If you have any
complaints or suggestions about how we can improve our service to you please calI
into your branch or telephone os.
Yours sincerely
Michael Rose
(Account Manager)
Answers
Example 1*, it) a b ____ c d e f
G ohI LeOII Ln1Ii,t 45

== Exercise 7
After Alison read the /etter she had the fo//owing questions. Match each question with the bariks answers.
Alison's questions
e What is an account number? (*) What is a loan? (6)
What is a branch of a bank? (1) What does sprint 0ff your balance'
mean? (7)
What is foreign currency? (2)
What does make bank transfers'
What is an ATM machine? (3) mean? (8)
What is a debit card? (4) What is interest? (9)
What is an overdraft? (5) What is a PIN number? (10)
Bank's answers
a it is an amount of money that you owe to g it means to look at how much money you
the bank because you withdraw more from have in your bank account and receive a
your current account than you have in it. piece of paper showing that amount. You
can do this at the banks ATM machines.'
b it is a card that aliows you to withdraw cash
from your current account or pay for goods or h It is a local office or bureau of your bank.'
scrvices electronicaiiy by taking money out of
your current account.' It is a machine that is often outside a bank.
lt will give you money from your current
C It is an amount of money that you borrow account if you put in your debit card and then
from the bank for an agreed period of time. enter your PIN number.'
d It means to move money electronically from j It is the amount of money that a bank
orle bank account into another bank account. charges you for a loan or overdraft. We also
pay this to you on any money you save at
e It is a personal nurnber that identifies your our bank.
bank account. No one else has the sarne
nurlibor. k it is your personal identification number. This
aliows you to riso yoir debit card at any ATM,
f Each country has its own. It is the money in or to pay for things with your debit card. You
coins and notes that people use in that country.' must never tell anyone else this number.'
WORKING IN A BANK
Read the following text about working in a bank. T/ie most important words are in the key vocabulary
below. Then complete the exercises that follow.
Key Vocabulary
account manager interest rates defaulted on loans
business account credit card identity theft
savings account credit history receipts
46
My name is Michael Rose and 1 am an account qLnckiy! One of the things we do is to check a
manager for the Royai Chatsworth Bank. This customer's credit history. if they have a good
means that 1 am not the general manager of the historv of paying for things on time we are happy -I
o
bank hut that 1 have responsrbiirty for iookrng after to give them a credit card. if they defaulted on =
o-
the bank accounts of certain customers. loans or credit agreements in the past then we wili
o
refuse them a credit card. If someone defaults on a =
We like to trave new customers at the bank. New
loan it means that they don't pay the money back
custorners make money for the bank. When people
and the bank might have to go to court to try to get
have a current account with us we can then offer
its money.
them other things from our range of services.
One of the biggest problems we have with credit
We can offer them other bank accounts, for
and debit cards these days is identity theft. Have
exampie. if customers have a business we can
you heard about it? if someone has your address
open a business account for them. Or, if they
and your credrt card or debit card detaiis they can
want to save money for the future or for therr
use your money to buy thrngs or even to take
children, we can offer them a savings account.
money out of your account. We have to tell ali of
We offer good interest rates on ali our savings
our new customers to be carefui. in fact, we give
accounts. For exampie, the interest rate on our
our new business customers a free shredder when
SmartSave account is 43%. This means for every
they open their account. A shredder is a machine
£100 that someone saves we pay interest of
that cuts documents into tiny pieces so that no one
£430 each year.
can read them. We recommend that ali of our
The bank also offers a credit card to customers customers destroy or shred oid bank statements
who are eiigibie. A credit card aliows peopie to buy and credit card receipts rather than throw them
things and pay for them iater. it doesn't take their away. A credit card recerpt is the piece of paper
money out of their bank account immediateiy in the that proves that you have paid for something with
same way as a debit card. This means that we have your card. lt is very dangerous to lose it or throw it
fo be very careful before we issue a credit card to away because it might fali into the wrong hands.'
someone. Peopie can create big debts quite
Exercise 1
Answer the foflowing questions using a fuil sentence.
Example question: What is Michaei Rosesjob?

Example answer: Mictruel Rose is ao account marrLrger for the Royai Chatsworth Bank.
a Why does the bank hke to have new customers?
Answer:
b What can the bank do for customers who have a business?
Answer:
c What rnterest rate does the bank offer on its SmartSave account?
Answer:
d When does a debit card take money out of someones account?
Answer:
e What does to defauit on a loan mean?
Answer:
f ií a stranger has your address and your credit card detaiis what can they do?
Answer:
Eng Sr 47
== Exercise 2
Decide if these statements are true or false.
= a Michael Rose is responsible for the accounts of ali of the True False
bank's custorners.
b Every custorner of the bank is offered a credit card. True False
c People who have a bad record of paying back their debts won't be True False
allowed to have a credit card from this bank.
d The barik offers to shred old bank staternents for its customers. True False
e A receipt is the sarne thing as a bili. True False
LOANS
Exercise 1
The application. Alison Goldsmith decides to take out a loan. She has to g ive the following information
on the application form. Read the inforrnation in the box and answer the questions.
Alison Goldsmith is 28 years old. She is single. She is a photographer. She moved to Chatsworth
six months ago. She bought a house. She bought 22 Bluebell Crescent, Chatsworth. She would
like to take out a loan. She would like to borrow £5000 from the Royal Chatsworth Bank. She
wants to apply for the loan by posting her application to the bank because her home computer is
broken at the moment so she can't do it onhine. She knows that the loan agreernent requires her
to give the bank a guarantee that they wihl have their rnoney back. This guarantee is her house.
Ahison wants to pay the rnoney back in equal monthly parts.
a What is the narne of the borrower?
b What is the name of the lender?
c What secur'ty 5 the borrower gvng

the lender?
d What is the address of the property offered

as security?
e What is the marital status of the borrower?
f What sum of money does the borrower wish

to have?
g Does the borrower wish to email her apphication

to the bank?
h Does the borrower wish to pay the hoan back

in a single payrnent or does she want to pay
by instalments?
48 O
Exercise 2
Thc ducisioi. The bank rnust /00k at Alison's loan application and decide whethcr to lend her the rnoney
that she wants. Read the inforrnation in the box and answer the questions.
o
The Royal Chatsworth Bank Iooked at Alisons loan apphcation yesterday. They Iooked at the
information she gave to them and they had to decide if she is a good customer and that it is safe
to lend money to her. To do this they had to check her credit history. Alison gave the bank
permission to 100k at her credit history when she completed her application form. The information
Alison gave to the bank is confidential. The bank prornised not to tell anyone her personal details,
for example, her address or her income.
The bank said •yes' to Alison's loan application. She received a Ietter from the bank this morning to
tell her this, together with a loan agreement. The loan is for 36 months. The letter teus Alison that
she rnust sign and return the loan agreement and then they will put the money into her current
account. She cannot change her mmd after the money is in her account.
a When did the bank process Alison's loan

appuication?
b When did Alison authorise the bank to check

her credit history?
c What did the bank promise not to disclose

to anyone?
d Did the bank approve Alison's loan or

refuse it?
e How did the bank notify Alison about

their decision?
f What clid the bank enclose with their Ietter?
g How long does Alison have to repay the loan?
h Can Alison cancel the loan atter the bank

credit the money to ticr account?
Exercise 3
Complete the following scntenccs wm th t/ ie correct preposition.
a 1 want to buy a new car. but 1 don't have enough money. 1 need to borrow £3000 the bank.
b 1 need to apply a loan of £2000.
c 1 am very pleased as the hank agreed to lend £1000 me so that 1 can buy a computer.
d It's the end of the month and 1 only have £1236 _________ my account. l'm glad it's pay day tornorrow.
49
Q Problems in paying back a loan. There are two very important words connected with repayment problems.
These are:
1 arrears (noun) to accrue (verb)
Arrears means money that someone owes to Accrue rrieans to grow or accumulate. We use
someone and they promised to pay it back by a the word accrue to talk about accumuiating
certain date but didnt. For example, in January, interest. In our example, if Harry did not pay his
Harry took out a loan and agreed to pay it back monthly instalments in Fehruary or March he
in monthly instalments. Each instalment must be now has arrears of £200. For exaniple, interest
paid on the first day of every month. Each is accruing ao the arrears at a rate of 15%.
instalment is £100. If Harry doesn't pay on
1 February he has arrears of £100. If he doesn't
pay again on 1 March, he has arrears of £200.
How are arrears different from debt?
Debt is not necessarily a bad thing. Most people

have debt. Arrears are always a bad thing. It
means you are not paying back your debt on the
agreed date.
Exercise 4
Put the correct word from the box below into the foiiowing senterices. You can use each word more than once.
arrears accrue accruing debt
a 1 owe rïioney on two credil. cards, 1 have a loa ri and 1 have an overdraft. 1 have a lot of
but 1 always make ali of my payments on time.
b 1 couldn't make the repayment on my car purchase agreement last month as 1 didnt have enough
money. The car company sent me a letter yesterday to say that my account is £147 in ______ -
c If your loan account falis into the hank will write a ietter to you and ask you to
make the missing payment immediately.
d If you don't make a payment immediately, interest will on the arrears at a rate
af 10%.
e English people have a lot of because everyone borrows a lot to have holidays or to
improve their houses.
f lnterest is - on your debt at the rato of 18%.
50
UNIT 2A VOCABULARY CHECK =
These are the important words that you have '1

o
studied in Unit 2A. You should make sure that =
a
you know these words before you go on to
o
Unit 2113. =
account identity theft

account manager income
accrue instalments
applicant interest
apply interest rate
approve a loan internet banking
arrears issue
ATM
lend
authorise
lender
automated payment
loa n
balance loan rate
bank account
mail
bank statement
marital status
bank transfer
bilI notifv
in the black
open an accourit
borrow
outgoings
borrower
overd raft
branch
owe
business account
pay
cancel
PIN number
charges
process
cheque
property (house)
chip and PIN
competitive q ii eu e
a credit
receipt
credit card
in the red
credit check
repay
credit history
cu rre n cy savings account
current account secu rity
statement
debit
subject to
debit card
sum
deht
(lefau It telephone banking
deposit transfer
disclose
validate
eligible
withdraw
enclose
fee
L. E' 51
- c
Exercise 1
Look at the groups of words below. Iri each group, three of the words belorig to the sarne subject area but
there is one word that does rot belong. Put a ci role around the word that is the odd one out. Do not c/rc/e
more than one answer for each sentence. There is an exam pie at the beginning (*).
(*) A cash B cheque D credit card
(1) A overdraft B loan C balance D goods
(2) A borrower B litigation C balance D account
(3) A branch B manager C staternent D tort
(4) A credit B owe C interest D grounds
(5) A landlord B savings C outgolngs D money
Exercise 2
Read the foliowing pairs of sentences. For each pair af sentences there are twa possibi/ities, A or B.
Decide which sentence uses the correct preposition. Write your answers in the box beiow. There is an
exam pie at the beginning (*).
Example
(*) (A) Your balance is the amount of money that you havo in your bank account.
(B) Your balance is the amount of money that you have at your bank account.
1 (A) I'm interested for opening a new bank account.
(B) I'm interested in opening a new bank account.
2 (A) There is no arrangement fee for overdrafts over to £5000.
(B) There is no arrangement fee for overdrafts up to £5000.
3 (A) Is my client eligible for a loan?
(B) Is my client eligible with a loan?
4 (A) 1 have an overdraft facility of £1000 on my bank account.
(B) 1 have an overdraff facility to £1000 on my bank account.
5 (A) We charge interest on loans at a rate of 4.3% a year.
(B) We charge interest in loans at a rate of 4.3% a year.
(*) A (1) (2) (3) (4) (5)
52
Exercise 3
Read this newspaper artic/e about a case in Court and answer the questions that follow, Answer each •'l
o
question using a fuil sentence. No points are awarded for answers that are not a fui! sentence. There is an o .
exam pie at the beginning. o
Chatsworth woman meant ElIa's overdraft accidcntallv reached £560. as shc

didn't know her PY was late and withdrew inone froin
iii bank victory fier account. The bank charged her a pcllalt\ of £1 18.
A wom ao from Chatsworth von a case i n courl Ms Moran toId us 1 was verv angrv indeed. 1 tlunk lhe
vcsterdavagainst her hank. ElIa Moran (aged 35) took ainounl tlie hank charges people is verv unfair. 1 gol om
her haiik to court claiming that tlic financial charges ali of mv old tiaiik siatenients and ii lias Iiappened hefore.
the baiik inakes to custonlcrs for unatiilioriscd Last vear the bank charged mc £50 tor going over m'
overdrafts is 001 fair. Filas accouni is 11h 11w Gleii overdraft liuni k jusi £1 7 5. 1 (Iecidcd lo see a Iaiici.
Roval Bank. which lias its hcad office lo Ediuhurgli. The
Ms Morau was rcpresented lo court liv Chatsworth
haiik lias a sniall branch lo Talbot Road. Chaisvorih,
solicitor, Barr llcnshall. Ilc told os 'This is a greal
which opcned lo 1988.
~ictorN lor 11w consumer. li was foI difficult. as the
Lasi ear a governmcnt dcpartment calied thc Otficc uf bank didn't file a defence. 'lhe hank has two weeks lo
F'air Trading began an investigation of alI tK banks pa m client £565. That pavs back the unfair charges
folloing thousands of complaints froni custoincrs. lo Ms Moran as well as covering legal costs. \Ve are
People complaincd that some 1K banks were chargiiig delighied with todav's result'.
their customers more tlian £1 0(1 for going over their
Legal cxperts sav that olher unhappv customcrs should
agreed ovcrdraft limit. lhe ()fficc of Fair Tradiug III
do lhe sarne as Ms Moran and take legal action againsl
puhlish its report later this vear, hut ElIa Moran decided
tlieir banks for unfair overdraft charges. Consunier law
to take legal adiou before this report is availahle. ElIa
savs that penally charges fllust oiily cover lhe real
Muran v lio works for a Chatsvorth tra cl agei1c
administrative cosi lo the hank and must not he used lo
spoke lo os outside the couriroom vcsterdav. She said,
make a profit. Banks are profiting from unauthoriscd
1 hope the Office of Fair Tra(ling supports manv olher
overdraft fees liv au amazing £4.7 hillion a vcar. 'l'his
PC0PIC. But 1 was 100 angrv 10 Wait for them ti) 11(11) 111C'.
amount will reduce ver qtiicklN if more customcrs
FIla Moran's 'agreed oerdralt limO with the Glen Roval follow the exaniple of ElIa .\luran.
Bankwas.500. However. lo March of thisvcar Filas pav
A spokesman for lhe Glen Ru\ ai Bank reftiscd to
arrived at her bank three davs later than usual. This
comment on the j udgment.
Example question: HOw old is [lia Moran?

Example answer: Elia Moran is 35 years old.
a Where is the head office of the Glen Royal Bank?
b When did the Chatsworth branch of the Gien Royal Bank open?
c Why did thousands of bank customers in the UK compiain to the Office of Fair Trading last year?
d Why did Elia Moran take legal action before the Office of Fair Trading made its report?
e What was Elia Moran's agreed overdraft limit with the Glen Royal Bank?
f Why did Elia Moran's overdraft accidentally reach £560?
g Who acted for Elia Moran in court?
h Why did [lia Moran win her case very easily?
i Why did the bank have to pay £565 to ElIa Moran?
What does consumer law say that banks must not use penalty charges for?
53
r\T7 'zJ
!A.-! r. 1: -.1M~f
THE LANGUAGE OF BANKING
A BANK ACCOUNT
Alison Finch has recently moved to the town of Chatsworth. She has Just opened a new current account
with the local bank, the Royal Chatsworth Bank. Because her annual income is over £30.000 Alison is
eligible for a GOLD account. This is a current account which offers some privileges.
The bank has given a leaflet to Alison which explains the GOLD account. The front cover of the leaflet
appears below. Read the information it gives to customers and do the exercise on the next page.
SERVIC ES
• Over 400 branches nationwide
• Convenient telephone banking
• Internet banking for quick and

easy transactions
• Competitive loan rates
• lnstant decisions on loans
• Zero commission foreign

ciirrency
• Free legal information helpline
USING YOUR NEW ACCOUNT

• Secure PIN number
4OLD • Easy paying-in facilities
• Withdrawal facility of up to £200

a day at ATM machines
À ~CCOUNT • lnterest-free overdraft facility*
• Single card for debit payments

and cash withdrawals
• Optionai identity theft insurance
• Automatic travei insurance

when you buy travei tickets
using your GOLD account card
!Í) C.C)flÇ! tiC)!
GIubii Lcd 1 E lgIish 55

Exercise 1
A customer has telephoned the bank to ask for more informatioo about the /eaflet. Ao emp/oyee of the
== bank is explaining it in more detail. For each of her statements below, find the phrase from the leaflet
which matches it.
Statement Phrase from Ieaflet
Example:
'You are covered worldwide. You may claim up to £4 Autornatic traveI insurance when you buy travei
miilion towards the cost of ernergency medical tickets using your GOLD account card.
treatrnent ahroad and lhe cost of returning you home.
a We have a very straightforward, easy to use

website. You can check your balance 24 hours a
day and print 0ff your current statement.'
b Ali cafls wiH be charged at local rates wherever

you ring from in England and Wales. Our staft are
there to speak to you whenever you need to'
c This number wifl be sent to you when you open

your account. if you want to change it you can do
so at any branch or at one of our ATM machines.'
d 'This service provides information oniy. Please

note that it cannot cover your legal costs or
represent you in court.'
e If you wish to go into the red by more than this

amount please contact us for detaiis of our
interest rates for GOLD account customers.'
f Borrowing for any reason, from buying a car to

consohdating ali of your debts, is quick and easy.
You wifl have a decision within 15 minutes of
making your apphcation and if you are successfui
the money will be availabie to you the sarne day.'
Preposition bank
to opcn an account with a bank to make a teiephoiie cail from d urairi
1 have two accounts with the Bank of number or piace

Scotland. 'Heflo, 1 am cafling from Chatsworth.'
to be ehgible for something to have a decision within a certain period

'You are not ehgibie for this type of account 1H let you know my answer within the
as you don't earn enough.' next week.'
to make a withdrawal from a bank account to go into the red

1 withdrew £100 from my account this My account has gorie into the red by £48
morning. because 1 had to pay my gas bilI and didnt
have enough money in my account.'
to be covered by an insurance policy
if 1 am iii when 1 am abroad the bilI will be
covered by my insurance.'
56 Gobul LegF I-riglish

Coliocation bank
w
to open a hank to withdraw money to be covered by a range of services

nccourit from a bank an insirance polo
to make an
account
to cover your legal a loan application application for
costs to consolidate someth 1 ng
interest rate(s)
your debts
ioan rate(s)
Exercise 2
10 minute crossword. Tt?is crossword conta/as words that you iavc seea ia unit 2A. Complete as much of
the crossword as you can ia 10 minutes to see how many of the words you can remember. Some of the
words may have changed their form. For exam pie. ifyou /earned the verb to wíthdraw ia unit 2A, you may
need the noun withdrawal to complete the crossword.
Across Down
2. If a borrower does not make the repayrnents as agreed 1 III run out of money towards the end 01 the month 1
when he or she takes out a loan. the bank will eventuaily usually put any purchases 1 need to make on my
deem that borrower to be in (7) (6.4)
7. 1 need a loan. However, 1 want to borrow money as 3. 1 am pleased to tell you that your loan application has
cheaply as possibie. 1 will compare the been - - and the money will be in your account
offered by my bank with other High Street banks before today (8)
make an application (8, 4) 4. Please note that you are in arrears on your loan and
8. Not many peopie pay for things by writing a interest is day by day (8)
these days, as mosi people prefer lo pay by direct debit 5. II you would like to know more about the bank's special
(6) otfers to new customers. please make an appointment to
9. 1 took £100 aut 01 my account yesterday. 1 made this speak to someone at your local .. (6)
at an ATM machine (10) 6. The bank's customers receive a every month
10. The total amount 01 money that a person receives in a giving details of ali activity on their current account (9)
month trom salary and other things. The opposite 01 7. 1 am repaying my loan in equal monthly (1
outgoings (6) 12. The opposite of borrower (6)
11. The amount 01 money that you have in your bank
account is formally known as your (7)
13. How much money are you planning on from
your bank to buy a new car? (9)
14 In order to process your loan 1 need to ask about
your . Are you married. single or
divorced? (7, 6)
Gloli,l L 1 npIis
AN EMAIL FROM THE BANK
Exercise 1
Alison F7uch has received this email from her bank. It talks about the problem of identity theft. Some of
the words in the text are under/ined. Match the underlined word or phrase with the definitions provided.
File Edil Vise Isoh Ma:)aae HeIp
Reply RepIyAiI írerd FrirS Delete Previsse NtAddreeees
Search - Srniley Central 'U Mail Stamp . My Sigrature ' Mail Stahonery .. Cursor Mõni
Fiam: RoyaI Chaleroorlh Bark

Date:
lo: Alieorr Firich
Sub ccl. BeÁvare ol ldenhty Thert
II SOtflEror)e *1 55j5 your ideritity thcy cern cse it to cornrnit fraijd. Ariyone who hs yoLir perrsorial burrkirrg detuHs rind yocr address -
ccci a obtan morley, (h) goods or serenes is your rvirTie. A streunger can easlly run up huge dehts in your name.
Isca are two mcm werys is which someone can steal your Ideritity:
• by making contact with you and pretending lo be trem e (e) Ieitimate organisation. They then triek you loto piving them yOur dotuila
• by tcrkirig docurrients thert you Cave thrown away. They mas take there from voar rLJbbIstl
To protect yourself:
• Se extra cureful if ou leu ri e d property where others riay Suva access tu coe riiel
• if vou think your mml is going mlsslng, contereI lhe Roycl Mcii customer desk
• iI vou rrrove house teil your bank immediately
• if your plastic cards are 10sf or stolcrr (e) etuneei them immediately
• (f) elieck your (g) li5flk statemern5 as soon as you pci them. if there is cri urrfamilicr (h) transaction, cali us at moe
• do flOt pise yoLir persoriul detoils lo anyorre wbo contacta you hy phone, eveo a they )i) eroO lo Se fruiu Lhe bcrrk or lhe police
• do not throw away complete hills. (j) burik stuternerits or debit.credit card slips. USE A SHÍ1FDDFR.
iI
Underlined words from the email Definitions
(*) tu steal means to.. .stop something or to make somethung void. (1)
a to obtain means to. • .document a customer receives from a bank giving

detaiis of payments in and out of theur account. (2)
b gcyuds tire,..
.take somethung that belongs to someone cisc.
c to be legitimate means to he...
• . .piece of busuness. (3)
d a oropertv is a... .claim or to declare that something is true. (4)
e to cancel means to.. .get possessuon of somethung. (5)
f to check something means to... piece of paper that proves that 1 have paid for
something. (6)
g a bank statement is a...
building (for example, a house). (7)
h a transaction is a...
.things that are made to he sold. (8)
1 to purport means to... real, genuine, lawful. (9)
j a receupt IS a... .look at the detaiis of something and make sure

they are correct. (10)
58 G uiL::ii Lcauil hilii

=
- LISTENING
Exercise 1
Alison Finch has decidod to apply for a loan with the Royal Cbatswob Bank. Lis(en to her intetview wth
her account manager and complete this page of A/ison s app/ication form.
LOAN APPLICATION
I'hank % ( itt íí ci1u(».ing t() apiv f( )í a luari it1i thc
Ruval (hatsïrth 1ank.
1(1 applv uni i nu \( )U
• 'lu Iive .i rugulai' incuinu and he aged 18 &)r u er

• lo have a hank accuunt in lnglant1 oi' Wales that can pay direct (Iei)itS
• To hc a pei'iiiaiteflt feSi(leIit ut inglan(l and \\ales
SI('FION 1: tÁ)AN DETAILS
Purpuse of the luan:
lO ian dfliüuflt : -- Repavinciit i)1'l'iO(I
S ECTION 2: APPLICANT 1 )ETAI I,S
'iltie: Stiriiaiiie: lot'eninic: MÍd(Ile initiai(s)
1 )ate of hjrth: Fiiiail acldress:
Nuniher 01 (lepen(Iant (hil(IreI1: \larital status:
'l\I)C ul tPPt1t''ti011: (siilgI(' 01' juiFlt)
1 lave vou heen kno n hv ;tn other naiiie (inc. iiiaidcn name) in thc lasi S N - cars 5 NIS \(
sF(:IIoN 3: CLJRRENT A1)1)RESS I)EI'Al1S
1 lo ouse name ti ti mher. 'O )st ((
R('sI(lelitlai St;tttiS: (t('rItlit o r ()Vst)CF)
Ii lhe at CUrrunt ;iddress: ( Vodís and niufltlis)
II o iiiio' tele1)h( )flC
\loiiiile tC1C1))ufle flIiliii)('í:
ç) Global Legal Enghsl 59

THE LANGUAGE OF CONTRACT
Here is an extract from an agreement. it is a smail part of the contract that Ahson Finch has with her
bank to use oniine banking services.
1. SECURITY MEASURES
1.1 The Customer is responsibie for acting in accordance with ali security procedures and
for making sure that any other Users you have authorised also (a) with
ali security procedures.
1.2 The Customer must take ali reasonabie steps to keep their Password secret and
must not (b) it to anyone eise rriciuding famiiy members, Bank staif or
anyone on our 24-hour helpdesk.
1.3 if the Customer or any User authonsed by the Customer thinks that a Password is
known to someone eise they rnust (c) the Bank immediateiy. lhe Bank
wiM temporariiy (d) the Customer's use of the Onhne Service untii a new
Password has been created. lhe Bank wiU try to resume the Customer's use of the
Onhine Service as soon as we possibiy can.
2. CARRYING OUT YOUR INSTRUCTIONS
2.1 The Cust.orner can (e) other Users to use the Onhne Service. lhe Bank
does not need to get further authorisation or confirmation from the Customer.
2.2 lhe Customer wifl not be hable for instruction(s) from themseives or a User under the
fohowing circumstances:
• lhe instruction(s) are roce ived after the Customer has informed us that the Password is
known to someone eise
• the instruction(s) were given as a resuit of some breach of security that the Bank does
not (f) to the Customer or a User
• lhe security codes have been breached due lo lhe actions or neghgence of
the Bank.
2.3 lhe Customer wW be iiabie for instructions in ali other cases.
2.4 Once the Customer or a User has given an instruction it is not possibie to
() or otherwise withdraw it. if circumstances shouid occur where the
Bank (h) II reasonabie to try lo reverse or otherwise (1) invabd
an instruction then the Customer wiii pay any reiated costs.
2.5 lhe Bank may not be abie lo (j) - a transaction immediately. ifyou need
to be sure that an instruction lias reached us or lhe time when itis carried out is
particuiariy important the Customer shouid cafl lhe 24-hour number which was
provided with their account detaiis.
60 O oi t r.r Ir
Eercise 1
You will soe tbat some of the words in the agreement start with a capital letter. This is becaLise they are
defined terrns. They are words that are given a precise definition at tho beginning of the agrcement.
Match these defined terrns from the agreement with the definitions given be/ow.
Customer Password User Bank Onhine Service
Definitions
a means the secret word or combination of a word and a numbor

known only tu a user which is used to conÍirm their identity and
which gives access to the service.
b - means the system that allows customers to give instructions

about their hank account using their computer.
c means you, the client, the person who holds the account with
the bank.
d - means any other person you may have given permission tu use
the service.
e - means the organisation registered as The Royal Chatsworth Bank.
Exercise 2
tVow complete t/ie extract frorn the loan agreement with Que of the following words.
inform suspend comply attribute process

cancel deems render disclose authorise
a b c d e
f g h _________ i j_
61
Exercise 3
Read the loan agreernent again and find the relevant clause or clauses that dea/ with the following situa tions.
=
a A customer has telephoned the bank to say that he has lost his wallet in central London and the
wallet contained his password. Money is transferred out of the customers account four hours later.
The customer says that the bank is liable for this.
Relevant clause?
b A customer buys some music CDs online and then decides the sarne day that he doesn't want to buy
them after ali. The custorner calls the bank to cancel payment but the bank says that its not
possible. The custorner then demands that the bank refunds £30 for the unwanted CDs.
Relevant clause?
c A customer wants a payment to he made urgcntly to pay for some goods she wants to buy for her
business. She authorises payrnent for the goods online, confident that payment will be made quickly
because the system has always been fast before. Unfortunately, the seller of the goods doesn't
receive the payment on time and sells the goods to someone else. The customer is furious and
demands compensation from the bank.
Relevant clause?
Coliocation bank
• to hold an account with a bank
• to render something invalid

. to take steps to do something
1
Preposition bank
a combination of two or more things to be authorised by someone to do something

'lhe password for my email account is a '1 am authorised by my head office to give
combination of letters and numbers.' you a few more days to pay.'
nformation that is known to a person to be liable for something

Was the information knowr to anyoílu We wili not be liabie for any car that is ieft in
else except you?' the car park of the bank.'
to be registered as a particular under the circumstances

company name 'i'm afraid that under the circumstances we
'Her company is registered as Mitchell will have to refuse you the loan.
Holdings plc.
to attribute something to sorneone
to behave in accordance with something '1 attribute the success of the bank to our
'lhe banks legal department must draft customer care service.'
the contract in accordance with English
banking law.' interest accrues on a debt or loan
1 am writing to inforrn you that interest is
accruing on your overdraft at the rate of 18%.
62
THE REGISTER OF LETÍER WRITING
Exercise 1
Alison í ich has received this ietter from her bank. Untortunately, she hasn 't maie ali of her loan
repayrnerts. The words that are uoderlined in the letter are too informal. Complete the sarne letter ao
the next page by choosing a better word ar phrase from those in the biue box.

Chatsworth
CH1 2DD
20th May 20XX
Ms Alison Finch
39 Belie Vue Avenue
Chatsworth
CH5 90J
Dear Ms Finch
Your loan account: Ref FIN/790R/000932RCB
1 am writing to (a) tell you that your loan account with this bank, account number as
provided above, has (b) got late in its payments.
As you were aware when you (c) got this loan for £6000 in January af this year you
agreed to pay back the total amount over a period of 36 months in monthly (d) prt of
£18611 by direct debit from your current account. The bank has been unable to
(e) _qet your monthly payment for the last twa months as there have been insufficient
funds in your current account.
Please note that interest is (f) growing on this outstanding amount and that the rate of
interest (g) demanded by the bank on this outstanding amount is higher than our
(h) normal rate.
Despite a letter to you earlier this month 1 see that we have received no (i) answer from
you. If we do not hear from you within seven days of the date of this letter you will be
deemed by the bank to be (j) not gomo to pay at alI. The bank will then follow its usual
recovery procedures through our legal department.
Yours sincerely
Michael Rose
(Account Manager)
Global Legal Engiso 63

a)
= accruíng response took out failen into

in defauit inform standard a rrears
= charged collect instalments

Chatsworth
CH1 2DD
20th May 20XX
Ms Alison Finch
39 Beile Vue Avenue
Chatsworth
CH5 9QJ
Dear Ms Finch
Your loan account: Ref FIN/790R/0009321RCB
1 am writing to (a) you that your loan account with this bank, account
number as provided above, has (b)
As you were aware when you (c) __ this loan for £6000 in January of this
year you agreed to pay back the total amount over a period of 36 months in monthly
(d) _ of £1 86.11 by direct debit from your current account. The bank has
been unable to (e) your monthly payment for the last twa months as
there have been insufficient funds in your current account.
Please note that interest is (f) on this outstanding amount and that the rate
of interest (g) by the bank on this outstanding amount is higher than our
(h) rate.
Despite a Ietter to you earlier this month 1 see that we have received no (i)
from you. If we do not hear from you within seven days of the date of this Ietter you will be
deemed by the bank to be (j) . The bank will then follow its
usual recovery procedures through our !ega! department.
Yours sincerely
Michael Rase
(Account Manager)
64 n,hSh
USING YOUR KNOWLEDGE =
=
Coliocation review
Complete these seu tences with a col/ocation that you have seen.
a if you need a new hank account 1 suggest you __ one with the Royal Chatsworth Bank
as it is a very efficient and reliable organisation.
b What of interest does your bank charge its customers for a business start-up loan?
c 1 have an application for a loan but 1 don't know at the moment if my application
has heen successful.
d 1 must go to an ATM machine immediately to some money. At the moment 1 have

nothing in my waliet!
e When 1 am at the ATM machine 1 will the balance of my account as 1 am not sure
how much money 1 have in there at the moment.
f My bank offers a very wide of services, including telephone banking.
g The legal helpline that my bank provides will give me advice but it will not my
legal costs.
h 1 have a lot of debts and 1 am thinking of them into one large loan that 1 can pay 0ff
over a long period of time.
i My bank does not always a transaction immediately and 1 have to cali the bank if 1
want to make sure that something has been done.
j 1 a loan two years ago but 1 feil into arrears when 1 became unemployed.
Vocabulary review
a My bank has over 500 in cities and towns alI over England.
b 1 need to ask my hank ifi can have an facility on my bank account. 1 need some
extra money for a few months hut 1 don't want a loan.
c If you use internet hanking it is irnportant that you never telI anyone your -- or else
that person could access your account online.
d lhe hunk ali customers' use of online banking for a few hours yesterday but the
service resumed after two hours.
e 1 am in arrears with my loan payments and interest is on the outstanding amount.
f 1 am repaying my loan in of £250 per month.
g if you do not repay your loan as agreed, the bank can decide that you are in , which
means that the bank thinks you do not intend to repay the money that you owe.
h My bank a very high rate of interest on arrears.
r E' is 65
i My bank account went into the for a while last year but 1 paid the money back
quickly as 1 hate being in debt.
j My bank sends me a to my home address every month. This document teus me

what has gone into my bank account and what has been paid out.
Preposition review
a Last year 1 opened an account Lloyds Bank.
b Yesterday 1 withdrew £100 the ATM machine on Cambridge High Street.
c My bank has written to me to say that 1 am not eligible a loan.
d What is your date birth and what is your marital status?
e How long have you been your current address?
f 1 am authorised my company to withdraw cash for my expenses.
g 1 am paying a very high rate interest on my loan and 1 am thinking of transferring my

business to another bank.
h 1 am paying back my loan a period of five years.
i If we do not hear from you seven days we will deem you to be in default.
The bank will follow its usual recovery procedures our legal department.
66
Exercise 1
F?L'KI t/io text be/ow and think of (be word that best fits each space. Use only one word in each space.
tVritc your answers (e the box be/ow. Thcre is an examp/e at the beginriru (*)•
The services offered by banks
Current accounts
Most banks ofter customers a range of current accounts to choose from. A customer enters into a contract
with the bank and rnust agree to the banks terms and conditions that regulate their particular current
account. Most people need a current account for day-to-day transactions such as paying bills or
money from a cash machine. In many countries, the majority of people have their salary
paid directly into the bank and they pay their bills by automated payment. There are usualiy no bank
charges for transactions if your account is in (1) - - _____ . However, if you have an overdraft your
account can be described as being in the (2) ' (as opposed to in the black') and the bank
may charge you for services such as paying bilis. As well as offering current account facilities, most banks
offer various other services to their custorners.
Loans
When bank custorners want to (3) out a loan, they need to find a borrowing arrangement that
suits both their circumstances and their budget. Loans are usually repaid over a specified period of time, by
paying a certain amount each month. Some banks allow a borrower to delay the first repayrnent for a few
months, although after that the loan will have to be paid in equal monthly (4) over the agreed
period of time. Any customer who chooses this option involving a repayment holiday at the beginning of the
repayment period should be aware that the bank charges (5) on the loan from the day that the
bank deposjts the money borrowed into the customers account. If a customer already has a current
account with the bank, the application process is easy. He or she can usually appiy for the loan online, or
cail into the local (6) of the bank and speak to one of the staff who works there.
Travei money
When you travei ahroad you will usually need to change your money into a different (7)
The exception is travellers who are from those European Union countries who are able to use the Euro in
several member states. Before choosing a bank or a hureau de change to exchange your money, it is a
good idea to check the exchange (8) as it may vary a great deal hetween different banks and
you can lose rnoney if you dont shop around for a good deal.
internet banking
Internet banking gives you access to your account 24 hours a day. You can use it whenever you want to
check your (9) which is the amount of money that you have in your account. You can also
use it to make hank (10) oniine if you need to move money from one account into another.
Most customers regard internet banking as being secure and easy to use.
Exarnpie VIthd ru.;Iru()
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
GfrjbiI Legal EngIis 67

Exercise 2
Read the foliowing extract from ao agreemeot. The missing words are lo the blue box below. For each gap
= choose the word which best fits into the space from the options provided. Use each option on/y once.
Write your answers in the box below. There is an exam pie at the beginning (*).
FROM THE TERMS AND CONDITIONS OF AN OVERDRAFT AGREEMENT
1 This overdraft will not be (*) by any charge.
2 Charges for using an authorised overdraft:
The Bank will not charge interest if your overdraft does not (1) £100.
The Bank will charge 1.26% per month on an overdraft balance above £100. This gives an
equivalent annual rate of 16.22%. lnterest is (2) daily on the overdraft
balance.
3 Charges for going over an agreed limit:
The Bank will charge you £12 if you become overdrawn without agreeing it with us first or if
you go over the limit that you have agreed with us. We will charge you this amount each day
your overdraft increases by £10 or more. We will do this up to a (3) of £100
each month.
The Bank will charge you a higher rate of interest when you become overdrawn without our
agreement. We will charge you the Unauthorised Overdraft Rate. This is (4)
2.20% per month.
4 It is a condition of this overdraft that you make regular payments into your account. We may
request fulI or partial repayment of your overdraft at any time. You can cancel this overdraft at
any time but if you do so you must return any money you (5) us.
(AA) secured (B) currently (D) owe

(A) calculated (C) exceed (E) maximum
(1)
, \
(3) (4)
68
Exercise 3
Read lhe fo/lowing seriteoces that have a preposition missing from them. For each sentence circie the
preposition which best tits into the space from the options provided. Put a circle around the correct ariswer (O
on the answer sheet. There is an exam p/e at the beginning (*). Do not mark more than one answer for
each ser)tence.
Example \V 1h ns :jank uccoun ou cu[ pu' rio charges lhe UK to issue cheques.
1 How much money do you have (1) ______ your bank account at the moment?
2 She has not made a payment on her loan account this month so this morning she received a Ietter
(2) her bank.
3 1 have just opened a new savings account (3) the Royal Chatsworth Bank,
4 If you make a cail to the bank, ali calis are charged (4) local charge rates.
5 lfi cannot make the repayments on my loan because 1 am iii and cannot work, wiU 1 be covered
(5) my insurance policy?
6 My account went (6) the red by £200 iast month.
7 Couid you let me know (7) Tuesday if 1 wifl be abie to borrow that amount as 1 want to go
ahead and rent premises for my new business.
8 if you use internet banking you shouid make sure that your password isn't known (8)
anyone else.
9 im afraid that (9) the circumstances your insurance pohcy does not cover you for the
missed payments.
10 interest accrued (10) her savings at a very high rate.
(*) A on C under D of
(1) A at B with C in D on
(2) A from B to C of D in
(3) A of B in C on D with
(4) A at B with C through D on
(5) A for B in C with D by
(6) A in B into C over D on
(7) A for B at C in D by
(8) A to B with C as D at
(9) A on B at C under D for
(10) A with B on C at D to
69
Listening
=
c.1
EKercise 4
Listen to the interview between a radio presenter and an actress. Decide if the fo/Iowing statemerits are
true or false.
1 Julie Barrie lives in London.
2 Julie Barrie saved half of the money that she made from her first job and she spent the other half.
3 Julie Barrie had to go into her bank for money because ATMs were not invented in the 1970s.
4 Julie Barries rent was about £16 a week when she was a drama student.
5 Julie Barries overdraft limit was £11 when she was a drama student.
6 Julie Barrie needed £250 as a deposit to buy her house.
7 Julie Barrie's mortgage was at a fixed-rate of approximatley 5% for the first five years.
8 Julie Barrie says that she owns four houses in total.
9 Julie Barrie says that she has no credit cards at ali because the interest rates on them are too high.
lOJuiie Barrie paid £1 miliion for a work of modern art.
True or false?
(1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
70
• '4#ff4ifr
2'
1/
c_..
r,.•
THE LANGUAGE OF CONTRACT LAW =
o
c
na
A CONTRACT CASE o
=
Exercise 1
Diana Williams is a lawyer. Today she lias a new client. Diana 's notes from the meeting with her new client
are below. Look at the headings in the b/ue box below. Read Diana 's notes and give each paragraph the
correct heading.
General information What 1 need to do Client details Facts of the case
New client notes
Name: Charlotte Hewittson

Address: Chatsworth School of English, Braeburn House, Chatsworth, CH3 2SJ
Telephone: 0771 883567
Appointrnent: 10 July, 2pm
Charlotte Hewittson has a language school in Chatsworth. Her school teaches Lnglish to
foreign students. On the last Thursday of every month Charlotte takes her students for a day
in London. They visit attractions like Madam Tussaud's and Buckingham Palace and they
eat lunch in Hyde Park. Charlotte uses a local bus company to take her students to London.
The name of the bus company is Chatsworth CitiTravel. Charlotte first used this bus
com pany six years ago. She trusts them and has a good working relationship with them.
However, Charlotte never signs a contract with them. She always books the bus by phone.
On 2 June Charlotte telephoned the bus company to book the bus as usual for the Iast
Thursday of the month. Unfortunately, it was Iunchtime and no one was in the office.
Charlotte leR a message on the answering rnachine to make her usual hooking. The bus
company secretary called Charlotte back. hut Charlotte was teaching her class. The
secretary left a message for Charlotte. lhe message was, We are very sorry Charlotte,
but we can't give you a bus on the last Thursday of this month. We will send one on
Friday instead. CalI us back immediately if this is not OK. If you don't calI us our driver will
be there on Friday.
Charlotte needed a bus for Thursday. not Friday. So, she used another bus company. She
forgot to cll Chatsworth Citilravel to say that Friday was no good. The bus arrived on
Friday morning. Now Chatsworth CitiTravel wants the cost of hiring the bus. This is £360.
1 need to advise Charlotte about paying Citilravel the £360 that they are demanding from her.
My advice depends on Charlotte's situation with CitiTravel. If she has a contract with them she
is obliged to pay. If there is no contract with them then there is no obligation to pay.
Global Legal Englisi 73

=o
== Eercise 2
o Read the information in Exercise 1 again and decide if the foliowing statements are true or false.
II-
=
a Charlotte takes her students to London every Thursday. True False
b Charlotte's students are not English. True False
c Charlotte signed a contract with the bus company six years ago. True False
d Charlotte agreed to use a CitiTravel bus on Friday instead aí Thursday. True False
e The cost of hiring the CitiTravel bus is £360. True False
Before you look at the next exercisc decide if Charlatte has made a contract with Chatsworth CitiTravel.
Yes No Maybe
Exercise 3
Diana Williams' opinion about Charlotte's legal problem is in the box in Exercise 4. Yau will need the
foliowing words to complete the text. Match each word with the definition pravided.
(*) Offer mears.. . . .a person wha makes an offer. (1)
..a decisian aí a judge in an earlier case that otherjudges

a Acceptance means...
must fallaw if the circumstances aí the situation are the
sarne ar similar. (2)
b Offeror rneans...
• .a proposal, the terrns of which are cortam.
c Precedent means.
.that you must do something. It is necessary to do it. (3)
d Case means... . . .a legal agreement niade between two ar rTlore parties. (4)
• . .an unconditional agreement ta what is praposed by the

e Contract means...
ather party. (5)
f Obliged means.. .a set aí arguments in a situatian that might become

legal ar is already legal in nature. (6)
HeIp desk
unconditional - absolute, wmthout any doubts ar parties - the peaple who have entered inta a
suggestians aí change. contract ar the peaple involved in a dispute.
no good an informal way aí saying not suitable

ar nat acceptable.
74
Exercise 4
Here is vi/at Diaia thinks about Charlotte's legal problem. Complete the text using the highlightcd words •'l
o
from Exercise 3, o-
Diana's opinion
Does Charlotte have a (a) wit.h Chatsworth CitiTravel?
In some legal systems around the world the answer is 'Yes' and in some it is 'No'. Many lawyers will
say it is difficult to reach a definite conclusion.
According to English law, Charlotte probably does not have a contract with the bus company.
Because she has no contract with the bus company she is not (b) to pay the £360.
What are my grounds for concluding that Charlotte has probably not made a contract with CitiTravel?
Beca use there is a (c) in English law that says (d) of an

(e) cannot be made by silence. Acceptance must be actively communicated to the
(f) . ln this () Chariotte did not accept the bus company's offer.
Therefore there is no contract.
MORE ABOUT PRECEDENT

We can say that Charlotte does not have a contract hecause there is a precedent case in English law that
says that acceptance of an ofíer cannot be made by silence. To make a contract Charlotte needed to cali
CitiTravei and accept their offer.
Exercise 1
You are now going to read more about precedent. The most important words are in the key vocabulary.
Read the text below. Decide if the staternents on the next page are true or false.
Key vocabulary
precedent common Iaw recorded binding
courts of first instance ratio decidendi obiter dictum distinguishable
Precedent comes from what is called the common similar points. in this way, a statement of iaw can
Iaw. The comrnon Iaw is one of the main sources of become binding upon later judges and can become
law in Engiand and the USA. The common law the iaw for everyone to follow. When does a
developed after the year 1066, when the whole of particular decision, or pronouncement, hy a judge
Engiand deveioped the sarne hody of laws instead hecome hinding upon laterjudges? There are two
of each area having its own local laws - that is why important deciding factors:
it is called 'common'. The common law covers both
1. Judges in courts at the lowest levei of decision-
criminal and civil court decisions.
making, often calied courts of first instance, do
As judges' decisions were written down, often not normaHy create binding precedents. It is the
described as 'recorded', in law reports that were higher courts that issue binding rulings and the
common to the whole country, the idea of lower courts must follow them.
precedent developed. This means that when a
2. The pronouncement must form what is called the
judge decides the result of a particular case he or
ratio decidendi of the case. This is Latin for the
she must pay attention to the principies of law that
reasoning hehind the decision'. This is the part of
come from an earlier case dealing with the sarne or
75
o the judge's words that provides the legal reasoning relevant to the case before him or her, or
for his or her decision. Everything else the judge distinguishabie from the present case, which
=
o says is calied obiter dictum. Obiter dictum is means that the case is so different that the
something that is not really necessary for the legal precedent does not apply in this particular
M
basis for the decision. OnIy the ratio decidendi situation.
= is binding.
Many countries use a codified systerT. However,
A laterjudge dealing with a similar case must many people believe that the common law is more
decide which precedents are binding. He or she practical than a codified system because it was
may decide that a precedent suggested by a lawyer developed from real life situations that were
is either; presented to the courts.
a Cornmon law and civil law mean exactly the sarne thing. True False
b Recorded can mean written as well as recorded on disk. True False
c Ali judges can make new precedents. True Faise
d Everything a judge says forms part of the precedent. True Faise
e Sometimes a judge will say that a precedent suggested by a lawyer True Faise
is not relevant.
HeIp desk
a source of law - a place where iaw comes a principie of iaw - an accepted idea that forms
from, for example, a civil code. part of the law.
a body of iaws a collection of laws. AlI of a factor - something that is important to

them together. consider when making a decision.
a pronouncement an old-fashioned word reievant - of significance or importance to a

meaning a judge's words at the end of a case particular situation.
giving his or her decision.
Exercise 2
Choose one of the words or phrases from the key vocabulary in Exercise 1 to complete these sentences.
a In England and the USA much of the law is based on the decisions made by judges. This source of law
is called the law.
b A judge's decision that forms the law for future cases is known as a
c The important part of a judge's pronouncement when he or she gives a decision in a precedent case is
not the obiter dictum but the
d Once a precedent is established it forms part ofthe law and is upon lower courts.
e The lower courts in the English system are called courts of first
76
Exercise 3 w
Diono Williams is serrding a short Ietter to Charlotte Hewittson about her case. The Ietter is in the wrong arder. '1
o
Put the parts ar' the /etter juta the correct arder. There is au exarn pie at the begirrning, wh/ch is the start ar' o.
the ietter. o
Williams & Co
1 Dublin Square
Chatsworth
CH1 1DX
Ms C Hewittson 11 July 20XX

Chatsworth School of English
Braeburn House
Chatsworth
CH3 2SJ
(a) As 1 explained to you, the relevant precedent says that acceptance of an offer cannot be
made by silence and you have told me that you drd not cail them. 1 will write to CitiTravel
today on your behalf and make our opinion on this matter clear to them.
(b) 1 enclose my account for your attention and hope that this matter is now at an end. If
you have any further questions please do not hesitate to contact me.
(c) Diana Williams
(d) Your dispute with Chatsworth CitiTravel
(e) 1 am pleased to confirm to you the advice that 1 gave you when you visitcd my oífice. lii
my opinion, you did not form a contract with CitiTravel as you did not accept their ofíer
to provide you with a bus on Friday 28 June.
(f) Thank you very much for coming to see me yesterday in connection with the above matter.
g Duar Ms Hevittson
(h) My advice is then to do nothing more about this matter and wait to see if Citilravel
respond to our Ietter.
(i) Yours sincerely
(1) (2) (3) (4) (5) (6) (7) (8) (9)
HeIp desk
account - when the word is used in this way

it means a bili ar an invoice that someone
rnust pay.
gai Engish 77
o THE ELEMENTS OF A CONTRACT
o
=
-
It is a general principie of Engiish and American contract iaw that ali of the necessary elements must be
o
1
present to make a contract. An element is a fundamental part aí something. This is true of ali contracts,
both written and unwritten.
=
Exercise 1
Read the stoly below and decide ifyou think the twa people concerned, Charles and Maria, have a
contract. In the space provided, write why you think this situa tion is contra ctual/non-contractual. Think
about the elernents of a contract ia your courjtty.
Maria is Charles's girifriend. The reiationship started eight months ago. Charles asks Maria if she
wouid hke to go to italy with him for a skiing hohday. Maria agrees. Charles pays for the holiday on
his credit card. The cost is £2500 in total. However, a week before the hoiiday Maria meets WiM.
She calis Charles and expiains that she is now WiU's girlfriend and she doesn't want the hobday.
Charles is vety angry. He demands £1250 from Maria and says she has to pay. She says she
thinks the holiday was a present from him. Charles says the holiday was not a present because
Maria has a greatjob and makes more moneythan him.
Do they have a contract? Why/Why not?
My reasons:
We wili return to this question later to check your conciusion. First, we need to look at the vocabuiary that
you need to be abie to taik about the elements aí a contract according to Enghsh and American iaw.
Exercise 2
The English courts have an objective test to decide if a coa tract exists in a particular situa tion ar not. The
court looks for a list of things that are the necessaiy elernerts of a contract. Look at the words ia the box
and circle those that you think rnight be one of the elements according to English law. Then look at the
explanation on the next page to see ifyou are correct.
subject offer motivation proposal
object topic acceptance value
consicleration receipt intention price
78
The elements of an English contract are from the common Iaw. They might be different from the elements
oí a contract in other countries. The elements aí an English contract are:
offer
acceptance
E
o
consideration
intention.
The other words in the blue box are not elements of a contract according to the common law. However,
they are ali words that lawyers from civil cade systems sometimes use. If you use the other words in the
box you may have to explain what you mean to a lawyer from the common law system.
Exercise 3
F?ead the iriforrnation below about the elements of a contract. Complete the text be/ow by writirig the
correct elernent of a coo tract after its description.
To form a binding contract according to Englmsh Iaw, four eiements must be present.
The first of these is where one of the parties makes a proposal to the other party. The proposal is on
absolutely certain terms. For example, '1 will seli you my car cleaning business on 1 January for
£20.000'. This proposal is called an (a)
ln arder to make the contract valid, the parties must exchange something. Each of them must give
something to the other, such as money, work ar goods. In the above example one party exchanges a
car cleaning business in return for £20.000. Each gives something to the other. If one party promises
the other a gift (in return for nothing) then in a situation like this the parties do not usually have a
contract. So, another element of a contract is (b)
The courts look at the relationship between the two parties. The courts decide if the parties really want to
make things legally binding in this particular situation ar not. If 1 agree to do some work for my mother or
my father did 1 really mean to make the agreement legal? Did 1 have (c) ?
It is absolutely necessary that a person accepting an offer does not change the terms aí the original
offer. For example, if 1 say, '1 will buy your car cleaning business. But not for £20000 as you ask. 1 will
give you £15.000', then there is no bmnding contract because there was no (d)
Exercise 4
Go back ta your reasons for deciding whether ar not Charles and Maria have a contract. Can you see ali
four elements? What do you think a judge from your country wou/d say? It is one af those cases where it is
difficu/t to give a dcf7nite answer.
My notes:
e Giobal Legal Engl l 79

THE END OF AN OFFER
Sometimos a contract cannot be made because the offer comes to an end before it can be accepted. In
other words, the offer is no longer open to acceptance. Lawyers refer to the peopie who make and receive
the offer as foliows:
lhe person who makes an offer is caiied the offeror.

The person who receives the offer is cailed the offeree.
Exercise 1
Jurnbled words. In each of the situa tions described below the Ietters of one of the words are mixed up. Put
the Ietters ia the correct order to spell the words. The first letter of each word is there for you. Thea give
the narne of the offeror and the offeree in each situation.
a David iackson has a newjob. When he starts work the company, DDS Furniture Ltd, offers him shares
in the company at a special, cheap price. A year after he starts the job he decides to accept the otter to
buy the shares. His employer teus him he cannot accept the offer. This is hecause the offer has
L (ELPDAS). it means too much time has passed.
The offeror is
The offeree is
b Julie Srnith buys a new computer. She advertises her oid one for saie for £50. Alex Harrison cafls and
suggests paying Julie £30. Juhe refuses. Alex then suggests £40 but Julie refuses. Julie says the reason
is that Alex made a C (TREUNOC-ORFFE). The legal effect is to cancei the
original offer.
The otteror is
The offeree is
c Jamie Hammond decides to sell his car to Ben Wardle. Ben says, No thank you. lhe offer was
R (CJEDETER). lhe legal effect is to cancei the offer.
The offeror is
lhe offeree is
d Mia lhomas decides to seil her house. She offers the house for saie at a price of £190,000. Andrea
Stewart decides to buy it. However, before Andrea can accept the offer, Mia changes her mmd and
decides to keep the house. The offer is R (KVDREEO) ar in other words, Mia withdraws
the offer.
The offeror is
lhe offeree is
80 Gioiii L! English
WHAT IS CONSIDERATION?
Exercise 1
.n
o
í-?ead the followiiií4 tLt. /1 is aboLil coosideration in contmct law. Choosj (be correct vvorcl ff0171 tbc toxt lo =
o.
complete the senterces below.
o
=
Ofíer and acceptance are not enough to make a Enghsh iaw. This is hecause one of the parties has
contract. There also needs to be two other not provided consideration. To make a contract
elements. They are: both parties must give something or do something
for the other in a kind of exchange. A iawyer
intention to create a legal reiationship, and
describes this by saying that consideration must be
consideration. reciprocal. It must travei in both directions. if
consideration is a good thing for a party and is
What is consideration? Consideration is what one positive in nature, we say that he or she has gained
party promises to give to, or promises to do for, the a benefit. Receiving a payment of money wouid be
other party. Both parties need to provide an exampie of this. However, sometimes the
consideration to make a contract vaiid. There are consideration provided is negative in nature. Lets
many precedents in English iaw where judges imagine an empioyee agrees in his or her
decide what is good consideration and what is not. employment contract not to start a business for two
Consideration is usuaiiy one of the foliowing things: years after the contract terminates. He or she has
promised not to do something in the future. We say
a promise to do something that this party has suffered a detriment.
a promise not to do something in the future
i promise to tidy a friends garden because she is iii.
(sometimes cafled forbearance)
i dont want to be paid. However. i am husy and i
goods dont tidy the garden for her. is our agreement a
services contract? No, it isn't. Why not? It is not a contract
because one of the parties to the agreement has
money.
not provided consideration.
A promise of a gift or of a free service does not Consideration is a fundamentai principie of English
usuafly create a contractuai situation according to contract iaw.
a As weil as offer, acceptance and consicleration, the parties to a contract need to have
to create a iegai relationship.
b To rnake a iegaiiy hinding contract both parties must consideration.
c Tu find out what is good consideration for a contract i need to check the relevant to
see whatjudges say about it.
d A promise not to do something ni the future can be good consideration for a contract. Lawyers usualiy
cafl this
e Both parties tu the contract must provide consideration, in other words it rnust be
f lfi receive sornething positive under the contract 1 gain a
g if i lose something under the contract i suffer a
Giohj LeOI Erghs 81

=
== Exercise 2
o Contract wordsearch. Look in the grid be/ow and find the fo/lowing words. The words can be found in
m any dircction.
=
acceptance offeror sou rce consideration
detriment case binding obiter
revoke precedent ratio benefit
contract intend offer factor
N 1 E N D R B F P E A A F 1 L
L X P 1 N 1 E 1 P R O T C A F
A C 1 C E P 1 1 A 1 N C 1 E E K 1 A A
P A E O E E N D R C L V C C X
S S F F N R F 1 E E T B O 1 1
E E C E A T L N C D U E B K R
D 1 O E C W R G Q E F N 1 i E
L A S R K A C A O N M E 1 O B
H S 1 O B 1 1 E C T D F E F
O D E T R 1 M E N 1 E 1 R E N
R A 1 C L 1 R H F A 1 T A E D
D E 1 R P N B O R V R A T R A
S O C O N S 1 D E R A T 1 O N
F S O U R C E 1 N 1 L A S R R
E A R A 1 1 O Z S L A B 1 1 E
CONTRACT AND STATUTE

Exercise 1
Much modern contract Iaw comes from statute. You are going to read about statute. Read the text and
write the highlighted words in the text next to the meanings given on the next page.
The common Iaw is ono source of contract Iaw The House of Cornmons
Another is statute. Thís is the most powerful of Parliaments two
TL-..-..-....
IIcuIIL,p3. iIict LIIc1IIIIJel
.-..-. ...
dIt UUdIIy rIR.)YVII
A statute is a law made by Parliament. We can say
as Houses. The House of Com mons has 650
that judges make the common Iaw but Parlíament
members, who are elected when the whole
creates statutes.
country votes in a general election. These
A statute passes through three stages: memhers of the House are called MPs. A statute
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begins in this House. The House of Commons King or Queen is the Head of State. lhis =
has only 427 seats. When it is fuli a lot of peopie permission is called giving the Royal Assent.
have to stand! However, thc mona rch always accepts the advice
o
of his or her governrnent. in fact, the monarch =
lhe HoLise of Lords
This is Pariiarnents second chamber. lts main does not even have the fuil text of the proposed
o
statute, only the titie oÍ it. lhe Iast monarch to =
function is to check new iaws, which were
proposed in the House of Com mons. lhe House reject a proposed statute was Queen Anne, who
of Lords has 786 mernbers who come from a died in 1715.
variety of backgrounds. This House has iimited
There are three words for the iaw made by
power to stop a proposed statute from becoming
Pariiament. They refer to the sarne thing.
law, but it can slow it down. Members of this
They are;
House are not eiected. Most members get their
seats from the monarch (the King or Queen) on Statute. This is often caiied statutory iaw
the advice of the Prime Minister.
Acts of Pariiarnent
lhe Monarchy
Legíslation. This is the coilective word for
The monarch has to give permission before a
ali the laws Parliament creates.
new statute becomes iaw. This is because the
Example: lhe law thnl comes from the decisions otjudges and is based ou precedent. Common iaw
a lhe main iaw-making body in Engiand.
b Mernbers of Parhament.
c A iaw made in Parhament.
d Chosen by the peopie to be a pohticai representative.
e A word meaning ali of the laws made by Parhament.
f A system of choosing new Members of Parhament. Ali of the peopie have a vote.
Eercise 2
F?eacl thc text about statute carefu/Jy and decide if t/ie folIowirg staternents are (rue or [a/se.
a A statute is the sarne thing as an Act of Parliament. True False
b A statute always starts in the House of Lords. True False
c Members of the House of Commons are elected but members of True False
the House of Lords are not.
d The King or Queen often stops a new statute if they disagree with it. True False
e Legisiation is another word for a singie statute. True False
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== Exercise 3
Look at this ve,y short text. It is about a statute. Look at the words that are highlighted ia the text. Without
using a dictioaary decide if each word is a verb ar a noun.
The Unfair Contract Terms Act (UCTA) 1977 is an example aí a statute that deaís with contract law.
It covers transactions between people.
This statute places some restrictions upon the contract terms people can agree to. One particular part af
it deals with the ways in which people that are selling something can limit their Ilability for negligence.
Verb Noun
Exercise 4
Here are the definit/ons af the highlighted words in Exercise 3. Put the correct ward into each sentence to
complete the defmnition.
aA is a piece aí business, such as buying or selling something.
b To something is to deal with, ar include something.
cA is a limit that is put on something.
d If you have for something it means that you have legal responsibility for it.
e The of a contract are its contents. It means the conditions and duties that you
agree to períorm when you enter into the contract.
f To a restnction upon someone is to put limits upon what they are allowed to do.
Exercise 5
Using the words term' and 'terms'. These can be confusing words because they can have more than one
meaning when lawyers use them.
Read the explanation about the meaning of these words. la the sentences opposite, decide which aí the four
options you need to complete the sentence. Then idcntif' which meaning aí the word is the carrect ane.
Terms Term
1 terms: AlI of the duties and conditions 1 term: A single duty ar condition contained in a
contained in a contract. contract. It is sometimes called a provision.
Example sentence: She explained the terms Example sentence: There is a term in this
of the conl.ract to her client. contract that forbids you to sell goods ia
Australia ar New Zealand.
2 terms: Words and expressions.
Example sentence: A lawyer sorrictimes uses 2 term: The duration aí a contract.
legal terms that his client might not Example sentence: Thc torrn ot this conlruct
understand. is ano yeur from the date of sígning.
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Example: T1c term oí this contract is one vear, commencing on tic date cl sip,nature. term 2
a Some of the used in this letter are very old-fashioned and lawyers dont realiy use them
o
any more.
o
b For the entire of this contract the Erïiployee shall not disclose any confidential
information to any third party.
c There is usually a in most commerciai contracts dealing with the jurisdiction of the
contract in case of disputes.
d When you sign a contract you agree to ali of the that it contains.
HeIp desk
third party - someone who is not one of the condition - sornething that you have to do in
two main parties invoived in a contract or a order for something else to happen.
particular situation.
entire - complete or whole.
jurisdiction - legal power over a geographical
disclose tell.
area or people.
READING CONTRACT LAW

Exercíse 1
You are nowgoing to read more about contract Iaw. The most important words are iri the key vocabulary
below. Decide if the statements on the next page are troe or false.
Key vocabulary
contrary to under duress com ply with
contract under seal enforceable donation
sum void consent
capacity to contract voluntarily deed
party in breach injured party discharged
breach
ln general, businesses are free to enter loto It is a general rule that both parties to the contract
whatever contracts they agree between tliernselves. must have capacity to contract. This means that
However, business contracts must not he contrary when a person signs a contract they must be:
to (against) case law or Acts of Parliament such as
old enough to consent (say yes) to it; and
the Unfair Contract Terms Act. If the contents of a
contract, usually called the terms and conditions, not mentally II; and
do not comply with the law, meaning they dont not drunk or using drugs.
follow the law correctly, then a judge will probably
decide that the contract is void. Void means It is another general rule that hoth parties must
empty'. It is not an enforceable contract. It is not enter into the contract voluntarily. This means that
a contract that a court will recognise as valid. they must have signed it freely and not under
duress (pressure).
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A contract may be: deed. An oral contract is binding according to
written or English law. Even if a contract involves a largo sum
aí money, it is still valid if it is not written.
oral (spoken); ar
When a contract comes to an end we say that the
in the form of a deed.
contract is duscharged. If the contract is
A deed is sometimes called a contract under seal. discharged because one of the parties does not
It is a special contract that is legal even though one fulfil their obligations it is called a breach. If one
aí the parties has not provided consideration. A party breaches the contract the injured party can
promise of a gift ar donation for exampie, can he a sue the party in breach. The injured party is the
valid contract if the agreement takes the form of a claimant and the party in breach is the defendant.
a Acts of Parliament concerning contract law are to protect the public True False
and they do not affect businesses at ali.
b lf a contract is void it will not be enforceable by a court. True False
c If 1 sign a contract after drinking a whole bottle of wine and three True False
beers the contract might not be valid.
d In ver' special circumstances it is possible to have a contract where True False

one of the parties does not provide consideration.
e The injured party and the party in breach are the sarne person. True False
Exercise 2
Choose a word ar phrase from the key vocabula,y ia Exercise 1 to complete the sentences be/ow.
a You are only 16 years old so you do not have to contract.
b A contract that is valid even though one of the parties has not provided consideration usually takes the
form of a contract under -
c We made an oral contract and even though it involves a very large of money it does
not need to be in writing to be valid.
d There are variei is ways in whih rnntract can he ncluding períorrnance of al! duties
or hreach.
e If a contract is binding then it is by a court.
f You did not fulfil your obligations under this contract and as the 1 have the right to
sue you for breach.
g Did you sign the contract ar was it signed under duress?
II One ui ir ie iFF11S Oi 1115 eoriiraci is the Saie of Goods Act and the term is therefore
not valid.
i If 1 promise to make a to a person ar an organisation it is a legally binding contract if

the agreement takes the form of a deed.
j Any private agreement must ali relevant law, including Acts of Parliament.
86 1
GOING TO COURT =
The foliowing exercises are about a dispute. This dispute is about a breach of contract.
o
c
=o.
o
Exercise 1 =
Read the facts and decide if the statements that follow are true or false.
John Oliver is the owner of a car busincss called Olivers Auto. John Olivor sells second-hand (used)
cars in Chatsworth. Many of the cars that John Oliver seus previously belonged to a taxi company.
Iwo months ago, John Oliver sold a caí to a woman named Susan Hicks. Susan Hicks paid for the
caí by cheque. The cost was £1000. The caí was not a good one. It stopped working twice in the
first week that Susan bought it. Susan was angry and went to John Oliver's office. Susan asked
John Oliver to give her a different caí. He íefused. Susan telephoned her bank and cancelled the
cheque. John Oliver did not receive any money. The car is at Susans house. The car will not starL
Susan telephoned John Oliver Iast week and said he can collect his broken caí any time he wants
to. John Oliver refused. He decided to sue Susan Hicks for bíeach of contract on the grounds that
she did not pay him.
Yesterday Susan received a claim from Chatsworth County Court, which is the local civil court. John
Oliver is claiming £1000 from her for the car, plus a court fee of £60. Hís total claim is £1060.
a John Oliver owns a taxi business in Chatsworth. True False
b Susan Hicks did not pay in cash for the caí she bought from John Oliver. True False
c Susan Hicks telephoned John Oliver to ask him for a different car. True False
d John Oliver collected the car from Susan's house last week. True False
e John Oliver is not claiming any interest on the £1000 he says Susan True False
owes to him.
Exercise 2
Susan now receives a claim from Chatsworth County Court. There are some words in the claim form that
she does not understand. Her questions are below. Match her questions with the correct arswer.
a What is a claimant? It means to start an action against someone in

the civil court. (1)
b What is a defendant? It is something that you suifer as a direct result
of the hreach of contract. (2)
c What does sue mean?
It is something that you suifer as an indirect
result of the hreach of contíact. (3)
d What does detective mean?
It is the person who starts the legal action. (4)
e What is direct loss? It is the person who the claimant is making a

claim against. (5)
f What is consequential loss? It means faulty not working correctly. (6)
CH:I 87
=e
Exercise 3
Use the high/íghted words from Exercise 2 to complete these sentences.
a 1 must return the goods that you delivered to my shop yesterday as they are ali and 1
cannot sell things that do not work properly.
b Mr Wilkes breached the contract because he delivered the goods two weeks Iate. As an immediate
result of this 1 suffered a loss of £2000 because 1 could not sell the goods to the
buyer who was waiting for them.
c You must pay what you owe me at once or 1 wili you in the County Court.
d When the claim form was served upon the he decided to pay the money that he
owed to the claimant.
e lhe loss that you suffered as a breach of the contract was not a direct result of the breach. A court wili
say that this is - loss.
f Several people owe money to my business and as a result 1 am the in three

different cases in the County Court.
88
IJNIT 3A VOCABLJLARY CHECK =
•l1
These are the important words that you have o
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studied in Unit 3A. You should make sure that
you know these words before you go on to o
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Unit 3113.
acceptance injured party

Act of Pariiarnent intention
benefit issue
binding jurisdiction
body of laws legisiation
breach 1 iabi 1 ity
capacity Member of Parliament (MP)
case rnonarchy
claimant
obiter dictum
common Iaw
obi iged
comply
offe r
condition
offeree
consent
offe ro r
consequential Ioss
consideration parties
contract party in breach
contract under seal place
contrary precedent
courts of first instance principie of law
cover pronouncement
propose
deed
defective ratio decidendi
defcndant reciprocal
detriment recorded
direct Ioss relevant
dischargcd restrictions
disclose revoke
dispute senior court
distinguishable source oÍ Iaw
donaUon statute
duress sue
duty sum
elected term
enforceable terms
entire third party
factor transaction
forhid unconditionaIly
general election valid
House of Commons void
House of Lords voluntarily
89
Exercise 1
Look at the groups of words below. lo each group, three of the words belong to the sarne subject arca but
there is one word that does not belong. Put a circie arourid the word that is the odd one out. Do not circie
more thari one answer for each sentence. There is an example at the beginning (*).
(*) A offer B acceptance D consideration
(1) A cornrnon Iaw B precedent C ratio decidendi D statute
(2) A revoked B rejected C factor D lapsed
(3) A MP B obiter dictum C election D Parliament
(4) A donation B deed C coritract urider sead D duress
(5) A sue B claimant C defendant D legislation
Exercise 2
Rcad the foliowing pairs of scntcrces. ror each pair of sentences there are two possibilities, A or B.
Decide which sentence uses the correct preposition. Write your answers in the box be/ow. There is an
example at the beginning (*),
Example
(A) (A) Contracts must not he contrary to Acts of Parliament.
(B) Contracts must not be contrary at Act.s oÍ Parliament.
1 (A) A precederit is binding upon later cases that are the sarne or similar in nature.
(B) A precedent is bindingto later cases that are the sarne or similar in nature.
2 (A) The lowest courts are called courts for first instance.
(B) The lowest courts are called courts of first instance.
3 (A) The company offered David some shares on a special price.
(B) The compariy oífered David some shares aI. a special price.
4 (A) Forbearance is a prornise not to do something in the future.
(B) Forbearance is a promise not to do something at the future.
5 (A) The contract is not valid because Mr Jackson signed it against duress.
(B) The contract is not valid because Mr Jackson signed it under duress.
(*) A (1) (2) (3) (4) (5)
90
Exercise 3 w
Look at this /ist of worrs. Tbev are aU riouos. Put the correct word luto the followin Id seriterices. Write votar -n
o
o
answers lo the boxes numbereb 1 10 belovi. There is ao example at tbe he)lnning =o-
o
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(AA) Ioss (C) sum (F) term (1) Iiability
(A) capacity (D) detriment (G) consent (J) dispute
(B) donation (E) factor (H) offer
Example
A direct (*) is something that the lnjured party suffers as a direct result of a breach of contract.
1 The boy is only 14 years old so according to English law he does not have (1) to contract.
2 When the parties to a contract exchange consideration they must gain a benefit or suifer a (2)
3 The (3) of Peters employment contract is six months.
4 A persons age is one important (4) that decides whether or not a person has capacity to contract.
5 In the UK the common Iaw says that acceptance of an (5) cannot be made by silence.
6 In England a promise of making a (6) or giving sorneone a gift is not usually an enforceable
promise because one of the parties has not provided consideration.
7 In some countries it is possible for one party to a contract to limit his or her (7) for negligence
under that contract.
8 To give your (8) - to something means to give your permission for something to happen.
9 There is a (9) - between Mr Greene and Mr Cox. Mr Greene issued a claim Iast weck.
10 My client claims the (10) - of £5000 in damages.
(*) AA (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
Gkjbdi Legal Englisl 91

il
fr'e'rc' 40
1 mé., Lá
-
or
d
00o
Á4
2t
THE LANGUAGE OF CONTRACT LAW =
=
r
WHERE DOES CONTRACT LAW COME FROM?
Exercise 1
Jack Winter and She//ey Hirst are flrst-year /aw students at the University of Cbatsworth. Their studies will
begin with contract law. The head of the law faculty has asked flrst-year students to read a book ca/Ied
An lntroduction to English Contract Law' before they come to their frst lecture. The first section of the
book that Jack and Shelley have to read is about the sources of English law. This page is on the subject
of statute. P711 the gaps in the text with a word or phrase from the box below.
amendments drafted into force rejects administrative

MP formality legislation approves elected
An liitroductioii to English Contract Law
Cliapter 1: Sources of English law

lo England there is no ci ii code. English contract Ia is lherefore fluI codified. Inslead we derive nor Iav
ti'iiiti t\V0 i11ai11 sotirce.whicli are st2llilte (la 1121(11 11V Parliament) and case lav (Ia nade hv judges)
Statute
A statute is also called ao .\cI of Parlianient. lo Ei iglai Id. sIal u les ha e beco lhe flH )SI O 011111011 source of
new contraci km since the 1 7th centurv. A ncw statute passes through three stages:
Vtage 1: A proposal is made for a ncw 121w. A proposal can Come from either a go\erniiient (Iepartnlenl ur
ao i ndividtial (a) This slands for 'Mciii ber of Parliarneul . If lhe proposal comes
from a governnlent depariment, thcn it vill usuallv he (h) bN a lav.ver in the Civil
Service. 'lhe Civil Ser ice is the organisation which manages the government ' s (c)
affairs. This proposal for a new Act of Parliainent lias lo he drafted. sometilnes ca!led 'drawn up', so that
it accurate1 States lhe go cciii lent's iillentions and 11111 ust he as u nainbiguous as possible iii lhe
language that ii uses. 1 ilstruclions as lo whal is lo hu included in lhe pruposal are gi co lo lhe Civil
Service bv lhe goveronient deparinienl responsible for il. \\ hen lhe proposal is drafted and puhlished, il
is then referrcd lo as 'a Hill', .\ pri ate meniber's Hill isa Hill pul foivard for considcralioii h au
individual MP. Relatielv feNN pri\ ate memhers ' RilIs becoine IaNN as coinpared lo ihose introduced bN lhe
goeriiiiienl. A Hill is (lehaled in lhe House of Comnions. If the House of Commons (d)
a Hill, whicli il does hv takini a vote, then it is passed ou lo the ncxt stage.
S'Iage 2: 'lhe 1 louse of l.ords oow debates lhe Hill. 'lhe inemhers of the 1 louse of l.ords can suggest
(e) lo lhe Ri II. and if the do so il ii 1 go hack tu the Coininons for its consideralion
of the proposed clianges. 1' IR' poer of lhe Ilouse ul 1.ords is liiniled and a Hill can heconie 121w even if
lhe Ilouse of l.ords (1) il. i'his is hecanse lhe role ot lhe Ilutise of l.ords is tu advise
and tu make suggestions ahout the 21w, ralh cc th ao to form til ate il. lhe process reflecls lhe fact that lhe
HoLise of Coitinions is a deinocraticall (g,) b(>dN 2111(1 lhe Ilouse of 1,ords is nol. When
a Hill has passed lhrough lhe House of Lords il goes on lo liii'—final slage.
S/ílge 3: 'lhe nionarch (lhe King or the Qtieen) gives lhe roval approval lo the Hill. This is called Roval
Asscnt. 'I'his isac tu al! oiilv a (li) , as lhe monarch does 1101 e cii see the fu II lexl of
the Hill. Ouce Roval Asseiil is giveii lo a Hill, lhe new AO of 1 1arliament will come (i)
011 lhe date slaied iii [li(-.Xct itself, or aI midnight ou the (121v that Roval Assenl is received. AlI of lhe
slalules crealed h Parliaiiieiit are known collecIi\el as (j)
GloCal Lega' Egh' 93

A note about the USA
lhe process is ver'j similar in the United States. In the USA a new BilI has to be passed by Congress.
Congress is constituted aí twa chambers. These are the House aí Representatives and the Senate. Both
chambers must approve the Bili. It then needs the signature of the Prcsident to become law.
=
Exercise 2
The second page of the book that Jack and SheI/ey have to read contains information on the subject of
case /aw. Fui the gaps in the text with a word frorn the box below.
binding judgment distinguish precedent

judge instance guidance common
Case law
Case iaw comes from judges. It is also knuwn b iwo olher names. These are:
• The (a) law. and

• (h) made law.
If a judge makes a decisiori on a poiiit of law iliat has never heen considered in coi.irt hefore, the jtidges
decision can hecome a statement of law. In the Engiish legal svslem this siatenieni forins lhe law for lhe
future. 11 is called a (e)
Au important principie of the svstem of precedeiit is ilial lhe legal reasons for pasl decisioiis musl be
clear. Foi' this reason, a (d) given. or 'handed dovn', at thc end of a case includes
the judge's reasoning iii giving los or her decision. iii other vords, as WC11 as giving a summarv of the
facts of thc case, a judge will also explain the principie of law he or she iised iii corning lo lhe decisioti.
These reasons foi' deciding the case are known as thc ratio decidendi' and this is what creates thc
precedent for future judges tu follow. The rest of what the judge savs is known as lhe obiter dicta and
judges in future cases do nm have to foliuw il. 11 can be prublematic for lawyers tu separate the ratiu
decidendi froni the ohiter dicta hecause thc judgmcnt does not contam anv (e) as tu
vhich is which.
Thcre are two important factors iii deciding vhether a judge's (lecisiun becomes (1)
01)00 future cases, meaning that thcre is ao ohligation tu foliow it:
• The decision that fornis the precedem inust have cume fruiu a court seniur tu the court hearing
the iatcr case. Jiidges at the luver leveis of decisiun-making, uíten cailed courls of firsl
(g) . do not generaliv issiie hinding prccedcnts.
• lhe facts of the later case niusi be similar enuugh tu the facts of the precedent case. A judge can decide
that thc materiai facts of the case before him ur her are suíficienliy different lo ailov, boi ur her lo
(h) _____________________ hetwccn this iatcr case and the precedent.
it is also pussible for a court iii a latei' rase tu decide that the precedem created hv an carlier case shuuld
no longer be the controlling law and a new precedeut is set. This is called overruhng. 1bovever, thc atei'
court must be of a higher levei than lhe original cuLlrt. Tlie Supreme Court, whicli is tlie highest court iii
the (K svstcm, can overruie its own earlier decisions fter lhe Supreme Courl, some decisiuiis can be
uverruied hv the European courts.
Case law and siatule are where niost Enghsh iaw and ccrtainiv most English conti'act lav Come from.
'lo find out more or tu read some cases vou caii visil lhe iaw reports wehsite at www.lawreports.co.uk
To find out niore ahout statute or to read some niodern slatutes troni the UK vou cin visil the website of
the Office of Ptihiic Sector inforniatiun ((WSi) at www.opsi.gov.uk
94 E'gIJ'
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Coliocation bank
w
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a source of Iaw to suggest an amendment to ussue a new precedent
to draft a Bill to make a decision to decide a case
to draw up a Bili to form a new law to make a

proposal/suggestion
to debate a Bili to hand down a judgment
Preposition bank
a soiirce of law to come into force

Legislation is the UK's most important The new Act of Parliament will come into
source of law.' force at midnight tonight.
to be drafted by a Iawyer a precedent is binding on/upon lower courts

This Bili was drafted by a lawyer in the A precedent from 1908 is binding upon
Civil Service. the court in this type aí situation.'
to put an idea forward for consideration to be made by someone ar something

This idea was put forward for consideration This decision was rnade by a judge in 1985.
by the Department of Health.'
to pass through a stage (that is one of
to suggest an amendment to something several stages)
The House of Lords is suggesting twa The proposal for a new Education Act is still
significant amendments to this Bili.' passing through the early stages.
Exercise 3
Here /s a short text about statute. Complete t/ie gaps lo the text with the correct preposition frorn the
box helow.
for through into to

on of as from
The UK does not have a civil code. Its laws therefore come (a) alternative sources.
Until the 17th century, the common law was the most important source (b) - law.
After that, Acts of Parliament, otherwise known (c) statutes, became the primary source
of law.
A Bili is the name given to a proposal for a new statute. A Bili is put forward (d)
Parliament's consideration by an MP ar by a government department. A Bili has to pass
(e) several stages hefore it becomes law. The first of these stages is usually the House
aí Commons. A vote is taken (f) the Bili and if it is approved it will pass to the House of
Lords. The House of Lords can suggest amendments () ___ the Bili but it cannot prevent
the Bili from becoming Iaw. The final stage IS Royal Assent. After this, the new Act of Parliament can come
(h) _force.
1 ei[ Lrlr
READING A STATUTE
You are now going to read part of a statute that deals with contract law. The complete statute has ten
sections and is six pages long. This is part of Section 1, which forms the Íirst page of the statute. It deals
A,Ith thip ruht nf nennI whn Arp. not nnp. nf thp rrtis to A nontract ht who mav have rihts tinder that
contract in certain circumstances.
ELIZABETH II c. 31
Contracts (Rights of Third

Parties) Act 1999
1999 CHAPTER 31
An Act to make provision for the enforcement ofcontractual terrns

by third parties. [1 lth November 1999]
by lhe Queen's most Excellent Majesty, by and with
B
E IT ENACTED
the advice and consent of lhe Lords Spiritual and Temporal, and
Commons, in this present Parliament assembled, and by lhe
authority oU the sarne, as foliows:-
1.—( 1) Subject Lo the provisions of this Act, a person who is not a party Right oU third
to a contract (a "third party') may in his own right enforce a term oU the party to enforce
contract jf contractual term.
(a) Lhe contract expressly provides that he may, or
(b) subject to subsection (2), Lhe term purports lo confer a benefit
on him.
(2) Subsction (i )(b) does fluI appiy if on a proper construction oU the
contract il appears that the parties did nol intend Lhe term to be
enforceable by the third party.
(3) The third party must be expressly identified in the contraci by
name, as a member of a class or as answering a particular description but
need aol be in existence when Lhe contract is entered into.
(4) This section does not confer a right on a third party to enforce a
terei oU a contract otherwise than subject lo and in accordance with any
other relevani terms of Lhe contract.
(5) For the purpose oU exercising his right Lo enforce a term of the
contract, there shall be available lo Lhe third party any remedy that would
have been avaliabie to hirn in an action Íor breach otcontract ifhe had
been a party to the contract (and the rules relating lo damages,
injunctions, specific performance and other relief shall apply
accordingly).
96 Cio o LORIISh
Exercise 1
Read the page from the statute, Contracts (Rights of Third Part/es) Act 1999, on the previous page. Some =
of thc words and expressions used lo the statute are expia ined be/ow to heip you. cv
a contract provision is a term contained in known as a remedy, to the injured party it the
a contract. term or contract is breached.
a third party to a contract is a person who has to be a member of a class is to be a member

not signed the contract but may be affected by it. of an identifiable group of people.
to enforce a term is to make sure that the a remedy for breach of contract is a solution
term is obeyed. provided to an injured party in cases of breach. It
is sometimes called relief'. The remedy is
to expressly confer a right or a benefit upon
usually damages but there are other solutions, or
someone is to write in a contract that a person
relief, available at the discretion of the court.
definitely has thal right or benefit.
an injunction is a court order that ordors the
the construction of a contract is the
party in hreach to stop behaving in a way that
interpretation of it. The verb is to construe,
breaches the contract. It is generaily an order to
meaning to interpret.
stop doing something.
an enforceable term or an enforceable
specific performance is a order from the court
contract is a term or a contract that a court will
that obliges the party in hreach to do what they
recognise as valid and will give a solution,
promised to do under the terms of the contract.
Match each explanation below with the correct subsect/on of the statute. The statute has five subsections,
which are clearly numbered 1-5.
a This subsection says that a third party may not enforce a right if a correct interpretation of the contract
concludes that the parties did not actually intend that the third party should be able to enforce that right.
This describes subsection
b This subsection says that the third party who wishes to enforce a right must be clearly named in the
contract or be a member of a group of people that is clearly named in the contract. This section also
says that the third party does not need to exist at the time the contract is made. This gives rights to
third parties such as unborn children or future hushands or wives of the contracting parties.
c lhis subsection says that a third party can enforco a right if the contract clearly states that he or she
may do so. This section also says that if a contract term clearly gives a benefit to a third party, then he
or she can enforce that term.
d This subsection says that if a term is enforced the court can give the third party any of the usual
remedies available to any person who brings a claim for breach of contract. This section also says that
the normal rules of law that apply to remedies will apply in the normal way to third party claims.
e This subsection says that if a third party wishes to enforce a contract term he or she can only do so
subject to any other term in the contract that is relevant. This means that the parties to the contract
can limit or place conditions on the third party's right. Thore may be another term, for example, that
says that any dispute must be resolved by mediation. lhe third party would have to comply with this
term when enforcing his or her right.
Giobi Lgi Engiish, 97

ai
Vau are now going to read twa short extracts from another statute. They are from The Unfair Contract
Terms Act (UCTA) 1977. In this statute, Parliament states what is acceptable ta include in a contract and
what is not acceptable. This part aí the contract deals with the situation where one aí the parties tries to
limit his ar her Iiability for a hreach af duty.
Exercise 2
Here is a surnmaty of a short extract from UCTA, followed by the extract itself. The sumrnary says the sarne thing
as the statute, but it uses less complicated language. Read the surnrnary ta help you understand the rneaning
of the extract from the statute, and then complete the extract by choosing a phrase from the blue box below.
Summary of paragraph 16 (subsection 1) of UCTA
This subsection says that it, in a contract, one aí the parties attempts to prevent ar lirnit his ar her
Iiability for breach af duty af care in situations connected with daing business ar using a building for
business purpases, then:
• the term will always be vaid ifone of the parties tries ta prevent ar limit his ar her Iiability far
death ar injury af the ather party; and
• in any situation except death ar injury, the term will be vaid if it was unfair ar unreasonable ta
allow it in the cantract.
Extract from UCTA
16.1 Where a term af a contract (a) ar restrict Iiability for breach af duty
(b) any business ar fram the (c) used for
business purpases af the occupier, that term:
16.1.1 shall be (d) where such exclusian ar restriction is in respect

af death ar personal injury;
16.1.2 shall, in any other case, (e) if it was not fair and reasonable
to (f) in the contract.
void in any case purports to exclude occupation of any premises

have no effect arising in the course of incorporate the term
Exercise 3
On the next page is another extract from the sarne statute, The Unfair Cantract Terms Act. Below, you can see
a summary of this extract. Choose a preposition from the blue box and put it in the correct gap in the extract.
Summary of paragraph 16 (subsection 3) of UCTA
If accarding to subsection 1 (the part of this statute that you have already read), a term aí a contract
is void, then it is not impartant whether the person who signed the contract knew about that term.
Knowing about a term, ar even agreeing to that term, does not necessarily mean that the person
who signed the contract agreed to take any risk.
98
Extract from UCTA
16.3 Where (a) subsechon 1 (b) . a terrn of a contract is void and has no co
effect, the fact that a person agreed (c) , or was aware (d) the terrn
shali not (e) itself be sufficient evidence that he knowingly and voluntarily
assumed any risk.
of to above under of
THE ELEMENTS OF A CONTRACT

Exercise 1
Jack Wirj ter went to bis first lecture on contract /aw at the University of Chatsworth this morning. He
/earned sornething about how a contract is formed. Look at Jack's lecture notes below and give each
paragraph a /ieadirg frorn the box.
Intention to create a Consideration Offer

legal relationship Acceptance
Lecture notes on contract

There are basic elements to every contract. in Enghsh iaw we usuaiiy need four essential things
(elements) to make a legal contract. In each country around the world the list of elements needed
to make a contract will be different. in English law there are four elements. If ali four elements are
preserit, a contract is formed. lfone or more ofthem is missing then there is no vand contract.
The four elements of a contract

a
Generaily in English Iaw, there can he no contract unless this exists. it is the name given to what the
parties exchange under the contract. it is usually money, goods or services.
it is something that a party says or wntes to another person. it is a statement that suggests that they
make a contract on very certain terms. The person who makes this statement wants it to he legally
binding when the other party agrees to it.
lhe courts judge this objectiveiy. The English case of Smith v Hughes (1871) tells us that the important
thing is not a party's real purpose or aim but how a reasonable person would look at the situation. The
precedent cases teli us that parties who are in business are usuaUy considered to have this hut that
parties who make an agreement in a domestic or social situation usuafly do noL
it can be defined as, 'a final and clear agreement to terms that have been offered'.
© Global Legal hnghs 99

READING A CONTRACT CASE
Jack and Shelley are learning about case law. Their textbook gives them an example of an important case in
English contract law. It is a case on intention, one of the four elements of a contract. It is a precedent case
from the year 1919, concerníng whether or not a husband and wife can form an oral contract. The claimant
is referred to as 'the plaintiff because the case is an old one. The extract is an example of the ratio of a
common law contract case. The ratio is the legal reasoning that forms the law for the future. The first part
of the text below is explanatory notes. The case begins with the words of the judge, Lord Justice Atkin.
Exercise 1
Read this extract from the case vety carefu//y and answer the questions that follow using a fulI sentence.
BALFO[ R V BALFOUR
Court ofAppeal (1919)

(1) lhe defenda,il zeas a cii'ilserrant based in Celon, Iii Voi'enher 1915 i)e carne lo
Eng/and with lhe p1aint bis ihej slayed in Eng/and unliLlugusl 1916 ichen
lhe husbands holidayperiod ended and he relurned lo Cej/on. lhe plain4ff on her
doctor adeice.slaj'ed in England. lhe hushand. hefore leai'inç', pmmised lo gil'e lhe
p1ainl:jJ.J.30 a nonlh unlilshe relurned lo Cejlon. Laler lhe hushand rerote saing Ibal
il u'ould he helter iflhe remained aparl. lhe plain4fl'sued ou the promise lo pa her
£30 a ,non/h.
(2) Sa rjanlj gaze judgmenl for lhe p/aiiili/ hülding lhat lhe hzishand was under an
ohh'alion lo support bis u, /é and tbeparlles bad legaily contracted lhal lhe
exlent oJ lhe obligalion should be £30 a inonlb.
The husband appealed.
(3) ATKIN LJ ......it is necessar to remember that there are agreemeilts between
parties, which do not result in contracts within the meaning of that term in our lhe
ordinarv example is whcre two parties agree to take a walk together, or where there is an
offcr or acceptance of hospitalitv. Nobodv woiild suggest in ordinary circurnstances that
those agreenicnts rcsult in what we know as a contract, and one of the niost usual forins
ofagreenent hich does nol constitute a contract appears tome to he the arrangerncnts
which are made hctween husband and wife.
(4) To mv mmd, those agreements, or nianv of them, do not result in contracts at ali,
even though thcy may be what as between other parties would constitute consideration for
the agreenieni. Neverthcicss, they are not contracts, and they are not coiltracts because
the parties (11(1 not inlerid that thev should he atteiided hy legal conscquenccs. l'o my
mmd it would he of the worst possible example to hold that agreemenis such as this
resulted in legal obligations, which could he enforced in the courts.
(5) The CommOn law does riot regulate thc form of agreemenis hetween spouses. Their
promises are not sealcd with scals and sealing wax. Their consideration is reallv that
natural loe and affection which counts for so little in these cold courts.
100
a In which court was this case heard? =
b What was Mr Balfours occupation at the time of the case?
c Why did the claimant not return to Ceylon with her husband?
d What did the judge in the court of first instance decide?
e What was the name of the judge in the Court of Appeal?
Eercise 2
In each paragraph of the case find a word that matches the ciefinitions provided for you.
Paragraph (1) Paragraph (4)
a A word meaning started legal action. d A word meaning to decide in a legal way.
Paragraph (2) Paragraph (5)
b A word meaning the amount of something. e An old-fashioned word, meaning husbands

or wives.
The word is
The word is
Paragraph (3)
c A more formal word that means word'.
The word is
Exercise 3
Say whether the foliowing statcments about the case are true or fa/se.
a The judge says that it is possible to have agreements that are True False
not contracts.
b The judge says that accepting an offer to have a meal with someone, True False
for example, is usually a contract.
c The judge says that what is consideration between other parties might True False
not be consideration between spouses.
d The judge says that there is generally no contract when a husband True False
and wife make an agreement because they don't mean it to be a
legal agreement.
L: 'o'
= Coilocation bank
to give judgment for the the extent of an obligation to constitute consideration

=
claimantldefendant
Preposition bank
tu do something on someone's advice tu give judgment for the claimantldefendant

'On my solicitor's advice 1 decided not 'l'm sorry but the judge gave judgment for
tu sue.' the other side.'
tu continue to do something until a to be under a legal obligation

certain date 'You are under a legal obligation to carry
Your husband will be obliged to continue to out your obligations.'
support your children until they have ali
finished their education.' an agreement between two parties
There was a clear agreement between US
to sue on a promise that you would provide haif of the finance
She sued him on his promise to deliver the for this project.'
goods on time.'
OFFER AND ACCEPTANCE

Jack and Shelley are doing their homework. The subject is offer and acceptance in contract Iaw. Offer and
acceptance are two of the essential elements of a contract. Jack and Shelley have decided to do haif of
the homework each.
Exercise 1
Look at Shelley's homework. It is about the ways in which au offer can come to au end before acceptance
can take place. Match the words or phrases in the Iist with the statements that follow.
How can an offer come to an end?

Susan Clarke offers to sell HoIly Quinn two tickets to a music festival. Tie price is £100 for each
ticket. There are tive ways in which this alTer can come to an end. These are:
• revocation
• rejection
• counter-offer
• lapse of time
• death of the offeror or offeree
a III give you £85 instead of £100 for each ticket.'
The word/phrase is
102 c
b 'You know those tickets you offered to seM to me four months ago? Ive decided to take them. =
lhe word/phrase is
c 'Ive changed my mmd. The offer is no longer open. i've decided to go to the festival myseif.'
lhe word/phrase is
d '1 know Susan offered to seM some tickets to you but i'm afraid she has passed away.
lhe word/ph rase is
e 'No thank you. lhe price is much too high. Forget it.'
The word/ph rase is
In ali oÍ these situatmons no contract can be formed because the offer has come to an end and therefore it
cannot he accepted. This means that two of the elements that are essential to the formation of a contract
are mmssing.
Exercise 2
Look at Jack's hornework. It is about how acccptance of ao offer rnust be comrnuriícated. Matcti the
staternents of /aw io this Iist with the situatiorjs be/ow.
How must acceptance of an offer be communicated?

Hoiiy Quinn agrees to buy two tickets to a music festival from Susan Ciarke. To make her
acceptance of the offer legaily binding, how must the ofíer be accepted?
1 lhe acceptance must be made to the offeror and not to anyone else uniess the offeror has
authorised it.
2 lhe acceptance must be communicated. Acceptance cannot be by silence.
3 The acceptance must be actualiy heard or received mn writing to be effective.
4 If the offer specifies a method of acceptance you must accept it using a method that is no ioss
effectmve than the method specified.
5 A request for more mnformation is not the sarne as a counter-offer and will not have the effect of
rejecting the original offer.
a 'My offer cieariy said that acceptance must he by sms text message or email. 1 did not receive your
ietter of acceptance hy post until after id soid the goods to someone else.'
lhe relevant statement of iaw is
b 'You toid my hrother that you wanted to buy the tickets but you didn't tell me. I'm afraid he was not in a
position to accept this.'
lhe relevant statement of iaw is
c You say that you accepted my offer by email. it never arrmved.'
The relevant statement of iaw is
d 'In answer to your question, the tickets offered for saie are for the lower stand on the right-hand side of
the stadium.'
The relevant statement of Iaw is

continued
(khiI 1 103
a, e If you do not hear from me by five oclock tomorrow please assume that 1 want to go ahead and buy
the tickets.'
lhe relevant statement of law is

=
If any of these situations arise then there has been no acceptance and therefore there is no contract
between the parties.
CONSIDERATION
Why is it important to understand consideration? It is important because consideration is notjust an
academic part of Iaw. The word consideration' will appear in contracts that you will have to understand or
translate. Look for example, at this clause from a contract between a writer and a fim company. lhe
company is buying the rights to make the writer's book into a film.
In consideration of the rights granted under this Agreernerit Uic Media Company shall pay to the
Author the Licence Fee as foliows:
1.1 £25000 upon signature of this Agreement

1.2 £25000 upon the first DVD release of the film to the public in the UK
This is a good example of how the word consideration is used in contracts.
Exercise 1
As part of her homework, Shelley must write a short essay about considera tion in contract law. Complete
her essay by putting a word from the box into the gaps.
contrary consent terms detriment unqualified

suifer profit reason reciprocal donations
lhe final element of a contract is consideration. An English case from 1875, Currie v Misa, gave a
definition of consideration which is still used today in the contract law of England, the USA and
Canada. The judge in that case defined consideration as:
some right, interest, (a) or benefit accruing to the one party or some
forbearance, (b) loss or responsibility given, suffered or undertaken by
the other.'
In other words, the parties must gain some benefit from what is exchanged or (c)
some Ioss. Consideration is usually goods, money, work or services but it can be other things. In a
very simple example, if 1 sell my gardening business to you for £50,000, my consideration is the
business and your consideration is the money.
Motive is not the same as consideration. Your motive for contracting is your personal
(d) for contracting. it may not coincide with the consideration you are giving, or
receiving, as part of the contract.
Under contract Iaw, there is no contract if there is no consideration. it is one of the four necessary
eieiiierits uía eoritrict. The consideration musi be (e) , with hoth parties provioing
coo tinued
104 Clobá
=
consideration. The consideration cannot be an act or a thing which is iliegal, imrnoral or
(f) tu public policy. If a certain act is punishahle by some Iaw. then it is descrihed
r
as illegal. An exampie would be a contract to empioy an () piiot to fly a plane.
There is one type of contract that is an exception to the requirement of consideration and that is a
deed, which is also sometimes known as a contract under soai. Many years ago, people entering
into a contract would put hot wax on the bottom of the paper and press a family ring into it. This
seal was a sign of (h) to the (1) ______________ of the contract. in modern times,
deeds are used mostiy iri contracts that involve land. If a contract is a deed, then no consideration
is required. This means that if, for example, (j) to charity are made under seal, they
are valid contracts, even though there is no valid consideration.
Exercise 2
The c/a use below is frorn a contract. lt deals with cousideration. Complete the contract clause by putting
Lhe words from the blue box below loto the correct gap.
In (a) of ali of the Services (b) by ALT Seices Ltd the Company
shall pay the (c) of £10000 subject lo lhe (d) ot the Services and
satisfactory completion ot work.
provided consideration provision su m
Coliocation bank
tu do your homework to make a counter-offer to be contrary to public

policy or to the iaw in
tu revoke an offer to gain a benefit
general
to reject an offer lo suifer a loss
Preposition bank
)
to buy tickets to/for an event to do something by a particular time in

We want to look after our new client ver' the tuture
well. Let's get him some tickets to thc opera We need to have this document ready by
tive o'clock.'
to accept something by postlemail
1 sent the cheque by post.' to enler into a contract or agreement
'You should nol have entered into this loan
tu put something in writing agreement unless you were sure you could
If you have evidence in writing it wifl heip make the repayments.
us to persuade the judge.'
tu rnake a donation to charity
a case/new Iaw from a particular year She made a donation to a charity for
in defence of my client 1 cited a case homeiess people when she won lhe iottery.
from 1995.
Lr 105
LISTENING
Exercise 1
Today Jack and Shelley are going to a contract Iaw lecture. Listen to the lecture and answer thcsc questions
a Do contracts involving large amounts of money need to be in writing in order to be valid?
b In which American state was Pennzoil based?
c In the example case of Pennzoil buying Getty 011 there was no written contract. How did they
agree the deal?
d A few weeks after Getty 011 had agreed to seU to Pennzoil, another company announced that it had
bought Getty Ou. What was the name of the other company?
e How much money was Pennzoil awarded by the court in damages?
f What type of contract does the lecturer say that her students will most often encounter in their careers
as law'ers?
g What used to be necessary in order to make a deed valid?
h What type of contract does the lecturer say must take the form of a deed?
i Which does the lecturer say is more common, bilateral or unilateral contracts?
j Is a reward contract bilateral or unilateral?
106
CONTRACT LAW IN PRACTICE =
Exercise 1
Look at this letter takcn from a newspaper. The Jetter is trom the newspaper's 1caI problcm paflo.
Complete t/ie gaps lo the letter with the correct preposition. Choose the preposition from the box below.
of in to into through
for from over at against
TI.e Chatsuorth Herald 111111'. chatsu'ort b/ierald. co . uk
to!d me 1 wouki have to wait at ieast iwo wcck.s for

Legal comer ao engineer hecause the fridge vas one (g)
Ed Samuelson, a hatch that dkl not vork properl
The engincer carne no 21 Septemher. 1 le told me
Chatsworth lawyer, answers
1h ai iwo paris of ii le fridge. ti te ii ten 111)51 at and the
YOUR legal problems. fan, were defective. 1k' replaced them.
I)eui' Id II is now 22 Nos.ember and 1 iia e jusi rewrned
(h) a two-weck hoiidav lo Goa. \\'hen 1 gol
1 boughl a new httcd kitchen tntni a companv caiied
horne 1 found that lhe fridge had broken dowo
Sinipiv Kitchcns lo Chaisvortii (a) June. The
again. Ali of the food in II VaS bad and thc srncli
total cost of lhe kitchen was just (b)
when 1 carne (1) lhe front door of mv house
£10.000. It was fitted on 8 Jul The kitclieu
as terribie. The nianagcr of tiic Chatsworth hranch
incliided a fridge that as huilt (c) the
of Simplv Kitchens has toid me thai 1 rnust vait for
svsieni. The fridge broke (10w n iii earlv Sepieinber
arI(I 1 contacted Simply Kitchcns to ask (d) a lhe engineer lo visit inc again. He also sas lhe
compan\ lias no complaints departrnent. hat can
new one. The manager said that 1 had no righi
1 (lo? Can 1 i nake a dai iii (j) lhe cooi panv?
(e) __________ a new une and that 1 had to vait for au
engineer lo look (f _ lhe fridge. lhe manager Vtephen Blake/j', Rose Terrace, (.ljatsuorlh,
Exercíse 2
Here is Ed Samuelson's answer to Stephens letter. Complete the gaps in the letter with the correct preposition.
as of from against
with for by to
Ed says
kitchen and vou therefore have what the law calis
I)ear Stephen a contract foi' vork and materiais' w Oh Simpi
Trv vriting a Ictier (a) lhe Chaisworih Kiichetts.
hranch asking for a new fridge. if that doesn't '1h is means th aI vou!' legal rights asa consu mci'
work. 51k tliein! lhe manager (b) Simplv are covered (O lhe Saie and Supplv nf
Kitchens admitted thai he liad originailv supplied (;oods Ad 1982. The supplier is also responsihle
you (e) defective goods, so vou have a case (g) __________ conscqtiential iossarising (h) __________
(d) lhe companv for breach ol coniraci. the (letects in lhe fridge. So, vou can claiiii
You ho tght lhe fridge (e) __________ part of a fincd conipdnsation for the spoiied food as we11 1 .
Global Legal Enghsh 107

= Exercise 3
Stephen Blakely has followed Ed's advice and he has written this Ietter to the manager of Simpiy Kitchens.
== The words that have been underlined are too informal. Replace these words by choosing the correct word
or phrase from the blue box beiow. Write your answers in the box on the next page. There is an exam pie aí
the beginning (*).
(*) Mr Russeil inconvenience notice

breach grounds as soon as possible
issue proceedings are aware admitted
replacement compensation
47 Rase Terrace
High Bennington
Chatsworth
CH8 5PG
Mr David Russell 29 November 20XX
Simply Kitchens Ltd
Unit 55, Green Lane Industrial Estate
Chatsworth
C25 1SD
Dear * Mr David Russeli
Fitted Kitchen, supplied by Simply Kitchens Ltd, June 20XX
In June aí this year 1 purchased a new kitchen from your company for a total price of
£10345. The fridge that you supplied was defective. As you (a) know verv well, 1 have had
numerous difficulties in trying to get this fridge replaced. This ietter is (b) wrojng of my
intention to begin legal action if the problem is not rectified immediately.
The kitchen was fitted in June and the fridge broke down for the first time just three months
later, on 5 September. When 1 contacted your office 1 was advised that 1 should wait for an
engineer to repair the fndge, as 1 had no right to a (c) new one. During that conversation you
(d) saidJtwas true that the fridge was ano of a batch that was defectivo and that 1 would
have to wait twa weeks (without having the facility of a fridge) as your engineer was so busy.
Now the fridge has broken down for a second time, which has caused me both expense and
(e) personai trouble. 1 am not prepared to wait for a second visit from an engineer and
request that you supply me with a new fridge immediately. 1 have taken legal advice and 1 am
advised that 1 have (f) reasons to make a claim against your company based on () dishonour
of contract. 1 understand that as a consumer 1 am covered by the Saie and Supply of Goods
Act 1982. If it is necessary to (h) starta legal action in Chatsworth County Court 1 shall claim
for the cost of the fridge and 1 will also include in the amount aí the claim (1) rnoney for the
consequential loss of spoiled food, which amounts to approximately £150.
1 look forward to hearing from you (j) verv quickly.
Yours sincerely
Stephen Blakely
108
=
(*) Mr Russeil
=
F
a f co
b g
c h
e J
Coliocation bank
to announce the the performance oÍ a to grant someone a right

acquisition of a company contract to do something
to create a legaily binding to fail to perform your to be covered by a

contract dutíes under a contract particular Iaw
to be awarded damages to rectify a problem a batch of goods
Preposition bank
a contract between two companies to buy goods from someone

'There was an oral contract between the We buy most of our electrical goods from
two 011 companies. King Electrics.'
to be awarded an amount of money in to supply someone with a replacement

da mages When my car broke down Iast month my
The judge awarded us $10,000 in damages. insurance company supplied me with a
replace ment.'
ri exchange for something
1 gave him my car in exchange for his van. to sue someone on the grou nds of
something
to give notice of something We sued them on the grou nds of breach
In his letter he gave us notice of his of contract.
intention to sue us.
Global Legal Engls 109

STARTING A CLAIM FOR BREACH OF CONTRACT
Stephen Blakely has received no answer to his Ietter to the manager of SimpIy Kitchens. He has decided
to follow Ed Samuelson's advice and sue the company.
On the next page you will see the first page of a claim form. This is the form that a claimant needs to flul in
to start a claim in court. Stephen Blakely has decided to make the claim without the help of a solicitor.
Exercise 1
Tbe information be/ow is for the c/aim form. There are some words missing from part of the information.
Fui the gaps with ao appropriate word so that the information for the c/aim forrn is comp/eted. The first
Ietter of each word is províded foryou.
The value of the claim is £650.
The claimants name and address is:

Stephen Blakely
47 Rose Terrace
High Bennington
Chatsworth
CH8 5PG
6QZ070C2 is the claim number.
The brief details of the claim are as follows:

The defendant (a) ç to fit a kitchen in June of this year. The defendant admits
that the fridge that was supplied as part of the kitchen was (b) d
The fridge has broken down twice and the defendant refuses to supply a new one. The claim is
to (c) c the cost of a second company supplying and fitting a new fridge and for
the cost af food that was spoiled during the (d) d with the defendant.
The court fee is £70.
14 December 20XX is the issue date.
There is no solicitor's fee.
The defendant's name and address s:

Simply Kitchens Ltd (registered office)
Unit 7
Fratton Park Industrial Estate
High Boldon
Bradford
BR4O 1DD
£720 is the total amount.
110
=
Exercise 2
The informatiori in Exercise 7 needs to be put onto the claim form below. Decide where the information =
00
needs tu go and then complete the claim form for Stephen.
In the
Claim Form
for cotirt use oniy
r
Claim No.
Issue date
(1aniant
SFAI.
1 )efindanÉ( )
Brief detai Is o Lela mi
Value
£
L)cInidaiu's
flIT1e JT1d \iount IiivieI
(ourt Ice
Sliturs eots
total aIlluUFtt
It 11ur 111(1 1 1 ,111 liii> 1 l(Id\ \'lrcci I . ILI'IIIIiIr villi II ICLLilil. Il1l\ 1 rIII IIt,t 5 1 LI NI,zJI. ri .ini
\I (liii Ii Cl'Jl Ini 71 101 02 i 1,iiT1,i //ItT 1 liii
GobaI Legal English 111

CoIocation review
Complete these ser,tences with a col/ocation that you have seen.
a 1 would like to one or two amendments to the document that you have sent to me.
b In England a statute has to pass through three before it becomes law.
c If a judge makes a decision it may become ___________ on other courts of the sarne levei and
on lower courts.
d Your client has to perform her duties under the contract and therefore we will start
legal action.
e Case law is also sometimes known as the law.
f To make an enforceable contract both parties must consideration.
g Thejudge __________ down his decision at four oclock this afternoon.
h In which court is your case being this morning?
1 The judge __________ damages of £5000.
j We wish to against the decision of the court of first instance.
Vocabulary review
Complete these seritences with a word that you have seco.
a My offer to you was made months ago and you can no longer accept due to of time.
bA -ofíer suggests alternative terms and has the effect of cancelling the original offer.
c An contract is a spoken agreement.
d Another name for an Act of Parliament is a
e When a contract is being formed, the two parties are known as the and the offeree.
f The judge in the Court of Appeal the decision of the court of Íirst instance and
reversed the result of the case.
g Consideration must he meaning that if only one party provides it there is no contract.
1, Tho nnr.ncutn nf kcsnofut e

II. "2
1 Most contracts involve both parties making a promise and they are therefore described as
and not unilateral.
j A contract that rnust be in a written form in order to he legally valid is called a

sometimes known as a contract under seal.
112
=
Preposition review
Complete tPese seriterices with the correct prcpositioo.
a Please put your cornpiaints writing and send them to our manager.
b In Engiand and the USA much of the iaw is made _______ judges due to the comrion iaw system
c You are a legal obligation to sell the house now that you have signed the contract of saie.
d We ali need to stay in the office 8pm to finish this important project.
e The new Bili has passed the debate stage and the members of the House of Commons
will vote on it next week.
f The construction company was sued its promise to finish building the hotel by December
as it wasnt finished until the foliowing July.
g 1 am acting __________ my barristers advice and not taking my claim any further.
h The agreement Charles and Michael was made two years ago.
1 didn't email my acceptance to you, as my server was down. 1 sent it post instead.
1 have forgotten the name of an important contract case and 1 will need to look it up in the law Iibrar.
1 remem ber it is the year 1995.
5ICt Lr» Lr 41 ,, 1 113

Exercise 1
There is a word or phrase missing from Lhe foliowing sentences. For each sentence. circie Lhe word which
besi f7ts into the space from the options provided. Do not mark more than one answer for each sen terice.
There is an exam pie at the beginning (*).
Example In the Lnglish legal systern a precedent is (*) upon similar fature cases.
1 The case you mention from 1976 is very similar to the current case but 1 think it is possible to
(1) between them.
2 The claimant was (2) - - damages aí £100000.
3 lhe decision of the first judge was (3) _______ by the judges in the Court of Appeal.
4 An offer can come to an end due to (4) of time. It means that too rnuch time has passed
since the offer was made.
5 When a person who makes an offer withdraws it before it can be accepted we can say that the offer
has been (5) _______
6 According to English contract law, acceptance must be (6) ______ and cannot be by silence.
7 Consideration in contract law requires the parties to gain a benetit or sufíer a (7)
8 When a Iaw'er refers to the (8) he or she puts upon a contract term it is a more formal way Oí
referring to his or interpretation or understanding of that term.
9 Specific (9) is an order from a court that tells a party in breach to carry out his or her
obligations under a contract.
10 According to English contract Iaw consideration must be (10) , which means that both parties
must give or receive something and not just one of them.
(*) A enforceable 8 unavoidable Q1g) D obligatoty
(1) A differ B distinguish C separate D discriminate
(2) A ordered B handed C awarded D granted
(3) A overruled B annulled C refused D rejected
(4) A conclusion B ending C lapse D disappearance
(5) A revoked B cancelled C negated D invalidated
(6) A said B contributed C given D communicated
(7) A difficulty B detriment C injury D disadvantage
(8) A mean!ng 8 e!uc:dation C version D construction
(9) A action B execution C performance D completion
(10) A rec!proca! 8 ont C common D shored
114
Exercise 2
!Renci the text below and think of the word that best fits eac/i space. Use on/y one word in each space.
Wrïte your answers in thc box below. There is an example at the beginning (*).
The elements of a contract

A contract is an agreemerit hetween two or more people or companies who are known as the
to lhe contract. However, in order for a contract to he recognised as legally (1) upon the parties,
certain conditions must be met. According to English law there is no requirement that a contract is in
(2) in order for it to be valid. Many high-value contracts are made orally. What is important is that
the agreement contains the four essential elements of a contract. These are:
(3) to create a legal relationship

Offer
Acceptance
Consideration
An offer is an indication from one person that he or she is prepared to contract with one or more other
people on (4) which are certain. This means that lhe most important provisions of the agreement
such as price, quality and date must be fixed. lf, for example, an offer is made and the (5) (the
person to whom the offer is made) suggests changes to that offer then no contract will have been formed.
This is because the effect of any suggested change to an original offer is to cancel it. The offer will no
longer be open to acceptance because a (6) -offer has been made.
There are also some important rules governing acceptance. There are, for example, several common law
(7) , which are decisions taken by judges in previous cases, that tell us that acceptance can be
made by conduct but that it cannot be made by silence. There are other rules about acceptance by post or
email. These objective rules telI us when acceptance is considered to have been received by the offeror
when a particular means 01 acceptance, for example, email, is used. Acceptance cannot, as we have
already stated, contain any suggested changes to the original offer. Acceptance rnust he absolute.
According to English law (8) must be exchanged by the parties in order to form a hinding contract.
This means that there has to be something of value passing in both directions between the parties. The
(9) to this is where the parties agree to form a contract despite the absence of this normally vital
element. This requires the parties to sign a special docurnerit known as a (10) . It is sometimes
also known as a contract under seal.
Example 1 partes
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
c;iobiI Legji [r ii) 115

Listening
=
Exercise 3
Usteri to tbe sem mar giveri by a professor of Iaw to two students. Decide if the fo/Iowing statements are
troe or fa/se.
1 The professor asked her students to read 285 pages of contract Iaw for homework.
2 The Iaw students at this seminar have already studied some of the elements of a contract.
3 Mr Browns event is called Save the Planet Day.
4 Mr Brown decides to hold the event in two parks in London and Manchester.
5 Mr Brown promises the manager of SeIlfast UK an extra £1000 if he can persuade the Ethical Food
Company to attend his event.
6 In the case of Sti/k v Myrick the captain oÍ the ship offered the men on board his ship a bonus If they
would sail the ship safely back to England.
7 The case of Stilk v Myrick is from 1890.
8 The claimant in the case of Stilk v Myrick was one of the sailors.
9 The claimant won in the case of Stilk v Myrick.
10 The professor thinks that a court would oblige Mr Brown to pay Sellfast UK the extra £1000 based on
the case of Williams v Roffey.
frue or talse?
(1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
116 L Erj
..
THE LANGUAGE OF EMPLOYMENT LAW =
-,,
o
==
o.
BEING AN EMPLOYER
o
=
Exercise 1
Read this text about being ari cinp/oyer. The most irnportant words are in the key vocabu/ary below.
Mswer the questions that fo/iow using a fui! sentence.
Key vocabulary
employer secretary salary fuil-time
employees admin work pay remuneration
staif payroll wages invoices
manager part-time order suppliers
My riarne is Peter Connolly and 1 am an employer froni suppliers. Another duty of the office staff is tu
in the town of Chatsworth. This means that 1 lave a deal with the payroll. lhe payroll is a list of people
business and 1 pay people to work for me. 1 ani the who work for the business. The payroll shows me
owner of two shoe shops and 1 employ a total of 12 who works for the business and what remuneration
employees. Another word for a group of employees each person receives from me each month.
is staif. Some of my staif work in the shops and Remuneration is a formal word meaning payment'.
some of them work in the office. Our office is My employees receive a salary. A salary is an
situated above one of the shops. 1 employ an office amount of money that an employee receives each
manager and a secretary in the office. A manager month. Employees who receive payment every week
has control of the office. A secretary is a person who usually refer to this money as wages rather than
helps the office manager with his or her work. These salary. Both salary and wages are sometimes called
two people are my office staif and they deal with ali pay. Some of my ernployees work fuli-time and
of the admin work connected with the shops. some of them work part-time. My fulI-time staff
Admin work is short for administrative work. For work for 35 hours a week and my part-time staif
example, the office staif order goods to sell in the work for 15 hours a week.
shops and they also pay the invoices we receive
a What type of shops does Reter Connouly own in Chatsworth?
Answer:
b How many staif does Reter Connouly employ?
Answer:
c How many staff work in the office of the husiness?
Answer:
d What information does the payroul show Reter Connolly?
Answer:
e What does remuneration mean?
Answer:
f Are Peter Connolly's staif paid weekly or monthly?
Answer:
g How many hours a week do Reter Connollys fuIl-time staif work?
Answer:
G ,h,i Legai Er ih 119

=e
'o
Exercise 2
=e
Reter Conno/iy needs a new em p/oyee to work as a saies assistarit in one of his shops. He decided to put
ao advertisernet -it in his local riewspaper. The most important words from the advertisement are in the key
= vocabulary. Put the correct word frorn the key vocabulany into the sentences below the advertisement to
complete each definitiori.
Key vocabulary
team track record maternity leave covering Ietter

weII-motivated wide range C.V. closing date
applicant temporary
Ao exciting opportuníty to be part of our great saies team!
THE CHATSWORTH SHOE BOX

• . . is looking for a weII-motivated saies assistant to work in our busy town centre shop. The
successful applicant must be prepared to work 35 hours a week (fulI-time) and should have a
good track record in the retail industry. He or she will have a wide range of duties including
serving members of the public and window-dressing. lhe position is a temporary one for 12
months to cover maternity leave.
Apply hy sending your C.V. and a covering Ietter to:
Mr Peter Connolly
The Chatsworth Shoe Box
10 Portugal Place, Chatsworth CH1 1BD.
The closing date for applications is 25 August.
a A person is someone who is ambitious and wants to work hard.
b A period of is the time that a woman is away from work before and after the
birth of her baby.
c A - is a document that teus an employer about a persons previous experience of

work and what qualifications that person has. This document is called a 'resume' in the USA.
dA is an informal name for a group of people who work together.
eA of duties means a variety of different duties.
f Something that is - is only for a limited period of time. It is the opposite

of permanent.
gAn is a person who asks to have something, especially a job.
hA is the name of the letter that a person sends with a job application.
i The for a job application is the last date that the employer will accept an application
from someone.
j A person who has a in a particular job has previous experience of doing thatjoh.
120
Help desk 4.
'1
=
o.
a saies assistant a person who seus goods or window-dressing preparing a shop window o
=
serces ir a shop, in an attractive way 50 that the public are
interested ir buying things from the shop.
the retaii industry - the industry involved in
huying goods and seuuing them to the public.
Exercise 3
Reter Connolly received this /etter today from someone who is interested ir the job at his shop. Read
the Ietter and decide ir each case which is the correct preposition from the two possíbilities. Wríte your
answers iri the spaces below.
6 Kenton Road
Chatsworth CH6 2DD
Mobile: 07779 34500
Email: AndreaF@chmail.co.uk
Mr Peter Connolly 20 August 20XX
The Chatsworth Shoe Box
10 Portugal Place
Chatsworth CH1 113D
Dear Mr Connolly
Job (A) as/of a fuli-time saies assistant
1 world like to apply (a) to/for the job ot a fuil-time saies assistant at The Chatsworth Shoe Box
as advertised (b) in/at Thursday's Chatsworth Herald. Please finci enclosed a copy of my CV.
My previous jobs include two years as a saies assistant in the footwear department
(c) at/within Selfridges on Oxford Street, London. This gave me experience of dealing with
customers, as well as basic cashier skills and a good knowledge of the shoe retail industry.
1 have good comrnunication skills and also speak basic Spanish and italian, which may be
useful when deauing with customers whose first language is not English. 1 am an
enthusiastic worker and enjoy working as part of a team. 1 returned (d) to/in Chatsworth a
week ago after a year of traveuuing around Europe and 1 am free to start work immediately.
1 world welcomc the opportunity to discuss the saies position with you on the telephone or
at interview. 1 can be contacted on my mobile phone or by email (please see details
(e) on/at the top of this letter). 1 100k forward to hearing (f) from/of you.
Yours sincerely
Andrea Farreil
Answers
Exampie i * as a b c d e f
Giobal Lp,aI ng si 121

=o
Exercise 4
=o
LI.
Read Andrea Farrell's letter again. Find a word in tíe lctter to complete the following sentences.
= a To for something, such as a job, means to ask if you can have that job.
b When 1 say please find my C.V. it means that 1 have put my C.V. in the envelope
together with my covering ietter.
cA is a porson who deais with the money that a shop or a business has in its cash
regi ster at the end of every day.
d Your are the things that you can do wefl, especialiy in relation to yourjob.
e lfyouare about something, it means that you like that activity and you enjoy doing it.
f Ifyouare to start work, it means that you are available to hegin working
immediateiy.
g An is the chance to do something.
h if a - __________ is available with a particular company it means that the company has a job for
which it needs an empioyee.
HeIp desk
communication skills a persons ability to cash register the machine into which a shop
speak and listen to other peopie in an effective or some other business puts the money when a
way. lhe opposite of good communication skiils customer pays for something. Also cailed a tili'.
is poor communication skiiis.
AN EMPLOYMENT CONTRACT
There are two very important words connected with taiking about any contract. These are:
clause (noun): a clause is a section of the contract. A clause usually has a number, for exampie, clause
1 ot the contract. Sornetimes a clause is divided into further sections, for example, ti, 1.2, 1.3, etc.
provision (noun); a provision is a term contained in a contract. Ali of the terms and conditions of a
contract are cafled the provisions of the contract. Lawyers often use the verb to provide', for exampie,
Clause 1 of the contract provides that the empioyee is entitied to four weeks' holiday every year. lhis
means that it is an obilgation of the employer to give the empioyee four weeks' holiday.
Exercise 1
Here are the titles of some clauses that you will find in ao ernployment coo tract. Lavyers usually cali them
clause headings'. On the next page are descriptions of what each clause deals with. Match the headings
of the clauses with the descriptions provided.
Term of the contract Holidays Pension
Job title Sick pay Confidentiality
Working hours Grievance procedure Non-competition
Remuneration Disciphnary procedure Termination
122 .1 L. rhsi
a This clause deals with the payment that the employee will receive in return for working for the employer.
The clause heading is -

'1
o
b This clause deals with the employee's obligation not to tell anyonc about ceain information that
belongs to the ernployer.
lhe cia use heading is
c This clause deals with the period of time that the contract will be valid.
lhe clause heading is
d This clause deals with the amount of time that the employee is obuiged to work every week or rnonth.
The clause heading is
e This clause deals with what the ernployer must do if he or she is unhappy wíth the way that the
employee is behaving at work.
f This clause deals with the arrangements for the employee to have money in his or her old age.
g This clause gives the narne of the employees job.
h This clause deals with the time that the employee is aulowed to stay away from work to rest and relax
and still receive his or her pay.
1 This clause deals with the ways in which the contract of employment can end.
j lhis clause deals with what an employee must do if he or she is unhappy at work and wants to
complain to the ernployer.
k This clause deals with the employees obuigation after the contract of employment ends not to start the
sarne business or work for a rival of the employer for a certain period of time.
1 This clause deals with the money that an employer must pay to an employee when the employee is iii
and canriot work.
HeIp desk
a rival a person or an organisation that is in the procedure the accepted or correct way of
sarne type of business as you and is in competition doing something.
with you for the sarne customers or clients.
Giobji Lp,. i Eflgiisii 123

=
== Exercise 2
A new em p/oyee has some questions about her employment contract. Complete each question using the
correct word from the box below.
hours term sick pay salary
provisions titie holiday terminate
a What does the of the contract mean?
It means the duration of the contract.
b What are the of a contract?
They are aH of the terms and conditions contained in the contract.
c Whatismyjob _____ ______?
It is assistant manager.
d What are my of employment?
Monday to Friday, 9am to 5.30pm.
e What will my annual be?
£25,000 a year.
f How many weeks' can 1 have?
You are entitled to four weeks a year, in addition to public holidays.
g Am 1 entitled to when 1 am iM?
Yes. But you must provide us with a medical certificate.
h How much notice rnust 1 give if 1 want to the contract?
Four weeks. We use that time to find a new employee who can hegin work at the time that you leave us.
Exercise 3
Here are the clause headings from Exercise 1 again. Below are some very short extracts from an
employment contract. Match the correct heading from the blue box with each extract.
Term of the contract Holidays Pension
Job titie Sick pay Confidentiality
Working hours Grievance procedure Non-competition
Remuneration Disciplinary procedure Termination
a For a period ot 12 months after the termination of this agreement the Employee agrees that he or she
will not start a business that is the sarne or similar to the Employer's business.
lhe clause is
b The Employer shall pay the Employee a salary of £21,000 a year.'
lhe clause is
124 ÇFn')
c if you have a compiaint relating to your empioyment you shouid foiiow the procedure attached to this
contract in order to inform your manager about your compiaint.
•'l
lhe clause is o
==
d lhe Empioyer agrees to empioy the Employee in the position of saies assistant. o
=
The clause is
e On the first day of your absence from work you must inform your manager. If you are ahsent for more
than seven days you must provide your manager with a medical certificate signed by your doctor.
The ciause is
f This contract is for a duration of 12 months.
The clause is
g Empioyees who wish to contribute to the Fund may do so untii the age of 65 years.'
lhe cIa use is
h •The Empioyee is entitied to 25 days per year in addition to public hohdays.
lhe cia use is
1 lhe Empioyee shafl not during the term of his or her empioyment disclose any material information
relating to his or her empioyment to any third party.
lhe cia use is
j A summary of the ruies and procedures that the Employer must foflow in relation to difficuities with the
Employee's performance in the workplace is attached to this contract.'
lhe cia use is
k The Employee is required to work Mondays to Fridays between 8.30am and 5.30pm, with one hour for
lunch.'
The clause is
1 lhe Empioyer may end this agreement hy giving four weeks' written notice to the Empioyee.
The clause is
IIelp desk
absence - when somebody is not in the place public holiday - a day that the governrnent says
where you expect that person to be, such as at is a hohday for everyone in the country. lhe
school or at work, then it is described as an important public hohdays in the UK are
absence. lhe adjective is absent'. Christmas Day and New Year's Day. in the USA
4 Juiy is also a public hohday.
fund an amount of money that a person or an
organisation keeps for a particular purpose. It notice a warning period. When you give notice
can be to pay for something special, such as a to someone you tell that person that something
coflege fund to pay for education, or it can be a is going to happen in the future.
way of saving money to spend in the future, such
contribute - to give money towards something.
as a pension fund.
lhis is often because you want to, and not
material iniportant, significant. because it is an obhgation.
125
HOW CAN AN EMPLOYMENT CONTRACT END?
Read this information about the ways that an employment contract can end and then do the exercises
thatfollow.
Resignation
The employee resigns from his or herjob. This means that the employee informs the employer that he
or she will stop working for the employer's business. This might be because the employee wants to work
for a new employer. The employee must usually teil the employer in writing that he or she wishes to
resign. This is called a Ietter of resignation. The employee will usually work a notice period of perhaps
two weeks or four weeks. This means, for example, that an employee who wishes to stop work on 1 July
must give his or her employer a letter of resignation on 3 June. Resigning is known informally as
•handing in your notice'.
Retirem ent
Thc empuoyee retires from work. This means the employee leaves his or her job with the intention not to
work again because he or she is a certain age. In many countries the age of retirement is 65 years old.
However, some ernployees choose to take early retirement if they have enough money. When an
employee retires they must live on the money they receive from their pension. Most people in the UR
have a state pension, which they receive from the government. When they are working they pay some
money to the government each month to pay for their pension. In the UK this is called a National
Insurance contribution. Some people also have a private pension plan. This is because they want more
money than the state pension gives them.
Redundancy
The employee is made redundant. This means that an employee leaves his or herjob hecause the
employer does not need them. This might be because business is not good for the employer or because
the business is closing. The employee usually receives a redundancy payment. This is an amount of
money that the employer pays to the cmployee as a final payment. The amount of money that the
employee receives sometimes depends on the number of years that he or she worked for the employer.
The employer sometimes offers the employee training for a new career as part of the redundancy deal.
Training means learning the skills necessary to do a differentjob.
Dismissal
The employer dismisses the employee. The employee is dismissed. This means that the employer is
unhappy with the performance or behaviour of the employee and tells him or her that they no longer
have a job. This might be, for example, because the employee is not doing the job well or because the
employee is always Iate for work. Dismissal is known informally as 'being fired' in the USA and as being
sacked' in the UK. Employment Iaw states that the employer must follow a certain procedure of warning
the employee before this can happen. However, the employer is not obliged to follow this procedure
when the employee is guilty of gross misconduct. Gross misconduct is very bad behaviour, such as
stealing money from the employer.
A fixed-term contract ends

The employee stops working for the employer or leaves his or herjob because his or her contract was
for a specific period of time, which has ended. For example, 1 agree to work in an office for six months.
My contract is a fixed-term contract for six months. At the end of the six-month period 1 stop working
for that employer.
126
=
Exercise 1 .1
Cboose a word from the prcvious pago to comp/ete these seritences about resigna tion. o
'1
=o-
a To rïieans to tell your employer that you intend to stop workirig for him or her o
b The correct way to resign is usually to give your employer a Ietter of
c When an employee resigns he or she must usually work a period of

several weeks.
d In the UK the informal way to say resigning' is to say in your notice.
Exercise 2
Choose a word from the provious pago to complete these sentences about retirement.
a To from work means to stop working with the intention that you will not
work again.
b Some people choose to take early and stop working at the age of 45 or 50
years old, for example.
c When a person retires they usually live on the money from a
d A private pension is a way of saving extra money for old age in case the money
from the government is not enough,
Exercise 3
Choose a word from the previous page to complete these sentences about redundancy.
a When an employee is made it is usually because the employer no longer needs

so many workers.
b is a great problem in western Europe and the USA at the moment. This is
because many goods and services are cheaper to produce in other countries.
c The final sum of money that an employer pays to an employee can be a very largo amount. This is
called a final redundancy and sometimes depends on the number of years that
the ernployee worked for the employer.
d When John lost his job at the car factory he was offered a course in computer
skills to help him find a new job.
Exercise 4
Cíoose a word from the previous page to complete ttese sontences about dismissal.
a The printing company Jason hecause he did some printing for his friend and he
did not ask his friend to pay for it.
b 1 dismissed an employee for gross last year because she telephoned me to say
that she was ill but really she was on holiday in Spain.
c My employer did not follow the correct when he dismissed me. My lawyer says
that 1 can make a claim against my employer because he breached employment law.
d The informal word for dismissed in the USA is fired' and in the UK it is
c;lu, L:r F-nIish 127

=o
-o
== Exercise 5
o Choose a word trom the previous page to comp/ete these sentences about the end of a fixed-term contract.
= a 1 am the company at the end of the month because my contract ends on 31 July.
b My contract with the airline is for a term of 12 months so 1 leave next ApriL
c We cannot employ you atter March. Your contract is for a specific of time and it
ends on 31 March.
d Your contract will be for a fixed, 12- term.
Exercise 6
a Susan resigned - herjob Iast week.
b 1 wrote a letter resignation and gave it to my employer yesterday.
c How much money will you have to live when you retire?
d 1 was fired because 1 was always Iate work.
e Resigning from work is sometimes known informally as 'handing your notice'.
f Two employees were guilty gross misconduct and they were sacked immediately.
g My contract of employment is a term of 18 months.
h Last week 1 informed my employer that 1 intend to stop working for her
30 September.
1 Your employer will pay you a redundancy payment £10000.
j The amount of money you receive as a redundancy payment depends the

number of years you worked for your employer before you were made redundant.
ACTING FOR AN EMPLOYEE

Exercise 1
Emma Lucas is an employment Iawyer in Chatsworth. Read what she says about representing employees
in employment cases. The most important words are in the key vocabulary be/ow. On the next page you
will see some questions and answers. Match each question with the correct answer.
Key vocabulary
grievance consult discrimination bullying
procedure tribunal disability unfair dismissal
constructive grounds harassment appraisal
dismissal
When 1 represent an employee it is usually do not do this. Employees often come to me

because he or she has a grievance against an because the employer has not followed the
employer. A grievance is a complaint. The law correct procedure for dealing wíth a grievance.
says that employers must listen to grievances and When an employee leaves a job because the
help the employee. Unfortunately some employers employer does not listen to a grievance, the Iavs
128 ,Iis1
says that it is not fair. Sometimes employees person feel uncomfortable or distressed.
consult me because although the employer Sometimes it is the employer who harasses the
followed the correct grievance procedure, the employee. Sometimes it is other employees who •'I
employee feels they were not treated in a fair way do it. In this case the employer has a duty to
lhe employee has the right to make a claim stop the harassment. If the employer does not
o
against the employer in a special employment stop the harassment and the employee leaves
court called a tribunal. Most towns and cities in work, it is constructive dismissal. lhe
the UK have a Tribunal Office where an employee employee can make a claim against the
can file a clairn. When an employee makes a employer if this happens. Harassment is
claim to a tribunal he or she must state the sometimes called bullying in the workplace. In
grounds for the claim. Here are some of the Europe the word mobbing is sometimes used.
reasons that employees give to a tribunal: This word is not used in the UK.
Discrimination. lo discriminate against Unfair dismissal. If an employer unfairly

someone at work means to act towards that dismisses an employee, it means that the
person in a different, more negative way from employer fired the employee without a good
other employees. Employees often claim that reason. Most employers do what is called an
they had a bad experience at work because of appraisal of an employee's performance every
their age, their sex, the colour of their skin, their year. An appraisal is an evaluation or a
nationality, or because they have some physical judgement of how the employee is doing. If an
or mental disability. employee gets two or three bad appraisals the
employer might not want to continue employing
Harassment. To harass someone means to act
that person. lhe problem is, employees often
towards someone in a way that makes that
think their appraisal was unfair.'
What is a grievance? (1) What does harassment mean? (5)
What is a procedure? (2) What is constructive dismissal? (6)
What is an employment tribunal? (3) What is unfair dismissal? (7)
What does discrimination mean? (4) What is an appraisal? (8)
a It is a special court. It hears ernployment cases. It is less formal than a normal court but it has its
OWO rules, which people must obey.
b It is when an employee leaves a job because he or she is very unhappy and the employer is doing
nothing to help the situation.
c It means treating someone in a different way at work. It may be because that person is a woman or
has a disability, for example.
d It is the accepted, correct way of doing something.
e It is a type of assessment of someones performance, especially at work.
f It is when an employer fires an employee, and the employee thinks that there was not a good
reason for it.
g It means hehaving in a way that makes someone feel very unhappy or uncomfortable.
h It is a complaint.
Glooji LGI Engsi 129

Exercise 2
Complete these senterices with a word or phrase from the key vocabulary in Exercise 1
a 1 am sure my employer treats me badly because 1 am a foreigner. My lawyer says that 1 can sue my
employer on the grounds of
b 1 was the only woman in my office. The men working there made jokes about me ali of the time and
said that myjob was only to make coffee for them. 1 stopped working there because it was horrtble and
my employer didn't help me. The grounds for my claim were dismissal.
c 1 have made a claim against my employer. The case will be heard next month by an employment
d 1 had an from my employer last week. It was very good. My employer said that 1
am a good employee and 1 work well with others.
e 1 am making a claim for dismissal. My employer sacked me Iast month and the
only reason was that my employer's daughter wanted to have myjob.
ACTING FOR AN EMPLOYER

Exercise 1
The employment lawyer, Emma Lucas, is going to talk about actirig for an employer. Before you read what
Emma says, complete the defir,itions of the words below by matching the first haif of each sentence with
the correct ending.
(.k) Non-contentious work is... . - .a meeting where a group of people Iearn and taik
about a new subject. (1)
a Legislation is... .work that does nol involvo any kind of dispute or
a rgument between pooplo.
b Regulations are... . . ali of the laws passed by a government or an

organisation such as the European Union. (2)
. . . a statement that someone has done something

c A seminar is ...
wrong. However, it is not proven. (3)
.. .to keep part of someone's salary as a punishment

d A duty of care is ...
because that person did something wrong. (4)
.an organisation of workers who unite for better

e Contentious work is...
pay and working conditions. (5)
.rules that a person or a country must obey. (6)

f An aliegation is...
.work that a iawyer does that invoives a dispute or
an argument between people. (7)
g To dock pay means...
• . .a duty to take care and not to harm anyone by
your actions. (8)
h To be fired on-the-spot means...
• . .that ao emp!oyee s d:smissed i mmed:ately and
without any warning. The more formal way of saying
j A trade union s... fired on-the-spot is to say that the employer
dismissed the empioyee summarily'. (9)
j A strike is... .. a situation where a group of employees stop

working for a period of time because of a
disagreement with an employer. (10)
130 GIcikI 1 npJisb

=
Exercise 2
f/ere /s wfiat Emma Lucas says about actirig for ao emp/oyer. Choosc a word or phrase frooi the box be(ow o
=
to completo tbe text.
o
=
docked legislation on-the-spot seminars contentious
aliegations regulations strike duty of care trade union
Acting for ao employer is very different from acung for au employee. Often my job is doing non-contenhous
work. Non-contentious means that the employer is not involved in a dispute with anyone. It means doing
work such as drafting contracts of employment or giving ernployers some advice about the latest
(a) . There are many (b) - that employers need to know about. A lot of
these come from the European Union. It is very important that employcrs corïiply with employment law.
This means that employcrs must follow employment law. To inform ernployers about new legislation my Iaw
firms holds (c) . These are meetings where groups of employers receive information from
our law firm about how new laws will affect them. lhe employers can ask os questions if they are not sure
about anything. A lot of new regulations are about health and safety issues. For example, an employer has
a (d) to employees and to any people who visit the employer's premises. In this
situation, the duty of care is a duty to make sure that no employee or visitor is harmed. This includes
things like making sure that employees have the proper trainingto dotheirjob correctly and saÍely. It also
includes making sure that machinery or office equipment is safe.
Sometimes 1 have to do (e) work, lhis is because an employee makes a claim against
my client, the employer. Some employees make very serious (f) and it is myjob to
defend my client at an employment tribunal. Sometimes the employee's claim is valid and the employer
must pay compensation. Last month 1 advised an employer who () an employees pay
as a punishment because the employee was always late for work. This means that the employer kept part
of the employee's pay. 1 explained to the ernployer that he is not allowed to do this. A tribunal would
support the employee in this situation. Another employer fired an employee (h) for heing
late. This means he dismissed the employee immediately and without warning. Again. 1 explained that this
is not legal. In that case, the employees (i) became involved. lhis is an organisation of
people who work in the sarne job or profession who help each other when a member has a problem like
this, Au employer has to he careful because when a trade union is involved it could Iead to a
(j) . This is a situation where a group of employees stop working because one of them
or a group of them have a grievance against the employer.
131
o AN EMPLOYMENT CASE
Eercise 1
Julie Murphy is an empioyee. She is making a claim against her employer at an employment tribunal.
Read the information in the box and answer the questions that foiiow using a fui! sentence.
=
My name is Julie Murphy. Today 1 am at an employment tribunal. 1 am the claimant. 1 am making a

claim against my former employer. 1 must use the word former' because he is no longer my employer.
My former employer has an estate agency in the town of Chatsworth. An estate agent seus houses. His
narne is Keith Penhaligon. 1 worked for Mr Penhaligon as a receptionist in his office for four years. My
job was to welcome people who carne into the office and give them inforrnation about property that
was for saie. 1 liked myjob. 1 was a good employee. 1 was never late for work. 1 had a good reiationship
with my coileagues. During the four years that 1 worked there 1 only had two days absence.
Six rnonths ago Mr Penhaligon said that he needed an assistant manager, He advertised the vacant
position in the local newspaper. The advertisernent said that candidates for the job should be young
and ambitious and with previous experience of working for an estate agent'. 1 arn 27 years old, very
arnbitious and 1 have experience. 1 applied for the job. 15 other people also applied for the job. Mr
Penhaligon refused to interview me for the job. He explained that it was a waste of his time to
discuss my C.V. and talk about the job. He told me this was because 1 got married a year ago. He
said that he was afraid 1 wouid have a baby very soon and would need iots of time away from work.
He said he would prefer to employ an older woman or a man. 1 stopped working for Mr Penhauigon
irnmediately. 1 am very angry. 1 am making a claim on the grounds of discrimination.'
a What type of business does Julie Murphy's former employer have?
Answer:
b What was Julie Murphy's job?
Answer:
c Did Julie Murphy have a good relationship with the other people in her office?
Answer:
d How many days did Julie Murphy have away from work?
Answer:
e Where did Mr Penhaligon advertise the job of assistant manager?
Answer:
f What was the total number of candidates for the job of assistant manager?
Answer:
g What did Mr Penhaligon refuse to do?
Answer:
h Who would Mr Penhahgon prefer to employ as assistant manager?
Ar swer:
i How does Julie Murphy feei about Mr Penhaligons decision?
Answer:
j What are the grounds for Julie Murphy's claim?
Answer:
132
LINIT 4A VOCABLJLARY CHECK
These are the important words you have o

=
Unit 413.
absence misconduct
absent non-competition
applicant non-contentious
apply notice period
appraisal
on-the-spot
bullying
pan-time
candidate
pay
cashier payroll
c lause
pension
closing date
procedure
confidentiali provide that
constructive d ismissal provision
contentious
redundancy
covering letter
redu ndant
c.v.
regulations
d isability remuneration
disciplinary resign
discriminate resignation
discrimination
retire
dismiss
retirement
dismissal
sacked
dismissed
sala ry
dock
secretary
e mployee seminar
employer
sick pay
estate agent
staif
fired strike
fixed-term contract
team
former
temporary
fuli-time
term
grievance termination
gross misconduct track record
harass trade union
harassment tribunal
interview unfair dismissal
job titie vacant position
made redundant wages
manager well-motivated
maternity leave wide range
E' 133
ENercise 1
Look at the sentences below. Each seotencc contains a mistake. The mistake is either ao iocorrect word
or a word that should not be there. Put a circle around the word. Do not circie more than one word for
each sentence. There is ao example at the beginning (*).
Example
k) The tclephone cornpany employs thousands
1 Your skUls are the things that you can do good.
2 Your employer did not make the correct procedure when he dismissed vou.
3 Coutd you please confirm me that you agree to pay my client for his work?
4 Marco explained me at our meeting that his cornpany dismissed him because he is a foreigner.
5 1 would like to discuss about my salary for next year.
Exercise 2
Read the text below. There are ter? words missing from the text. lo the spaces below, write the missiog
words. The first letter of each word has beco provided for you. There is ao cxample at the beginniog (*).
DISMISSING AN EMPLOYEE FOR GROSS MISCONDUCT

Gross misconduct is (*) that is completely unacceptable. When an employee is gulity of gross
misconduct the law does not expect an employer to tolerate it. The employer can usually dismiss the
employee without giving him or her any warning. A lawyer would describe this as dismissing the employee
without (1)
When an employee is dismissed 00 the (2) of gross misconduct he or she might file a (3)
against the employer in a special court called an employment tribunal. The tribunal will take several
(4) _ into account when deciding if the employer acted fairly. One of the most important things that
an employer must do is make sure that the correct disciplinary (5) is followed. Even in cases of
very serious misconduct thc employer should:
lnform the employee in (6) what the problem is, as well as speaking to him or her about it. This
normally takes the form of a letter.
Allow the employee a face-to-face meetiog to discuss the misconduct. The employer must telI the
employee that he or she is entitled to a have a (7) union representative or some other witness
present at that meeting.
Allow the employee to (8) _______ against the decision if he or she is disrnissed.
Employers must follow these rules. It is very dangerous to dismiss an employee on-the-(9) This
means asking the employee to leave immediately without having a proper investigation. If an employer does
this, then the employee will almost certainly (10) for damages and he or she is very likely to win.
() behaviour
(1) n (6) w
(2) g (7) t
(3) e (8) a
(4) f (9) s
(5) p (10) s
134
n
Exercise 3
F?eaU tbe text bolow. It is frorn a coreract. Some of the words lo the text are underlined. The meaoings of
these words appear lo the l/st be/ow, but they are not in the sarne order. Match the underlined words in
the text with the correct rneanings by wríting the Ietters (A, B, C. etc) in the Iist below. There is ao exam pie
at the beginning (*).
FROM AN EMPLOYMENT CONTRACT
2. The (AA) ]rrn of this Agreement shall commence on 1 December 20XX and shall continue until
30 November 20XX unless terminated by either (A) party in accordance with the (B) terms of
this Agreement.
3. The Employer agrees that (C) remuneration shall be paid into the Employee's bank account on
the 25th day of each calendar month.
4. The Employee shall (D) be entitled to normal remuneration during sickness (E) absence for a
maximum of six weeks in any period of 12 months.
5. The Employee shall be entitled to (F) contribute to the Employers (G) pension scheme.
6. The Employer may (H) terminate this Agreement without notice if the Employee shall at any time:
• Be guilty of gross (1) misconduct.
• (J) Disclose confidential information which has detrimentally affected the interests of
the Employer.
(*) AA the duration of the contract, the period of time for which the contract is valid
bad or unacceptable behaviour
teli, reveal
end
the duties and conditions contained in a contract
to have the right to something
a person or company who signs a contract
a penod of time a person is away from the place they are expected to be
money that a person receives after he or she stops working
to give because you choose to give and not hecause you must
payment
C;It]I LeOji [ 135

Im
A
THE LANGUAGE OF EMPLOYMENT LAW =
FINDING A JOB
Exercise 1
On the rext page you can see some advertisements from the jobs section of a newspaper. In the box
bclow are some words that are Lised in the advertisements. Match the words in the box with lhe meanings
provided be/ow.
remuneration recruitment absence temporary

training grievance track record legislation
a lhe coliectivo narne given to aH 01 lhe laws that

have been passed by Parliament and which are
enforced by the courts. lhe word is
b Something that an employee complains about

to their employer. lhe word is
c Non-attendance at work. The word is
d Payment. lhe word is
e The process of learning the skills needed to do

a particular job. The word is
f lhe opposite 01 permanent. For a limited period

of time only. The word is
g A persons past behaviour and attendance that

show how well he or she has dono their job. The word is
h lhe process of finding employees to work for a

particular organisation or company. lhe word is
Exercíse 2
Find a word in the advertisements on the next page that matches the following meanirigs.
a lo produce or create something
lhe word is - (from the Chatsworth and Gatford Bank advertisement)
b A group 01 things that are different but are of lhe sarne general type.
lhe word is --- (from the Chatsworth United Football CIub advertisement)
c A person who has formally asked lo have a particular job.
lhe word is (from the David Ross & Co advertisement)
d Sornething that is absolutely necossary.
The word is (from the Homefast UK Esta te Agency advertisement)
1 egI EngIIs 137

'If you want to join
= a winning team
come and taik to us.'
THE CH.vIswoRI'El \N1) G.vlFoIu) B.\NN
Branch Manager
Coinpetitii'e sa/an + be,wflts
1)o ou liae a proen track record lo
financia! saies? Cari '.oii inoti ate a tCtlfl
lo maximise the Cúlil niercia! potential ot oor
brandi? \oii could hae found tire career
\'OU are looking for.
Tire Chatsworth and Gatford Rank is iookint for a

branch manager for its (atford branch. If oo
ha e excelieni managemeni skills and are
confident of Nour ahilitv to geilcratc rle\v hiisiires
opportunities WC want to hear from vou,
lo fl 0(1 more and app lv. e mai 1 voi ir ( : . v.
011 t
A1i,Makepeace( cagb.co . 11k

or cail 0771 6S2 9090.
(cIosinç' (Iate 31 ia,ch)
CHATSWORTH UNITED
FOOTBALL CLUB
Require a personal assistant to join us requ ires au
within the catering department. You will be
responsible to the department manager for
Assistam Valuer
a wide range of duties including A NFW POSITION FOR A
(X)NFIDEN'1' ANI)
• recruitment and selection of new kitchen
WE11-'1O'iIVATF[) PLRSON.
and dining room employees
This is a saies role focusing upon advising
• performance and absence management
clients who are thinking of selling their
of empioyees
borne. Good knowledge of the propert'y
• disciplinary and grievance procedures
sel/ing process is needed, ideally from
You should be abie to demonstrate an previous experience of estate agency or
up-to-date knowiedge of ali of the above property-related employment. However.
and be familiar with current employment training can be provided to the right person
legislation. if they have no previous experience.
Should you wish to be considered for this Fuil drivind liceu cc esseri tial.
position p!ease send a C.V. and your
current remuneration to
Pamela Howard, Chatsworth United
Football Club, OId Highgate,
Chatsworth, CH1 2SG.
Closing date: 1 April.
138
=
Exercise 3
Read the advertisernents and decide if the following staternents are true or falso. =
a A legal receptionist is required at David Ross & Co because the True False
receptionist they have at the moment is going to have a baby.
b A person needs previous experience of working as an estate agent to be True False

considered for the job at Homefast UK Estate Agency.
c The job at the Chatsworth and Gatford Bank offers other advantages, True False
(maybe things like a company caí or medical insurance), as well
as a good salary.
d 1 can apply for the job at Chatsworth United Football Club until the True False
end oí April.
e The job at David Ross & Co is usually done by one employee from Monday True False
to Wednesday and by a different employee from Thursday to Friday.
Exercise 4
Look at the advertisements agairi. Complete the foliowing sentences with the correct preposition.
a 1 heard _ Stephen Brown yesterday. He sent me a postcard. He is working in Sydney for a year.
b You can contact me Chatsworth 577 9940.
c Do you have up-to-date knowledge disciplinary and grievance procedures?
d Do you have any experience of dealing with people the telephone?
e My contract of employment says that 1 have to deal with any task relevant to myjob required.
Coilocation bank
te have previous experience to generate new business to forward a C.V. to

someone
to apply for a job to join a department
Preposition bank
is
to have a track record in a particular area to be familiar with something
She has a strong track record in Are you familiar with recent empioyment
financial saIes.' legislation?'
to be confident of/in something to have experience of a particular job

'1 am confident of my ability to '1 have five years' experience of working as
increase saies.' a receptionist.'
te work within/in a department of an to focus on/upon something.

organ isation In this com pany we have a strong focus
'A new assistant manager is needed within upon client satisfaction.
the accounts department.'
© Giobai Legai Enflhish 139

WORKING IN EMPLOYMENT LAW
Exercise 1
Paul Hollingsworth is a partuer in the /aw firrn Freeman Srnith. He works in the ernployment departrnerlt.
=
Today Paul Hollingsworth is speaking to a group of trainee lawyers and giving thern his opinion about
working as a so/icitor in employment law. Fui the gaps in the text with a word from the box below.
employers confidential representation data

judgments complying statutory safety
tribunal governed legislation paternity
It is extremely difficuit to describe a typical case in () frorn the European

employment law because there is a lot of variety. Court of Justice
For example, the nature of the work means that
you have to deal with contentious work, such as l have been with this firm for 12 years and in that
acting for a client at an employment time 1 have dealt with ali aspects of employment
(a) , and non-contentious law. These include:
work, such as drafting a contract of employment. l
drafting contracts of employment
decided to specialise in employment iaw because
the work is varied and interesting. advising empioyers on (h) -
with new Acts of Parliament
Cases are usually of a very sensitive nature and are
health and (i) - at work
therefore highly (b)
issues
sometimes requiring very careful handling. 1 act for
both employers and employees, although to be advising on alI aspects of discrimination at work
honest, it is usually an employer who is more likely advising on family-reiated issues such as
to be able to afford legal (c) maternity and (j) rights
However, it is an area of law, perhaps second only
advising on pension rights
to family law, where a client's emotions are
involved. To work in employment law you need to (k) protection
be able to cope with that, and to understand that acting on behalf of clients at empioyment
clients feel very strongly about the issues tribuna Is.
concerned.
It is fair to say that employment law has required an
Employment law covers the rights of workers and
increasing number of lawyers over the last few years,
the obligations of (d)
largeiy because employees are a lot more aware of
In the UK these rights and obligations come from
their rights than they used to be. Also, there has
the following main sources:
heen a lot of new (1) some
Acts oÍ Parliament, which give rise to of it from the European Union, so we have to keep
(e) rights and employers completely up-to-date with the law. 1 think
obl igations it's true to say that employers feel slightly under fire
at the moment. By that 1 mean that employers feel
Employment contracts, which give rise to
they are being attacked by the law, while employees
contractual rights and obligations. This area is
are protected by it. Employing people is a tricky
iargely (f) by the
business these days and employers must get good
common law and there is a large body of law
advice every step of the way.'
created by earlier decisions
European Unon !egislation and
140
=
Exercise 2
lo Exercise 1, Paul Ho/Iíngsworth gave a /ist of different aspects of employrnent law that he has dea/t with
during his 12 years at his law firm. Match the statements be/ow wíth the correct aspect of ernployrnent Iaw
mentioned by Paul
Example statement: A new statute wH come loto torce next yeur concerning smokn w Um workplucu.
The purpose of this serninar is to make employers here in Chatsworth aware of their duties in this area.
Aspect ol Iaw: advising ernployers on complving with nevv Acts nt Parliament
a As an ernployee you are entitled to 52 weeks' leave after the birth of your child regardless of the
number of hours you work or the Iength of your service with your current employer. However, you must
give the correct period of notice.'
b Your claim for unfair dismissal has been filed and your ernployer now has 28 days in which to respond
to your allegations.
c The information that your company holds on its computers is an asset of the business. We can advise
you on how to safeguard it; something that rnost companies are doing these days.'
d Your ernployees will receive rnoney from the governrnent when they retire because they paid National
Insurance contributions while they were working. However, as an ernployer you can help your
employees by contributing to a private retirement fund for each of thern.'
e In clause 10, which deals with termination, 1 have stated the minimum notice period that your
employees must give you if they wish to end their employment with you.'
f It is important as ernployers to bear in mmd that you have a duty of care to visitors to your premises as
well as to your employees.'
g Under current legislation, a woman has the right to equal pay if she does the sarne job as a rnan.
Exercíse 3
Read Paul Hollingsworth's view of working as ao emp/oyment lawyer in Exercise 1 again and ariswer the
foliowing questions using a fuil sentence.
a Why does Paul say that it is so difficult to describe a typical ernployment case?
b Why did Paul choose to practise in the arca of ernployment law?
141
=
o c Why does Paul say that an employer is more likely to use his services than an employee?
=
= d Paul says that an ernployrnent layer needs some of the sarne skills as a family lawyer. Why is that?
e How does Paul describe the rights of workers and obligations of employers that arise from Acts of
Parliament?
f How long has Paul been working .or Freeman Smith?
g Paul says that more employment Iawyers have been needed in recent years, partly because of more
legislation from Europe. What other reason does he give for the increase in the number of
employment Iawyers?
h Who does Paul say feels unhappy about current employment law - employees or ernployers?
Coliocation bank
highly confidental to keep up-to-date with to be entitled to

the law leave/holiday
to comply with a
statute or the law
Preposition bank
to work in employment taw to hold information on a computer

Jane has worked in employrnent law for Ali of our clients contact details are held
five years.' on our computer.'
to cope with a problem to contribute to something

Solicitors in this area of law have to cope My employer contributes every rnonth to
with some very emotional clients.' my private pension plan.'
to advise someone on a particular issue to end your employment with a company

This morning 1 advised members of the 1 give notice that 1 will end my ernployment
local Chamber of Commerce on employers with the Royal Chatsworth Bank on 30 April.'
duties regard ing maternity leave.'
under egisation
to increase in number over a fev years •Under current legislation, employers are
Employment lawyers have greatly increased not allowed to discriminate on the grou nds
in number over the last few years.' of an employee's age.'
142 O
I LISTENING
Exercise 1
This morning Paul Hollirigsworth of the Iaw firm Erceman Smith, is giving a taik to a group of c/ients. The
clients are ali em p/oyers in the town of Chatsworth. Paul is going to talk about a new Act of Pari/ament that
will affect the way in which employers advertiscjob vacancies. Listen carefully and write the missing words
in the box on the next page.
Good morning, ladies and gentieman. First of ali, thank you very much for coming along to this
breakfast seminar at Freeman Smith this morning. You are ali very welcome. My name is Paul
Hoihngsworth and as most of you know, im a partner in the empioyment law department here at
Freeman Smith.
The subject of this morning's taik is the Age Discrimination Act, a new Act of Parliament that carne
into (a) a few days ago on 1 October. This new legisiation wifl affect ali of you
as employers and one of the key messages that 1 have for you today is the importance of compiying
with it in order to avoid being taken to ernpioyment tribunais by unhappy empioyees. From now on
you shouid be very aware of how you treat employees with regard to their age. The new regulations
wili have an impact on every aspect of a company's empioyrnent policies inciuding pay and benefits,
(b) , disrnissal, redundancy and retirement and even training opportunities.
it might surprise you to learn that one of the most important areas for you to consider as empioyers
is the language that you use in advertisingjob vacancies. When you are looking for new
(c) you have to be very aware of the words you use in any newspaper or
Internet advertisement as wefl as in any internal memo you might write advertising a new or vacant
position within the company.
To use another country's experiences as a guide for us here in the UK, our neighbours in the
Republic of ireland introduced legislation six years ago to prevent employers discriminating against
employees on the grounds of age. Our research on how things have worked out in ireland is
interesting. it teus us that most claims in tribunais have been based on discriminatory advertising
rather than discrimination in the workpiace. in other words, too many employers are using
discriminatory language in the (d) process. So what do you need to be aware
of when you advertise a job?
WeM, first you should remember not to use certain words in your advert that suggest you only want
peopie of a certain age. You might for exampie, face legal action from older people if you advertise for
a young, dynamic (e) 'to fui a position in your company. These words young'
and dynamic' have been interpreted as automaticaily excluding older people. On the other hand, be
careful of words such as senior', mature' or well-experienced' as they couid be seen as exciuding
younger people from applying.
As weli as being careful about the words that you use, you also need to be carefui about making
general statements in job adverts. For example, requiring that ali (f) for a
particular job have a degree if it is not reauiy necessary to do so might be seen as discriminating
against older people. This is because younger peopie are more likely to have had the benefit of a
university education.
Just to make local employers here un Chatsworth fuily aware of the situation, 1 have with me a copy of
Thursdays edition of our local newspaper, the Chatsworth Herald. As you ali know, the Herald carnes
a jobs vacant section every Thursday. It might come as a shock to you to discover that approxumately
25% of ali of the adverts in the newspaper this week breach the new legisiation. That means that ali
of these advertisers are open to claims from potential empioyees who might feel that they have been
discriminated against on the grounds of age.
continued
1 E' 143
Now let's move on to empioyees who are () working for you. A case was
brought against an employer in Ireland last year by a female employee aged 61. Her name is Brenda
Flanagan. Brenda worked in the accounts department of a large chemicai company and there is a
= normal retirement age of 65 for people in her position. This parncular lady did not wish to retire at 65
and intended to make a request to continue working when she received notice of her retirement. The
employer arranged a (h) training course for everyone in Brenda's department
on a new software package that they are going to use. The employer told Brenda that she would not
be trained because she was retiring soon and it wasn't worth spending the money on training her.
Brenda took legal action against her employer immediately.
Another age-(i) ________________ case was brought on quite different grounds. Michael, aged 55,
worked in an office where most of the rest of the staif are aged 25 to 40. Everyone in the office,
including the manager, often met for drinks on Friday evenings but they didn't ask Michael to iam
them. Michael discovered that they discussed work issues on those nights out and he felt
undervalued and excluded.
In both cases above, Brenda and Michael were successful at tribunais. Both successfully argued that
they had suffered from age discrimination at work. 1 cannot stress to you strongly enough how
important it is to be aware of the new regulations and not to suifer (j) because
of compensation payments to employees.
1 have prepared a fact sheet for you to collect at the end of the seminar but we will now have a
question and answer session based on the new legislation.
Thank you'.
a f
b g
c h
SOME CLAUSES FROM AN EMPLOYMENT CONTRACT

A typical employment contract will contain clauses dealing with:
the term of the contract and the starting date non-competition

the job titie and job description confidentiality and data protection
hours of employment oension arrangements
salary and expenses coliective agreementWagreements with trade unons
holiday entitiement termination
sick pay entitlement address for notices to be served
discipline and grievance procedures governing law/jurisdiction
144
Here are three clauses from a contract ot employment. Ihey deal with salary, expenses and termination of =
the contract. Look at the contract and complete the exercises that follow.
5. PAYMENT
The Company agrees that ali remuneration payablc (a) this contract
(b) employrnent shall be paid (c) the Ernployee's bank
account (d) the last Friday of each month. (e) the event of
a public holiday falling on a Friday the payment will be made on the following Monday.
6. EXPENSES
In addition to the (a) specified above in clause 5 the Employee is entitled to
be (b) hy the Employer for ali costs (c) in the performance of
his/her duties in (d) with the terms of this agreement and with the rules and
practices of the Employcr's business which are at the time in (e)
7. TERMINATION
The Employer may terminate this agreernent without any period of notice or payment if the
Employee at any time:
7.1 is guilty of serious misconduct or neglect or any other conduct in respect of the
Employee's employment or personal life which may seriously adversely affect tlic
interests of the Employer
7,2 is convicted of a criminal offence other than an offence under road traffic
legislation in the UK or abroad for which a penalty other than a term of imprisonment
is imposed
7.3 becomes the subject of a bankruptcy order
7.4 is diagnosed as mentally ilI or becomes a patient for the purposes of the Mental
Health Act 1983
7.5 is guilty of any material breach of the provisions of this agreement or any neglect in
carrying out his or her duties under the terms of this agreement.
Such termination will be without prejudice to any other rights of the Employer against
the Empioyee.
Exercise 1
Look at claLise 5 of the employment coo tract above. It deals witb payment of the em ployee. Complete the
cia use by using one of the prcpositions in the box below.
into of under In on
Exercise 2
Look at c/ause 6 of the ernployment contract above. It dea/s with expenses that the emp/oyer must pay
back to the ernp!oyee. Complete the clause by using one of the words in the box beiow.
reimbursed accordance remuneration incurred force
145
= Exercise 3
Look at clause 7 of the employment contract. It deals with the circurnstances lo which the emp/oyer can
termioate the contract without giving any warning to the employee. Match the words that are high/ighted in
the clause with the meanings below.
a The terms and conditions contained in a contract. Answer:
b A failure to do something when it is your duty

to do it. Answer:
c Except, with the exception of. Answer:
d Negatively, badiy. Answer:
e Bad or dishonest behaviour. Answer:
f Forced upon you. You have no choice about it. Answer:
g Having no eftect on something. Answer:
h Regarding or concerning. Answer:
i To be found guilty of a criminal act. Answer:
j In this context, it means the person that

something happens to. Answer:
Exercise 4
Read the three clauses agair and decide if the following statements are true or false.
a The employee must collect his or her pay from the company office on the True False
last Friday of each month.
b If New Year's Day is on a Friday the employee will be paid on the True False
following Monday.
c If the employee makes a negative statement about the company's True False
products when he is at a party with his friends he could possibly
be dismissed.
d If the employee is stopped by the police for driving too fast and she True False
receives a fine of £200 she could possibly be dismissed.
e If the employee cannot pay his debts and a court has issued an order True False
to say that he is insolvent he can be dismissed immediately.
CoHocation bank
to incur a cost or an expense to be convicted of a crime a material hreach
to adversely affect to impose a penalty on

something someone
146
Preposition bank
=
tu be reimburscd by someone to be in force
1 was reimbursed by my employer for my There are rales in force as to where
train fare to London.' employees are allowed to srnoke cigarettes
at work.
in respect of something
My employer wrote to me last week in to be the subject of sornething
respect of my redundancy payment.' 1 was the subject of an investigation into a
breach of confidentiality when 1 worked for
under the terms of an agreement the government.
Under lhe terms of your contract you are
entitled to five weeks' holiday.'
AN EMPLOYMENT TRIBUNAL
Employment cases in the UK are heard in Employment Tribunal Offices. An employment tribunal is not as
formal as a court but it must follow the correct rules of procedure in the sarne way as a normal court.
Employment tribunaIs have the power lo make decisions but there is a period where the parties are
encouraged to reach an agreernent before a case is heard. On the next page you can see a diagram
sumrnarising the process of making a claim at an employment tribunal.
Exercise 1
The dia gram on the next page uses some important co/loca tions to descr/be the process of making a claim
at ao emp/oymeot tribunal. Using the dia gram to help you, complete the sentences below using a verb or a
phrasal verb.
a First of ali a dispute
b The parties should then try to the dispute.
c If the parties cannot agree then the claimant should advice from a professional.
d The tribunal will the claim if it is presented on the correct form.
e The tribunal will then a hearing to examine the facts of lhe case.
f The tribunal will finally a judgment.
Exercise 2
The diagrarn contains Some formal words and phrases. Fiod the words or phrases in the dia gram that
match the meanirigs provided be/ow.
a A process in which the two parties to a dispute are brought together in order to try to find a solution.
Mediation is an example of this.
b The formal answer to a clairn.
c An order issued by lhe court which says that the claimant has won the case hecause the respondent
failed lo file a response to the clairn.
d The process in which the parties to the dispute agree on the conduct of lhe case, for example agreeing
whether expert evidence is needed, what documents must be disclosed to each side and the time
allowed for this, etc.
egI f- flIft 147

Claim process summary
=
Dispute arises
Try to sort it out
Get advice F'
E
Claim not
Send claim to
O . . - accepted and
tribunal office
returned
(3
Claim accepted,
• sent to the respondent and
conciliation starts
Response
accepted receeronse
not accepted co
Default
judgment issued
A Case Management
Hearing held
26 'eek
Judgment issued
3O.ek
Employment Tribunais
Printed with permission of the Employnient Tribunal Office
Exercise 3
Look at the dia gram again and say whether the following statements are true or false.
a The first thing an employee who is in dispute with his or her employer True False
should do is file a claim with an employment tribunal.
b The defendant' is known as a 'respondent' in a case at True False

an employment tribunal.
c The respondent has just three days to respond to the claim. True False
d If the respondent does not respond to the claim then the tribunal can True False
rule in favour of the claimant without a hearing.
e The entire process takes about 30 weeks from start to finish. True False
148
=
Exercise 4
Maggie /Redman is ao employee of a busir?css /o Chatsworth. Shc is involvcd lo a serlous dispute with ler
em ployer. Maggie has some questions about employment tribunais. Complete her questions with a word
from the box below.
with How do When Can
a Mat exactly do employment tribunais ?
b Where can 1 get a fuli Hst of the categories of complaints that employment tribunais deal
c he staif at ao cmpioyment tribunal office give me legal advice?
d long does the tribunal office give my employer to respond to my initial letter of
complaint before 1 can bring a claim?
e 1 understand that 1 have three months in which to make a complaint about my employer.
does the three-month period begin?
Exercise 5
On the next page is a ieaflet that Maggie Redman has picked up from her local tribunal office in
Chatsworth. The information needed to answer Maggie 's questions from Exercise 4 is contained in the
leaf/et. Answer Maggie 's questions using a fui! sentence. Each sentence has been started for you.
a An employment tribunal
b You can get
c The staif at
d The tribunal office
e The three-month period
CiIoI Legdi Eiglish 149

•1• What does the Chatsworth form provided hy an empioyment tribunal
= office. You must teu us:
Employment Tribunal do?
your name and address
Employment tribunais hear cases and the name and address of the respondent
make decisions on matters connected with that you are making a claim against
empioyment. Empioyment matters inciude
cases in the areas of discrimination at the detaiis of your complaint.
work, unfair dismissai, breaches of heaith
Please note that before making a claim
and safety reguiations and a range of
you should write to the respondent and
ciaims deahng with payments reiating to
give details of your complaint. You
wages and redundancy.
should then allow the respondent 28 days
If you want a fuli Iist of the compiaints that to repiy before bringing your claim to a
empioyment tribunais deai with, you can tribunal office.
coUect a fufl jurisdiction iist from the
Chatsworth Tribunal Office or downioad the
hst from our wehsite. How much time do 1 have to
make a claim?
Further information In most cases you have three months to
make your ciaim. This time limit is very
The staff at this tribunal office can answer
strict and if you wait longer than three
general enquiries and give you information
months the tribunal may not be able to
about how the tribunal system works. They
deal with your claim. The three months
cannot give you legal advice or advise
begins with the date your employment
you as to whether your claim wifl be
ended or when the event that you are
successful. If you need heip with your ciaim
complaining about took place. ln exceptional
you can contact a sohcitor, or seek help
circumstances more time may be given. For
from your trade union if you are a member.
example, if you were in hospital at the time
that your ciaim should have been made.
Information needed
to make a claim Where to send your claim
Your claim must rneet certain conditions You can send your ciaim to the Chatsworth
before it can be accepted. It must be Tribunal Office or you can complete the
submitted to the tribunal on the correct anime version on our website.
Exercise 6
Look at the ieafiet again. In each of the exam pies beiow, tick the box which uses the correct collocation.
hsten to a case / hear a case
a empioyment matters empioyment affairs
b unjust dismissal untair dismissal
c seek heip search for heip
cl bring a claim do a claim
e draft a claim form complete a claim form
150
AN EMPLOYMENT CLAIM
Exercise 1
It you want to make a claim at an e; ploy; ;;t tribunal you ;nust check that the nature of your clatin /s
covered by the tribunais jurisdiction iist. On the next page you wi/i see ten types of ciaim that are covered by
the jurisdiction iist. Look at the empioyees cornplaints beiow. Match each employee with the correct type
of cornplaint.
Anna Kingston 1 am a machine operator in a factory in Chatsworth. 1 have worked here for two years.
have just discovered that a man who works here is paid £2 an hour more than 1 am for
doing exactiy the sarne job as me.
David Cainley 1 work in the office of a pubhshing company. 1 had to attend a disciplinary meeting Iast
month because 1 was accused of using the internet to 100k at footbaii wehsites during
paid working hours. 1 was dismissed at the end of that mecting. 1 was extremeiy angry
because my empioyer refused to ailow my trade union representative to attend the
disciphnary meeting with me.
Arthur Bentley 1 am 55 years oid. 1 work for a travei agency. Last month our manager resigned and thc
job of branch manager became available. Despite the fact that 1 have 20 years
experience of this type of work, a younger man in my office was promoted over me. The
area manager actually toid me afterwards that although they were impressed by me at
my interview they thought that i was too old to handie the new technoiogy that the
company were pianning to introduce over the next few years. 1 feel that this is extremely
a nfa ir.
Simon Cole 1 am 45 years old. 1 applied for a job working in a petrol station in Chatsworth. lhe job
advertisement said apphcants should be young and dynamic'. 1 was not selected for
nterview, despite lots of previous experience of doing similar jobs. 1 beheve the
employer only wanted people who were younger than me.
Brian Hedley l am 19 years old. 1 work for a sole trader who runs a gardening business. Last month 1
decided to take out a loan and the hank asked for my iast three months payshps. My
employer pays me in cash at the end of every day and refuses to give me payshps.
Without proofthat 1 earn money 1 cant get a loan.
Jack Walsh I am 23 years old. 1 do seasonal work for a local fruit grower near Chatsworth and 1 pick
fruit for eight hours every day. The law says that my employer must pay me at least
£535 an hour but my employer only pays £3 an hour.'
Deborah Clark 1 worked in the oftice at a local brewery. My employer needed to reduce the number of
administrative staif Iast month because there wasnt enough work for everyone. Two of
es in the office, my cofleague Jane and 1, have young children and we only work 20
hours a week in comparison to the other employees who work 37 hours a week. The
hoss made Jane and I redundant, although we had actually heen there longer than
some other employees.
Alex Harmon '1 am 41 years old and 1 have worked for ali of my working, life in a factory that produces
furniture. The factory is due to dose in two months and we will ali be made redundant.
It is really difficult to get a newjob at my age but to make matters worse my employer
refused to let me have a morning off to go for an interview.
Dan Beale 1 work for an advertising agency based here in Chatsworth. My employment contract
clearly states that I will be paid on 26th of each month hut my employer always pays
me later than that. 1 have had a few financial troubles as a result.
Maggie Redman 1 used to work as a manager of a restaurant business until l resigned Iast July. 1 didn't
want to resign but when my employers found out that l was expecting a baby they
treated me very badly and I didn't feel that l could stay.'
151
Jurisdiction Iist
a You have suffered a detriment or have been dismissed as a result of your employer's refusal to allow
you to he accompanied at a disciplinary/grievance hearing.
Employee name:
b You have a complaint based upon breach of contract.
Employee name:
c You have a complaint based upon a discriminatory advertisement.
Ernployee name:
d You have suíÍered discrimination in the workplace on the grounds of age.
Employee name:
e Your employer has failed to provide equal pay for equal work.
Employee name:
f Your employer has failed to allow time off to seek work during a redundancy situation.
Employee name:
g Your employer has failed to provide a written pay statement.
Employee name:
h You have suffered a detriment or have been dismissed on the grounds of pregnancy.
Employee name:
i You have suffered a detnment or have been dismissed as a result of your employer's failure to pay
the minimum wage.
Employee name:
j You have suffered less favourable treatment or have been dismissed as a result of being a part-time
employec rather than a fuil-time employee.
Employee name:
Coilocation bank
unfair dismissal to meet certain conditions to attend a meeting
to seek help a strict time limit to be made redundant
Preposition bank
to be promoted over someone in comparison to/with something/someone

Sandra has worked here for seven years
• 'We are paid well in this country in
now and three people have been promoted comparison to/with workers who make cars
over her.' in other countri es.
to have time off work to be paid in cash

'1 had a lot of time off work last year due to 'Many illegal workers are paid in cash'
family problems.'
152 E
Exercise 2
lRead the newspa por story ou the nex t pago. it is a stoty about a hoaring at au emplovment tribunal. E/li
3;
the gaps lo the tet with a word from the box be/ow.
suspended resigned dismissal hearing admitted

earnings awarded alleged manager distressed
Exercise 3
Read the newspaper stoy agaiti and answer the foliowing questions uSing a fui! sentence.
a What was Maggie Redmans job at Casa?
b What was Maggie Redmans yearly salary at Casa?
c Who were the owners of Casa?
d How long had Maggie Redman been working at Casa when she discovered she was going to have
a baby?
e Was Michael Roeder sympathetic towards Maggie Redman when she told him that she was pregnant?
f What reason did Maggie Redman give for being unable to work efficiently after her conversation with
Michael Roedor?
g When Maggie Redman returned to work, how did Mr and Mrs Roeder financially punish her for alleged
offences such as making late payments to suppliers?
h Was Maggie Redman fired from herjob at Casa?
i What were Maggie Redmans grounds for bringing a case against her employers?
What did the tribunal award to Maggie Redman when it upheld her complaints?
Gba Lu5I 153

lhe (]hatsuort/ llerald u'uu. chalsuorfh/)er(jld. co. foge 12
Tribunal rules in favour of manager suspended from top restaurant
Woman asked to choose between

her baby and her job wins £60,000
for constructive dismissal
A CIiatsworth oivan who vas asked Liv hcr of lhe dav. Michaels rcsponse lo mv distraught
empiovcrs lo choose hetwccn her tniborn bab coflditiuii v as lo suspend H1C 011 the spot. 1 had
and her job was (a) £00,000 no choice excepi lo go home. 1 lcft work that dav
in daniages at a tribunal toda. aI 11 ani,
Mlaggic Rediiian, agcd 29, originaliv froni Alilmougli Mr and \irs Rocdcr suspeiided Miss
Manchester. Liad worked as (b) Rednian froni her p051 that dav, she later
at the fashionahlc rcstaurant Casa' iii Beaumont returncd lo work. She eventuallv
Street, Chatsworth for just two months \Vhcfl she (í) ________________ iastjulv aftcr being given
infurnied her enipiovcrs, restauraril ovners what she termcd au inaccurate. negative w'oi'k
iichael and Sarah Rocdcr that she was going to appraisal thai portray cd me as a Ilai' and au
have a habv. Shc was initiailv (c) opportuiuist'. Duri ng lhe th rce-dav tribunal
from her £30,000-a-vear post. hut rcturned lo 11w (g _______________________ , Miss Rcdinaii told of heing
reslaurant to resutiic work iast ?lav, lhe tribunal verhahlv abused b lhe Roedcrs and of having her
as toid. Miss Redman clainied shc wis thcn saiar docked for (h) offences
forced oul bi a catnpaign of hiarassnicnt. that she had not cornmitted, such as faihing lo file
irnportant invuices and uiaking late pavrnents
\liss Rednaii told the tribunal that she had
lo supphers.
informed her empiover Sarali Roeder as soon as
she kncw that shie was expectiilg a hah. Miss After todav's judgrncnt. Miss Redmnan toid lhe
Rcdniaui described Mrs Rocdcr's response lo her Chatsworth Herald , 'The Roeders rnadc mv hfe a
news as 'brutal'. Sarah Roeder vesterdav niiserv when 1 workcd for them and for inanv
(d) to saving, lf vou keep tluis nionthsafter. 'I'hievsuggesled lo inc and lo other
babv. 1 (loul't think we can keep sou. We have put staff that 1 canie lo work aI Casa vith a deliberale
cvervthing wc havc juta this husiness and we have pian lo take a highly-paid post and theii liave a
to prioritise It above evcrvthing cisc'. According lo .
hahv inimediatelv lo take advantage of statulorv
Miss Redman, who is uuniarried. Michaci Roeder inalernitv rights. Nothing conid be fiirther froum
ap)roached lier later on thc sarne rnornirig and lhe truth.
asked her how strong her reiaiionship was with
AI thc tribuiiai Miss Rednian allcgc(l constructive
Gicnn 'lavior, lhe falher of her child. Miss
and unfair (i) as weli as sexual
Redman told lhe tribunal, Michacl vas furious
(liscrinlinalion. Her clainis vere uphckl. resulting
vhcn he heard iui news. 1 le askcd me (lcepl
iii damages of £60.000 for harassmneiit, sexual
persuuial questions abotit mv rclationship with
discriminalion and lost (j) . As a
mv partner and encouraged mc not to continue
resuht. lhe Roedcrs, vho have since sold Casa. 110W
with mv prcgnanc 1 s, as shockcd hevond hei icf
face financial rum. Thev vere not available foi'
hv bis attitu(lc and vas too (e)
comiunent after lhe tribunal lodav.
bv lhe conversation to work efficieiillv for lhe rest
154
USING YOUR KNOWLEDGE =
Coliocation review
Complete these sentences with a co//oca tion that you have seco.
a Please do not disclose this information to anyone, as it is confidential.
b Ifyou any expenses on your training course in London the company will reimburse
you upon your return.
c Do you have any experience of working in a bank? We are ideally looking for
someone who wont need very much training.
d 1 have for a job with a major law firm but i'm not sure that 1 will be seiected for
interview, as there is sure to be a lot of competition.
e it is vital to up-to-date with changes in employment Iaw because employers have to

comply with many duties and obligations.
f Employees have been affected hy the bad economic situation that we have at the
mornent and many people have lost theirjobs as a result.
g The erTiployee's dishonest behaviour amounted to a hreach of his employment

contract and he was dismissed immediately.
h Ifyou have been of a serious criminal offence in the past you are not eligible for a
job in the police force.
1 have t.o a pension fund for 30 years and 1 hope 1 will have enough in it to be able
to retire at the age of 50.
j The European Union penalties upon member countries that breach its employment
legislation.
Vocabulary review
a The successful for this challenging post wili have experience of financial saies and
be a good leader of staif.
b Mothers of new babies are entitled to 52 weeks' maternity according to current

legislation.
c The clause of this contract explains the circumstances in which the employer can
bring the contract to an end without notice to the employee.
d She was fired from herjob without good reason and she is bringing a claim against her employer for
unfair
e Employers are not aliowed to against employees on the grounds of age, sex
or religion.
( çhl 1 ep Esh 155

f If you are iii and you are away from work your empioyer is obiiged to pay you pay
= for a certain number of weeks.
= g in the UK, speciai courts known as deal with empioyment cases.
h Empioyers are obiiged to give pay to men and women if they are doing
the sarne job.
i The work of an empioyment iawyer that does not involve any kind of dispute is known as
non- work.
j There is a lot of health and _______________ legisiation these days, which is designed to keep
employees safe from harm when they are at work.
Preposition review
a Are you familiar the iatest European Union iegisiation on sexual discrimination?
b We hold ali of our confidentiai information a computer at our head office.
c 1 was reimbursed the company accountant for ali of the expenses that 1 incurred in
the month of Juiy.
d i give notice that i wifl end my empioyment Harrods on 23 Aprii of this year.
e The Empioyees saiary wili be paid directiy his or her bank account on the iast day
of each month.
f the terms of his empioyment contract he must give four weeks' notice if he wants
to terminate his empioyment.
g Empioyment tribunais hear cases relating a wide range of compiaints.
h 1 wish to make a ciaim my empioyer on the grounds of breach of contract.
1 am very angry because i thought 1 wouid be made a manager at my company this year but a younger
man was promoted me.
j 1 was not abie to go to an interview for a new job because it was at two oclock and my current
empioyer refused to give me the afternoon
156
TOLES HIGHER EXAM PRACTICE =
Exercise 1
Read the cor?tract clause below. The missing prepositions are in the list below. For each gap choose the r
preposition which best fits into the space from the options provided. Use each option on/y once. Write your
answers in the box below. There is an exarnple at the beginning (*).
FROM A CONTRACT OF EMPLOYMENT
7. HOLIDAYS
The Company and the Empioyee agree as foflows:
7.1 Ali ofthe Empioyee's hohday dates shali be agreed with the human resources department of
the Company a minimum (*) six weeks (1) advance of holiday being taken.
7.2 lhe Company shail be entitied to require the Empioyee to work any public hohday including
Christmas Day if any such holiday falis (2) a day on which the Empioyee wouid normaily
be required to work.
7.3 in the event that the Empioyee leaves the Company he or she shall be entitied to pay in heu
(3) any hohday entitiement that may have accumuiated.
7.4 in the event that the Employee leaves the Company and he or she has received paid hohday in
excess of hohday entitiement the Company is entitied to deduct any overpayment (4)
any other sums due (5) the Empioyee from the Company.
(AA) of (A) upon (B) from (C) in (D) of (E) to
(*) AA (1) (2) (3) (4) (5)
I Listening
Exercise 2
Listeri to this conversa tion between a /awyer and his client. Decide if the following statements are true or false.
1 Mr Winter had already fiied a claim against his former employer before his visit to the iawier.
2 Mr Winter was employed as an office worker in Birmingham.
3 Mr Winter was dismissed two weeks ago.
4 Mr Winter was injured by a woman when he tried to stop her fighting with her husband.
5 Mr Winter has now completeiy recovered from the injury he sustained to his ear.
6 Mr Winter suffered no broken bones in the attack upon him.
7 Mr Winters supervisor was very sympathetic about his medical probiems.
8 Mr Winters supervisor telephoned him to say she intended to file a defence to his claim.
9 Mr Winter has only worked for six weeks since the attack upon him.
10 The lawyer thinks that Mr Winter's claim wiil be unsuccessfui.
TrLJC or íalse?
(1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
157
Exercise 3
Look at tíe /etter below. A lawyer has written it on behalf of his client. Parts of the letter are written in an
inappropriate way. They are underlined. Rewrite the underlined words in a more appropriate way. There is
an exam pie at the beginning (*).
McKay, Browne & Co

11 Cardogan Square
Liverpool
Li 3BQ
17 July 20XX
Mr Fergus Keane
General Manager
Cariton Engineering
Unit 33, Broome Industrial Park
Liverpool
L23 5CH
Dear (*) Fergus Keane Esquire
Our client: Neil Hoffmann
1 (1) writc about your letter of 14 July 20XX, sent to Mr Neil Hoffman at his home address,
44 WilIow Gardens, Merton, Liverpool. Mr Hoffman has (2) talked to McKay, Browne & Co
and 1 will be representing him (3) about this oroblem.
1 am instructed by Mr Hoffmann that, (4) oosite to what you now claim, he was not
informed at any stage of the company's offícial (5) process to comlain, nor was he offered
an interview at your head office on the afternoon of Monday 2 July.
Mr Hoffmann insists that he was involved in a heated argument with his supervisor,
Mr Kevin Radcliffe, on the morning of 2 July and was subsequently asked to leave the
company's (6) buildings by you in your capacity as General Manager. Mr Hoffmanri then
received notifícation that his employment contract had been terminated without notice on
the grounds of his (7) terrible behaviour by a letter dated 3 July.
My client insists that the (8) argument he had with Mr Radcliffe on 2 July was one oÍ several
similar incidents and that his repeated attempts to speak to someone in authority in order
to make a formal complaint were not taken seriously.
1 have advised my client that he has excellent grounds to make a claim against Cariton
Engineering for (9) unlust firing. 1 have instructions to issue proceedings against you if we do
not receive reasonable proposals for settlement of this matter within (10) two weeks after
the date written on this letter.
Yours sincerely
Brendan Lambton
Partner
158
(* Mr Kane
(1
e,
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
159
THE LAW OF TORT =
çJ,
'1
==
WHAT IS THE LAW OF TORT? o
Exercise 1
Read this inforrnation about the /aw of tort. Thc rnost /mportant words are in the key vocabulary below.
Decide if the statements that follow are true or false.
Key vocabulary
wrong damage compensate negligence
harm liable intention conduct
The iaw of tort deals with civil wrongs. A wrong is of tort. 1 am hurt physicaUy and 1 have perhaps iost
something that causes harm or damage to rnoney, ali because of someone else's conduct.
another person. The words harm and damage' Conduct is a more formal word that means
have the sarne meaning. A person who suffers behaviour.
harm or damage is hurt in some way. This hurt
lhe law of tort says that i must not harm another
might be physical in nature, but it might be some
person either because 1 choose to harm him or her,
other type of hurt, such as causing someone to
or beca use 1 was not careful enough. in other
lose money. This area of law is based on the
words, 1 am liable for any harm that 1 cause to
foliowing principie. in situations where 1 cause harm
another person either from having intention to
to another person, 1 may be liable to compensate
cause harm, or from negligence.
hirn or her for that harrn, even in situations when:
How is this area of iaw different from criminal law or
1 do not have a contract with that person and
contract law? The answer to this question is that
1 did not commit a criminal act against there is a lot of overlap between the law of tort,
that person. contract law and criminal Iaw. Overlap means that
these areas of law include some things that are the
Lets say that 1 am shopping in a large supermarket
same. However, an important difíerence between
and an employee of the supermarket washed the the law of tort and criminal law is that the main
floor five minutes ago. The floor is not completely purpose of the law of tort is to com pensate people
dry. 1 do not know this. There is no sign to warn me who suifer harm and not to punish the people who
that the fioor is wet. 1 slip on the floor and hurt my caused this harm. An important difference between
back. 1 have to go to hospital and i cannot go to
the law of tort and contract law is that the law of
work for a rnonth. This is a situation where 1 need
tort makes us liable to people with whom we have
to make a claim hased on the principies ofthe Iaw no previous relationship.
a The law of tort aims to compensate people for different types of harm True False
and notjust physical harm.
b 1 must have a contract with someone to make a claim against that True False
person under the law of tort.
c 1 can only make a claim against someone under the law of tort if that True False
person hurt me intentionally.
d lhe main purpose of the law of tort is to punish people who cause harm True False
to others.
e 1 can be liable for my actions under the law of tort to someone who was True False
a complete stranger to me before my conduct hurt that person.
- 161
o
HeIp desk

Ln
a principie of iaw - an estabiished idea that is to siip - to fali because of stepping in someUung
used as the basis for a particular area of Iaw. that is wet or icy.
Exercise 2
Use the correct words from the key vocabula,y in Exercise 1 to complete the followirig sentences.
a The main idea of the law aí tort is not to punish people who do something wrong but to
people who suifer hecause of someone else's canduct.
b 1 am for the harm that 1 cause to other people, which means that 1 have legal
responsibility for causing that harm.
c In situations when 1 deliberately harm another person, 1 have to harm that persan.
d In situatians when 1 harm another person because 1 was not careful enough, the law says that the
person can make a claim against me based upon my
e The word means the sarne as the word harm'. The word damages', however, is nat
the plural of this word. Damages means financial compensation for harrn or damage suffered.
Exercise 3
Read this short text that gives you more information about the /aw of tort. Answer the questions that follow
using a fuJi sentence.
Conduct that causes harrn to another person is referred to as a tort. We can descríbe a person's conduct
by saying that he or she is guiity of a civil wrong. We can also say that he ar she has committed a tort.
Several different types of tort exist in Engiish law. Lawyers refer ta the different types af tort as categories
of tort ar as the heads of tort. lf someone harms me 1 can bring an action in tort. This means that 1 can sue
that person on the grounds that 1 have suffered harm. If 1 am successful in this actian, 1 will receive a
remedy from him ar her. A remedy is something that compensates me for my loss or that stops the harm
from happening again. The usual remedy for a tort is damages. The person who is guilty af harming
another person is referred to as a tortfeasor.
a What is a tort?
Answer:
b What are the heads aí tort?
Answer:
c What does to bring an action in tort' mean?
Answer:
d What is a remedy?
Answer:
e What is the usual remedy for a tort?
Answer:
f What name do lawyers give to the person who cornmits a tort?
Answe r:
162
TYPES OF TORT =
Exercise 1
'1
o
Read this information about the differerit types of tort that exist ia Eriglisb mw. Ia each case, decide which ==
is the correct preposition from the twa possibilities. Write your answers ia the spaces below.
o
There are several heads * ofito tort in English ti want to bring an action (b) againstlto a
Iaw. The most important heads are: tortfeasor, that persons conduct must usually fit
(c) on/into one of the heads. However, some areas
Negligence
of tort are constantly developing. As society
Trespass to land changes, the conduct that we regard (d) tolas
N uisance unacceptable or harmful changes too.
Trespass to the person Lawyers usually divide the heads (e) into/to two
Defamation categories. These are torts that cause harm to
people and torts that cause harm to land.
We will look at the nature oí these torts in Exercises
3 and 4 below. lo 'trespass is a general word that
means to interfere (a) tolwith something or
someone, or to do something that causes harm.
Answers
Example (*) aí a b c d e
Exercise 2
Read Exercise 1 agamn and answer the following questioris using a fuIl sentence.
a What does the verb to trespass' mean?
Answer:
b What are the twa types of trespass?
Answer:
c Does the Iaw of tort always stay exactly the sarne?
Answer:
d What two categories do lawyers usually divide the heads of tort into?
Answer:
Exercise 3
Read this information about the heads of tort that iavolve causing harm to people. The most irnportarit
words are ia the key vocabulary below. Complete the seateaces that follow with the correct word from thc
key vocabulwy.
Key vocabulary
assault libel negligence trespass to the

person
battery false imprisonment duty of care
defamation siander
L.dI L': 163

=o There are three main torts that cause harm to peopie Defamation comes in two forms. The tort of libel
is pubiishingthe statement in a permanent form,
= Trespass to the person means to harm
o for exampie, writing it in a book. The tort of
1 someone in a physicai way. To make someone
siander refers to a statement in a form that is
Lt afraid that 1 wifl physically hurt them is the tort of
= not permanent, for exampie, saying something in
assault. To actualiy hurt someone in a physical
ordinary conversation.
way is the tort of battery. To keep someone in a
certain place without that persons permission is Negligence occurs when you cause harm to
the tort of false imprisonment. Ali of these torts another person because you were not carefui
are known as trespass to the person. enough. The iaw of tort says that in situations
where you can anticipate that your conduct is
Defamation occurs when someone makes a
hkeiy to cause harm to another person then you
negative statement about another person whích
have a duty te he carefui. Lawyers refer to this
harms that person's reputation. In other words,
duty as the duty of care. Negiigence is the most
it means saying or writing something negative
common ground for ciaimants bringing an action
about someone, so that other peopie think in a
in tort.
more negative way about that person.
a Juha runs a café in the town centre. Last week one of Julia's customers burnt his hand when he
touched a very hot piate. Julia did not warn the customer that the piate was hot. He claims that Juha
was not carefui enough and that he wifl sue Julia on the grounds of
b Juha's sohcitor expiained to her that as the owner of a café she has a to ali
of her customers. This means that she has a duty to make sure that her customers do not suffer any
harm in her café.
c Mary was shopping in a iarge department store iast week. A shop assistant says that she saw Mary
take a neckiace from the shop without paying. The manager of the shop kept Mary in an office for 45
minutes until the poiice arrived. The manager did not aflow Mary to ieave. The police discovered that
Mary paid for the neckiace. Mary sued the store on the grounds of
d Gary was piaying footbafl on Saturday. Gary shouted at his friend named BiM on the other footbafl team.
He shouted, 1 am going to kiU you!' This is not the tort of , as BiH did not
reaMy beheve that Gary intended to cause him physicai harm in this situation.
e Last year Paul was successfui when he sued the pohce on the grounds of
Paul was taking part in a politicai demonstration when a poiiceman kicked him and pushed him for
no reason.
f The head of tort that includes faise imprisonment, assauit and battery is
g The head of tort that inciudes iibel and siander is
David Boyie was at a party iast night. David couid not find his waflet, which contained £200. David
accused George Lee of steahng his waliet. David said that George was a typicai thief', and everyone at
the party heard this. David iater found his waiiet, which he had ieft at home. George might sue David
on the grounds of
i The actress Crystai Benn is suing a major newspaper on the grounds of

The newspaper piihiished a story that said Crystai takes iflegai drugs and the story was not true.
164
c
Exercise 4
Read this inforrnation about torts that cause harm to land. FiJI the gaps lo the text with the correct words '1
o
from the box below. =o-
=
objects committed permission grounds
Claimants enjoy factory waiking
There are two main torts that cause harm to land.
Trespass to land means to go onto someones land without that person's (a) This might
mean (b) on the land or it might mean stayingthere permanently. Trespass to Iand also
includes placing (c) on another persons land without that person's permission.
Nuisance means to interfere with a person's enjoyment of his or her own land. This means that every
individual has a right to (d) being in his or her own home or on his or her own land
without anyone spoiling that experience. (e) who might not be successful in an action
for trespass to land often use this tort as a basis for legal action. Lets say 1 have some beautifui trees in
my garden. Near my house is a smali (f) involved in a manufacturing activity that uses
strong chemicais. These chemicais smeil very bad, but in addition to this, the fumes from the chemicais
1<111 the trees in my garden. The factory owner has not () _ the tort of trespass to land.
However, his conduct might give me the right to take action against him on the (h)
of nuisance.
THE DUTY OF CARE

Exercise 1
Read this information about the duty of care lo the tort of negligence. The most irnportant words are in the
key vocabulary below. Complete the senterices that follow by matching the f7rst half of each sentence with
the correct ending.
Key vocabulary
negligence acts omit objective
duty of care omissions foreseeable subjective
in the UK and the USA most cases in tort are based reasonable person would do under the
upon the tort of negligence. in order to bring a circumstances. A iavyer wifl say that 1 am liable for
successful claim against someone for negligence, my acts and also for my omissions. Omissions are
the claimant must prove that the defendant was in the things that 1 do not do. For exampie, when
breaich of his or her duty of care. The duty of care doctors give patients medicine to treat an iflness,
is the duty to make sure that my conduct does not and that medicine is dangerous if peopie drink
harm anyone. aicohoi at the same time, the doctors must warn
their patients. if the doctors do not warn the
However, the Iaw is a liWe more complicated than
patients, then the doctors omit to teM the patients
this. The law of tort says, for example, that 1 am
something important and that omission can cause
liable for
harm to the patients. Both statute and the common
the things that 1 do, and also Iaw contain ruies about the situations in which
people are liable for their acts and their omissions.
the things that 1 don't do.
Do 1 have a duty of care to everyone under ali
in other words, 1 can be habie for harming another circumstances? The answer to this is no'. It is an
person because of my actions and 1 can also be estabhshed common Iaw principie that 1 am oniy
hable because 1 fali to do something that a hable in certain situations. The main limit upon my
coo tinued
165
c
o Iiability to others is that the harm that 1 cause to How do we know if something is reasonably
another person must be reasonably foreseeable. foreseeahie? The test is objective and not
=
o Foreseeable means that the results ot my conduct subjective. It does not really matter what the
are predictable. For example, a gas company is defendant says that he or she was thinking at the
LI)
c
doing some work in the street. The men doing the time of the harmful conduct. The common iaw
work dig a deep hole. The men then go home at the provides many principies that come from hundreds
end of the day. They do not put a sigo anywhere to of cases about what is foreseeabie and what is not
warn peopie that the hole is there and they do not foreseeabie.
provide a iight. A man falis into the hole at night-
Ali of these factors must be considered when we
time and breaks his leg. Was the result of the gas
ask the question Is the defendant in breach of the
companys omission reasonabiy foreseeable? The
duty of care?'
answer to this is 'yes'. A reasonable person can
anticipate the results of conduct such as this.
a Negligence is... e To omit to do something means
b The duty of care is... f Reasonabiy Foreseeable means...
c Acts are... g Objective means...
d Omissions are... h Subjective means...
not to do that particular thing. (1) the duty not to harm other people.
However, this duty is hmited depending
predictabie. Something that 1 anticipate upon the situation in which the harm is
might happen as a result of my conduct. (2) caused. (6)
things that 1 actively do. (3) not influenced by your own feeiings when
you have to decide something. (7)
influenced by your own, personal feehngs
and opinions when you have to decide things that 1 do not do. (8)
something. (4)
not being careful enough. It is similar in

meaning to 'careiessness'. (5)
Exercise 2
Read the information lo Exercisc 1 again and decide if the followirig statements are troe or ta/se.
a Negligence is the tort that most legal action under the law of tort is True False
based upon.
b 1 am not liabie for omissions under the law of tort, True False
c Ali of the rules about hability under the law of tort come from the True False
common iaw.
d 1 do not owe a duty of care to everyone under ali circumstances. True False
e A defendant can always escape liability by saying that he did not True False
personaily foresee the harm that the claimant suffered.
166
=
Exercise 3 I1
Complete tPe foliowing sentences with the correct prepositions.

==
a In the UK the rnajority of cases are based the tort of negligence.

=
b 1 am bringing a claim against my doctor negligence.
c An omission is a failure to do what a reasonable person would do the sarne

circumstances.
d 1 am only liable for breaching my duty of care to people certain situations.
e The test to decide if something is reasonabiy foreseeahle or not is an objective test, which means it does
not matter what the defendant was thinking the time when he or she caused the harrn.
MORE ABOUT NEGLIGENCE

Exercise 1
Read this information about some of the general principies of the tort of negligence. The most important
words are in the key vocabulary below. Match the questions that foiiow this inforrnation with the answers
that are provided.
Key vocabulary
deterrent remote damage actionable per se compensation
redress proof of damage negligent conduct damages
The rules in the law of tort concerning negligence being entitled to receive cornpensation or damages.
airn to com pensate anyone who suffers harm. Lawyers do not say entitled to a redress'.
However, these ruies have another purpose. They
As we already know, a court first of ali considers
airn to act as a deterrent against negiigent
whether or not the defendant owed a duty oÍ care
conduct. A deterrent is something that persuades a
to the claimant. If there is no duty of care, then
person not to behave in a particular way. For
there is no claim. Then the court considers whether
example, the idea of prison may act as a deterrent
or not that duty of care was hreached. If there was
to a person who considers committing a criminal
a hreach, was the harm that the clairnant suffered
act. The principies of the tort of negligence are
reasonahly foreseeabie? If the harm was not
designed to act as a deterrent against negligent
reasonahiy foreseeable then a lav'er will describe it
conduct. Negligent conduct is behaviour tbat might
as remote damage. The claimant is not usually
lead to harm.
entitled to redress for remoto damage.
However, when a person is guilty of negligent
Some torts require proof of damage. In other
conduct then it may be necessary to make a claim
words, the claimant must prove that the
against that person. A court will look at the evidence
defendant's conduct caused harrn. However, some
and decide if the claimant is entitled to redress.
torts, such as libei, are actionable per se. if
The verb 'to redress means to correct something
conduct is actionable per se, it means that the
that is unfair, usually by putting the claimant back in
claimant does not need to provide proof of
the position that he or she was in before the
damage. The phrase per se' is Latin. In English,
neghgent conduct happened. The noun redress' has
per se means by itself'. The Íact that the defendant
a very similar meaning to compensation. Redress
committed the tort is enough for the claimant to be
usuaily takes the form of damages. Lawyers often
entitled to redress.
taik about being entitled to redress'. This means
167
o
a What is a deterrent? d What is remote damage?
- c
o
=
o
1 . b What is negligent conduct? e What is proof of damage?
o c What does redress mean? f What does it mean if something is

actionable per se?
It means the sarne as compensation. (1) Ir is something that is des;gned to make

people nor do a particular thing or not
It means that the claimant can make a behave in a particular way. (4)
claim for the thing that happened without
any evidence of actual harm. (2) It is careless behaviour that is likely to
cause harm to another person. (5)
It is evidence that the claimant actually
suffered real harrn, such as physical harm It is damage that the defendant could not
or loss of money. (3) reasonably foresee. (6)
A FAMOLJS CASE IN ENGLISH LAW

Exercise 1
Read this iriforrnation about a farnous case from the Iaw of tort ia Erigland. Ariswer the questions that
follow using a fuil sentence.
The 'McLibeI' case
On 15 February 2005, the longest case in English who were in the area. The title of the leaflets was
legal history carne to an end. The case lasted for an What's wrong with McDonalds: Everything they
amazing nine years and six months, the longest didn't want you to know'.
case in either criminal or civil legal history. There
The problem was that the leaflets contained some
were 313 days of legal argument in court and
very controversial claims. For example, the leaflet
20,000 pages of court transcripts, which are the
said that McDonald's was partly to blame for the
documents that record what happened in court.
destruction of the rainforests. It also claimed that
130 witnesses gave oral evidence to the court. This
McDonald's' food was unhealthy and eating too
case was based upon the law of tort.
much ofthis food could give people health
The case was famous ali over the world because of prohlems later in life.
the nickname that people gave to it. This nickname
In 1990 McDonald's issued a claim against Helen
was the McLibel case'. The claimant in the McLibel
and David on the grounds of libel. lhe company did
case was, of course, McDonald's, the chain of fast
not need proof of damage, as libel is actionable per
food restaurants. lhe case was so famous that the
se. The libel trial started in 1994. There was no
word McLibel' now appears in some respected
judgment until three years later. Helen and David
English dictionaries.
were found to be guilty of libel. In 1999 Helen and
The facts of the case are as follows. The defendants David appealed, but again they were ordered to pay
in this case, Helen Steel and David Morris, belonged damages to McDonald's.
to a group of people who were worried about the
Helen and David refused to pay the damages. They
environment and about the way that certain large
decided instead to appeal to the European Court of
corporations were behaving ri reiatiori to the
Human Rights in Strasbourg. Two barristers from
environment, lhe group decided that the best way
England represented Helen and David in Strasbourg.
to telI the public about this was to give out leaflets
The Strasbourg court made a decision that changed
containing information about the problem. In 1990,
English law. lhe court decided that the English courts
Helen and David stood outside several McDonald's
followed the correct procedure but that, nevertheless,
restaurants in London. They gave leaflets to people
168
the trial in England was unfair. This was mainly so well prepared. lhe court also ruled that Helen and
hecause Helen and David were poor compared to a David's right to free expression was violated.
hig corporation such as McDonald's. which meant
lhe court awarded Helen and David damages of
that they could not pay for an expensive legal team.
nearly £47.000.
As a result of this, Helen and David's defence was not
o
A FAMOUS CASE IN ENGLISH LAW

Exercise 1
Read this information aboit a famous case from the /aw of tort lo Erig/and. Answer the questions that
follow using a fui! sentence.
The 'McLibel' case
a How long did the 'McLibel' case last?
Answer:
b Who was the claimant in this case?
Answer:
c Who were the two defendants in this case?
Answer:
d What global issue were Helen and David worried about?
Answer:
e How did Helen and David telI the public about their worries?
Answer: -
f What claim did Helen and David make concerning McDonald's and the environment?
Answer:
g Why did McDonald's not need proof of damage?
Answer:
h What was the decision of the court of first instance?
Answer:
1 Why did the European Court decide that Helen and David's defence was not so well prepared as
McDonald's' claim?
Answer:
What other ruling did the European Court of Human Rights give in this case?
Answer:
GIoiI 1 edI E r:,h 169

UNIT 5A VOCABULARY CHECK
These are the important words that you have

Unit 5B.
act
actionable
assault
batterv
compensate
com pensati on
conduct
da mage
da mages
deta matio n
deterrent
duty of care
false impnsonment
toreseeable
ha rm
heads of tort
intention
liable
bel
negligence
negligent
nuisance
objective
o m issi on
omit
overlap
per se
principie of Iaw
proof
redress
remedy
remote
siander
subjective
tort
tortfeasor
trespass
wrong
170
Exercise 1
o
Hvrc is a convcrsation hetwecn a lavvyer and his client. T/ic convcrsation is nJixod up. Put the conversatioii =
o.
lo the correct order. Write your answers in the boxes nurnbercd 2-9 below. There is an exam pie at the
e
beinning (*), which is the start of the conversatiori.
* Good morning Mr Decker. Thank you for coming to soe me today. 1 understand that you have a
cornplaint about a newspaper story concerning you and your farnily pubHshed on 5 September.
a Thats good news. Im glad that Im entitled to do something about this. And Im certainly sure that
this story darnaged my reputation. But what does sue mean? Will the person who wrote this story go
to prison?
b Is that the sarne as compensation?
c That would be the grounds if the untrue story about you was spoken and not written. In this situation
however, we have good grounds for a defamation claim based upon libel.
d No. In England this type of thing is not a criminal matter. lt is what we call a tort. It's a type of civil
wrong. The punishment for the person who published the story will almost certainly be that he or she
has to pay you damages.
e Really? 1 thought the grounds would be slander.
f Yes, thats correct. The story was in a London newspaper on 5 September and again in a magazine
called Celebrity Gossip on 7 September. My wife is ver)' upset about it. Were trying to make sure that
our children do not see the story, but it is difficult. Because Im a professional footballer, my family are
often in the newspapers and millions of people seem to be interested in our personal lives.
g Yes, it is. Both are a payment of money that the court considers will compensate you for the harm that
the story did to your reputation. In this case the story was in written form, so we will sue them on the
grounds of libel.
h 1 soe. 1 understand that protecting your family is very important to you. As a professional sportsman.
people are naturally interested in what you do. However, no one is allowed to say or write anything
untrue about you that causes damage to your reputation. When this happens, you have the right to sue.
(1) (2) (3) (4) (5) (6) (7) (8) (9)
LgI 171
o
Exercise 2
Read the text below. There are teri words missing from the text. In the spaces below, write the rnissing
Ln words. The first /etter of each word has been provided for you. There is an example at the beginnir?g (*)
=
THE LAW OF TORT
lhe law of tort com pensates people who suifer a civil wrong. lhe formal name for a civil wrong is a
Several different categories of tort exist under English law. Lawyers refer to these categories
as the (1) of tort'. These divide easily into two main types. lhey are torts relating to people and
torts relatingto land.
The tort that deals with being on another persons land without his or her permission is known as the tort of
(2) to lanci. This tort also includes piacing objects on another persons land without that persons
permission. The second tort relating to land is the tort of (3) This is the tort of interfering with
someone's enjoyment of his or her own land. lhe usual complaints from claimants in this area are noise,
pollution or bad smells. AlI of these are unacceptable when they last for a long period of time.
The second category of tort deals with a persons (4) that causes harm to another person. Most
cases in this area are on the grounds that the defendant was negligent. lhe unacceptable behaviour can
be an act or an ornission. An omission is a (5) to do something that a normal, reasonable person
would do under the sarne circumstances. However, the law places a limitation upon liability for negligent
acts or omissions. lhe law says that a person only owes a duty of (6) to another person in
situations where it was reasonably (7) that the act or omission would cause harm.
The law of tort is concerned with the idea of redress more than with the idea of punishment. lhe main aim
of the law of tort is to (8) the injured party. In cases where the defendant has liability for causing
harm, the law offers the claimant a (9) . lhis means the claimant receives a solution for the wrong
that he or she suffered.
In a case involving tort, the defendant, who is referred to by the formal name of a (10) will
usually have to pay damages to the claimant if he or she is guilty of causing harm.
(*) tort
(1) h (6) c
(2) t (7) f
(3) n (8) c
(4) c (9) r
(5) f (10) t
172
Exercise 3
F?ead tho [o/lo wir?g article and decide if the staternents under it are true ar false. Write your answers in the
box below. There is an example at the beginning (*).
Coileen Corr is Irish. At the moment she lives in London. Coileen is a laer. She works in a hank. She
works in the bank's legal department as a case manager. The hank that Coileen works for has a contract
with a large catering firm to provide a restaurant service for ali members of bank staif. Anyone who works
for the bank can either eat in the restaurant ar buy a meal from the restaurant to take away and eat at his
ar her desk.
In December of last year, Colleen bought a salad in a plastic container from the restaurant and, because
she was busy, she took the salad to her desk to eat while she continued to work. As she was eating,
Colleen bit a hard ohject that was in the salad. The object was a small stone. Colleen broke a tooth as a
result of biting the stone. Colleen had to visit the dentist and the bili was £630. Coileen complained to the
catering company hut the manager of the catering company says that it accepts no iiability for Coileens
injury. Colleen is now suing the catering company on the grounds of negligence. She is claiming the cost of
visiting the dentist and an additional amount of £100 for her pain and suffering.
Example
Coileen Carris not English.
1 Coileen Corr works as the general manager of a bank.
2 The bank has a contract with a catering company to provido Íood for bank ernployees.
3 Coileen was eating in the hanks restaurant when she damaged her tooth.
4 Colleen is not suing her employer for negligence.
5 The total amount that Colleen is claiming is £730.
(*) TRUE (1) (2) (3) (4) (5)
G!oa! Lfl 1 173

THE LAW OF TORT =
AN INTRODUCTION TO THE LAW OF TORT

Exercíse 1
Ano Edington is a professor in the Iaw departrnent at the University of Chatsworth. She is giving a Iecture to
the first-year Iaw students on the subject of the law of tort. Here are Anos notes for her /ecture. Fui in the
gaps ia the text with a word from the box beiow,
remedy damages distress care wronged

deterrent redress incurred proof breached
Lecture notes - an introduction to tort

The word tort comes from the latin term tortus, which means 'twisted. From there it
carne to mean wrong, as the word continues to be used in French. In English, the word
tort' is only used as a technical term by iawyers. lhe iaw of tort is the Iaw that deais with
civil wrongs. Some Iaw textbooks describe the Iaw of tort as 'the iaw of wrongs'.
What is the purpose of this area of Iaw? Many lavv'ers describe this as the most disorganised
area of law. it has even been described as the dustbin of iaw' meaning that it is the piace
where ali of the problerns that other areas of law cannot deal with will eventually arrive.
However, the principal purpose of the law of tort is to provide a (a) to those
who have been (b) by others. Some of these wrongs might be covered hy
criminal law or by contract law as well as by the law of tort, but some might not he.
However, peopie are not liable for wrongs to others in every situation in life. Lets say that
person A harms person B in some way. Is person B entitied to what lawyers cail
(c) '? It is certainly not automatic that person B can make a claim against
person A according to the law of tort. It depends on the type of harm that has been caused
and under what circurnstances. The Iaw of tort is based upon principies that have deveioped
over many years. These principies explain what iawyers refer to as tortious liahility'. This is
where one person or organisation has a duty in the eyes of the iaw not to harm another in
any way. This duty is called a duty of (d) ______ To make a successful ciaim against
someone according to the law of tort, you must first of ali establish that:
the person who has harmed you owed a duty of care to you, and
the duty of care was (e)
In some cases you also need to provide the court with (f) of harm, hut in
other cases just proving that the duty of care was breached is enough,
lhe main objective of the law oÍ tort is not to punish the wrongdoer, but to compensate the
injured party. This cornpensation usually takes the form of a payment of money that is
referred to as () - Let's say that person A is driving dangerousiy and causes
harm to person B by crashing into his car. In this example, person A has an automatic duty
of care not to harm anyone in this way and that duty has been breached. A court might
award damages to cover the cost of buying a new car. It might also award damages for any
coo tinued
1 Efl Eilil - 175

IJ, other expenses that person B has (h) such as loss of earnings if he is unable
= to go to work. The court also might add a certain amount of damages to the sum awarded
for things that are difficult to measure, such as person B's pain and suffering. The phrase
moral damage is not used in English to describe this kind of suffering. We usually describe it
as pain and suíÍering' or emotional (1)
Some lawyers think that the law of tort also acts as a (j) _____ in that people think
twice before behaving in a way that could lead to harm.
Exercise 2
Complete the sentences below with the correct words from the box lo Exercise t.
a My client was seriously by the story that you printed about her in your magazine and
she is considering legal action against you.
b According to English law you have a duty of to every citizen not to harm them in
any way.
c The grounds of our claim against you are that you have your duty of care to my client.
d The court awarded my client in the amount of £15000 in her libel case against
Gossip magazine.
e The judge said that he hoped the amount awarded would act as a to anyjournalists
in future who are thinking about publishing a story that might not be true.
f Libel does not require that any damage has occurred as a result of the tort. It is
actionable in courtperse.
g My client admits that his conduct was a breach of the duty of care that he owes to your client. He also
acknowledges that your client is entitled to some kind of probably in the form of
damages, to compensate her for her Ioss.
h My client has expenses totalling £8500 as a result of your clients negligent driving.
This amount includes my clients loss of earnings for the period in question.
1 We will be claiming damages totailing £12,000, which includes an amount to cover the ernotional
that my client has suffered as a result of your breach of duty.
j Your client was at fault in this situation and the Iaw will provide my client with a -- ifyou
do not settle the matter aut of court.
176 (
=
Coilocation bank rJ1
T
to provide a rernedy to award da muges Ioss of earnings
to be entitled to damages to incur expenses tu act as a deterrent
Preposition bank
)
to be liable for something to be entitled to something

You are liable for the results of your My client is entitled to redress.
hrcach of duty of care.'
to have a duty to another person
to depend on something You have an autornatic duty to every other
'The amount of damages awarded will citizen not to cause them harrri because of
depend on the amount of earnings you your conduct.'
have lost.'
to cause harm to someone.
under certain circumstances Your clients negligent conduct was the
Under the circumstances your client is cause of the harm to my client'
atfault.'
WHAT IS TORTIOUS LIABILITY?

Exercise 1
Ann Edington 's second Iecture on the Iaw of tort is about tortious Iiability. Here are the notes that Anti has
prepared for her lecture. Read what Ann is planning to say to her students about tortious Iiability and
decide whether the staternents that follow are troe or false.
Lecture notes - tortious Iiability

It is very difficult to give an exact definition nf what tortious liability is. Lawyers and academic
writers do not seem to be abie to find a clear definition upon which they agree completeiy.
In general, it is liahility for harrn that is caused to another person due to a breach of a duty
of care. Let us now look at some important aspects of tortious liability.
Some tortious Ilability arises from the common law and some from statute.
Ali citizens within a particular jurisdiction have a duty of care automatically imposed upon
them hy the law of tort. In this way, it is veiy different trom contract law, in which the
parties to a contract assume their obligations voluntarily. For exampie, the law of tort in
England imposes an automatic duty upon every citizen not to go onto anyone eise's land
without his or her permission. There is no need for any two individuais to agree privateiy
upon this. The parties concerned may not have had any contact with each other at ali
hefore the tort of trespass to land is committed. In this respect, it is much the sarne as in
cririiinai law.
The law of tort will impose liability where a person has acted in a certain way, or failed to
act in a certain way if the law requires it. This means that iiability in the law of tort can
arise as a result of either an act or an omission.
continued
(;o)ai LCgLI :flg'Lsh 177

=
IJ)
It is also possible according to the Iaw of tort to be liable for the acts or omissions of
another person with whom you have a certain relationship. An employer, for example, can
sometimes be held liable for the acts or omissions of his or her employees. This type of
liability is called vicarious liability.
Most of the tort claims that are brought are based on fault. This means that the
defendant has done something wrong. This fault can consist of having an intention to
comrTlit a wrong, but negligence is oíten enough to establish fault.
Some torts are based on what lawyers calI strict liahility'. This means that there is Iiability
in certain situations independent of any Íault. The defendant in any situation, known as
the tortfeasor, will be liable even though harm to the claimant happened without intenbon
or negligence. For example, let's say a defendant keeps something on his or her land that
is dangerous, such as a harmful chemical. The chemical escapes, due to no fault of the
defendant, and causes harm to neighhours. This is called a breach of a strict duty. The
defendant is liable even though he or she is not at fault.
Most torts require proof of damage suffered. In addition, that damage must not be too
remote as a consequence of the defendants behaviour. However, some torts do not
require proof of actual damage. Libel is an example of this. If 1 write something about
someone that is not true, that person does not need proof of damage to bring an action
against me under the law of tort.
a According to English Iaw the liability that arises in the law of tort comes True False
from both statute and the common law.
b It is possible to bring a case against someone under the Iaw of tort True False
without having any kind of private agreement or contract with that person.
c It is impossible to be liable under the law of tort because you haven't True False
done something.
d It is impossible to be liable for the actions of another person under the True False
law of tort.
e It is not always necessary to be guilty of some fault to be liable for a tort. True False
Exercise 2
Look at Ann Ed/ngton's lecture notes on tortious Iiability again. Find the words or phrases in the notes that
rnatch each of the foliowing meanings.
a The duty that every citizen owes to every other citizen, according to the law of tort.
The word or phrase is
b The name for the general responsibility for harm caused to other people according to the law of tort.
178
c The tort of entering anta someone eise's land or property without that person's permission.
(J1
r
d A word that means a failure to do something that it is your duty to do. o
lhe word or phrase is
e lhe name aí the particular responsibility that one person might have for another persons acts ar
amissions according to the law aí tort.
The word ar phrase is
f A lack aí proper care or not íulfilling a duty that it is your obligation ta fulfil which results in harm
to anather.
lhe ward ar phrase is
g lhe name af the particular responsibility that every citizen owes to every other citizen regardless of
whether he or she is guilty aí any intentian ar negligence when causing harm.
h A person who has breached the duty aí care and has caused harm ta anather persan as a result of
that breach.
The ward ar phrase is
i A word meaning distant or far away'.
j A published statement that is not true and which damages someane's reputation as a result aí
being published.
Coliocation bank
to impose a duty of care to assume an abligatian ta be held liable for

upon someone voluntarily sornething
lo commit a tort remote damage to owe someone a duty
Preposition bank
ta arise from the camman law ar statute the tort of trespass to land
'Many af the principies af the law af tart Gaing anta sameane's land without their
arise from the comman law. permissian is knawn as trespass to and.
a duty impased upon someone ta have praaf of something

Statute impases a duty upon yau Some tarts are actianable withaut proaf
concerning yaur liability for any praducts of damage.'
that you sell to the public.
Global Legal EngIib 179

SOME CATEGORIES OF TORT
Exercise 1
Lt
Several different types of tort exist in the UK and the USA. Some of these categories of tort are listed in tbe
=
c
box below, together with areas of liability arising under the law of tort. Match each type of tort or area of
Iiability with the situa tiorls that fo!Iow.
occupier's Iiability (1) defamation (5)
vicarious Iiabitity (2) employer's Iiability (6)
product Iiability (3) trespass to land (7)
nuisance (4) false imprisonment (8)
a 1 owri a factory where hread and cakes are manuíactured. 1 did not provide my workers with the
speciai gioves that they need when they are taking things out of the ovens. One of my workers has
suffered very serious hurns to his hands and arms as a result.
b •My neighhour has started to keep animais in her garden. She has some hens and a smafl pig. The
noise and the smeil are terrible.'
c 1 own a company that transports goods by lorry. Last week one of my drivers was in a petrol station
during his working hours. He lit a cigarette and threw away a hghted match, which caused an
explosion.'
d 1 bought my son a toy from a company on the Internet. The toy is a battery- opera ted train. When
the train was switched on the batteries became extremely hot and my son burnt his hand when he
was playing with it.
e 1 own a magazine that contains a lot of gossip about celebrities. Last month my magazine printed a
story that said a local foothaller here in Chatsworth had kept some money raised at a charity event
for homeless people. 1 now know that the story was completely untrue.'
f 1 study geography at the University of Chatsworth. Last week the whole class had very bad results
ou a test. The professor was furious. He Iocked the door of the lecture room and he refused to let
anyone out of the room until he had finished speaking to us. He kept us there for one hour after our
usual time.'
g 1 went into a bar Iast week with some friends and 1 slipped on some beer that was on the floor.
When 1 feli 1 cut my hand on some broken glass. Another customer in the bar told me that a man
had dropped a bottle of beer there about 20 minutes earlier. The bar staif had been told that there
was heer and hroken glass on the floor, hut they had been too busy to clean it up.'
h My neighhour walks across my land as a shortcut to the shops. 1 have been asking him to stop
doing this for months now, but he doesn't listen to me.'
180
I LISTENING
Eercise 1
Listen to this professor who is giving her students a lecture. It is an irtroduction to tbe Iaw of tort. Listen to
the lecture and answer the fol/owing questions.
a The professor says that some people gíve the law of tort a different name. What is it.?
Answer:
b What is the meaning of the word redress'?
Answe r:
c What do the majority of claimants want when they bring an action to court under the Iaw of tort?
Answer:
d The professor says that damages are one forrn of redress that the courts can offer to an injured party.
What is the other remedy that she mentions?
Answer:
e How does the professor define the tort of nuisance?
Answer:
f What does the professor say is the correct term for a persons liability in the Iaw of tort?
Answer:
g The professor mentions an automatic duty that the Iaw imposes upon everyone. What is the name of
this duty?
Answer:
h The professor mentions two ways in which a person has a duty under the law of tort not to harm
another. One duty is not to harm a person physically. What is the other duty that she mentions?
Answer:
The professor mentions that t.he law of tort and the law of contract overlap in some ways. She gives an
example of a company supplying sornething to a group of consumers that will lead to concurrent liability
in tort and criminal law. In the professor's example, what did the company supply to the consumers?
Answer:
j How does the professor say that some legal commentators have described the law of Lort?
Answer:
° Global Legal EngIish 181

THE TORT OF NEGLIGENCE
=
Exercise 1
Most tort cases in Eng/and and the USA are based upon the tort of neg/igence. Read the fo/Iowing text
about the tort of neg/igence. Fui the gaps in the text with a verb from the biue box.
expect do ask agree

owe contribute argue establish
Under what circumstances is a person or the law (f) from me? How do 1 know
organisation guilty of the tort of negligence? when 1 have breached my duty of care? To answer
Unfortunately, the definition of the legal term this question, most English law students are asked
negligence' varies according to which book or legal to remember the general principie of negligence
dictionary you are reading. The legal term provided by a judge named Alderson in the case of
negligence' has a rnuch more complex meaning Biyth v Birmingham Waterworks (1856). The judge
than the general English meaning oÍ the word. said:
However, rnost lawyers (a) upon the
Negligence is the ornission to ()
idea that in order to establish negligence in a
something which a reasonable man, guided
particular situation we rnust (b)
upon those considerations which ordinarily
three fundamental questions. These are:
regulate the conduct of hurnan affairs, would do,
Did the defendant (c) the or doing something which a prudent and
clairnant a duty of care? reasonable man would not do.
Was that duty of care breached?
Again, the question of whether or not 1 have
Did the defendant's breach cause, or materially
breached my duty of care has been decided by an
(d) to, the darnage suffered by
objective test. What would an ordinary, reasonable
the clairnant?
person do under the sarne circumstances?
If the answer to alI three questions is yes', then the Finaily, in order to firmly (h)
defendant has been negligent in the legal senso of negligence, the claimant must demonstrate that the
the word. negligent act of the defendant was the main cause
of the damage complained of. A court will often ask:
To whom do 1 owe a duty of care? lhe case law in
this area is complicated. However, there is a Was the chain of causation broken at any time?
principIe of English law that says that 1 owe a duty
Would the harrn that the claimant suffered have
of care to anyone in situations where it is
happened anyway, even if the defendant had not
reasonably foreseeable that my act or ornission
acted in a particular way?
rnight cause harm to another person. In other
words, it is a defence to an allegation of negligence Even where there is a clear chain of causation,
to (e) that no reasonable person was the damage too rernote, in other words, not
would have anticipated that my act or omission reasonably foreseeable by the defendant?
would cause harm.
In conclusion, establishingthat someone has been
Assuming that 1 can reasonably anticipate the result negligent is not as straightforward as the general
of my act or omission, what standard of care does public might imagine.
Coliocation bank
to establish negligence reasonably foreseeable the cause of damage
to suifer damage to aliege negligence a chain of causation
182
=
Preposition bank ct'
=
to act in a way foreseeable by sorneone CM
Your client acted in a particular way thnt lhe damage was reasonably foreseeahle
caused harm te my client. by yoir client.
in order to do something to be guilty of something

In order to esta blish negligence we must •The defendant was guiity of committrng
show that the defendant breached his duty this tort.
of care to you.
Exercise 2
Read the text in Exercise 1 again and decide if the following statements are troe or fa/se.
a The legal meaning of the word 'negligence' is more complicated than the True False
general, dictionary meaning as the public would understand it.
b According to English law, 1 owe a duty of care to ali other citizens in True False
ali situations.
c The test of whether or not one person owes another person a duty of True False
care is an objective one.
d lhe definition of negligence in this text from the year 1856 comes from True False
the com mon law.
e In cases where there is a clear chain of causation between the True False
defendant's conduct and the claimants harm, the defendant will
always be guilty of negligence.
Exercise 3
Cora plete tho fo/Iowin svntences ou the subject of negligence with a preposit/on from the box below
by under At upon of
a Do we agree the fact that your client owed my client a duty of care?
b We must ask ourselves what a reasonable person would have done - those circumstances.
c The defendant did not take reasonable care when using dangerous chemicals and so he is guilty
behaving negligently.
d The damage caused to the claimant was not reasonably foreseeahle the defendant.
e _______ what point do you think that the chaín of causation was broken?
O - 183
THE MOST FAMOUS TORT CASE
Exercise 1
Read this text about a very farnous case lo thc law of tort and answer the questions that fol/ow usiog a
fui! sentence.
There is a particular case that almost every lawyer lnfirrnary. She also clairned that she had suffered
in every common Iaw system in the world is familiar from nervous shock'.
with. This is the famous case of Donoghue v
If it had been Mrs Donoghue's mysterious friend,
Stevenson. The facts of the case are as foliows:
(he or she was never named), rather than Mrs
On 26 August 1928, Mrs May Donoghue of Donoghue herself who had suffered the effects of
Glasgow left her horne to make the short journey the ginger beer, then the legal world would probably
into Paisley, a neighbouring town. Upon arriving in have heard nothing about it. The fnend could have
Paisley, Mrs Donoghue met a friend at Mincheila's sued Mr Minchella because there was a contract of
café at 1 Wellmeadow Street. Her friend ordered saie between tbem, of which Mr Minchella was
and paid for a pear, an ice-cream and a bottle of clearly in breach. However, there was no
ginger beer, which is a drink that was very popular contractual relationship between Mr Minchella and
at that time. In doing so they began the events that Mrs Donoghue. The only person she could possibly
would change legal history forever. sue was David Stevenson, the rnanufacturer of the
ginger beer. The question was, on what grou nds?
The ginger beer was rnanufactured by Mr David
Stevenson of Paisley. It carne in what was Mrs Donoghue was advised hy a rema rkable
described as an 'opaque' bottle, so unfortunately solicitor, Walter Leechman, of Leechrnan and Co,
no one was able to see what was in the bottle until Glasgow. Mr Leechman decided to proceed with
the contents were poured out. The café's Mrs Donoghue's case, even though there was no
proprietor, Mr Francis Minchella, poured part of the legal precedent for such an action. The basis of the
ginger beer onto Mrs Donoghues ice-cream to ciaim was simple. It was that any manufacturer of a
make what is known as an ice-cream float'. Mrs product intended for human consurnption rnust be
Donoghue apparently began to eat with liable to the consurner for any damage resulting
enthusiasrn. frorn a lack of reasonable care to ensure that the
product is fit for consumption.
What happened next was the hasis for the entire
case. It is said that when Mrs Donoghue's friend The case proceeded through various appeals to the
was pou ring out the rest oÍ the contents of the highest court in the land, the House of Lords. The
hottle into a glass, he or she saw floating out of the Lords decided in favour of Mrs Donoghue, and so it
bottle what seemed to he the partly decomposed happened that a new precedent was established
remains of a snail. Mrs Donoghue clairned she was and a lady who said she was worth five pounds
made ili by what she had seen. Certa inly, she had in ali the world' became the reason why, these
medical treatrnent frorn her doctor three days later days, millions of pounds and dollars have been won
for gastro-enteritis, and again three weeks later, on by claimants based on the tort of negligence.
16 September 1928, at the Glasgow Royal
a Where was Mrs Donoghue from?
Answer:
b What was the address of the café where the incident happened?
An swer:
c Why was no one able to see the contents of the bottle of ginger beer before it was poured out?
Answer:
d What did Mrs Donoghue's friend claim to have found in the bottle of ginger beer?
Answer:
184
e What physical illness was Mrs Donoghue treated for soon after her visit to the café?
I1
Answer:
=
f What was the name of the hospital whcre Mrs Donoghue was treated?
Answer:
g What second serious effect did Mrs Donoghue claim the incident had caused?
Answer:
h Why could Mrs Donoghues friend have sued Mr Minchelia if he ar she had drunk the ginger beer?
Answer;
1 Why was it so surprising that Mr Leechman decided to take this case to court?
Answer:
This case established that a duty aí care exists in Englísh and Scottish law between manufacturers and
which other general group aí people?
Answer:
GIObL1I Ligl - 'iis 185

o USING YOUR KNOWLEDGE
u.
Coilocation review
Complete these senterices with a collocation that you have seen.
a lhe judge the claimant damages of £12000.
b As my client has been unable to work, she will be making u claim hased on her - of
earnings. This amounts to £3500.
c Some legal professionals think that the law of tort as a deterrent in that it makes
people think very hard about the consequences of their actions and may stop some people from doing
potentially damaging things.
d The law a duty of care on ali employers to make sure that their employees work in a
safe environmenl.
e The judge decided that the defendant a duty of care to the claimant and that the
defendant had breached that duty,
f Each party to a contract his or her obligations voluntariiy, but in the iaw of tort
obhgations exist whether people want to have them or not.
g In order to __ - that there has been negligence, the claimant must first satisfy the court
that the duty of care has been breached.
h My client damage to her health as a result of your client's negligence.
1 My client could not have anticipated the result of her conduct and we deny that the harm that she
caused was reasonably
My client's conduct was not the direct cause of the damage to your client's financial loss, as the
of causation was broken by several other events.
Vocabulary review
a English speakers do not use the phrase moral damage to describe a claimant's suffering but describe
this type of suffering as emotional
b The name of the general liability that people have according to the iaw of tort is
li abi 1 ity.
c lhe name of the liability that one person might have for the acts and omissions of another person is
called - -_______________ liability.
d lhe name of the liahility that requ ires no proof of harm but is actonable per se is known as
lia bi 1 ity.
e lhe person or organisation that has committed a tort is tormally known as a
f lhe tort of interfering with someones enjoyment of his or her land by, for example, making a lot of
noise is known as
186
g Libel and siander are collectively known as the tort of
ul
h The tort of going onto someone's land without his or her permission is known as =
to land. vQ
1 The usual that is available to the claimant in tort cases is an award of damages,
which must be paid by the defendant.
j If the damage caused to the claimant by the defendants conduct was not reasonably foreseeable then
a court rnight describe this as damage.
Preposition review
Complete these sentences with the correct prepositioo.
a Each citizen within a particular jurisdiction is liable ______ - any breach of his or her duty of care.
b If you cause harm someone as a result of a breach of the duty of care then you will
probably be ordered to pay damages to that person.
c The amount of damages that you have to pay will be dependant the circumstances of
the case.
d My client is entitled redress for the harm that she has suffered.
e Many of the principies of the modern law of tort arose the facts of the case of Donoghue v
Stevenson.
f Many of the obligations that we have under the law of tort are imposed upon us statute.
g Do we agree --________ the fact that your client was liable for this accident?
h There was no break in the chain causation and your client was directly responsible for my
client's loss.
1 Mrs Donoghue met her friend at a café the town of Paisley.
j When Mrs Donoghue's case went to court there was no legal precedent -- such an action.
187
Exercise 1
There is a word or phrasc missirig from the fo/lowing sentences. For each sentence circie the word which
best fits into the space from the options provided. Do not mark more than one answer for each sentence.
There is an exam pie at the beginning (*).
Example As well as cornperisating people who have sLlffered a Ioss, the Iaw of tort is intended to act as a
to harmful conduct.
1 According to Engltsh law, each citizen has a duty of (1) to other citizens under certain
circumstances.
2 The liability that people have under the law of tort in situations where no proof of damage is required, is
known as (2) liability.
3 The main objective of the law of tort is to compensate the (3) party for the harm that he ar she
has suffered.
4 lhe phrase emotional (4) is used by Iawyers in England to describe a clients mental pain and
sufferi ng.
5 People have no choice as to whether to accept Iiability under the law of tort, as the law (5) this
liability upon them.
6 In negligence cases, a claimant will only be compensated for harm that is reasonably (6) _______ by
the defendant.
7 In some negligence cases the claimant is refused a remedy on the grounds that the harm he or she has
suffered is too (7)
8 The liability that people have in the law of tort in situations where one person can be liable for the acts
and (8) of another is known as vicarious Iiability.
9 The act of going onto someone's land without their permission is known as the tort of (9)
10 The tort of defamation has twa forms, which are slander and (10)
(*) A prevention C warnin, D caution
(1) A carefulness B caution C care D watchfulness
(2) A absolute B total C definite D strict
(3) A injured B damaged C defective D hurt
(4) A damage B misery C torture D distress
(5) A puts B imposes C forces D compels
(6) A anticipated B foreseeable C probable D predictable
(7) A distant B :solated C far D remote
(8) A errors B failures C omissions D oversights
(9) A intrusion B trespass C invasion D disturbance
(10) A criticism B falsehood C libel D fiction
188
=
Exercise 2
Read the fo/fowfng sentcnces that fave a prepositiori rn/ss/ng from them. For eacb sentence circ/c tho
preposition that best fits foto the space from the optio os provided be/ow. Do not mark more than one
answer for each sentence. There is ao example at the beginoing (*)
Example Mv client vas seriouslv hnrrned hy your conduct ond he is entitled to SUO you Â) - the
,rojnds of negl gence.
1 The court awarded damages to the hotel (1) the amount of £10,000 after the magazine
published a defamatory story about events that happened in its kitchen.
2 The grounds of our claim (2) your client are that your client's story in the Daily Journal
amounted to defamation.
3 My client will be claiming for his loss (3) earnings for the entire period that he could not work.
4 In some cases an employer is liable (4) his employees' acts and omissions.
5 A manufacturer of goods is liable (5) the consumer for the safety of those goods.
6 My client has suffered emotional distress (6) a result of your client's conduct.
7 The amount of damages that you are awarded will depend (7) the amount of harm that you
have suffered.
8 An omission is a failure to act (8) a certain way.
9 The law of tort says that you have a duty (9) other people.
10 Several of my neighbours walk (10) _______ my land as a shortcut and 1 would like them to stop.
(*) B for C with D to
(1) A for B on C in O into
(2) A with B against C of O to
(3) A from B to C in D of
(4) A to B with C hy D for
(5) A to B with C by D for
(6) A with 8 for C as D for
(7) A by B on C into D to
(8) A in B for C to D on
(9) A for B with C to D by
(10) A across B to C in D against
189
a)
Listening
Ln
Exercise 3
Listen to this conversa tion hetwcen a lawyer and her client. Decide if the following statements are true
or false.
1 A friend of Mr KeIIy recommended Miss Reay because she has a good reputation in
defamation cases.
2 Mr KelIy and his wife have moved to France to escape from the terrible rumours about his life.
3 FriendsAgain.com is a website where old school friends can chat.
4 Most of Mr KeIIy's pupils were French and German.
5 Gary Hetherington's father was angry with Mr KeIIy when Gary was expelled from the school.
6 Mr KeIIy has emailed the untrue comments from the website to Miss Reay.
7 Mr KeIIy was dismissed from his job at St Bernadette's school.
8 Jim Murray was libelled on the sarne website as Mr KelIy.
9 The defendant in the case that Jim Murray brought in 2002 is now also a teacher.
10 If Mr KeIIy wins damages from Gary Hetherington he is going to use the money to pay for a holiday.
TrLJc or false?
(1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
190
UNDERSTANDING CONTRACTS 1 =
o
o
=o.
THE STYLE OF WRIT1EN CONTRACTS
o
Exercise 1
Read this text about the sty/e of Eoglisb that Iawyers use lo contracts. Ariswer the questioris that fo/Iow
using a fui! senterlce.
The English of contracts

Lawyers in most countries use different and more contain very formal words that no one realiy uses
difficult language to draft contracts from the in general Engiish.
language that they use every day. This is certainly Lawyers use long iists of synonyms mn contracts.
true within the English legal system. However, when
Thms is because when a Iawyer drafts a contract
you know in what ways the language of contracts is he or she thinks about the fact that a judge wmiI
different, you can look at the language very interpret the contract mf there is a dispute. in
carefully and understand it more easily. Here is a
codified legal systems words have a clear
list of what makes the Engiish of contracts different definition. However, in the common iaw system
from normal English;
judges have mnterpreted words in dmfferent ways.
Lawyers use very long sentences when they draft Lawyers use lists of synonyms to make sure that
contracts. A typicai sentence in a contract can there is no possmbmiity of misinterpretation.
be 100 words or more. Lawyers like to use the passive voice. The
Often these very long sentences have no passmve is more dmffmcult than the active.
punctuation. This sometimes makes it difficult to Contracts contain technical words that are part
understand what the sentences mean. of the language of the law or part of a particular
Sentences in contracts have an unusual area of business. It is necessary for a Iawyer to
structure. Sometimes legal writing doesnt use use these words.
words in the same way as general English. Ali of these things produce a style of writing that is
Sometimes verbs, nouns and adjectives are put very unusual, even to a native Enghsh speaker. The
in a sentence in a different order from normal. language that lawyers use in contracts is so
Lawyers often use too many words. A iawyer different from general Engiish that some people say
might use 20 words to write something that he it is not real English at ali, but a ianguage only for
or she could write with five words. lawyers, called legalese'. There is a movement mn
England away from iegalese. Lawyers are now
Contracts contain words that peopie don't use
encouraged to write in a more modern,
any more because they are so oid-fashmoned. For
understandable style called 'plain English. This is
exampie, there are Engiish words that you will
good news for international lawyers.
find in a piay like Romeo and Juliet or in a
contract, but nowhere else. Contracts also
a Is the English of contracts easier or more difficult than general Englmsh?
Answer:
b How long can a typical sentence sometimes he in a contract written mn Englmsh?
Answer:
c Do lawyers use words lo the same order as in general Englmsh when they draft contracts?
Answer:
d Why do iawyers use long lists of synonyms when they draft contracts?
Answer:
continued
Co::d 193
o e What is the name that people give to the style of writing that law'ers use?
=
-D
Answer:
o
f What is the name of the style of writing that modern lawyers are encouraged to use?
=
Answer:
HeIp desk
punctuation - the marks that people use to synonym - a word that has the sarne meaning
divide writing into different sections. Examples of or almost the sarne rneaning as another word.
punctuation are commas and fuIl stops. For exarnple, small' and little are synonyms in
English.
sentence structure the way in which a
sentence is organised. the passive - a sentence that uses the passive
is a sentence that has as its subject the person
word order - the order of sornething is what
or thing to which an action is done. An example
comes first, second, third, etc. In different
of the passive is 'the contract was signed by the
languages the verb, noun and adjective may be
client'. In the active you would say the client
in a different order in a sentence.
signed the contract'.
Exercise 2
lo the biue box are some exam pies of words or phrases that lawyers often use in contracts. They are
exam pies of the more difficult words that iawyers use. You will need to understand these words to do
Exercise 3. Match the words or phrases with the definitions below.
in the event of (1) territory (5)
terminated (2) entitled to (6)
forthwith (3) compensation (7)
extent (4) manner (8)
a an area of land e ended
b amount or levei f if something happens
c payrnent for something that is lost g irnmediately

or damaged
h the method or way of doing sornething
d have tl-ie right to sornethirig
194
Exercise 3
Herc are three examples of a lawyers writing. Ali Ibrue examples are extracts from contra cts A client asks '1
o
his /ave,'er what each extract means. Use Exercise 2 to help you lo match each piece of writieg with the a-
explanation given by lhe lavyer below. Vou do not need to understand every singie word (o do o
=
this exercise.
Extracts from contracts

a In the event of the death of the Supplier the rights and obligations under this Agreernent shall be
terminated forthwith.
b In the event that any property 01 the Contractor is lost or damaged in the course of transportation then
the Contractor shall be entitled to compensation from the Company.
c The Company shall allow the Distributor to have fuli and complete control over the manner and the
extent of the exploitation and advertisement 01 the Product in the Territory.
The Iawyer's explanations

If any 01 your property is lost or damaged on the journey then the company will pay for it. (1)
'You will have complete control of the advertising of the product in the area 01 the world that we
agreed.' (2)
'If you die then this contract will end immediately.' (3)
HeIp desk
a supplier - a person or com pany that provides a contractor a person or company that makes
a particular product or service. a legal agreement to provide goods or services to
another person or com pany.
a right a legal entitlement to do or to
have something. a distributor a person or a company that
supplies goods in a particular area, often to
property a person's possessions or general
shops, on behalf 01 another person or conipany.
things that they own. Property is different from
real property, which means land. an obligation a legal duty to do or not to
do something.
UNDERSTANDING FORMAL EXPRESSIONS

Exercise 1
Lawyers sometimes use expressions that are veiy formal when they draft contracts. Here is a list of formal
expressions that you will often see in contracts. Choose the more modern word or cxpression from the blue
box on lhe next page (o match the foliowing expressions.
in the near future until such time as

at the present time 'on the part of'
in the event ot 'due to the fact that
during such time as not less than'
(ilobil Lega! Eng!ish 195

=o
until now at Ieast because
=
o if by while soon
(O
a In the nearfuture' means e until such time as' means
b at the present time' means f on the part of' means
c in the event of' means g due to the fact that' means
d during such time as' means h not Iess than' means
£xercise 2
The foliowing sentences use the formal expressions in Exercise 1. Be/ow each sentence there is an
alternative sentence that contains the sarne inforrnation. Complete the alternative sentences with a more
modern word or expression from the blue box in Exercise 1.
a Dunrig suci as time as this contract is in effect the parties agree to the toliowing terms.
this contract is in effect the parties agree to the following terms.
b In the eveflt of breach the party in breach must provide a remedy within seven days.
there is a breach of contract the party in breach must provide a remedy within seven days.
c This contract will continue until such time as one of the parties terminates it by giving four weeks'
notice in writing.
This contract will continue one of the parties terminates it by giving four weeks' notice
in writing.
d DUO to ttic fact that there was fire at the premises of Forum Marketing Ltd we cannot hold our meeting
there next week.
there was a fire at the premises of Forum Marketing Ltd we cannot hold our meeting
there next week.
e The meeting cannot take place on Wednesday but it is important that we have it in tIio near fature.
The meeting cannot take place on Wednesday but it is important that we have it
f We cannot consider employing any more people at the present time, as we do not have enough work
for them.
We cannot consider employing any more people ____________, as we do not have enough work
for them.
g Due to some very hard work on the part of employees the new business was very profitable in its first
year of trad:ng.
Due to some very hard work employees the new business was very profitable in its first
year of trading.
h A party who wishes to terminate this contract must give not Iess than four weeks' notice in writing.
A party who wishes to terminate this contract must give four weeks' notice in writing.
196 Gk 'ISh
HeIp desk
'1
o
What do these words mean? c
=
o.
in effect in operation or in force. Valid. to take place - to happen, to occur. o
=
trading operating as a business. a remedy - a solution for a breach of contract to
make sure that the innocent party does not suffer
notice - warning that something is going to
from the breach.
happen in the future.
Exercise 3
There are two important formal expressions that lawyers often use in contracts. These are:
notwithstanding inasmuch as
Notwithstanding means despite or in spite of Inasmuch as means that what you are saying in
something. For example, The new law concerning the rest of your sentence is true only in a limited
the protection of the environment will come into way or to a certain extent. For example, Caroline is
force next year, notwithstanding a huge amount of a good law'er inasmuch as she usually gets a good
opposition to it from industry'. result in court. However, she is not very good at
keeping up to date with important work'.
Use the correct expression, notwithstanding or inasmuch as', in the following sentences.
a Some good has come from my uncles death he left a lot of money to a children's
charity in his will.
b 1 agree to sign this contract the fact that 1 have some doubts about your ability to
deliver the goods to me on the due date.
c She was employed by one of the top law firms in London her lack of experience.
d The judge in the Court of Appeal held that the court of first instance made a mistake
inadmissible evidence was taken into consideration,
HeIp desk
to come into force - to begin to have lack of experience - only a little experience
legal efÍect. of something.
opposition to something - strong disagreement inadmissible evidence - evidence that for

to sornething. some reason cannot he presented in court.
a top Iaw firm - one oÍ the most successful

and well-known law firms.
197
= Exercise 4
1 Here are some more formal words that are vesy common in contracts. They are followed by a preposition.
It is a good idea to learn the word together with the preposition. Match the words with the definitions.
==
a •prior to' means.. ... dependingon (1)
b •subject to means... • . .involved in, doing (2)
c engaged in means... • .named, called, mentioned (3)
d inclusive of means... • before (4)
e referred to means... • .including (5)
Exercise 5
PUt a word and its preposition from Exercise 4 into these sentences.
a Is the price of the goods tax?
b In this contract we will define you as the Company' in the defined terms section and that is how you
will be every time you are mentioned later in the document.
c He worked in an office for many years but now he is running his own business
in London.
d Vou haven't always worked here. What did you do working for this law firm?
e This holiday is offered at the price stated in our advertisement availability. We

have a limited number of places available.
Help desk
to define -- to say exactly what a word means. running - operating.
defined terms section - the section of a availability - how many/much of a product that
contract where the parties agree exactly what a company has that it can seu.
particular words mean when those words appear
in the contract.
198
UNDERSTANDING TECHNICAL WORDS
When a lawyer drafts a contract he or she will aften use words that are very technicai. In arder to
o
understand contracts you need to know the meaning af these technical words. ==
o.
Exercise 1
Here are some words that are very common in contracts. They are ali connected with buying and selling
goods. Match the words with the definitions.
outlet (1) invoice (4)
retailer (2) manufacture (5)
defective (3) sum (6)
a amount of rnoney) d a person ar company who seus goods to

the pubiic
b not working pruperly, faulty
e a shop or campany through which goods
c a iist of goods ar services that you have are sold
received, showing how much you have to pay
for them f make ar praduce goods to seu
Exerclse 2
Complete these sentences with a word from the list lo Exercise 1.
a He is a very successfui businessman. He has a chain of more than 20 shops in cities and tawns ali over
the south af Engiand, inciuding a large in Landon.
b Have you received our ? It states that yau must pay for the goods within 28 days af
dehvery.
c We will have ta return the camputer ta you hecause it is it laaked fine in the hax but
when we instafled it, it wauidn't work properiy.
d Mar' is renting a factory unit an an industrial park. She has a new business that invoives the
of products for beauty salons.
e £20000 is a very large to invest in a new business. 1 think you need ta get legal
advice befare you decide to go ahead.
f That supermarket chain is the biggest food in the United States.
HeIp desk
to invest to put money into a business ar put to instail to put a machine in the place that
tinto a hank account in arder to make a prafit. you want to use it and connect it ta a pawer
supply so that it is ready ta use.
go ahead continue.
199
=o
EKercise 3
Jumbled words. Look aL the definitions below. They are ali definitions of formal words. The letters of the
words that belong with each definition are mixed up. Put the letters lo the correct order to spe// the words
The first Ietter of each word is there for you.
Example: A word meaning to end sornething, especially sornething such as a contract. TERMINATE
(RATEINEM)
a A word that has the sarne rneaning as duration. Lawyers use it to taik about the period for which a
contract is valid. T (MRET)
b Two words that mean to warn someone that something is about to happen. Often il rneans to warn
someone that a contract is about to end. G N (GVIE NITECO)
c A very formal word meaning the ending of somethirig. E (EXPRITIONA)
d A noun that means obtaining or getting something. P (MENTCUREORP)
e A formal word that means an accumulated total. A (AGATEREGG)
f A formal word that means to promise to do something. U (TAKEUDERN)
g A word that means to suffer something or to place yourself in a bad situation by your own actions with
the result that you receive a punishment. 1 (CURNI)
Exercise 4
Choose the correct word from Exercise 3 to complete these sentences.
a This offer will come to an end at the of four weeks of the date of this letter.
After that date it will not be possible to buy goods at this special price.
b The machinery that you hire under this contract will be available to you for not onger than an
of 12 weeks. lf you wish to continue to hire the rnachinery after that you must
sign a new agreement with us.
c The selier must to insure the goods during transportation before we agree to
buy them.
d Julia Davies signed the contract, as she was responsible for obtaining office
supplies for the government departrnent.
e In writing this letter 1 formally that 1 will end my employment with this company
on 2 May.
f The _________________ of this agreement is six months frorn the date of the parties signing it.
She will probably _________ a fine because she left her car in a no-parking zone.
200 HLHh
UNDERSTANDING ARCHAIC TERMS
a)
An archaic term is a word that people don't use in everyday speech hecause it is so old. However,
•'l
Iaers sometimes use archaic terms in international contracts. This rneans that Iawyers sometirnes use o
o-
English words that you can find in the plays of Shakespeare but that you will never hear people using in
ordinary speech. o
An important group of archaic words are those that begin with here', (for example, herein, hereby) and
with there', (for example, thereon, therein). The text below will tell you something about these here' and
'there' words.
Exercise 1
Here is some important advice about understanding and using certaín words that often appear in
iritemational contracts. Choose a word from the box be/ow to complete the text.
legal archaic herei nafter mentioned

clause preposition delete thereon
There are words that some Iawyers use that are not part of modern English language. Language specialists
describe these words as (a) , meaning that they are no longer in common use. These are
not technical, (b) words, but words from general English. Some lawyers believe using
these archaic words makes a document more serious. The more modern view is that they only make a
document look old-fashioned.
The general advice these days from ali modern legal writers and Iaw firms is not to use them. Very often
you can (c) them without it having any effect on the meaning of the document at ali.
However, you will see these words in some documents so you need to understand them.
There is a particular category of archaic words that are very common in contracts. These are words starting
with here or there', followed by a (d) . Examples would be words like herein' or 'thereon'.
The here' words usually mean In this document' or, in a contract, it could mean In this (e)
lhe there' words refer to something that the writer (f) before now.
For example:
The persons (g) named.

This means the people named later in this document'.
Jhe sum of money borrowed and the interest thereon shall be repaid in fuli on 5 June'.
lhe word (h) - _____ here means on the sum of money borrowed.
Some lawyers argue that these archaic words are more exact or precise than modern English. Modern
language specialists and many ieading law firms say that this is not true and for this reason archaic words
are fauling out of use in the UK.
(lo- LeI [r 201

c
o
== Exercise 2
o Look at the defïnitions of the archaic terms below. Complete the sentences that fol/ow with one of the
archaic tcrms from the Iist. You will need to use each word only once.
=
Hereby - by means of this document'with these words/with this action.
1 hereby accept your offer.'
Herein in this document.

The price named herein is final and non-negotiable.
Hereinafter - starting from this time/later in this document.

ATL Electrics plc, hereinafter known as "the Company".'
Heretofore - earlier in this document/previously/before the time of writing.

The property heretofore known as Downing House is renamed Appleby House.
Hereunder in a later part of this document/under the terms of this agreement.

The terms and conditions are listed hereunder.'
a Royai Airiines Limited, referred to as RAL'. (/ater in this document)
b The Author guarantees to the Publisher that the Work is unpubhshed by any other
company or individual. (previous/y)
c in consideration of the sum of £10,000, receipt of which the Seiler acknowledges.

(by means of this document)
d Any products referred to remain the property of the Supplier until the Customer pays
for them mn fuli. (in this documerit)
-
e in case of dispute between the parties, any arbitration conducted will be conducted
by Arbitrators Direct of London. (under the terrns of this contract)
Help desk
in common use something that people to fali out of use - if something falis out of use
use often. it means that people dont use it any more.
to delete something - to remove something to acknowiedge receipt to confirm that you

from a piece of writing. have received something.
a category - a group of things that are of the in fuli - completely.

sarne kind.
arbitration the process of a third party setthng
a leading Iaw firm one of the most important an argument or a legal problem without the
iaw firms. matter going to court.
non-negotiable - can't be changed, fixed. conducted - done, carried out.
202
Exercise 3 0)
Look at the deflnitions of some more archaic terms below. Complete the sentences that Íollow with one of o
1
the archaic terms from the list. You will need to use each word only once. =o=.
e
=
Thereby - as a result of this or that action.
Your client signed the contract and thereby entered into a binding agreement.'
Therein - in or into a particular place or thing/in thatlin there.

The rented property and the furniture contained therein.'
Thereon - on itlon there/on what 1 have just mentioned.

'The arnount borrowed and the interest due thereon must be repaid by 10 March 20XX.
Thereinafter later in that place or thrng/later in what 1 have just rnentioned.

We were defined in that contract as the Cornpany and we were known as the Company thereinafter.
Thereto - to it, to the thing that 1 have just mentioned.

At the meeting we will discuss Mrs Jones's will and ali matters related the reto.'
a He soid the company and became a millionaire. (as a result of that action)
b 1 enclose a copy of the contract. Please return it to me together with any amendments
(to the contract 1 havejust mentioned)
c The owner of the land and any person who wishes to claim an interest shouid
contact this firrn of solicitors as soon as possible. (in the land that / ha ve just mentioned)
d The defamatory story in the newspaper refers to my client in the first paragraph and refers to her
another four times in total. (later in the thing that / ha ve just mentioned)
e The Buyer agrees to insure the painting and to pay any import tax due upon
delivery to the UK. (on that particular thing)
Exerclse 4
There are certain archaic words that iawyers use in contracts to mean rnentioned in an earlier part of this
document. These words are:
said' aforesaid'
aforementioned the sarne'
Look at this typical example. The relevant parts of the sentences are highlighted
The contract between the claimant and the defendant was signed in August. Said contract was for the
supply of goods.'
In this example the word said' is used to rnean the contract that 1 have already mentioned. The iawyer
could have used the other words in the list to do the sarne. Alternatively, he or she could have just said
or The contract':
The contract beiween the claimant and the defendant was signed in August. It was for the supply of goods'
continued
Gth Legal EngIs 203

When you see one of these archaic words in a contract you must look back in the document to find the
noun that it refers to. Sometimes you are iucky and the noun that is being described is near the archaic
word, as in our example. However, sometimes the noun and the archaic word are far apart and that makes
things more difficuit.
w
Look at the foliowing examples. They are ali from the terms and conditions of sa/e of a contract. in each
exam pie you wili see one of the archaic words from the previous page. in each exam pie underline the word
or words that the archaic word refers to.
a Payment must be made upon delivery of the goods. lhe exception is where payment by invoice has
been agreed. In the event of payment by invoice payment must be made within 30 days of receipt of
the sarne.
b Where a specific delivery date has been agreed and aforesaid cannot be met the Buyer wifl have the
option to receive a fuil refund.
c The goods shail be inspected by the Buyer upon dehvery. Ali goods come with a dehvery note. in the
event that goods cannot be examined by the Buyer the aforernentioned document shafl be marked
not examined.
d Any detective goods must be returned to the Suppher. Said goods must be correctly packaged.
HeIp desk
cornments - things that are written or said meet (met) an obhgatíon - to fuifli an obhgation.
about someone or something. To do what you promised to do.
exception - something that is not inciuded in a refund - the money that you get back from a
general rule, shop or a suppher when you return goods,
packaged - put into the correct box, bag or option - a choice.

container for transporting or sefling.
UNDERSTANDING SOME COMMON WORDS

Exercise 1
Look at the words and phrases in the blue box. They are ali connected with a specific lype of contract. Use
the correct word or phrase to comp/ete each definition on the next page.
In transit On board Carriage Copyright

Staif hirer patent Irnport duty
invention trademark Premises owner
204 C chj .i Ergiih

a are the buildings that a business uses.
b - is the legal right for someane such as a writer ar a singer to publish his ar her awn
work and ta be sure that no one can capy ar explait it withaut permissian.
o
c - is a type af tax that you have to pay when you bring certain goads into a cauntry.
d is moving gaods from one place to another.
e are alt afthe people wha wark for a particular business ar arganisatian.
f A - is a symbal such as a word ar a picture that a company puts anta its praducts to
distinguish it fram the praducts af its campetitars.
gA is an afficial document. The document pratects a new inventian, such as a new

medicine ar a new machine from being capied ar explaited.
h means in the process of being transparted fram ane place ta anather.
i A is a persan ar organisation that pays maney ta someone ta use something for a

certain period of time.
j An is something new that someone has made or designed for the first time.
k means placed on a plane, ship, lorry ar a train.
1 An is a person ar arganisatian that has the legal right ta possess something. It

belongs to them.
Exercise 2
Each of the words and phrases in Exercise 1 are connccted with a specific type af cantract. Sort the words
into the correct type af cantract under the headings below.
A contract for the hire A contract for the transport A contract concerning a
of a hotel for a company's of goods by ship company's inteliectual
conference property rights
Legdl Ergs 205

o
-o Exercise 3
o
L .
Put the correct word or phrase from the contract for the hire of a hotel for a com pany's conference
into the foliowing sentences.
a The of the hotel bought it last year from a large hotel chain.
b The of the hotel conference roorn wants lo book the roorn for three days in June.
c The hotel are very big. In fact, it is probably the biggest hotel in the city.
d There are over 200 working in the hotel.
Exercise 4
Put the correct word ar phrase from the contract for the transport of goods by ship into the following
sentences.
a The goods were put the ship in Liverpool and the buyer wili unload theni in Sydney.
b The cost of is £600.
e The buyer agrees to pay any that the customs authorities demand when lhe goods
arrive in Australia.
d The goods are - . They are on a ship sornewhere between England and Australia.
Exercise 5
Put the correct word ar phrase from the contract concerning a company's inteilectual property rights
irito the fo/lowing sentences.
a The com puter was a new in the twentieth century.
b The publishing company and not the author has in lhe book.
c If you invent sornething new it is irnportant to register a - You will get a docurnent
that protects your right to produce and sell your invention.
d The of the Victoria Bennett Jeans Cornpany is the letters VB with a gold circle
around thern.
Help desk
a conference - a large meeting where people customs authorities - a government

discuss irnportant rnatters, especially business department that collects tax on goods that
rnatters. peaple bring inta the cauntry.
a hotel chain - a group of hoteis that ali have an author - a person who writes books.
the sarne owner.
intellectual property rights - a person's rights in
to book something - to say that you want to sornething that they have invented ar created. No
reserve samething to use in the future such as a one else has the right to make, seu, copy ar exploit
car ar a hotel room. lhe invention ar creation without perrnission.
206 Odl Líï rSt

THE STRUCTURE OF A CONTRACT =
Read the foliowing text about the structure of a contract. The most important words are in the key
vocabu/ary below. Then complete the exercises that fo//ow. o
r
=
Key vocabulary o
=
drafts delivery of precedent recitais
parties goods/services bankJiibrary
definitions section
the operative drafting checkiist to draft 'from
precedent
provisions template scratch'
A contract has a logical structure. Some lawyers However, a lawyer who is drafting a contract doesnt
say that a well-written contract is like a story often begiri with a hlank page. A Ia'er would cail
because it explains the agreement from the this to draft from scratch. Most modern
beginning to the end in a way that a reader can contracts are not drafted from scratch but are based
clearly understand. When a modern lawyer drafts on a precedent. A precedent is an existing contract
a contract he or she is foliowing a tradition that has that a lawyer can use as a model for drafting
deveioped over many years. Lets look at the first another, similar agreement. A precedent also acts
haif of a commercial contract. Most commercial as a useful drafting checklist to make sure that
contracts begin with the foliowing sections: everything necessary is included. Most law firms
have a precedent bank or precedent Iibrary as
the parties - the people or companies who are
part of the word processing faciiity on the company
entering into the contract
computer, or they rely on an encyclopaedia of
the recitais the background to the contract precedents. The precedents are regularly updated,
and the reason(s) why the parties are entering particularly when the relevant law changes.
into the contract
A precedent can also be referred to as a template,
the definitions section - how certain words
but this is a more general word for something that
must be interpreted when they are used in the
you can copy. it is not so specific to contract law as
contract
a 'precedent. Remember, a contract precedent
the operative provisions the most important should not be confused with the other meaning of
things that each party agrees to do the word precedent, which is the decision of a
the delivery of goods/services the time when judge in common law that is used as a general
the key obligations will he carried out and where principie of law.
they will be carried out.
HeIp desk
an operative provision an important obligatiori. current existing now.
carried out - done, performed. a checklist - a Iist to help you niake sure that
everythirig necessary is done.
a blank page - a page with no writing on it.
Gi:iI ic: Er 207

= Exercise 1
o Here are some questions about the words in the key vocabu/aty. Match the questions with the
1
answers provided.
=
a What is a contract precedent? They are the people or companies who are entering
into the agreement (1)
b What does to draft' mean?

It is a model contract that already exists A Iawyer
can use it when he or she has to draft a similar
c Who are the parties to a contract? contract. (2)
Because it specifies the exact meanings ot words.

d What does the recitais section of a Both partes (and maybe a court) must be sure how
contract contam? particular words are interpreted in the contract. (3)
It is another word meaning 'to write. (4)

e Why does a contract contairi a clefinitions
section?
It means to write a contract from the very beginning
without the help of a precedent. (5)
f What does to draft a contract from scratch
mean? The decision of a judge that forms part of the
common law. (6)
g What is the other meaning of the word This part of the contract contains background
precedent? information and explains why the parties are
entering into the contract. (7)
Exercise 2
Here is a list of different sectiors that Y0L1 wi// find in the flrst half of a commercial coo tract. Match each
section of the contract with the correct extract below.
the deiivery of the operative the parties the definitions/

goods/services provisions defined terms
the recitais
a 'Goods means any goods or services that are ordered from ABC Printing Ltd and includes any materiais
incorporated in them.
This is from
b This Agreement is made on this fifth day of March 20XX
between ALT ELECTRICS Ltd
and PARSONS MANUFACTURING Ltd
This is from
208 b
c The Work will be carried out on 5 May 20)O( at the Buyers address.
This is from
o
o
d (1) The Buyer owns a shop.
(2) The Supplier is an experienced electrician.
(3) The Buyer's shop is in need of electrical modernisation and repair.
(4) The Supplier will carr-y out the electrical modernisation and repair to the shop upon the conditions
set out in this agreement.
This is from
e In consideration of the sum of £5000 the Supplier agrees to carry out the Work Iisted in Schedule A of
this Agreement according to current UK standards as specified by the relevant legislation.
This is from
HeIp desk
incorporated in - included in. relevant legislation the part of the general

law of a country that the parties to a contract
to carry something out to do something.
must obey in a particular situation.
set out - written or stated.
Exercise 3
Put a word frorn the text about the structure of a contract in Exercise Ï into these seotences.
a The people or companies who are entering into an agreement are called the to
the agreement.
b Lawyers rarely have to draft a contract from as they usually have a precedent that
they can use as a template.
c The section of a contract that gives the background to the contract and the reasons why the parties are
entering into the agreement is called the
d Most law firms have a collection of precedents that they refer to as a precedent or a
precedent library.
e lhe section of the contract that deals with - of goods or services usually states exactly
when the key obligations will be carried out.
(;Io))l L'' 209

e
= UNIT 6A VOCABULARY CHECK manufacture
== non-negotiabie
e
LI-
These are the important words that you have notwithstanding
= obhgation
Unit 6113. on board
operative provisions
aforernentioned option
aforesaid outiet
aggregate
parties
a rb itration
patent
archaic term
precede nt
avaiiability
premises
carriage prior to
clause procure
compensation procu rement
con tractor property
copyright
real property
defective recitais
defined terrns referred to
definition refund
dei ivery remedy for breach
distributor reta i ie
d raft
sa id
engaged in sarne
entitied to subject to
expiration su m
extent supplier
forthwith take piace

from scratch tempiate
give notice term

terrninated
hereby
territory
herein
thereby
hereinaíter
therein
heretofore
therei nafter
hereunder
thereon
h i rer
thereto
irnport duty trademark
in efíect trading
in fufl
undertake
in transit
inadrnissb!e
inasrnuch as
inciusive of
incur
invoice
210
TOLES FOUNDATION EXAM PRACTICE =
Exercise 1
o
Read the follovv/ng pairs of seateaces. For each pair of sentences tliere are twa possibilities, A ar H. ==
Decide which sentence uses the correct preposition. Write your answers ia the box below. There is an
example at the beginning (*). o
=
Exampie
A lhe Cornpany shall not be responsible for any of lhe Agent's costs and expenses.
3 lhe Companv shall not he responsible to any of the Agents costs and expenses.
1 (A) Ali prices stated in the Agreement are inclusive of tax.

(B) Ali prices stated in the Agreement are inclusive with tax.
2 (A) The Company is engaged at the business of manufacturing electrical goods.

(B) The Company is engaged in the business of manutacturing electricai goods.
3 (A) lhe Buyer agrees to pay interest of any outstanding payment.

(B) lhe Buyer agrees to pay interest on any outstanding payment.
4 (A) lhe Company wifl pay the Empioyee's expenses subject to the Empioyee providing valid receipts.
(B) lhe Company wili pay the Empioyees expenses subject on the Empioyee providing valid receipts.
5 (A) JHS Manufacturing, hereinafter referred to as 'the Company'.

(B) JHS Manufactunng, hereinafter referred in as the Company.
(*) A (1) (2) (3) (4) (5)
Exerclse 2
Look at this list of words. They are ali nouns. Put the correct word into the foliowing sentences. Write your
answers in the boxes numbered 1 10 below. There is ao exampie at the beginning (*).
(AA) distributor (C) invoice (F) copyright (1) term

(A) recitais (D) expiration (G) precedent (J) duty
(B) outlet (E) remedy (H) premises
Exam pie
() A person ar company thut sLipplias goods ui a particular geographical area is often referreil lo n a
contract as a (*)
1 A (1) is an existing contract that a iawyer can use as a model when drawing up a new contract.
2 Many written contracts refer to a (2) for a hreach. This is a solution that the party in breach
can offer to the injured party to compensate him ar her for the effect of the breach.
3 An (3) is an itemised bili. Many contracts state what the penalty wili he if it is not paid on time.
4 The (4) section of a contract provides the background to the contract. II states why the parties
are entering into the agreement.
5 A contract wifl often use the formal word (5) to describe commerciai land and buildings.
6 Contracts that deal with the export ar import of goods usually have a clause that states which party will
be habie for any import (6) - when lhe goods arrive in a foreign country.
(k)IJ,Il i 211
o 7 In contracts where creative work such as artwork or writing is sold, it is important to state which aí the
parties owns (7) in the work.
=
o
1 8 A place that seus goods to the public is often referred to in a contract as a retail (8)
w
= 9 The (9) of a period of time is a very formal way af saying the end of that period of time.
10 The duration of a contract is usually referred to as the (10) of the contract.
(*) AA (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
Exercise 3
Read the text be/ow. It is from a contract. Some aí the words ia the text are underlined. The meariings of
these words appear in the 11sf below, but they are not in the sarne arder. Match the under/ined words ia
the text with the correct meanirigs by writing the letters (A, B, C, etc.) in the box below. There is an
exarnp/e at the beginning
FROM A PAYMENT CLAUSE
1.1 In (AA) consideration of the Goods (A) furnished under this (B) Agreement the Buyer agrees
to pay the SelIer the (C) sum stated in Schedule 1 to this Agreement.
1.2 Save as may be (D) set out in this Agreement the Bayer shall make payment in (E) sterling
within 14 days of (F) receipt ot invoice.
1.3 lnterest shall (G) accrue on (H) overdue payments at the rate of 5,5% per annum above the
base rate from time to time ofThe Royal Bank (1) in the event that payment is not received
on the (J) due date.
(*) AA what the parties exchange under the contract; in exchange for something
contract
amount of money
receiving
written, specified
the currency of the United Kingdom; pounds
agreed date when something must he done
grow, accumulate
provided
Iate
if
212 E
Z
11
- au
'
UNDERSTANDING CONTRACTS 1 o,
r
rt
THE DIFFERENT PARTS OF A WRITEN CONTRACT
Exercise 1
Here are six headirigs that are used by /avycrs to describe different parts aí a contract. Match the
descriptions be/ow with the correct heading.
the delivery of the operative the parties the defined terms

goods/services provisions the recitais a scheduie
a The part of a contract tinat sets out the most rnportant things that the parties have agreed to do under
tho contract.
lhe heading is
b lhe part of a contract that gives the background information to the contract. It often states why the
parties are entering into an agreement.
The heading is
c The part of the contract that gives a precise explanation of how the parties wiH interpret certain wards
used in the contract.
The heading is
d An extra docurnent that is attached to the contract giving information that is too detailed to be included
in the body of the contract.
The heading is
e The part of the contract containing the names of the people ar companies who are entering into
the contract.
lhe heading is
f lhe part aí the contract that gives a specific time and date for when certain obligations must be carried
out. It might also specify where these obligations will he carried out.
The heading is
UK lawyers often refer to the parts oÍ a contract as clauses. For example, 1 would like to suggest some
amendments to clause 4 af this contract. However, there are other words that Iawyers often use in the
sarne way:
section
paragraph
article
Internationaily, Iawyers use the words as synonyrns - they ali have the sarne meaning.
'Can 1 draw your attention to sectian 5'

'If we can just 100k at paragraph 5 for a moment
If you wouldnt mmd looking at clause 5'
Let's 100k at article 5'
215
PARTIES AND RECITAIS
=
You need to know about...
Parties
A contract wili aiways name the parties to the agreement. It is necessary to identify the parties so that
everyone concerned is sure who the agreement is between. The addresses of the parties are usuaily
inciuded. This is important in case you want to serve a notice on the other party. With a company it is
usual to give the address of its registered office, which is often not the sarne as the business address.
Recitais
Most contracts inciude a recitais section, aithough many iawyers say it is not absoiuteiy necessary. The
recitais give the background information to the contract. it is useíui because it usuafly says why the parties
are entering into the contract. The recitais often start with the word WHEREAS and in some contracts every
sentence in the recitais wili begin with the word WHEREAS. it is a very oid-fashioned word meaning
something hke 'Taking the foliowing facts into consideration or The situation is as foflows'.
Exercise 1
Read the foliowing extract from a contract. Complete each gap with the correct word from the blue box below.
This AGREEMENT is made on this third day of Aprii 20XX
between
CLADDAGH FURN1TURE & DÉCOR Ltd a company incorporated in ireiand under number 1000576
having its registered office at 30 King Charles Crescent, Gaiway City, Repubhc of ireiand hereinafter
(a) to as 'the Supplier', (b)
ALL THINGS 1RISH Ltd a company incorporated in Engiand under number 2297103 having its
registered office at 1 Montgomery Square, Birmingham, Engiand hereinafter referred to as the
(c)
REC1TALS
WHEREAS the Suppher is (d) in the manufacture and distribution of handmade furniture
and various other househoid goods for saie and distribution to retaiiers
WHEREAS the Buyer is a (e) who operates a chain of retail outiets around the UK and
wishes to purchase a seiection of furniture and other goods from the Suppher for saie to the pubhc
via said outiets
WHEREAS the Suppher agrees to suppiy specified furniture and other goods to the Buyer
to the terms and conditions set out in this Agreement.
referred subject retailer

engaged and Buyer
216
Exercise 2
A client has te/ephoned you to ask for ao explanation of some of the words in the extract lo Exercise 1.
Match the highlighted word or phrase with the definitions provided.
(* Incorporated means... .,.people or companies who sell things in their

shops directly to the public. (1)
a Hereinafter means.
• . .written. (2)
b Manufacture means... runs or manages a business. (3)
c Retailers are... .number of shops or offices run by the sarne

business or company. (4)
d Operates means...
.to be formed into a registered company.
e Achainisa... ,later in this document. (5)
f Outlets are... ,to rnake or produce something. (6)
.somewhere where goods or services are sold,

g Said means...
such as shops. (7)
h Set out means... .already rnentioned. (8)
Exercise 3
Here is another introduction to a contract. It is very similar to the exam pie that you saw in Exercise 1. P111
each gap in the text with the correct preposition from the blue box below.
This AGREEMENT is made (a) this eleventh day of August 20XX
between
COMPUHIRE Ltd a company incorporated (b) England under number 9998113 having its
registered office (c) 55 Maple Court Lane, Manchester, England hereinafter referred to
as the Owner' and
ONLINE COUNTRY GIFTS Ltd a company incorporated in England under number 7890123 having
its registered offlce at 60 Vale Arbour, Birmingham, England hereinafter referred to as the Hirer'
RECITALS
WHEREAS the Owner is engaged in the hire and maintenance (d) office computer
systems to onhine business operations
WHEREAS the Hirer is a business which operates an online gift purchasing facility for use
(e) the general pubhic
WHEREAS the Owner agrees to supply specified computer hire and maintenance services to the
Hirer subject (f) the terms and conditions set out in this Agreement.
on of at to in by
C,hF Lg E' 1 J 217

Exercise 4
Complete the following iotroduction to a contract using the information from the blue box.
=
DATE: 19/07/20XX
PARTIES: BPP Distribution Ltd (known as the Distributor), company number 3456789 and
The Engiish Educationai Press Ltd (known as the Pubiisher), company number 6789012
This AGREEMENT is made on this (a) day aí (b) 20XX
between
(c) a company incorporated in Engiand under number

(d) having its registered office at 15 Regent Street, Liverpooi, England
hereinafter referred to as 'the Distributor' and
(e) a company
incorporated in Engiand under number (f) having its registered office at
Princess Diana House, York, Engiand hereinafter referred to as 'the ()
RECITALS
WHEREAS the Distributor is engaged in the distribution of academic and educationai textbooks for
saie and distribution to schoois, universities and other educationai estabhshments.
WHEREAS the Pubhsher produces academic and educationai textbooks for use in educationai
estabhshments within the United Kingdom.
WHEREAS the Distributor agrees to distribute specified tities to educationai establishments subject
to the terms and conditions set out in this Agreement.
Exercise 5
Complete the fol/owing sentences witb a word or words that you have seen in Exercises 1 4.
a The company was incorporated in 20XX and has its office at 10 Admiraity Square,
London.
b The Distributor agrees to the terms and conditions in this agreement.
c COMPUHIRE is known as the Owner'.
d He runs a of 15 retaii outlets in the south of Engiand.
e In the recitais section of a contract you often see at least one sentence beginning with the word
f The Hirer is in the business af the distribution of educationai textbooks.
Coilocation bank
to serve notice/a notice to enter into a contract to run/operate a husiness

on someone
to carry out an obiigation to be engaged in a particular
the terms and conditions business/occupation
to make ao agreement
set out in an agreement
218
=
Preposition bank
the parties to an agreementJcontract to enter into a coritract

Who are IJie parties to this contract? Did you enter into Pus contract voluntarily?'
subject to terms and conditions an agreement between two parties

The Cornpany agrees to supply the Buyer This agreement is between the Publisher
with goods subject to the terms and and the Distributor.'
conditions set out in this Agreement.'
to draw someones attention to something
to suggest an amendment to a document 'Can 1 draw your attention to what you said
1 suggest an amendment to clause 6. in your email?'
DEFINED TERMS
You need to know about.
This section of a contract usuaiiy comes after the parties and recitais. However, some contracts have this
section at the end of the agreement. The purpose of this section of a contract is to give a precise definition
of important words as they are used in that particular contract. It is important because the parties need to
know for sure what words mean. For example, look at this very precise definition of the word 'Goods'.
'Goods' shall mean any goods or services that are the subject of the contract and shall include
components and any part(s) of components supplied and any materiaIs incorporated in them.
You will see that it is different from the normal dictionary definition. That is because the parties have
agreed on the meaning of the word 'Goods' in this particular contract.
A word or expression that has been defined is called a defined term. Often, a defined term is only one
word, for example Goods'. However, a defined term may be made up of more than one word, for example,
Final Repayment Date'. In the definitions section, each word ofthe defined term must be given a capital
letter, as in our example. Then, every time a defined term is used in the contract it also starts with a
capital letter. This is to remind anyone reading the contract that these words are defined and have a
speciai meaning. The first time a defined word is used it is put in inverted commas like this, 'Goods'
means.... After the first time the defined term is used without inverted commas.
The section of the contract that begins after the recitaIs often begins with the words Now it is agreed as
foMows' or It is hereby agreed'. This means that the definitions section is the start of the legaily binding
part of the agreement.
Exercise 1
lo (he bluc box thcre are four defiried terrns froru a coritract. Match each defiried term with /ts definition below.
'Company' (1) Contract' (3)
'Buyer' (2) Goods' (4)
a the agreement dated 5 March 20XX entered c any goods/services that are the subject of
into between the Company and the Buyer to this contract and shall include components
supply goods/services to the Buyer. and any part(s) of components supplied and
any materiaIs incorporated in them.
b the person/company or the
person's/company's servants or agents d THE ANNE HARTIS COOKIE COMPANY LTD,
purchasing goods/services from of 25 Station Lane, Cuthbert Road, Durham
the Company. DH15 8HK.
Gkha Legul rt' 219

Exercise 2
Exercise 1 contained the failawing definition:
Buyer' means the persan/campany ar the persan's/company's servants ar agents purchasing

goods/services fram the Company
What do the words servant' ar agent' mean when used in this way?
In the case aí Ma/calm v University af Oxfard (2002) the Caurt af Appeal spake about the meaning of
these twa wards.
Fram Malca/m v University ot Oxford (2002)

'The term servant" means an ernplayee under a cantract aí service. The term "agent' means a
persan entrusted with the fulfilment af a rale ar perfarmance aí a task an behalf aí his principal,
usually invalving ar afíecting the legal relatians aí the principal with a third party.'
Here is a simplified version of the judge's explanation. Complete the explanatian of what servant' and
agent' mean by fil/ing the gaps in the text with a word from the box below.
The word (a) ' means an emplayee wha has a cantract aí emplayment with yaur campany.
A gaod example aí the legal meaning af the ward servant' wauld be a servant' aí a university. This wauld
include any (b) _ who has a contract ta wark íar the university but nat, for example, a visiting
(c) wha was paid a fee ta give a talk ta the students.
The ward (d) means a persan wha the party ta the cantract, knawn as the
(e) ar the master, trusts ta act an his behalf when dealing with a third party.
professor principal servant agent employee
Exercise 3
Here is the çlefinitians sect/an from anather cantract. Fui each gap with the correct preposition from the
blue bax below.
(a) these terms and conditions the fallowing words shall have the faliowing meanings:
'the Supplier' means Petersan Electrics Ltd trading under the title appearing on any invoice
(b) the Gaads
the Gaads' means any praduct, articles ar things supplied by ar subject to negatiations for supply
(c) the Supplier (d) the Buyer
the Buyer' means any corporate entity, firm ar persan ta wham the Supplier supplies ar
(e) whorn the Supplier enters negotiat;ons for the supply (f) Gaads.
In for to of by with
220
=
Exercise 4 a,
Look at this inforrnation from the definitions section ofarother coritract. The information refers to how
certain words ia the contract will be interpreted. This is common to many commercial coa tracts. Match F
each piece of information with the correct explanation given below.
In these conditions, unless a contrary intention appears:
a reference to the singular includes a reference to the plural and vice versa
b reference to a gender includes a reference to the opposite gender
c reference to a party includes a reference to its servants and agents
d headings are used for the purpose of reference only and do not form part of these conditions.
If the word he/hirrVman is used in this contract, The title of a contract clause, for example,
that word also means she/her/woman. (1) payment terms or termina tion is not included
as part of the terms and conditions of the
If the contract refers to one of something, contract. (3)
such as a component of a machine, that
word includes components - the contract Every time one of the parties to the contract
doesn't need to use both words each time is mentioned, for example, the Company,
that term is used. (2) the name of that party will be understood to
include ali of that party's employees. (4)
Coilocation bank
to provide a precise definition of a word
Preposition bank
to be the subject of a contract to act on behalf of someone else

'Goods shall mean the goods that are the Any servant or agent who is authorised to
subject of any contract between the parties act on behalf of the principal,'
to refer to something to trade under a particular name

Where the masculine is referred to in this That company went out of business last
contract it shall include the feminine.' year but they are now trading under a new
name.'
to supply goods/services to someone
'Our company supplies electricity to the goods/services supplied by a company
London area. •Any goods supplied by your company must
meet European Union safety regulations.'
to be a person who is under a contract of
employment/service to be subject to something
'He is under a contract of employment to a The price of the Goods is not subject to
big recording company in Los Angeles for negotiation.'
the next six months.'
to be entrusted with doing something or
to work for a company or organisation dealing with a person
1 work for an international law firm in '1 am entrusting you with a very important
Hong Kong.' new client.'
GbI Legal Engh 221

Exercise 5
Look at the text be/ow. it is from the definitions section af a procurement contract. Procuren7ent contra cts are
usually used by governments or large corporations to buy the things that they need from outside com pan/es.
Read the tet and explain the meaning of the underlined words or phrases. You can use one word or a short
sentence. There is an exam pie at the beginning.
Terms and conditions aí purchase
DEFINITIONS
1.1 Buyer shall mean the United Kingdom Department of Health, their servants or () çnts.
1.2 Selier shall mean the person, firm or company (a) issued with an Order and any
(b) servants, agents ar authorised sub-contractors of any such person, firm or company.
1.3 Order shall mean a purchase arder as may be varied by a Change Order.
1.4 Change Order' shall mean an arder varying ar cancelling an Order as described in clause 4
(c) hereaf.
1.5 Wark' shafl mean any equipment, gaads ar services ar part thereof ta be provided under
the Order.
1.6 'Price' shall mean ali (d) sums oayabie ta the Seiler for perfarmance af the Work.
1.7 Intellectual Property Rights shall mean ali copyright, ali ather rights in relation ta registered
and unregistered trademarks, inventions and ali other rights resulting from intellectual
activity in the industrial, scientific and artistic (e) fields.
(*) Agents are the people who are authorised ta act an behalf aí a principal. The principal is one af the
parties to the contract.
Exercise 6
Complete the fo/lowing sentences with a word ar wards that you have seen in Exercises 1-5,
a in these conditions, unless a intentian appears, a reference to the singular

includes a reference to the plural.
b Any reference to the Company shall include ali authorised sub-contractors, ar agents
aí the Company.
c Throughout this agreement such as NOTICE ar TERMINATION' are for reference

anly and do not form part aí the contract.
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d An agent usually works on hehaif of one of the parties to the contract. This party is known as the ==
agent ' s o,
e She is an expert in her chosen of law, which is the protection of inteliectual r
property rights.
THE OPERATIVE PROVISIONS

After the recitais and the defined terms there are clauses giving a detailed description of what each party
promises to do. This part of the contract could be a short paragraph or it could be severai pages and contain a
very exact description. Depending on the type of contract it is, it might contain diagrams, drawings or graphs to
explain the nature of the obligations more clearly. Additional information like this may be inciuded here.
although it is usually contained in attachments to the contract known as scheduies.
ENerclse 1
Here is the first clause from the operative provisions section of a contract. It is a contract between a wine
irnporting company and an exclusive hotel. The company wants to hold its New Year party for 1000
employees at the hotel. Match the underlined words from the clause with the rneanings below.
In consideration of the sum stated in paragraph 1 of the Schedule hereto to be paid by the Hirer to
the Owner, the Hirer is hereby authorised to enter upon and use for the purpose only of holding a
private social function between the hours and on the date set out in paragraph 2 of the Schedule
hereto, the following rooms of the London Bridge Hotel together with the right of access thereto by
the usual routes. The said rooms are hereinafter known as the Hired Premises':
(i) The King Henry VIII Ballroom
(ii) The Thames Cocktail Lounge
(iii) The Westminster View Bar.
a A person who pays money in exchange for permission to use something for a certain period of time.
b A document attached to a contract. It forms part of the contract and contains specific information
about what the parties are agreeing to do.
The word or phrase is -
c Written or stated.
d A building or a part of a building that is used for something in particular.
e An amount of money.
continued
223
f What the parties exchange under the contract, such as goods, services ar maney.
g Ta this cantract.
h Bythiscantract.
i Later in this dacument.
The ward ar phrase is -
Exercise 2
Here is the clause again. Read it carefully using your answers fram Exercise 1 ta help yau ta understand it.
Answer the questions that follow using a fuil sentence.
In cansideratian af the sum stated in paragraph 1 of the Schedule hereta ta be paid by the Hirer ta
the Owner, the Hirer is hereby autharised ta enter upon and use for the purpase anly af haiding a
private sacial functian between the haurs and an the date set aut in paragraph 2 of the Schedule
hereto, the fallowing raams af the Landan Bridge Hotel tagether with the right af access thereta by
the usual rautes. The said raams are hereinafter knawn as the Hired Premises':
(1) The King Henry VIII Bailroam
(ii) The Thames Cacktail Launge
(iii) The Westminster Víew Bar.
a Why do the names af the parties have a capital Ietter whenever they are used in this contract?
b What term has been given to the wine importing company in the definitions sectian of this contract?
c What term has been given ta the hotel in the definitions section of this cantract?
d Where should the Hirer 100k to find aut how much the hire of the rooms in the hotel will cost?
e What else does the Hirer have the right ta use in addition to the three rooms that it has hired?
f What term is used ta describe the three raoms in later cÍauses afthis cantract?
224 1 (: LI Eng
Coliocation bank 0)
to hold a party or au event somewhere
Preposition bank
in consideration of sornething to agree to do something/exchange

In consideration of the sum specified in something under a contract
Schedule A. You agreed to buy my car under the terms
of our contract.
to get to a place by a certain route
1 get to London by the Ml Motorway. to do something between certain hours
or days
in exchange for something You may use these rooms between 8pm
1 will give you £1000 in exchange for and 2am.'
your car.'
Exercise 3
Hcre are four short clauses from the sarne coo tract. Two of the c/auses are obligations of the Owner and
twa are obligations of the Hirer. Put the cia uses under the correct íeading below.
a to ensure that during the aforesaid period of occupation the Hired Premises shall be heated and Iighted
by means of existing or additional heating and Iighting apparatus.
b to deposit with the manager at Ieast seven days prior to the execution af this agreement the sum of
£1000 to be applied in case of any damage to the Hired Premises howsoever caused.
c at the expiration of the period of occupation to remove any property including that beonging to any
servants ar agents and to leave the Hired Premises in a clean and orderly condition.
d to have available on the Hired Premises adequate staif to serve the needs of the occupiers af the
Hired Premises.
1. The Hirer undertakes as foliows 2. The Owner undertakes as foliows
225
ENercise 4
Hore are the c/auses again. Match the highlighted words from the c/auses with the definit/ons below.
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to ensure that during the aforesaid period of occupation the Hired Premises shall be heated and
Iighted by means of existing or addítional heating and lighting apparatus.
to deposit with the manager at Ieast 7 days prior to the execution of this agreement the sum of
£1000 to be applied in case of any damage to the Hired Premises howsoever caused.
at the expiration of the period of occupation to remove any property including that belonging to any
servants or agents and to leave the Hired Premises in a clean and orderly condition.
to have available on the Hired Prernises adequate staif to serve the needs of the occupiers of the
Hired Premises.
a in any way d used
The word is lhe word is
b performance/the parties carrying out their e end

obl igations
lhe word is
lhe word is
f leave, put, give
c already mentioned
lhe word is
lhe word is
Exercise 5
Look at this cia use frorn a contract. it is from a contract between a busiriess that offers a com puter
consuitancy serv/ce and its custorners. Read the clause and find the words that have the sarne meaning as
the words /isted be/ow.
SERVICES PROVIDED BY TECH1 CONSULTING
During the lerm of this Agreement TECH1 Consulting shall at the request of thc Customer provide
the following services for the aggregate number of hours specified in Schedule A:
1 provide a remote diagnosis service during Office Hours
2 visit the Customer's Premises to diagnose the exact nature and cause of malfunctions
and advise as to the repair or replacement of defective equipment
3 advise as to the choice and procurement of new equipment inclusive of software
4 provide additional services at the extra charges specified in Schedule B
5 be available 350 days per annum and to notify the Customer in writing of any period of
unavailability greater than 3 days.
a duration d obtaining or purchase
b total e year
c faulty
226 L igish
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Exercise 6
Thc contract clause lo Exercise 5 coo tains e/ght words/names that are included lo the def/ned terms
section of the coo tract. Look at the clause carefu//y and the list the words that are defined tereis.
a e
b f
c g
d h
Exercise 7
Here is another cia use frorn the sarne contract. There are some prepositions missing. Read the clause
carefully and P11 each gap with the correct preposition.
CUSTOMER'S OBLIGATIONS
During the Term (a) - this Agreement the Customer shall:
1 make available to TECH1 Consulting free of any charge whatsoever any operating manuais,
program information or any other technical information required (b) - TECH1
Consuiting to pertorm its duties under this Agreement
2 provide TECH1 Consulting with adequate working space and facilities to enable it to carry out
its duties under this Agreement without charge to TECH1 Consulting
3 where possible to provide TECH1 Consuiting with staft familiar (c) the
Customer's programs databases and computer records in order to co-operate in the diagnosis
of any maifunction or fauit in the system.
GIchI Legai Enghsh 227

Exercise 8
Here are the two schedu/es mentioned irj the contract. Some of the words are missing. Ff11 each gap ír the
schedu/es with the correct word frorn the blue box beíow.
payable reviewed Included

Overnight increase Additional
SCHEDULE A - MONTHLY CHARGES
The initial monthly charge for this contract i s £450 (a) monthly in advance.
The charge table below will be (b) _______ annually. 30 days' notice of any
(c) in charges will be given.
Monthly Charge £450 £500 £550 £600 £650 £700 £750 £800 £850
(d) Hours 8 9 10 11 12 13 14 15 16
SCHEDULE B - (e) CHARGES
On-Site lst Hour Office Hours 08:00 to 18:00 £120
On-Site Additional Hours Office Hours 08:00 to 18:00 £80
On-Site lst Hour Out of Office Hours Week days £150
On-Site Additional Hours Out of Office Hours Week days £75
On-Site lst Hour Weekend Friday 18:01 £150

Monday 07:59
On-Site Additional Hours Weekend Friday 18:01 £120

Monday 07:59
Early Morning Telephone Support per 30 minutes 06:00 to 0:800 £40
Office Hours Telephone Support lst 30 minutes 08:01 to 18:00 £25
Office Hours Telephone Support per additional 08:00 to 18:00 £20

30 minutes
Evening Telephone Support per 30 minutes 18:01 to 21:00 £40
(f) Telephone Support per 30 minutes 21:00to05:59 £80
Weekend Telephone Support per 30 minutes 18:00to20:59 £40
Coilocation bank
defective equipment or goods
228
=
Preposition bank
=
to do something by certain means to be on the premises
o
My house is heated by means of How many people work on the premises?'
solar power.
to be inclusive of something
to have/perform duties under an Is this price inclusive of tax?'
agreementicontract
Under the terms of this agreement you are to do something in writing
obliged to give 14 days' notice oftermination. Either party may terminate this contract by
giving 14 days' notice in writing.
duringfthroughout the term of an
agrcement the be the hirer of something
During the Term of this agreement the The Hirer of the equipment must pay
Hirer will pay £450 per month.' a deposit.
to advise/enquire as to the reason for pay for something in advance

something
1 paid for the hotel conference room three
•Can 1 enquire as to your reasons for months in advance.
starting litigation?'
ENercise 9
Here is another exam pie of some key obligations from a contract. It is a coo tract between a com pany and
a builder who is going to do some maintenance work on the company's offices. Fui each gap lo the
cia uses with the correct preposition from the blue box beiow.
1 COMMENCEMENT AND DURATION
(i) The Builder shall commence the Building Work (a) 25 April 20XX.
(ii) The Builder shall complete the Building Work (b) 20 December 20XX at the
very latest or suifer the late completion penalty stated in Schedule B hereto.
2 THE BUILDING WORK
The Builder will cariy out the Building Work specified in Schodule A hereto.
3 PRICE AND PAYMENT ARRANGEMENTS
(i) The Company shall pay the Builder the sum agreed in Schedule B hereto.
(ii) The Builder shall invoice the Company (c) the end (d) every
quarterly period (e) the Date of Commencement.(f) no event
shall any payment be made prior to the Date of Commencement.
(o) The Company shall pay the Builder the amounts invoiced () 30 days of
receipt of the Builders invoice.
on at by within of after In
229
Exercise 10
Corno/etc the fo//owir sentcnces with a word or words that VOU have seen in Exercises 1 9
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a Duringthe of this agreement the Customer shall pay £500 per month to
the Company.
b The buiiding specifications for the Work are iisted in A hereto.
c in of the sum stated in ciause 8 below the Hirer is hereby authorised to use
the Premises between 8pm and iam.
d 1 am returning the goods to you because none of them work properiy. Every computer that you provided
Is
e Piease the sum of £300 at least seven days prior to the execution of this
agreement. The sum is returnable if there is no damage to the premises at the end of the agreement.
DELI VERY OF GOODS OR SERVICES

The agreed date of delivery of the goods or services in the contract is important for several reasons. These
reasons inciude:
the date sets a deadiine for performance of contractual obiigations. if one of the parties does not keep
to the agreed date he or she wiii be in breach of contract
the date sometimes decides when the legal ownership of goods passes from the seiler to the buyer
the date of delivery of the goods or services sometimes decides when the selier/suppiier gets paid.
The dei ivery cia use includes:
When the goods or services wiM be dehvered

When they wili be supphed (if it is necessary to state it)
and perhaps
What will happen if the dehvery ciause is breached for any reason.
lo make sure that the other party knows that the date/time of dehvery is extremely important many
business and commercial contracts contam a phrase like this:
Time of delivery shall be of the essence in this agreernent.'
If something is of the essence' it is of the greatest importance.
Exercise 1
Here is a clause dealing with delivery. There are some words missing from the c/ause. E/li each gap in the
clause with the correct word from the four choices on the opposite page.
The (*) agree that aH dates (a) in this Agreement regarding dehvery, completion and
payment are a (b) part of the Agreement. Faiiure by either party to (c) with the
dates shail amount to a fundamental breach of this Agreement. In the (d) that either party
agrees to a later date this wifl not entitle the defauiting party to consider that any subsequent date
may also be deiayed and such dates wiii remain of the (e) in this Agreement.
230
* A parIs B traders (e) D people
a A said B made C specified D wntten
b A significant B principal C material D huge
c A comply B obey C fuifil D meet
d A case B situation C event D occasion
e A importance B key C essence D meaning
Exercise 2
Here is another c/ause dealing with delivery. it is from a shipping contract to transport goods from lreland
to England. Read the clause carefully and answer the questions that follow using a fulI sentence. One of
the terrns used in the clause is explained below to help YOLI.
5. lhe carriage and transport of the Goods specified in Schedule 1 to this Agreement shall he free
on hoard which shall mean that ali costs of any nature whatsoever incurred in placing the Goods
upon the Queen Of lhe Liffey shall be borne by the Seiler. The Seiler acknowiedges that it wili be
liable for any and ali export duty. Until such time as the Goods are ioaded on board ali property
rights, risks and liabiiities shall remain with the Selier.
free on board is a term known as an lncoterm'. An Incoterm is a term used in international trade
contracts and its meaning is internationally agreed. lhe term free on board' is only uscd in contracts for
shipping. It means that the seller of the goods is liable for them until the moment the goods pass over
the rafl of the ship when they are being ioaded. From the moment the goods pass over the rail they
become thc buyers liability.
a Where in the contract will 1 find the iist of goods that are heing soid under this agreement?
b What is the name of the ship that is carrying the goods from Ireland to England?
c Who is responsible for the cost of transporting the goods from the factory whore they are mude
to the ship?
d Who is liabie for any taxes that must be paid when the goods leave Ireland?
e If the goods are dropped and some are broken when they are being removed from a lorry to be ioaded
onto the ship who will suifer the loss?
continued
Global Legal FOGIF» 231

w
f If goods are dropped and some are broken a few moments after they are loaded onto the ship who will
suffer the loss?
Exercise 3
This clause also deals with delivery. However, it does not use the term free on board'. Ei!i each gap in the
clause with the correct word from the b/ue box below.
(i) The (a) shall only accept (b) _____________ for non-delivery of any item
Iisted in the delivery note and/or damage to the Goods caused in transit provided that written
(c) is provided to the SeIler within 7 days of (d) of the Goods
by the Customer.
(u) The SeIler shall at its solo (e) _ repair or replace the Goods lost or damaged
prior to (f) to the Customer.
Seiler option delivery

receipt Iiability notice
Exercise 4
Here is another c/ause dealing with delivery. Ff11 each gap in the clause with the correct preposition from
the blue box below.
lhe delivery date provided (a) the SelIer is (b) guidance only
and is subject to final confirmation by the SelIer. Delivery times and/or dates shall not be
(c) the essence of the Agreement. The SelIer shall not be liable for any loss or
damage (d) the Buyer arising (e) late delivery or failure to
deliver. The Buyer shall notify the SeIler in writing (f) 14 days of delivery of any
claim in respect of deficit or damage in respect of the Goods that form the delivery.
by of from for to within
232
Exercise 5
Here is ano ther cia use dea/ing with delivery. Fui each gap in the c/ause with a phrase from the biue box.
1. The Cornpany shail (a) of transit including shipping costs, import/export duties,
storage, customs duties, security checks and any other cost (b) compliance
with the laws of any count.
2. (c) the Company faiis to deliver the Goods in accordance with the terms of this
Agreement the Customer shali have the right to terminate this Agreement forthwith in writing
and no further obligations shail (d) the Customer. in the event that this
Agreement is terminated on the grounds of non-dehvery the Company shall be habie to the
Customer for ali direct Ioss (e) as a result.
3, The Company wih replace free of charge any Goods proved to the satisfaction of the Company to
have been damaged in transit provided that the Customer provides notification in writing of any
such damage within (f) of the Goods.
cover the costs which arises from In the event that

be binding upon 48 hours of receipt incurred by the Customer
Exercise 6
Complete the foliowing sentences with a word that you have seen in Exercises 1 - 5.
a Any costs incurred in the transport of the Goods wili be by the SelIer.
b The Selier acknowiedges that it wili be -- for any and ali export duty.
c The Seher shall at its sole repair or repiace Goods Iost or damaged prior to
dehvery to the Customer.
d lhe carriage and trarisport of the Goods by ship shali be free on
e lhe Seiler shali repiace Íree oÍ charge any Goods damaged in provided that
the Customer provides notification of any SUCh damage in writing within three working days of receipt.
Ginhal Legal EngIsh 233

ØJ
Coliocation bank
to set a deadiine a specified date to comply with

= iaws/regulations/ruies
to perform an obligation to bear a cost
to Ioad goods onto a
to keep to an agreement to uncur a cost
ship/plane/Iorry
to be in breach of contract
Preposition bank
failure by either party to do something to be on board a ship

Faiiure by either party to compiy with this The Goods wiil be transported on board
ciause will result in termination of the The Pride of Norway.'
contract.
damage caused to goods in transit
to agree to something The Company will be habie for any damage
The parties agree to the foliowing terms caused to Goods in transit.'
and conditions.
to be for guidance
transport of goods This information does not form part of the
Transport of ali Goods specified in contract but is for guidance oniy.
Scheduie A wili he by rail.
arising from an event
the costs incurred in doing something lhe Company wifl be habie for any direct
•Any costs incurred in importing the Goods ioss arising from iate dehvery.
wifl be borne by the Customer.'
to do somethingwithin a certain time period
to be habie for something lhe Customer shafl notify the Company of
'The Supplier wili not he hable for any ioss any damage to Goods within 48 hours of
caused by iate delivery of the Goods.' delivery.
234
a,
Coilocation review
Completo thcsc sontences with a co//oca tion that you have seen.
a lhe Owner agrees to supply Equipment to the Hirer subject to the terms and conditions
in this Agreement.
b A commercial contract will usually provide one of the parties with an address at which any notices must
he upon the other party.
c Each party should think very carefully before into a contract, as it will give rise to
binding duties and obligations.
d Your client tailed to his obligations under the contract, in that he did not do as he
promised.
e The electrical goods that you provided to my client did not work properly. As the whole batch of goods
was , my client returned them to you without delay.
f My boss has a very strict deadline to finish this work. He wants it on his desk
by 5pm.
g Does this agreement with contract law in your country? Or is it contrary to the Iaw in
some way?
h In clause 11 of this contract your client expressly agrees to the cost of any duty that
is required when the goods arrive in the USA.
1 My client has significant costs in transporting the goods to you, which he did not
agree to do in the contract. My client requests that you reimburse these costs immediately.
j We have been informed that when the goods were heing onto the lorry at our
factory, some of them were damaged. Please return these goods to us and we will replace them
at once.
Vocabulary review
a The section of a contract provides the general background to the contract. Often
each sentence in this section begins with the word WHEREAS'.
bA is a person or company that sells goods directly to the public.
c You may see the word in a very formal contract. It does not have the usual,
dictionary definition. When used in a formal contract, this word means employee'.
d An is someone that the other party to the contract, known as a principal,

authorises to act on his or her behalf.
e lhe money, goods or services that the parties exchange under a contract is referred to in the contract
by the term
c Globui Legal Engilsh 235

03 f When a written contract refers to the of the agreement it means the duration of the
a gre e m e n t
g In contracts where one party is providing a service to the other, there is often a reference to the
number of hours or days for which the service will last. This is a more formal way of
referring to the total number.
h The verb to is a more formal word that means 'to obtain' or 'to get.
1 If goods are described as being in it means that the goods are in the process of
being moved from one place to another.
j When a contract uses the phrase time is of the it means that the time agreed for
doing something under the contract is extremely important.
Preposition review
a This Agreement is made this twentieth day of September 20XX.
b The Owner agrees to hire the Equipment to the Hirer subject lhe terms and
conditions set out in the Agreement.
c Who are the parties this contract?
d Where the masculine is referred in this contract it shall include the feminine.
e 1 work a law firm that is based in London.
f What name does your company trade - ?
g An agent acts behalf of his or her principal.
h Use of the Equipment is limited and may not be used 8pm and 9pm each evening
for maintenance reasons.
the terms of this Agreement the Hirer agrees to pay £600 per month to the Owner.
j The costs for the Work are specified Schedule 1 hereto.
I1
TOLES HIGHER EXAM PRACTICE =
0)
Exercise 1
Reacl Lhe following contract clause. The missiog words are lo Lhe Iist helow. For each gap choose thc word
which hest fits foto the space from the options provided. Use each option only once. Write your answers ia
the box below. There is ao example at the beginning (*).
FROM A CLAUSE DEALING WITH THE DELIVERY OF GOODS
3.1 lhe Seiler shaii aniy accept (*) for nan-dehvery af any item Iisted on the dehvery
note and/ar damage caused ta Goods in (1) if the Customer pravides written
(2) of any such non-deIive and/ar damage to the Selier within 7 days of
(3) of the Goods.
3.2 in the event that the Selier accepts Iiabíhty under ciause 3.1 it shali at its saie option, repair
ar (4) the Gaads cancerned which are praved ta the Selier's satisfactian ta have
been iost ar damaged (5) ta dehvery to the Custamer.
(AA) Iiability (B) transit (D) receipt

(A) replace (C) prior (E) notice
A.À (1) (2) (3) (4) (5)
Exercise 2
Read the fol/owiog coo tract ciause. The missing prepositioos are ia the Iist bc/ow. For each gap choose Lhe
prepasitioo whích best fits jota the space from the options provided. Use each option only ooce. Write your
answers ia the box below. There is ao example at the beginniog (*).
FROM A DEFINITIONS SECTION
(*) this Agreement, the foHawing terms and expressians shali have the faflowing meanings:
the Company' shaH mean ARJ Computer Technology Ltd, which may from time ta time act
(1) an autharised Agent.
the Buyer' shafl mean the persan, firm, company ar ather arganisation wha ar which has agreed
(2) purchase Equipment (3) the Cornpany.
a Contract' shafl mean ai contract (4) the saie and purchase of Equipment between the
Company and the Buyer.
'Equipment shafl mean ali items manufactured ar suppiied (5) the Company inciuding
without hmitatian, instruments, camputers, printers, and accessanes/spare parts.
(AA) In (B) through (D) to

(A) by (C) from (E) for
*) AA (1) (2) (3) (4) (5)
(obdI LgdI F »F.I 237

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1
•
THE LANGUAGE OF BUSINESS LAW =
1
e
o.
SOLE TRADERS
o
Exercise 1
Mano Stephens works for a local magazine in Chatsworth. The name of the magazine is Business Today.
Manie is writing an article about the different ways in which peo pie can start a new business. Marie went to
the local advice centre to get some information about being a so/e trader. The advice centre gave her this
leafiet, which expiains the main points. Look at the words that are highlighted in the ieaflet. Without using
a dictionaly decide if each word or phrase is a verb/phrasal verb, a noun/compound noun or an adjective.
Sole Trader
Being a sole trader is the simpiest way to set up and run a business and does not invoive
paying any registration fees. Keeping records and accounts is straightforward and you keep
ali of the profit. But you are personafly liable for any debts that your business runs up,
which can make this a risky option for businesses that need a lot of investment. This aiso
means your home or other assets may be at risk if your business runs into troubie.
Setting up
• Vou need to register as self-employed with the authority which coiiects tax
(HM Revenue & Custorns).
Rurining your business

• Vou make ali of the decisions on how to manage your business.
• You use your own money or assets to start the husiness, or borrow money from a
bank or another lender.
Records and accounts

• You send an annual seif-assessment form to HM Revenue & Customs.
• Vou must keep records showingyour business income and expenses.
Profits
• You wifl keep ali the profit you make.
Tax
• As you are seif-ernpioyed your profits are taxed as income. Vou wili pay income tax on
this income.
Verb/phrasal verb Noun/compound noun Adjective
( r)I)i LLgiI .1 239

HeIp desk
=
to run a business - to have control of a records and accounts - written details of ali
business and decide how you manage it. your business activities, especially the financial
details of the income and outgoings of the
a self-assessment form - a form that you
complete and send to the tax authority. You give ali business.
ofyour financial details and caiculatethe amount at risk this means to be in a situation where
of tax that you must pay. You do this yourself. something unpleasant may happen.
to run up a debt - to create a debt because you to run into trouble - to experience difficulties
borrowed money or bought something on credit. (otten financial) that you did not expect.
risky - a word to describe an activity or action income tax - the amount of your income that
that is dangerous or that may fail. you have to pay to the government in tax.
Exercise 2
Here are the dcfinitions of the words in Exercise 1. Fui each gap with the correct word from the box to
complete the definitions.
sole trader liable assets annual
set up option register expenses

profit investment manage self-employed
a An is one of the available choices from several possibilities.
b Your are the money that you must spend on the day-to-day costs of
the business.
c An is the amount of money that someone puts into a business with the aim of
making that business successful and getting more money back.
d To something means to start something or to create something, especially

a business.
e A ______________________ is a person who owns and runs an unregistered business by himself

or herself.
f lo be - means not to have a boss. You organise your own work and people pay you
for the goods or services that you provide. You are responsible for paying tax on the money you receive.
g Your is the amount of money you get from selling something or providing a service
to someonc, aftcr you deduct thc costs of making that thing or pro''iding that service.
h Your are things that you own and which have a financial value, for example
your house, your car or the money that you have in the bank.
i lo be for something means that you are legally responsible for that thing.
240
i 'o as something means to put your name on an official list for a =
particular purpoSe.
•1
o
k To a business means to have control of how you run that business. =
o
1 An event is something that happens once every year. =
Exercise 3
Mano Stephens talks to Eddie Anning, who is a car mechariic. Mano wants some information aboul
working as a sole trader. Match Manos questions with Eddie's answers to complete the conversation
betweeni Marie and Eddie. The first one is done for you as ao exam pie.
How did you finance your business when you set it up? (1)
Is the business profitable? (2)
Did you have to register your business anywhere? (3)
Can you tell me about yoir hackground?
Did you get any professional advice from anyone? (4)
What sort of business did you form? (5)
Example: Can yoti tell me about vour background?
1 did my apprenticeship with Bugler Cars. An apprenticeship is a period of training. After that 1 worked
for Bugier for four years to get some experience. Then 1 decided that 1 couid do the job on my own, so
1 set up my own business.
a ?
I'm a solo trader. 1 wanted a husiness that 1 could manage myseif without a lot of complicated
rules and regulations. That's why 1 chose to be a solo trader.
b ?
No. 1 didn't want to use lawyers or accountants because they cost so much. But 1 went to the
local advice centre and they gave me some help at the beginning.
c 2
No. But 1 had to telI the tax authorities what 1 was doing, of course. 1 have to send thern an
annual self-assessment form.
d EI
1 invested ali of my savings and 1 took out a loan from the hank.
The first year was really hard. 1 ran up a big overdraft because 1 had to pay the ront and other expenses.
1 didnt get much work in the first year. But 1 continued with it and things got better during the second
year. This is my third year and finally my income is more than my expenses.
G obi Lgai Ergi isI 241

=e PARTNERSHIPS
= Exercise 1
o
Marie Stephens wants to write about partnerships in her magazine article. She found an Internet site
cal/ed WorkforYourself. com and printed out the informnation she found on this site about partnerships.
= Read the information that Marie has printed out and decide in each case which is the correct prepoSitiorJ
from the two possibilities. There is an exam pie at the beginning ().
http:/,JorkforYourseIf.com/partnershi ps/html
Advantages of partnerships:
Two or more peopie can set up *) with/in business together.
• This means that you may have more money to invest (a) in/for the business.
• Pamtnerships are easy to set up and flexible to run.
Partners share the risks, costs and responsibilities (b) to/of running a business.
Disadvantages of partnerships:
* Probiems can occur when there are disputes (c) between/to partners.
• Partners have unhimited iiability (d) to/for the debts of the business.
Partners have joint and severai Iiability (e) for/with the partnership debts.
Our advice:
It's a good idea to draw up a written partnership agreement, which cleariy states how
the partners wili run the partnership and how the partners will share the profits. You
shouid use a solicitor to do this.
Answers
Example (*) in a b - c d e
Exercise 2
Match each of the following questions with the correct answer.
What does to invest mean? (1) What does unlimited liability mean? (4)
What does flexible mean? (2) What does joint and several Iiability mean? (5)
What does a dispute mean? (3) What does to draw up mean? (6)
a It is another word that means a disagreement e It means to put money into a business,
beca use you hope that you will get more
b It means to write. Another verb that lawyers money back in the future.
often use is to draft.
f This means that partners are responsibie both
e This rneans there is no restriction to your individualiy and together as a group. in a
responsibility. You might lose your home or situation where the partnership owes money
other personai assets if things go wrong. to someorie, that person can demand
repayment of ali that money from any of the
d it means that something can change easily partners individuaily, or he or she can ask
to adapt to different situations. Not fixed. each partner to pay a part of that money.
242 L; rsn
c
=
Exercise 3 -4
fvlaric' v/cr?t (o viSil a lawyer who specialises in serring up partnerships. The Jawyer explained a little more
about partncrstips. Tiie most important words are lo the key vocabu/ary belaw. Read the text and answer =
the questions that fo//ow using a fuil sentence.
=
Key vocabulary
trade under loss management notice period
capital proportion retire expel
contribute drawings resign dissolved
•My name is Francesca Rodd and 1 draw up lots of 1 have to know about the duties of each partner
partnership agreements for new businesses. It's not and any special responsibilities they have. 1 also
compulsory to have a partnership agreement but 1 ask about the management of the business, which
always advise my clients to have one. 1 meet my is the way the partnership is run on a day-to-day
clients and 1 ask them lots of questions about the hasis. Partners must decide who has the authority
partnership. First 1 need information about the to sign cheques for the partnership, pay bills, buy
partners and what name the partnership will trade things for the partnership. etc.
under. That means the name that the partnership
My clients and 1 also talk about what will happen
will use for its business. 1 also need details af the
when partners leave the partnership, either because
capital of the partnership. The capital is alI the
they retire or resign. In general, retirement is when
rnoney, property and assets that the partnership
a partner leaves the partnership because he or she
has. Each partner has to decide how much money
reaches a certain age, for example 65 years old.
he or she is going to contribute to the partnership.
Resignation is when a partner decides to leave for
Contribute means the sarne as invest.
some other reason. The partners must decide on
Then 1 ask my clients about the profits of the the notice period for resignation, in other words
partnership. Often the partners share the profits of how many weeks' ar months' warning a partner has
the partnership equally, but sometimes partners get to give to the ather partners before he ar she
different shares af the profits depending on how actually leaves the partnership.
much ofthe capital they contributed or how much
1 know its horrible to think about things gaing
work they do in the partnership. If the partnership
wrong, but partners have to think about the reasons
makes a loss, which is the opposite of a profit, the
to expel a partner. To expel someone means to
losses are usually divided in the sarne proportion
force that person to leave the partnership because
as the profits. Also. 1 need to know what amount oÍ
he ar she has done something really bad. Last, its
drawings each partner can have. Drawings is an
sensible to state the circumstances in which the
advance payrnent af a partner's share of the profits.
partnership can be dissolved. ar in other words, the
Each partner usually takes, or to use the correct
partnership can end. Having a partnership
term 'draws', this money out of the partnership hank
agreement helps the partners ta think carefully
account for his or her own use each month, rather
about the partnership from the beginning.
than having to wait until the end of the year before
receiving a share of the profits.
a If people want to set up a partnership, what does Francesca Rodd advise them to have?
b What does to contribute money to the partnership mean?
c How do partners usually divide losses?
Gobii Legai Englisr 243

d How often do partners usually draw money out of the partnership bank account for their own use?
-c
r'.. e Francesca mentions two ways that a partner can voluntarily leave the partnership. One is retirernent. What is
the other?
f What is a notice period?
g What does to expei someone mean?
h What does to dissolve a partnership mean?
Exercise 4
Read the text again and decide if these statements are truc or false.
a Every partnership must have a partnership agreement. True False
b Ali of the partners always have to contribute the sarne arnount of True False
money to set up the partnership.
c lhe partners usually share losses in the sarne proportion as they True False
receive the profits.
d The partners should decide who is responsible for the managernent True False
ofthe partnership.
e Retire is the sarne thing as resign. True False
f Expel is the sarne thing as resign. True False
Exercise 5
Com plete the following sentences with the correct words from the key vocabulary in Exercise 3.
a lhe partners agreed that they can each take out £600 every rnonth as
b When they set up the partnership, Mr Hicks decided to £5000 and Mrs
Pearson agreed to invest £3500.
c 1 prepared your accounts and you will see that the partnership did not perform well last year. It made a
of £15,000.
d 1 want to leave the partnersh:p. What must 1 give to the other partners?
e My birthday is in Septernber and 1 will be 65 years old. 1 will then from

the partnership.
244 GL.
f One of the partners often takes cocaine and other illegal drugs. This is a hreach of the partnership =
agreement and provides clear grounds for the other partners to hirn from -J
the partnership.
o
=o.
g 1 must tell my partners that 1 want to from the partnership. 1 went on holiday
o
to Spain and met a man 1 wish to marry. 1 will move to Spain and join him in his business. =
h The total of the partnership is £405,000.
i Each partner has definite duties. For example, 1 am responsible for the computer system and Mr Brown
is the partner responsible for the day-to-day of the business.
j The husiness was unsuccessful and the partners the partnership last year.
k lhe partnership will the name of Fast Fiowers.
As each partner contrihuted different amounts of rnoney to the business. the partners agreed to share
the profits in the sarne as the amounts that they invested.
Exercise 6
it is possib/e to have different types of partner. Look at the definitions of three types of partncr bclow. The
Ietters of the words that match each definition are mixed up. Put the Ietters in the correct order to spell the
words. The first Ietter of each word is there for you.
a A partner who receives a share of the partnership profits and has the right to take part in the
management of the partnership.
An E (TIQUEY) partner
b A partner who receives a fixed amount of money each year, called a salary, paid in monthly
instalments. This partner does not receive any more of the proíits.
A S (DRASALIE) partner
c A partner who contributes capital to the partnership but does not take part in the management of the
business. He or she receives a share of the partnership profits. This partner is also known as a dormant
partner or a silent partner.
A S (GEESPILN) partner
Exercise 7
For each for the followiog people, decide which type of partoer he or shc /s.
a Sarah: im a partner. 1 specialise in employment law. lhe law firm offered me this
position as this is the area of law that the firrn wants to develop, but they want to see how good my
work really is. l'm happy with that as im earning good money each month.'
b Ken; '1 am a partner. 1 do not work fuil-time or make decisions for the partnership.
but 1 expect to receive a iarge share of the profits. This is because 1 contributed most of the capital
when we started this law firm.
c Bovin: 1 am an partner. 1 set up the partnership with two other people. We have
fuli control of the management of the business and we share ali the profits of the business.'
E, - 245
=
o A PARTNERSHIP AGREEMENT
= Francesca Rodd has a detailed checklíst to remind her about what she has to discuss with her clients
o
when drawing up a new partnership agreement. Here are some of the points on the checklist:
Names of partners Drawings
Partnership name Cheque signing arrangements
Capital contribution of partners Period of notice for resignation
Share of profits/Iosses Retirernent age
Exercise 1
These are some of the questions that Francesca asks her clients. The missirg words are bc/ow each
question. Put the words in the correct place to complete the question.
a What the of partner?
is name each fuil
b What name - undor?
will trade the partnership
c How will each contributo the partnorship?
much partner capital to
d How the partners - profits or the
losses the will share
e How each partners - he?
much monthly will drawings
f Who - - have partnership cheques?
will sign to authority
g How notice for resignation be?
period long the will
h What the ?
be will age retirement
246 L] F-rp!iSh
Exercise 2
Francesca meets two aew c/iets who want to set
complete Francesca 's check/ist below.
LIJJ a partnersh/p. IRead what they say ar7ci tben
=
'1
o
o-
=
o
Im Samantha SulIy and this is my friend Kate Mace. Were both beauty therapists. We went to
college together in Shoredon and worked together at Faces Beauty Salon, so we know each othcr
well. We want to set up our own beauty salon in Chatsworth called Revitalise. We want to make a
lot of money and give up work when we are 55. Of course, 1 suppose one of us may meet the man
of our dreams and go to live in Australia, so we may need to leave the partnership before we reach
our retirement age - you never know We agree that its OK to leave the partnership if you tell the
other partner three months in advance. Well share everything 50:50. Well both put £2500 in the
partnership so we can buy some equipment but we dont need much more than that. We each
want to be able to take £500 each month from the partnership account. Either of us can sign
cheques, otherwise it will be difficult if one of us is away on holiday when we have to pay a bili.
i
Checklist for a new partnership
a Names of partners:
b Partnership name:
c Capital contribution of each partner:
cl Share of profits/losses:
e Drawings:
f Cheque signingarrangements:
g Period of notice for resignation:
h Retirement age:
HeIp desk
a beauty therapist - a person who is qualified 50:50 - equauly, half for each person.
to do heauty work, usually in a salon.
otherwise if not. This word is often used
give up - to stop doing something. \vhen there will be a had result if something
happens, or you do not do something. Go now,
put in contribute, invest.
otherwise you will miss your train.
Cotj L yII Eriiti, 247

LIMITED LIABILITY PARTNERSHIPS
== Exercise 1
0
Mar/e Stepheris then talked to Francesca Rodd about Francesca's Iaw firm, Hedgsons. Marie asked if
1'
Hedgsons Iaw firm is a partnership. Read what Francesca says. The most important words are ir the key
= vocabulaty below. Put the correct word or expression from the key vocabulaty loto the sentences that follow.
Key vocabulary
limited liability legal entity incorporated limited Ilability
business partnership
personal assets member
Hedgsons Iaw firm is a partnership, but it is different A limited liability partnership has to supply its
from the partnership that 1 told you about earlier. financial details and certain information about its
Our Iaw firrn is what is called a limited liability partners to the registry of companies. Anyone can
partnership. In a traditional partnership each look at this information. In this way a !imited liability
partner has unhimited liability for the partnership partnership is different from a traditional
debts. But in a Iimited liability partnership that is not partnership. Information about a traditional
true. As the narne suggests, the partners have partnership is secret. but information about a
limited Ilability for the dehts of the husiness. That limited liability partnership is not. A limited liability
means that if the partnership owes a lot of money to partnership must also follow more rules and
sorneone but cannot pay, a partner will not have to regulations than a traditional partnership.
use his or her own money to pay that debt. In other
A limited liability partnership is taxed in the sarne
words, a partner's personal assets are not at risk.
way as a traditional partnership. Each partner, or
Personal assets are the things that someone owns,
member as we call them, must pay income tax on
for example, a car, a house, and the money that he
his or her share of the profits.
or she has in the bank. A Iimited liability partnership
uses the capital of the partnership to pay the debts A límited liability partnership usually has a deed of
ofthe partnership. partnership, which is similar to the partnership
agreement in a traditional partnership. The deed
When people want to set up a limited liability
of partnership contains details of the amount of
partnership, they must register it with our central
money that each mernber will contríbute to the
registry of companies. The name of a límited liabilty
partnership, each member's duties and what
partnership must end with the abbreviatíon LLP.
happens if a partner leaves the business.
When someone registers a limited Ilability
partnership, it becornes what is known as an A limited liability partnership is becorning a popular
incorporated business. This means that the choice in situations where two or more people wish
business is registered in its own name and has its to set up a business together. This business
own legal personality. We say that it is a legal structure is very popular at the rnoment, especially
entity. In other words, a limited liability partnership with people who set up a new law firm.'
is a legal person.
a My name is Grace Harrnen. 1 am a partner of Finneson & Edge LLP. LLP is the abbreviation for
b 1 own a house. a car, and some jewellery. These things that belongto me are formally known as my
c If things go wrong with the partnership, 1 wont lose any of my own money or belongings because 1 have
the protection of
d A lirnited liability partnership is an . lts narne appears on the central

register of cornpanies and it exists as a separate legal person.
e A limited liability partnership is a legal person. Another name for this is a
f In a limited liability partnership, a partner is also called a ofthe partnership.
248
=
Exercise 2
Complete t/?c' folloviing sentenccs viit/i tde cOrrect prcposition. You cnn (ind tbe prepositions lo Exercise 1. '1
e
=
e.
a The members have limited liability the debts of the business. o

=
b lfyou have limited liability, it means that your personal assets are not risk.
c Every year the partnership has to supply financial details the central registry of companies.
d l have to pay income tax - my share of the profits of the business.
e In many ways a limited liability partnership is similar a traditional partnership.
f The mcm bers each contrihuted £6000 - the partnership.
COMPANIES
Exercise 1
Marie Stephens wants some information about com pan/es. She went to a sem/nor at a Iaw firm called
Taylor Waltis. A 50/leitor called Greg Harrison is taiking about companies. Read what Greg says. The most
important words are in the key vocabulary below. Com p/ete the defiriitions of the words contained lo the
key vocabu/ary by matching the first haif of each seritence with the correct ending.
Key vocabulary
incorporate shareholders share capital invest
founders hold nominal value return
members share issue dividend
When a person starts a new company, he or she obligations, the clairnant nomes the company as
must be very careful to comply with the rules. When the defendant, because a company is a legal entity.
lawyers taik about setting up a new com pany they On the other hand, if someone wants to sue a sole
use the expression to incorporate a compan. That trader, the claimant nomes the owner of the
means to set up and register a new company in the business as the defendant.
proper way. If you want to incorporate a company in
The owners of a company are called the members.
England, you must register the company with
Another name for members is shareholders.
Companies House, which is the central registry of
Shareholders can de people or companies. They
companies. You cannot start to trade in the
own, or hold' a share or shares in the com pany. A
company's name until the company appears on the
share is a part of thu cornpanys share capital.
offlcial register of companies. Every company has its
When we talk about share capital, we mean the
own file at Companies House and anyone can 100k at
arnount and value of shares that the members
the file to find out information about the company.
hold. Let's say that a company has a share capital
The people who set up a company are often called of £1000 and that this is divided into 1000 shares.
the founders of the com pany. When the founders In this example, each share has the value of £1.
set up a company and register it with Companies We calI this the nominal value of each share. AlI
House, the company is known as an incorporated the shares in a particUlar cornpany have the sarne
husiness. This means that the company has its own nominal value. When the founders set up a
separate legal personality. Another name that company, they decide upon the nominal value of
means the sarne as legal personality is legal the shares for that company.
entity'. Sole traders and traditional partnerships are
When someone buys shares in a company, the
unincorporated businesses and do not have their
company will issue the shares (o him or her. To
own legal personality. If sorneone wants to sue a
issue a share means to officially give that share to
company, perhaps because it did not fulfil its
continued
(-. ()D LLO 249

o a person and register his ar her name in the the shareholders. This payment is called a
company's register of shareholders. The dividend. If the company performs badly and
= shareholder receives a share certificate from the makes a loss, the company will not pay a dividend
o
company giving details af the share or shares that to its shareholders,

1
= he ar she owns.
If a company does really badly and becomes
Why do people want to invest their money in a insolvent, that company may have to stop trading.
company and buy shares? The answer is that they But the shareholders will not have to pay the debts
hope to get some money back in return for aliowing aí the company, because the shareholders have
the company to use their money. We cali this a the protection af limited Ilability. This means the
return on an investment'. If the company performs shareholders may lose the money that they
well during a year and makes a profit, then the invested in the company, but their personal assets
company may decide to pay a part ot that profit to are not at risk.
a To incorporate a business means... • ..to own a share. (1)
• . .the people ar companies which own shares in

b The founders oÍ a company are... the company. (2)
• a payment of the companys profits to its

c The members are...
shareholders. (3)
• . .the people who create the company. (4)

d The shareholders are...
• . .to put money into a company by buying shares in
e A share is... the company. (5)
.the same as the members. They are the owners

f To hold a share means... of the company, (6)
• . .to set up the business and register it as a

g Share capital reíers to... company. (7)
.to officially give that share to someone so that he

h lhe nominal value of a share is...
ar she becomes the owner of that share. (8)
• .the value af shares that the shareholders

i lo issue a share to someone means...
own. (9)
j To invest monny iri a cornpany means... .one of the equal parts of the companys
capital. (10)
k A return on ao investment is... .the money that someone receives from their
investment. (11)
1 A dividend is.. • . .the fixed value af each share. (12)
Exercise 2
Read what Greg Harrison says again and answer the fo/lowing questions using a fuJi sentence.
a What does to incorporate a company mean?
Answe r:
b Where are ali companies in England registered?
Answer:
250
c When can a new company begin to trade in the companys name? =
Answer:
o
==
o-
d What is another name for a legal personality?
o
=
Answer:
e What are the people called who own a company?
Answer:
f What is a dividend?
An swe r:
g In general, why wont a shareholder have to use his or her own money to pay the debts of the company?
Answer:
Exercise 3
Decide if thc foliowing statements are true or fa/se.
a AH of the information about a company at Companies House is available True False

to the public.
b Each company has its own legal personality. True False
c A traditional partnership is a legal entity. True False
d If you want to sue a company, you must name the shareholders as True False
the defendants.
e A company issues share certificates to its members. True False
f Shareholders always receive a dividend each year. True False
HeIp desk
to comply with to foi ov tlio r Liles to ne. to name someone to wnte that persons or
to abide hy. companys name on a document.
to trade - to do bLislness with another person to become insolvent to be unable to pay your
or company. dehts at the time when you must pay them.
251
=
o
Exercise 4
= o
l.- Greg Harrison riow talks in more detail about the different sorts of share values and share capital vai ues,
Read what Greg says and match each of the questions in the blue box with the correct answer below.
=
When you set up a company, you decide on what the value of the shares that the company has issued
the nominal value of each share is. The nominal to shareholders. lhe issued share capital and any
value is a fixed price that doesn't change. The authorised share capital are expressed in the
nominal value is the minimum price for which the nominal value of the shares, and not the actual value
company can sell the share when it first issues that of those shares. Let's say that a company has an
share. The nominal value has two other names. issued share capital of £1000. There are 1000
These are the par value and the face value. AlI three shares, each having a value of £1. Now let's say that
names have the same meaning. the company issues 500 ofthese shares. In this
case, the nominal value of each share is £1 and the
A company incorporated before October 2009
issued share capital is £500. 1 want to buy some
decided on the maximum amount of share capital it
shares in the company. 1 pay £5 for each of my
could issue. This was called its authorised share
shares. The nominal value of each share is £1, but
capital. The Companies Act 2006 abolished this
the actual amount that 1 pay is £5. This is called the
requirement for any company incorporated on or
market value of the share. The market value in this
after 1 October 2009.
example is higher than the nominal value. The
When a company is incorporated it issues shares to difference between the market value and the
the first shareholders. These shareholders are called nominal value is called the premium. In this
subscribers. The company can then issue more example, the premium is £4.
shares at a later date. lhe issued share capital is
What is the market value? (1) What is authorised share capital? (4)
What is the nominal value? (2) What is issued share capital? (5)
What is the premium? (3)
a This is the amount of money that someone d lhis is the value of shares, expressed in
must pay to the company when he or she nominal terms, that the company has
buys a share. actually issued to its shareholders.
b This is the amount of money that someone e This is the value that the people who set up
pays in excess of the nominal value. the company decided to fix for ali of the
shares of the company. It is easier to
c This is the maximum total value of shares, understand if you think of it as the official
expressed in nominal terms, that the value, not the actual value.
com pany is allowed to issue.
Exercise 5
Kevin Hooper buys some shares in a company called Onephone plc. lhe share certificate says that the
shares are £1 each. Kevin pays £4 for each share to Onephone plc. Complete the fo/lowing sentences by
writing the correct figure in each gap.
a lhe market value of each share is
b lhe nominal value of each share is
c The premium on each share is
252
PUBLIC AND PRI VATE LIMITED COMPANIES =
-.1
Exercise 1
'1
(1arie Stephens wat ts tu include SO(7?C ínforniatíon ubout com pan/es lo her (naazirie article. She /ooks at
=
the website of Iaw firrn. Taylor WaIlis. She prints off the fo//ow/ng information about priva te limited companies
o
and public /imited com pan/es. Pie most important words are in the key vocabulary be/ow. Read the =
information and decide if the statements that follow are true or false.
Key vocabulary
private Iimited company stockbroker
public Iimited company single-member company
www. taylorwallis. co. uk/companíes
Public and private Iimited companies
There are several different types of company in England, but the most common are the
private Iimited company and the public Iimited company. The name of a private limited
company rnust end with ltd or iimited and a public limited company's name must end
with plc. This means that when YOU 100k at a companys name you can see immediately
what type of com pany it is.
A private limited company cannot offer shares in the company to members of the puhlic, but
a public limited company can do this. Some people use the services of a stockbroker to
buy and sell shares. A stockbroker is someone who buys and seus shares on hehalf of his or
her clients. A stockbroker only deals in shares of public Iimited companies. The law does not
allow people to trade in shares of private limited companies through a stockbroker.
A private limited company can have any number of shareholders. However, it is very
common to have a private limited company with just one sharehoider. If a company has just
one shareholder, the company is called a single-member company. A public limited
company must have a minimum of two shareholders, but usually has a lot more. Another
big difference between the two types of company is the amount of share capital that the
companies must have in order to incorporate and register them. Someone may register a
private limited company with a very small amount of share capital. maybe only £1. However,
to register a public limited company it must have a substantial amount of share capital. This
amount is decided by iaw. At the moment the minimum amount required is £50,000.
a There are only two types of company in England. True False
b A company which has the name of Lexton Metais Ltd is a private True False
limited company.
c A stockbroker buys and seus shares in private limited companies on True False
behalf of his or her clients.
d A single-member company has just one shareholder. True False
e A public limited company can be a single-member company. True False
f A public limited company must have a share capital of at least £50,000 True False
at the time when someone registers it.
Lep,. 1 O .1 253
o
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o
= common - usual, happens frequently. to trade - to do husiness, to buy and seu.
to offer shares - to invite people to buy shares to incorporate a company - to form a

in the company. registered cornpany.
to deal - to trade, to buy and seu. substantial - significant, large.
Exercise 2
A new client named Mr Ratel te/ephoned Greg Harrison, tho solicitor from Taylor Wallis. Mr Pate/ wants
some advice about setting ijp a new business. However, Greg was not in his office and so Mr Ratel left
Greg a voicemail message. When Greg returned he listened to the message and rnade the foliowing notes.
Read the notes and frorn your knowledge of the different types of business structure, decide wh/ch of thern
Mr Ratel can choose to set up.
Telephone attendance:
Date: 16 March 20XX
Name: Raj Patel (RP)
Address: 2 Cherryholt Road, Chatsworth, CH3 6GH
Telephone: 0771 669624
Mobile: 047987 5463471
Detalls
RP wants to sot up a business. At the morncnt RP is working alone, but his brother will probably
want to join the business at some time iri the future. lhe business supplies computers and
software to small businesses and advisos the businesses on operating the systems. RP has capital
of £25000 to start the business. RP owns his house, but wants to make sure that if everything
goes wrong, he will not lose the house. RP is married and has three children.
RP wants advice on what sort of business he should set up.
a Sole trader Yes No
b Partnership Yes No
c Limited Iiability partnership Yes No
d Private limited company Yes No
e Public limited company Yes No
lhe next exercise gives you the answer to what type of business RP should set up.
254 L
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Exercise 3
Greg is writing to Mr Patel. Put the parts aí the Ietter ia the right arder hy writiag your answers ia thc boxes
aumbered 2 ÏO below. There is ao exam pie at the beginairig, which is the start aí the /etter.
Taylor Wailis
2 Maio Street
Chatsworth
CH1 2FH
Mr R Patel 16 March 20XX
2 Cherryholt Road
Chatsworth ReI: GH 408RP
CH3 6GH
(a) Setting up as a saie trader is certainly the easiest type aí business. A saie trader is seIí -
empioyed and this type of business does not have to be registered ar compIy with
complicated ruies, other than the obligation to pay tax.
(b) 1 100k forward to hea ring from you.
(c) 1 understand from this message that you wish to sei up a business which supplies
camputers and software to smaiI husinesses and you would like some advice on what is
the mast apprapriate structure for this new business.
(d) Dear Mr Patei

New com puter consultancy business
(e) Therefore, in view of the fact that you are investing a substantial amount of money into
the business, and more particuIariy that you wish your personai assets to be as safe as
possibie, 1 think the best option is for you to incorporate a private Iimited company. Your
brother will be abie to join the company at a later date.
(f) However, lhe main disadvantage is that as a saie trader you will have unlimited iiabiiity
for aH the debts aí the business if II does not succeed in the way in which you hope. This
means that you may have to seM your persanai assets ia pay the debts aí the husiness.
() 1 wUii he very pieased to explain the pracedure af incorporating a company to yau. Please
teiephone me ta arrange a canvenient time to meet.
(h) Thank you for your telephone message regarding the formation aí a new business.
(1) Yours sincereiy
Greg Harrison
(j) As yau are the anly person involved in the business at present, there are twa aptians
avaiiabie la yau. One is ta aperate as a saie trader and the ather is ia incarporate a
private hmited company. Let me give you a little more detail about each option.
(1) cl (2) (3) (4) (5)
(6) (7) (8) (9) (10)
Global LeaI FrgIt 255

INCORPORATING A COMPANY
Exercise 1
Marie Stephens is finishing her magazine article. She wants to know how to set up a com pany. She found
the foliowing information about this on Taylor WaIIiss website. The most ímportant phrases are in the key
vocabulary be/ow. Put the correct phrases from the key vocabulary into the sentences on the next page.
Key vocabulary
memorandum of association off-the.-shelf company

annual return certificate of incorporation
articles of association
www. tay(orwa/Iis. co. uk/new companies
Incorporating a company
There are two ver' important documents that every company has. These are the memorandum of
association and the articles of association. The memorandum of association is a short
document which contains the names of the first people who wish to become shareholders ofthe
company. They are called the subscrihers. When they sign the memorandum the subscribers
confirm that they wish to form the company and agree to take at least one share each. The articles
of association contain the internal rules that the company and its shareholders must follow.
These rules include, for example, notice periods for holding company meetings and procedures
for selling company shares. The articles of association is a long and complicated document.
If you want to set up a company, you may choose to incorporate a compietely new company.
You need to draft the memorandum and articles of association for your company. You should
ask your solicitor to do this. He or she will probably use a standard document as a model and
then make any changes to the model that are necessary for your company. Your solicitor will
file the memorandum and articles oÍ association at Companies House, together with the other
necessary documents. You must then wait until Companies House issues a certificate of
incorporation. When you receive this certificate, which proves that the company is properly
registered, your company can then start to trade under the company name.
Your ather option is to buy an off-the-shelf company from a company formation agent. A
company formation agent is a person or company which incorporates new companies and
then sells each company to people who want to buy one. You can think of an off-the-shelf
company as an empty company, which is set up and ready to trade. An off-the-shelf
company is also called a shelf company.
With an off-the-shelf company, the company formation agent filed the memorandum and
articles of association when he ar she incorporated the company. The company has a
certif]cate of incorporation and so it can start trading under the company name immediately.
After the company is registered, it has its own file at Companies House. Every year the
company has to send a document called an annual return to Companies House. This
gives up-to-date information about the company including details of its share capital and
shareholders. The company also has to submit its financial accounts to Companies House.
It has to send a profit and loss account and a balance sheet. These two documents give
information on whether the company is making a profit or a loss. If a company makes a
profit, it must pay corporation tax on that profit. AlI of the information at Companies House
is available to the public, so anyone can see it.
For more details contact Greg Harrison at harrisontavIorwaIIis.co.uk
11
a We want to start trading as quickly as possible so we decided to buy au
company. -.1
'1
b If you want to see the rules of the company you must look at the ==
c This is the company's You must keep it safe as this shows that the
company is properly set up and can trade in the companys name.
d The is one of the documents that every company has. This document
contains the names of the subscribers and includes their agreement to take at least one share each
in the company.
e lo find the most recent information about the company, you should look at the last
that the company sent to Companies House.
Help desk
to submit te present, to send or provide balance sheet a statement of a companys

something (usualiy a document or some financial position on a certain date. It shows the
informatior) that is required. assets of the company and its liabilities (debts).
profit and Ioss account this document shows corporation tax - when a company makes a
the income and expenses of the business, profit, the company has te pay part of that profit
usualiy for the period of one year. te the government in tax.
essential - fundamental, necessary.
Exercise 2
Jurnbied words. lhe incorporation documerits of a com pany a/ways conta/ri the fo//owing information.
Look at the expiaria tions beiow. lhe letters of the words that match each explanation are mixed up.
Put the letters in the correct order to spell the words. lhe first letter ofeach word is there for you.
a The titIo of the company. C N (ANYPCOM MENA)
b The place where people will send ali official letters and legal notices to. Lots of people think of it as the
legal seat of the company. R O (RISTREEDGE COFFIE)
c A declaration by the first shareholders to say that the registration of the company compiles with the
requirements of Companies Act 2006. S O C
(MENTETATS FO ANCEILPCOM)
d The nominal value of the shares that the company has issued. S C
(HERAS PITCALA)
e The flrst shareholders of the company. S (SCRIBSUBERS)
. GIobji LJgai FtgIiI 257

=o
Exercise 3
Put the correct word or expressior from Exercise 2 frito the sentences below.
1'-
a Rose Ferries and Sara Beil are the people who are taking the first shares in Herlink Ltd. They are called
the
b 1 want to issue a claim against Pearsons Ltd. 1 will serve the claim form on the company at the
company's
c The and the address of the companys registered ofíice must appear
on aH invoices that the company sends to people.
d The of the company is £10,000 divided into 10,000 shares of £1 each.
e The subscnbers must sign a to confirm that the company registration

is in accordance with the registration requirements of Companies Act 2006.
258
UNIT 7A VOCABULARY CHECK market value
me m be 1
These are the important words that you have rïiernorandum of association '1
=
studied in Unit M. You should make sure that nominal value
notice period
Unit 78.
off-the-shelf company
annual option
annual return partner
articles of association partnership
assets personal assets
at risk premium
authorised share capital private limited company
balance sheet profit
profit and loss account
capital
proportion
certificate of incorporation
public limited company
contribute
corporation tax records and accounts
register
dispute
registered office
disso lved
• n resig
dividend
retire
dormant partner
rn retu
d raw
risky
draw up
rules and regulations
d rawi ngs
run a business
equity partner
run into trouble
expel
run up a debt
expenses
salaried partner
flexible
self-assessment form
founder
self-employed
income tax set up
incorporate share
ncorporated husiness share capital
invest shareholder
investment single-member company
issue sleeping partner
issued share capital sole trader
joint and several liability stockbroker
submit
legal entity
subscriber
legal personality
substantial
liable
limited liability trade
limited Iiability partnership trade under
loss unlimited Iiability
ma n age
ma nageme nt
O ()t)dI LO1 's•

259
o TOLES FOUNDATION EXAM PRACTICE
e,
-c
Exercise 1
o
1
Look at this /ist of words. They are ali nouns. Put the correct word into the following sentences. Wrïte your
r.
answers in the boxes numbered 1-10 beiow. There is an exam pie at the begirining (*).
=
(AA) office (C) profit (F) stockbroker (1) partner

(A) assets (D) dividend (G) capital (J) liability
(B) subscribers (E) drawings (H) shareholders
Example
Lvery company has a registered (*) wbich is the companys legal seat.
1 A sole trader has unhimited (1) for the debts of his or her business.
2 The (2) of a company are the owners of the company. They can be individual people or other
companies.
3 The aim of every commercial business is to make a (3)
4 1 own a lot of shares in different companies. 1 don't deal with the process of buying and selling the
shares myself. 1 prefer to use the services of a (4)
5 Sara Jones and 1 are in business together. It is not an incorporated business. Sara is my business
(5)
6 Translate Ltd is a small company that provides translation services for people who move to the UK, but
who don't speak much English. The company doesn't have many (6) _______ just a computer and
office furniture, some books, and cash at the bank.
7 Fenlake and Griffiths is a partnership. The partners do not receive a salary but they are each allowed to
take £500 each month from the partnership account for personal use. The formal word for this money
is(7)
8 The shareholders are delighted because the company performed very well this year. The company
announced that it will pay the shareholders a (8) in June.
9 The issued share (9) of a company is the total nominal value of the shares that the
shareholders own.
10 The formal narne for the first shareholders of a company is the (10)
*1 AA (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
260
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ENercise 2
Look at the groups of words be/ow. lo each group, three of the words be/ong to the sarne subject area but
there is one word that does not belong. Put a circie around the word that is the odd one out. Do not circle
more than one answer for each sentence. There is an example at the beginning (*).
(*) A retire B resign Cc' D expel
(1) A set up B start C form D dissolve
(2) A sleeping B shareholder C equity D salaried
(3) A capital B sole trader C partnership D company
(4) A market value B premium C asset D nominal value
(5) A issued B joint and several C unlimited D limited
Exercise 3
Look at the foliowing article. Read it and decide if the statemerts under it are true or false. Write your
answers in the box below. There is an exam pie at the beginning (*).
Tom is a director of a private limited company called Fixit Ltd. He is the sole shareholder of that company.
Tom incorporated his company in April 2009. The company has an authorised share capital of £1000.
Each share has a nominal value of £1. Tom owns 50 shares. The rest of the shares are unissued. Tom
qualified as an accountant six years ago. He worked for a big firm of accountants as an auditor. Then he
decided to start up his own business. Fixit Ltd provides a consultancy service for other businesses. Tom
advises businesses on the best way to operate their accounts systems. He also gives businesses a lot of
advice about tax.
Fixit Ltd is a successful company which has a lot of clients. Tom lives in Birmingham but he spends a lot of
time at his clients offices. Most of his clients are based in London.
Exa m p te
Fixit Ltd is a public irTilteci company.
1 Fixit Ltd is a single-member company.
2 The issued share capital of Fixit Ltd is £1000.
3 Tom is a qualified accountant.
4 Fixit Ltd collects tax from other businesses.
5 Tom spends a lot of his time in London.
FALSE (1) (2) (3) (4) (5)
) Giobal Legai Engiisi 261

THE LANGUAGE OF BUSINESS LAW =
-S i
=
e,
INCORPORATED AND UNINCORPORATED BUSINESSES
Eercise 1
Lavyers often talk about the differences between incorpora ted businesses and unincorporated businesses.
Look at each of the words and phrases in the blue box and decide if it is connected with:
a incorporated businesses
b unincorporated businesses
legal entity member
partnership limited Ilability partnership
private limited company corporation tax
share joint and several liability
unlimited Ilability public limited company
dividend limited Iiability
partner sole trader
Exercise 2
Look at the fo/Iowing Iist of five different business structures. Read what the people say be/ow and match
their businesses with the correct business structure.
sole trader limited liability private limited public limited

partnership partnership company company
a Esther Jackson: We set up our business togeher Lwo years ago. i'm an accountant and Mark is a builder.
We trade under the name of MH Property Services. Mark does ali the building work whiie 1 deal with ali the
paperwork. Mark and 1 share ali the profits. We didn't have to register the business anywhere, but we joined
the local smail builders association. We took out a loan from the bank when we set up, to huy a van and
any toois that Mark needed. lhe bank insisted on securing the loan on our house, hut as we were confident
about the future of the business, we decided to take this risk. Were doing quite well at the moment.
This type of business is a
b Harriet Higgins: 1 own shares in Express Enterprises, which 1 bought two years ago through a
stockbroker. Express Enterprises has just announced that it has made record profits this year. It has
deciared a dividend, which provides an exceflent return on my investment. lhis dividend is to be
distributed soon. Ali of the shareholders will be dehghted that the price of shares has risen by 21 pence
each since this announcement was made. Stockbrokers are reporting that a lot of people are interested
in buying Express Enterprises's shares.'
(;;obal Legal Engs 263

c Hassan Abdullah: 1 own a specialist business consultancy firm. 1 have office premises in Birmingham
and 1 ernploy two fuli-time employees. 1 have just completed the annual return for the last year of
trading, providing details of the capital. the shareholders, address af the registered office and other
information. My accountant is preparing the annual financial accounts. Business fluctuated last year.
but 1 am optimistic that it will grow and provide a steady income.
d EIliot Solomon: The four of us set up our accountancy business about 18 months ago. After considering
the options, we decided on this type of business structure. Most new proíessional services are using this
structure. There is less risk involved as we are only liable for the amount of money we contributed to the
business. Tax was another consideration. We didn't want to pay corporation tax which is generally at a
higher rate, so we opted for this. We each have to pay income tax on our share of the business profits.'
This type of busíness is a
e Suzanne Marshall: l am a maths teacher. 1 used to work in a big school, but decided that 1 wanted to
do private tutoring, specialising in helping children who find it difficult to understand maths. The
business is very successful and 1 have a waiting list of parents who are interested in their children
having lessons with me. 1 dont want a big husiness, l'm happy just doing the hours 1 want. 1 can be as
flexible as 1 want. If 1 need more money, 1 just accept extra pupils. The business is easy to run and l'm
not restricted by rules and regulations.'
Coilocation bank
to set up a business to declare a dividend business fluctuates
to take a risk te distribute a dividend te consider an option
to make record profits a return on investment to secure a loan
qk
Preposition bank
to trade under a name a return on investrnent.

The business is owned by Mr Fox, and 1 own shares in a number of companies
trades under the name of "Foxgloves".* which provide me with a good return on
my investment.'
to insist on something
1 advised her to settle the case, but she to decide on something
insisted on taking legal action. Our layer advised us about the different
husiness structures and we finally decided
to be confident about something on a partnership.
He took his law exams last week and he
says that he is confident about the results.' to opt for something
•At first we wanted to set up a private
to own shares in a company lirnited company, but in the end we opted
My uncle owris shares in Harax plc and for a partnership.
also in Janson plc.'
to be restricted by something
to be interested in doing something Companies are restricted by a lot of rules
1 am interested in buying shares in Next and regulations.
Express plc.
264
SOLE TRADERS
-J
Exercise 1
José Perez is a website designer. He is thinking about startin his own businoss and yesterday evening
he went to a talk giveri by the local BusinessConnect office, which gives infomiation to entrepreneurs.
Look at José's notes and match the headin.,'s in tbe blue bo.x with the correct sirnrnary in the notes.
Setting up Management Tax Profits/losses

Liability Capital Employing staif
Notes about being a sole trader
It is very easy to start the business and you can begin to trade immedíately. The owner
does not need to register with anyone other than HM Revenue & Customs, which is the
government department in the UK that coilects tax.
The owner is compieteiy responsibie for the business. If the business fails, the owner is
fully responsibie for ali the business debts.
if the business does weli and makes money, that money beiongs to the owner. But if the
business does badiy, the owner bears ali the losses.
The owner runs the business himseif or herseif and does not have a boss. You can pay
other peopie to work for you if you start to get busy, but you wifl remain the boss.
You must register with HM Revenue & Customs within three months of starting the
business. if you make a profit you will have to pay part of mt to the government.
The owner's word is final. The owner has fuli control over how he or she runs the business.
The owner uses his or her personai money, or borrows from friends or reiatives. Banks
can be reluctant to offer a ioan to a new soie trader. You need a good husiness pian and
the bank wmfl want security over your personal assets to make sure you repay the loan.
Coilocation bank
to make a profit to bear a ioss personal assets
unhimited iiabiiity to run a business to repay a loan
to make money to have control
Global Legal tngli 265

Preposition bank
to register with someone to borrow something from someone

=
1 am going to register with the local 1 had to borrow £100 from my Dad Iast
association of smali businesses.' week as 1 had no money to pay my rent.
to be responsibie for something to belong to someone

You are responsibie for notifying os if you 'The house belonged to my uncle before
change your address. he died.'
to do something within a period of time tu have control over something

'1 need to answer that Ietter within five days He has fuil control over the banking
arrangements of the business.'
to have seco rity over assets
'The bank has security over my house.
Exercise 2
José Perez is talking about the advantages and disadvantages of being a so/e trader. Using your knowledge
of collocations and prepositions, correct the language below.
'1 considered ali the advantages and disadvantages when 1 (a) created my husiness and in the end 1 opted
(b) to a type of husiness in which 1 am called a sole trader. it is easy to (c) operate and you dont need to
register (d) to anyone except the tax authorities. As 1 am the sole owner, 1 am entitied (e) for ali the profits
that the business (f) earns, but if things go wrong, 1 () take ali the losses. 1 have (h) unrestricted habihty
for the debts of the business, which means that my (i) own assets are at risk ifi can't pay my credítors.
1 borrowed some money (j) with the bank, and they now have security (k) for my house.'
1 considered ali the advantages and disadvantages when 1 (a) up my busíness and
in the end 1 opted (b) a type of business in which 1 am cafled a sole trader. it is easy
to (c) and you don't need to register (d) anyone except the tax
authorities. As 1 am the soie owner, 1 am entitied (e) aii the profits that the business
(f) but if things go wrong, 1 (g) aH the iosses, 1 have (h)
habihty for the debts of the business, which means that my (i) assets are at risk if 1
can't pay my creditors. 1 borrowed some money (j) - the bank, and they now have
security (k) my house.
PARTNERSHIPS
Exercise 1
The Royal Chatsworth Bank lias produced some Business Fact Sheets for its customers. The fact sheet
about partnerships is on the next page. Fui thc gaps in the text with the correct words or phrases from
the box bciovv.
joint and several sleeping profits assets

self-employed creditor register legal entity
resigns dissolved salaríed equity
266
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Business Fact Sheet - Partnerships
if two or more peopie wish to go into business together, a partnership offers a simple way to
do so. Partners share the control, responsihiiity and finances of the business. Vou do not
need to (a) your partnership, except with the tax authorities. A partnership
is not a (b) . it does not have its own legal personality. As a result, each
partner is usually regarded as being (c) . Each partner wili pay income tax
on his or her share of the (d) of the partnership.
A partnership often just consists of general partners. Ali of these partners have the authority
to make decisions about the business. They share ali the profits and have (e)
Iiabihty for any debts incurred hy the business. This means that if the partnership does not
pay what it owes to someone, that (f) - - may demand payment from one or
more of the partners. The partners' personal () - are said to be at risk'.
it is possibie to have other types of partner. An (h) partner contributes capital

to the partnership and receives a share ofthe partnership profits in proportion to the amount of
capital he or she has invested. These partners are invoived in ali decision-making. Another type
of partner is a (i) partner, who receives high remuneration for his or her
services, but does not receive a share of the profits of the partnership. Finaily, some peopie may
contribute money to the partnership but they do not invoive themseives in the day-to-day control
of the business. They are often cafled (j) partners or dormant partners.
There is no legal obhgation to have a partnership agreement aithough this is recommended.

it wifl heip to avoid or resolve any disputes which may arise. If there is no partnership
agreement, the dispute wifl be settled according to the Partnership Act 1890. However, the
Partnership Act may provide a solution that the partners do not like. Also, if there is no
partnership agreement, the partnership must be (k) instantly if a partner
ceases to be a partner, for exampie if he or she dies, (1) or goes bankrupt.
Again, this is probably not what the partners wouid iike to happen.
Coilocation bank
to go into husiness to incur a debt to settle a dispute
a legal entity to demand payment to dissolve a partnership
to make a decision to resolve a dispute to go bankrupt
Preposition bank
according to something to consist of something

Ali disputes are resoived according to the My diet consists of coffee and chocolate!'
terrns of your partnership agreement.'
© Global Legal English 267

w THE LANGUAGE OF DRAFTING
Francesca Rodd is a iawyer who speciahses in partnerships. Two of her clients, Samantha SulIy and Kate
N
Mace, are setting up a beauty salon. Samantha and Kate have aiready met Francesca once to ask some
questions about operating a business as a partnership. However, they have now decided to include a third
partner, Angie Forrest, in the business. The addition of a new partner means that Fraricesca wiil have to
think carefully when she defines the term 'partner' in the agreement.
Ali three partners have instructed Francesca that they would like new partners to be abie to join them in
future if the business is successful. This is another factor that Francesca will have to take into
consideration when she defines the term 'partner' in the partnership agreement.
The cia use that Francesca drafts must:
a include ali three current gartners.
b include any gartner who mayjoin the gartnershig in the future.
c exclude any gartner who leaves the partnershig. This applies to any future partners as wefl as the
three current partners.
Exercise 1
The three situa tions above that Francesca must cover in her clause are described in more detail below.
Match the situa tions with the correct description.
Any individual who used to be a partner of the business but who now stops being a
partner for any reason at ali. (1)
Ali of the individuais who are parties to this agreement at the date of this agreement. (2)
Any individual or individuais who join the partnership each starting from the particular
date on which he/she adds his/her name to the scheduie attached to this agreement. (3)
Exercise 2
Here are some words that Francesca will need to use when she drafts the clause that provides a definition
of the term partner' iri the partnership agreement. Match each word with the correct meaning.
a Respective means... .a document containing extra information that is

attached to a contract. (1)
b A scheduie is... • . . relevant, particular, the one thing in a group of
things that refers to or belongs to a particular
c Annexed means... person. (2)
• . .attached. (3)
d Context means...
...at ali. (4)
e Whatsoever means... • . .circumstances or situation. (5)
268
Exercise 3 •.1
Choose the correct word from the list lo Exercise 2 to complete these sentences.
CM
CD
a lhe specifications for the buiiding work that your client wiii carry out are contained in the
attached to this contract.
b The company wili not pay any additionai expenses so you shouid be very careful
not to spend more than the money that you have been given.
to this draft contract is the iist of assets that you are purchasing.
d What is the fuil of the dispute between the partners? 1 only have one person's
story so 1 do not know the exact circumstances.
e After the meeting both of the iawyers returned to their offices to discuss the new deveiopments in the
case with their clients.
Exerclse 4
Using the descriptions from Exercise 1 and the definitions in Exercise 2 to help you, complete the clause
that Francesca drafts for the partnership agreement by putting the words from the blue box below lo the
correct place.
hereto whatsoever former respective

annexed hereof thereof
The Partners' means ali the individuais who are parties (a) at the date
(b) and shali include, from the (c) dates upon which any
other individuais by the addition of their names and addresses to the schedule
(d) hereto such other individual or individuais, and shafl unless the context
otherwise requires exciude any such individual being a (e) partner of the
business who shali have ceased for (f) reason to be a partner
()
Clobel Legal hngli.l 269

o
.0
Exercise 5
Look at thesu clauses from the partnership agreement. They deal with when the partnership between the
three partncrs will begin and how long the partnership will continue. Match the words and phrases that are
highlíghted in the clauses with the meanings below.
2. Commencement and Duration
2.1 Subject to the provisions for retirement, resignation, expulsion and dissolution
hereinafter contained the Firm shall continue during the joint lives of the Partners and the
survivors of them.
2.2 if any Partner ceases to be a partner by reason of his death or retirement or expulsion in
accordance with the provisions of this agreement the Firm shall not determine as regards
the surviving or continuing Partners.
2.3 The Partnership shaH continue until terminated at the end of any Partnership Vear by a
majority of the Partners giving to ali the other Partners not less than three months' written
notice of their intention to do so.
a Formal communication or warning that something is about to happen.
The word is
b A situation where someone leaves a business partnership because the other partners force him or her
to go.
The word is
c To end or to terminate. This word also has another meaning in legal Enghsh, which is to decide. When
you see this word in an agreement you must be careful to be sure of which meaning the layer is using.
The word is
d A word to describe the situation where someone stops working because he or she has reached a
certain age. In many countries this is the age of 65.
The word is
e The terms and conditions contained in a contract.
The word is
f A formal way of saying because of.
g lhe situation where a partnership has been brought to an end so that it no longer exists.
lhe word is
h A formal word meaning the start or the beginning of something.
The word is
270
i A formal word meaning stops'. =
The word is
j The situation where someone leaves his or her job voluntariiy. That person stops working by telling the
employer, usually by letter, that he or she is leaving.
The word is
k A formal way of saying considering what is written in' or except as stated in'. These words also have
another meaning in legal English, which is depending on. When you see these words in an agreement
you must be careful to be sure of which meaning the lawyer is using.
The word is
1 A period of time. It has a definite beginning and a definite end.
The word is
m Most of the people or things in a particular group. More than half of any particular group.
The word is
n The remaining parfners. The people who continue to be partners after one of the partners dies or leaves
the partnership for any other reason.
The word is
Exercise 6
!n the partnership agreement that Francesca Rodd is drafting, she has referred to the partnership as the
Firm'. Samantha, Kate and Angie are the only three partners in the beauty salon. Read the clauses in
Exercise 5 again and decide if the fo/lowing statements are true or false.
a Unless something happens that is stated in the clauses about True False
retirement, resignation, expulsion and dissolution, the partnership
will continue while Samantha, Kate and Angie are ali alive.
b The word survivors' in clause 2.1 means the children of Samantha, True False
Kate and Angie.
c If one partner dies, the partnership will end. True False
d If Kate does something wrong and is forced to leave the Firm, then True False
Samantha and Angie will continue with the partnership.
e If one partner retires at the age of 60, the partnership will end. True False
f Kate and Angie can end the partnership by writing to Samantha, teiling True False
her three months in advance that they want to dose the partnership
at the end of the Partnership Year.
Ci)I 1 271
Exercise 7
Here are two more c/auses from the partnership agreement. Exp/airJ the meaning of each of the
highlighted words. Make sure you check how the words are being used in these clauses. There is an
example at the beginning (*).
6. Profits and losses
The Partners shall share the Profit for each Partnership Year and (*) bear any Ioss for any Partnership
Year in the (a) proportions specified opposite their names in coumn 2 of Schedule 1 hereto.
7. Drawings
Unless otherwise (b) determined by the Partners each Partner shall be (c) entitled to (d) draw
from the Partnership Account on account of his share of the Profit for each Partnership Year the
(e) aggregate monthly sum stated opposite her name in column 3 of Schedule 1 hereto.
Example: To bear a Ioss means to carry a Ioss. You will have to pay for that Ioss.
a Proportions means
b Determined means
c Entitled to means
d To draw means
e Aggregate means
THE REGISTER OF LET1ER WRITING
Exercise 1
Francesca has written the Ietter ou thc opposite page to her clients, enclosirig the partnership agreement
that she has drafted for them. The words that have been underlined are too informal. Rep/ace these words
with a more appropriate phrase. There is au example at the beginning (*).
(*) your instructions
272
=
Hedgsons 111'
IIi,/) Street
(hatsuortb
(.'LJI ó(,T
Samantha SuIIy, Kate Mace and Angie Forrest 15 March 20XX

14 Kitstone Avenue
Chatsworth My ref: FR 44
CH1 6GT
Dear Ms Suily, Ms Mace and Ms Forrest
Partnership agreement for Revitalise beauty salon
1 have drawn up a partnership agreernent iii accordance with vi uu toci rjíj..
You are ali (a) giving an amount of £5.000 to the business. 1 have provided in clause 8 of
the agreement that you will receive interest on this sum at the rate of 5% each year. You
wifl (b) ali have any gains and losses equalIy. Simiiarly, you wifl be equaHy (c) resonsibie for
the costs of running the business and for paying the (d) arnounts of money that the
prnCrbIp owes if there are insufficient funds in the partnership account.
Clause 7 provides that each of you wifl be able to (e) take £500 a rnonth from the
partnership account for your personai use, which represents a prepayment of your share of
the profits over the accounting period. if at the end of the accounting period any of you
has had more than your share of the profits, then you have to repay the excess amount
immediateiy.
Clause 9 specifies the earhest possibie (f) time for leaving the oartnership for age reasons is
60. Clause 12 sets out the grounds for () forcing a partner to go out of the partnership,
either because they have done something wrong or for some other reason. Finaily, clause
15 says what will happen when you want to (h) f(flIsti the partnership.
1 look forward to seeing you next Wednesday morning at 10 oclock when 1 can answer any
questions that you may have and we can finalise the agreement.
Yours sincereiy
Francesca Rodd
Gobal Legai ErigIis 273

COMPANIES
Exercise 1
Sandra Hobson is a /aw student at the University of Chatsworth. She has just attended a lecture on cornpany
Iaw. Here are her notes about private /irnited companies and pub/ic Iirnited companies. Read Sandras notes
and find the words or phrases in the notes that match each of the rneanings on the next page.
My notes - company lecture

Private Iimited and public Iimited companies
lhe governing legislation is Companies Act 2006.
Ali companies are registered ai. Cornpanies House, which is the central registry of
companies in the UK.
Companies are i ncorporated businesses.
A company is a legal entity. It has its own legal personality.
Companies must disclose certain information. Each year, every company must file its
financial accounts and Annual Return at Companies House. The financial accounts include
a balance sheet and a profit and Ioss account, and must usually be accompanied by a
directors report and an auditors' report. The Annual Return contains up-to-date
information about that company.
The owners of a company are known as the members, or shareholders.
Shareholders have Iimited liability. They will not be liable for the company debts with their
own assets.
Companies pay corporation tax; employees pay income tax.
Companies must follow Iots of rules and regulations.
Every company has a memorandum and articles of association.
The business of a company is run by the directors.
The shareholders may receive a dividend if the cornpany makes a profit.
Private Iimited company

The name of a private limited company must end with the word Limited' or the
abbreviation Ltd.
A private limited company rnust have a minirnum of one director. Some pnvate limited
companies choose to appoint a company secretary but this is not a requirement. It is
possible (and common) to have a single-member company, with only one shareholder. No
minimum share capital is required to set up a private limited company.
lhe agreement of existing shareholders is needed to issue new shares or buy or seu
existing shares.
Public Iimited company
lhe name of a public Iimited company rnust end with the abbreviation plc'.
A public limited company must have a minimum of two directors and a company secretary.
It is not possible to have a single-member public limited company.
A puhlic limited company can be a listed company or unhisted. lf listed, the company
shares can be bought or sold on the Stock Exchange or Alternative lnvestment Market
(AIM), often through a stockbroker. A stockbroker deals in shares.
A minimum of £50000 share capital is currently required to start a public limited company.
274
a These are businesses which have been formaiiy set up and registered as companies. =
1
Answer:
b This is something that exists in the eyes of the law. It is a legal beíng, and can he a person or
a company.
Answer:
c This means to make public, to teli someone, or to reveal.
Answer:
d This is another name for the sharehoiders of the company.
Answer:
e This means that the sharehoiders wifl not lose more than their investment in the company. They wili
have to pay any amount that they stili owe to the company for their shares, but no more.
Answer:
f This is the name of the tax that a company has to pay.
Answer:
g This is the name of the tax that individuais must pay when they earn money.
Answer:
h These are the peopie who are responsible for the day-to-day management and running of the company.
Answer:
i This is a payment of a company's profits to the sharehoiders of the company.
Answer:
j This is the person who must make sure that ali the statutory regulations regarding a company are foliowed.
Answer:
k This is a company that has just one sharehoider.
Answer:
1 This is the amount of money that represents the value of a company's shares.
Answer:
Coliocation bank
to disclose information to issue shares to list a company
Preposition bank
o
to have the agreement of someone to file a document at a place
We have 'me agreement of our You need to file your statement at the
sharehoiders to enter into this contract.' court office.
to do something through someone to end with something

1 am buying some shares in Hattord plc •The name of a pubhc hmited company
through a stockbroker.' aiways ends with pic'
© Giobai Legai EnglisI 275

w INCORPORATING A COMPANY
Exercise 1
1'.
Peter Craig and his friend want to set up a new business. They have found a website cal/ed wvwv.CoTypes.co.uk ,
which provides information about the different types ofcompariy that exist in the UK. Peter has printed off the
foliowing information about private /imited com panies. Complete the gaps in the text by using the correct
word or phrase from the box be!ow.
su bscribers incurred registered office memorandum of

objects off-the-shelf articles of association
incorporate entity association Iiability
sole compliance
w. CoTypes. co . uk/ltd
Private Iimited companies

Ali private limited companies are registered at Companies House. A private limited company
must have a minimum of one shareholder. lt must also have at least one director, but since
6 April 2008 there has been no need for it to appoint a company secretary. If there is only
one director then this (a) director can also be the company secretary, if one
is appointcd. Directors run the company and the company secretary is responsible for
administering the company and ensuring that certain statutory information about the
company is available to shareholders, members of the public and official bodies.
Limited (b) protects the owners of a limrted company from personal loss as
the company is a separate legal (c) - A private limited company has its own
profits and debts. ln other words, any debts (d) are the company's debts
and not those of the owners.
Forming a company
You can buy an (e) companyfrom a companyformation agent. This is a
company that has already been set up, but it has never traded. Alternatively you can
(f) a company yourself. ln this case, you need tu submit the following
documents, together with the registration fee to Companies House:
e Memorandum of association
e Articles of association
e Form INOÍ (Forms 10 and 12 for companies incorporated before 1 October 2009)
The () __contains the names of the first shareholders of thc company, known
as the (h) . For companies incorporated on or after 1 October 2009 this form
is now a very simple document. However, for companies incorporated before that date it also
stated the company's name, its share capital, the situation of the (i) and
what the company would do, in other words the purpose of the company. Lavers calI that the
(j) of the company and this was often just a short clause stating that the
purpose of the company was to carry on business as a general commercial company.
The (k) set out the rules for running the companys internal affairs, including
such things as procedures for holding company rneetings, directors' duties and procedures
for selling company shares.
Forrn INO1 gives details of thc first directors, any company secretary, the intended address of
the registered office, details of the share capital, as well as a statement of (1)
with ali the legal requirements relating to the incorporation of a company.
276 Enlisi
Preposition bank
=
to protect someone from something to have at Ieast a number
'A patent will protect your invenUon from •We need at least £20.000 to finance
being copied.' the project.'
to have a number of something to make something available to someone

'We need a minimum of 12 people to 1 promise that 1 will make this information
attend this course.' available to anyone who asks for it.'
the object of something to submit something to someone

'What is the object of your meeting?' You must submit these documents to the
tax office by 31 January.'
III LISTENING
Exercise 1
Peter Craig and his friend decided to set up a priva te Iimited com pany in August 2009. Peter went to see a
soficitor called Greg Harrison, who specialises in company Iaw. Listen to their conversation. lt is about completing
one of the forms which is needed in order to incorporate the new com pariy. Answer the foliowing questions.
a What is the name of the company?
b What is the address of the registered office?
c Is Mr Craig using an agent?
d What is Mr Craigs telephone number?
e Does Mr Craig have a DX number?
f What is the name of the company secretary? -
g What is the address of the company secretary?
h Is the company secretary a Miss, Ms or Mrs?
i Complete the foliowing details about the two directors of the company:
Directors details Directors details
FulI name, including title
Address
Date of birth
Nationality
Occupation ____
Director of other companies? Yes/No Yes/No
Global Legal Engls 277

a) PAPERWORK
Exercise 1
1'.
Using the deta lis tliat you have from the Listenirig Exercise, complete Form 10 below.
=
Please completo ira typ050rrpt,

First directors and secretary and intended situation
lo of
o, ,n bold black capitais registered office
CHWP000
Notes on c.omprelior appear os mal tinge
Company Name in fuil
Proposed Registered Office

1P0 Pos rmumnbers ornly, tire foI acceprablem
os! lowrr
Comrnly /
lhe nrerhorarrdurr, is delmverrnd by arr agent

Reqion
1 Posteode
for lhe subscrmber(s/ olhe rnerrrorandimn

mark lhe bon opposmte and 9155 lhe aqents
oanre and address
Agent's liame
Address
P051 tomo
Courrly / Region noslcode
Nurrnber ol corrtnnuatmon sheets altached
YOu da sol bane 10 gmse anry sootaci

infon,nrat,orr rrr lhe Soe opposlte but
you do, It mlii help Companres Hosse
lo cootacf you mi there is e query 01,
lhe trinei The nmrn,acr rolornsr,en
Tel
that "rr'
serchers aI lhe psblic reojrd DX morri/rei DX enchange
Doorynnoms Horise sm..'mpi liS, bonde When you bane completeS and signos lhe lema please send milo lhe
Th,s forre has boa,, presido5 face ef ,ilnx-ge Registrar ol Companres at
by Coreparrres pouse Corr,pariies l ouse. Crown Way, Cardmlt Gb 14/FU/ DX 33050 Cardtl
for cornparlmes regrstered me Englacd and Wales
10103 Comparries House, :11 Castie Terroce Fdmohurgh, FHI 2E8

for compares regrslered me Sço!Iand DX 235 Edinbugh
or LP - 4 Filio horgh 2
Company Secretary '.0555.5
Ciii" torny nOme
NAME 'Stylo / Tdle

'Honours elC________________________
For000rne(s)
1
Surname
Previcus forename(s)
Tick 1h15 Ccx 116

Prevrous suroame(s) -
addrsr,s shownise --
see,iCe addreus ler Address
lhe beneficiar5
grannsdonderseo,,an __________
Con,proioh Aer 1985 P551 tOwrl
audrees. In lhe case COrnoty / Regmõfl Postcode

ora Corporarion 05
Sccttish lirm, give nhr
negicrereu or pr,nurpai Ceinnlry
a II Ice
1 eo"senrt lo actas secrinlary cl lhe eor-pnury iIr'eo e 0598 1
Consent signature Date
coo tinued
278
=
Directors -a
-1 4p11,ct,ctlI arde,
NAME SlyIe / fOle 0500115 ele. - - =

as
zr
Founarro(s is
Suriarie
Previuus furboarrIelsI
Prev,ous sua/anre(S)
TieS lh, boi ilibe -- -
adOrou Shoeen,sa Add reis
untei add,ess for lhe
bOrehcary oVa
Corrfdorl,al,ly Order
granted under seel,ofl
Post town
,cdnrI,aIuddrnesIn courty / Rogion -- - Pusfuode
l,rnr. gue lhe Counlry

reg,uicred or pr,ncÍpal
Olt,CO addro*S Day - Month Year
Date of btrth Nalionality
BCSInOOS occitpatior
Other directorships
.,.,srtrlt lo dcl as declor aI tie cor,pa , y r,arned On pago 1 -
Directors -
1 'cC/ç ' 0P'JDÜOCOI urde,
NAME StyIe / Tdle Horlours etc
Farertame(s)
Surnarne
L
Prev,ous forenar)te(s) E
Prraa,C,uS surnante(s)
nCk 1h15 boa ilha --
addr,s, %hOwn Address
1h
gnaeted ,rndor seotion

l-'ost town --
reu,000r,a1 iddriui In
corporalon Or SCOtt,sh
Co,t-rty Rcqo"
-
1 Pctslcode
f,rm goa lhe /0Ufl

reg.,l,r,d ou prIncipal
ohm. addr.a5
D,,v Montb Ver
Date of b,rth
Natmorsatity
[
Business occupation
Other drrectorships
1 , t to O ructor ot lhe coslprly nacted 011 pote 1
Consent sigriature Date
This section must be

Signed Date
slgned by either an
agent on behalf of ali
subscribers or the Signed Date
subscribers
(ie those who signed
Signed Date
as niembers on the
memorandum of
assoclation) Signed Date
Signed Date
Signed Date
Signed Date
Printed with permission

of Companies House
Glnh.-rl Legal EngIr 279

o,
&ercise 2
1. Peter Craig asks his solicitor, Greg Harrison, to draft the Memorandum ofAssociation of the new com pany.
The memorandum appears below. Fui each gap in the memorandum with the correct word or phrase from
the blue box.
objects Ilability share capital

registered office subscribers name
The Companies Acts 1985-89

Private Company Limited by Shares
Memorandum of Association
of
Outback Adventures Ltd
1. The company's (a) is Outback Adventures Ltd.

2. The company's (b) is to be situated in England and Wales.
3. The (c) of the company are to carry on business as a general
commercial company.
4. The (d) ofthe members is Iimited.
5. The companys (e) is £100000 divided into 100,000 ordinary
shares of £1.00 each.
6. We, being the (f) to this Memorandum of Association, wish to be
formed into a company pursuant to this Memorandum and we agree to take the number
of shares shown opposite our respective names:
Names and addresses of subscribers Number of shares taken by each subscriber

Peter Craig Ten thousand shares
15 London Road
Oxton
Hapshire
0X5 4HJ
Shane Bradman Ten thousand shares
87 Hunts Roads
Oxton
H a psh 1 re
0X2 6GP
Total shares taken Twenty thousand shares
Dated 14/08/2 OXX
280 Ers
Exercise 3 -.1
Greg Harrison actcd for arothcr c/icnt, Raj Pate/, io the incorporation of a new company. This compar?y =
was incorpora teci before L October 2009. Using tbe mernorandum ir) Exercise 3 as a model, draft the
Mernorandum ofAssociation for Raj Pate/s new company. Here are the details that rnust be included in
your memorandum.
Client details: Company details:
Raj Patel RP Computer Services Ltd

2 Cherryholt Road Capital: £100000.
Chatsworth Nominal value of each share is £1
CH3 6GH lssued: 25,000
RP to be sole shareholder

of
1.
2.
3.
4.
5.
6.
Name and address of subscriber Number of shares taken by the subscriber
Total shares taken
Dated
O Giobai Legal Engiish 281

SHARES AND SHARE CAPITAL
= Exercise 1
Kerty Bingharn is a trainee lawyer. She is doing her training contract with Taylor Wailis. She is currently mi
=
the com pany law department of the firm and Greg Harrison is her supervisor. Greg is explaining the
concepts of shares and share capital to her.
Clients often ask about the different share capital lhis figure appeared in a company's memorandum of
values that there are. lts quite difficult to expIam, association. For a company incorporated on or after
especially if the clients are from another country 1 October 2009 there is no longer any requirement
where they don't have the sarne sort of capital for it to have an authorised share capital.
values. First, let's just go through the different share
values. lhe market vatue of a share is the amount A company's issued share capital refers to the quantity
that a share is worth when it is sold on the open and value of shares actually issued to shareholders.
market. It is usually the amount a buyer pays for the lssued means gven out'. Another word is allotted'. The
share. That value fluctuates, meaning it varies, issued share capital is sometimes also called the
depending on how well the company is performing. nominal share capital, as it refers to the total nominal
The nominal value of the share stays constant - it value of me shares that have been issued and not their
is fixed for each company. The nominal value is the market value. Before it can start to trade, a public Iimited
minimum price at which a share can be sold when it company must have allotted shares to the nominal value
is first issued. lhe most common nominal value for of £50000. The shareholders of ffie company do not
a share in the UK is £1. Now, let's say a company is have to pay for the total amount of their shares at the
pertormingverywell, and 1 wantto buy some time they receive them, but in a public limited company
shares. 1 pay £6 for each share. So the market they must pay for at least a quarter ofthe nominal value
value is £6 and the nominal value is £1. That leaves of alI their shares at that time. In additíon, they have to
a difference of £5 and we cail that the premium. pay any premium on the share.
Now let's look at share capital values. In the U, any Going back to my example, if a share with a nominal
company incorporated before 1 October 2009 had to value of £1 is sold for £6 then the premium is £5. This
decide on the amount of its authorised share premium must be paid to the company together with a
capital. This referred to the quantity and nominal minimum of a quarter ofthe nominal value of each share.
value of shares that a company was allowed to issue. So, £5 plus £0.25 makes a total payment of £525.'
Look at the following informatiori and answer the questions below.
Highgrave plc was incorporated in April 2009. lts memorandum states:
lhe company's share capital is £300000 divided into 300,000 ordinary shares of £100 each'
lhe company's balance sheet says:
Share capital 200,000
Share premium account 160,000
a What is the authorised share value of the company?
b What is the nominal value of each share?
c What is the issued share capital?
d How much more share capital can the company issue if it wants?
e What is the total amount of the premiums that have been received hy the company?
t Assume that ali the shareholders paid the sarne amount for their shares. Was the premium on each
share 8p, 80p. £1 or £160?
282
LIMITED LIABILITY PARTNERSHIPS
•'1
Exercise 1
Era nccsca Rodd is writing a short explanation of /imited liabi/ity partnerships. Her /aw flrm is going to put
this informat/on on its website. Read the text and answer the questions that fo/low using a fuli sentence.
Limited Liability Partnerships
Limited Liability Partnerships (LLPs) were first introduced in the UK in April 2001. This has become
a popular way of structuring a business. This is especially true of professional practices, such as
accountancy firrns and law firms.
Setting up an LLP involves a similar process tu that of setting up a lirnited company. LLPs are
registered at Companies House and the requirements of disclosing information and filing annual
returns and accounts are similar to those for companies. The name of the partnership must end
with LLP. In the sarne way that a company has a separate legal personality, so does an LLP. It may
sue and be sued in the name of the LLP. The partners of an LLP have the advantage of limited
liability, which protects their personal assets. However, an LLP is not taxed as a limited company
but as a partnership. Also, an LLP is a more flexible structure than a company, with fewer rules and
regulations to cornply wíth.
The partners of an LLP are called rnembers. At least two of those rnembers are chosen to be
designated rnernbers, which are the equivalent of the directors of a company. The 'rules' of the
partnership are contained in an agreernent, decided by the rnembers.
We can help you decide if an LLP is the right form of business structure for you and prepare the
necessary formation and internal documents.
For more information and legal advíce on Limited Liability Partnerships, cal! Francesca Rodd
on 08451 2536478 or email her at frodd@hedgsons.co.uk
a When did it become possible to set up a lirnited liability partnership in the UK?
b Which professions like to use this particular structure for their business?
c What documents do limited liability partnerships have to send to Companies House each year?
d How does sorneone know that a business is a limited liabílity partnership?
e How is an LLP taxed?
f How many designated members must a limited liability partnership have?
GioLal Legal brgIish 283

THE LANGUAGE OF DRAFTING
Exercise 1
Francesca Rodd is acting for some new clients who wish to set up a fim ited liability partnership.
Francesca has drawn up a deed of partnership. The clause below deais with setting up the limited iiability
partnership. Fiji each gap in the cia use with the correct preposition from the biue box.
under at with to in of
2. Incorporation
2.1 The Members shali complete and deliver ( a) Companies House ali such
documents and pay ali such fees as shail be necessary to iead to the incorporation
(b) the LLP (c) _________ accordance (d) the Limited Liabihty
Partnerships Act 2000.
2.2 The certificate of registration ofthe LLP issued (e) the Limited Liabihty
Partnerships Act 2000 shail he kept (f) the Registered Office.
Exercise 2
Look at the words and phrases in the bluc box. Match them with the correct meanings be/ow. You wili
need these words and phrases to complete the next exercise.
ratify (1) take effect (4) benefit (7)
prior (2) determine (5) consent (8)
subsist (3) indemnify (6) In the event that (9)
a if d sLrt to operate g hefore
b decide e officiaiiy approve h continue to exist
c good f pay for any damage i permission

suffered
284
Exercise 3 .1
w
F?ead the cia use be/ow. It deais with when the business wili begin and how iong it will continue. Fiji each
gap in the cia use with the correct word or phrase from the blue box in Exercise 2.
3. Commencement and duration
3.1 The the provisions of this Agreement shail (a) on the

Commencement Date.
3.2 The LLP shall carry on the Business and/or carry on such other or additional trade profession
or business as the Members shall from time to time (b)
3.3 The LLP shail (c) until wound up in accordance with the provisions of
the Limited Liability Partnerships Act 2000.
3.4 (d) any Member may be personafly liable under any contract entered
into by him (e) to the incorporation of the LLP which was for the
(f) ofthe LLP and with the express or imphed () of
the other Members then the LLP shall on incorporation be deemed to (h)
that contract and shall (i) that Member from and against ali claims,
iiabiiities and costs in connection with it.
Exercise 4
Read the clauses in Exercise 1 and Exercise 3 again and decide if each of the foliowing staternents are
true or faise.
a It does not cost anything to register a iimited iiabiiity partnership. True False
b When a new iimited liabiiity partnership is set up, it receives a True False
certificate of registration frorn Companies House.
c The members can change the type of business that the iimited iiabiiity True False
partnership carnes out, if they wish.
d To end a iimited iiabiiity partnership, the terms of the relevant statute True False
must be foflowed.
e Ciause 3.4 aims to protect the partners from any iiabiiity that they True False
may have arising from certain contracts that they signed before the
hmited habihty partnership was officialiy created.
Ersn 285
= Coilocation review
Complete these seritences with a col/ocation that you have seen.
a l've -- - ali the options available to me and decided to go ahead and start thc business.
b The shareholders were pleased when Gernee plc - - a dividend, as Iast year they
received nothing.
c Harrow & Trot plc has just announced that although business foflowing the changes
in interest rates, annual profits were up by 11% last year.
d If the business does badly, 1 may lose my house as 1 have - liability for ali of the debts
of the business.
e We wifl not information about you to any third parties without your permission.
f If you do not have a partnership agreement, any disputes wiM be according to a

statute from 1890.
g 1 wasn't able to pay my creditors and had no choice but to bankrupt.
h The company shares to three new members.
i Ive always wanted to own a business, but was a bit worried about it. Two years ago 1 decided to
a risk and start a nursing agency. Im pleased to say it's doing well.
j We had a fantastic year Iast year - we made profits.
Vocabulary review
a We are afraíd that your behaviour gives us no choice other than to you from
the partnership.
b 1 have decided to ali my money in a new company cafled TenBase plc.
c When a new company is set up, it receives a __ of incorporation from Companies House.
d The authorised share capital is £100000 divided into 100,000 shares with a value
of £1 each.
e Partners have joint and ____________ -- liabihty for the partnership debts.
f Theír solicitar advised them on the procedure that it is necessar' Lo follow in arder to
a new company.
g Another expression meaning a legal person is a legal
h Each partner is allowed to take out some money from the partnership account each month for his or
her personal use- This is called his ar her
286
i The first shareholders of a company are called the =
.1
Every company incorporated before 1 October 2009 has an clause in its =

memorandum of association, which states the purpose of the company.
Preposition review
a 1 want to be a company lawyer as 1 am very interested commercial and business law.
b We are a limited Iiability partnership. which operates like a company but is taxed
a partnership.
c You must submit an annual return and accounts Companies House every year.
d Our business name appears the list of reputable estate agents.
e We are a small business, consisting four fuil-time employees and two part-time
employees.
f You must have least £50,000 share capital to start a public Iimited company.
g The object this exercise is to make sure that you can remember the
correct prepositions!
h According the partnership agreernent, each partner is entitled to drawings of £500

each month.
1 authorise you to make this information available Mr Richard Jard.
j The bank is willing to lend us some money, but it is insisting a personal guarantee
from each of us.
287
Exercise 1
Read the following clause. The missing words are in the Iist below. For each gap choose the word which
best fits into the space from the options provided. Use each option only once. Write your answers in the
box be/ow. There is an example at the beginning (*).
FROM A PARTNERSHIP AGREEMENT
6. Profits, Losses and Salaries
6.1 (*) to the following (1) of this clause the Partners shall (2)
the profit for each Partnership Year and (3) any loss for any Partnership Year 'n
the proportions specified opposite their names in column 2 of Scheduie 1 hereto.
6.2 There shall be paid in each year by way of gross (4) salaries which shall be
deemed to accrue from day to day and shall be paid (5) such sums (if any) as
are set out opposte the Partners' respective names in the Schedule 2 hereto.
(AA) Subject (B) monthly (D) annual

(A) share (C) provisions (E) bear
AA (1) (2) (3) (4) (5)
Exercise 2
Read the fo/lowing c/ause. Tlie rnissing prepositions are in the Iist below. For each gap choose the preposition
which best fits into the space from the options provided. Use each option only once. Write your answers in the
box be/ow. There is an example at the beginning (*).
FROM A LIMITED LIABILITY PARTNERSHIP AGREEMENT
10. Drawings
10.1 There shall be paid tu each Member (*) the Payment Date (1) - each
Month the Drawings or such other sum as the Members may (2) -- - time to time
agree (3) respect either of ali MerThcrs or such Mernbers as may thus he
determined.
10.2 Any further payrnents to he made 10 or on hehalf of any Member and any assets Lo be
transferred to or (4) the benefit of any Member shall only be made, transferred or
applied (5) the consent of the Memhers.
(AA) on (B) with (D) for

(A) from (C) of (E) in
* (1) (2) (3) (4) (5)
288 OIr:L
=
Exercise 3
Read the text be/ow and think of the word that best fits eact space. Use oniy one word lo each space.
Write your answers beiow. There is ao exam pie at the beginning (*)
Companies
There are several different types af company in England, but the most camman are the private Iimited
company and the (*) limited company. The name of a private limited company must end with
ltd ar Iimited' and a public limited company's name must end with plc', so you will always know what
type of company it is just by looking at its name. A company is an (1) business. This means
that it has its awn separate legal personality. Lawyers calI it a legal (2) . Both types of company
must be registered at Companies House. That is the central registry of companies. There are over
2.3 million registered companies in the UK. Every company has its own file at Companies Hause and
anyone can look at the file to find out information about the company. You may like to visit the website of
Companies House for more information. The web address is www.campanieshouse.gov.uk .
The owners' of a company are called the (3) ar the sharehalders. This means that they own
shares in that com pany. A share is a part af the company's capital. A private company cannot offer shares
in the company to members of the public, but a public limited company can do this.
A private limited company can have any number of shareholders. It is very common ta have a private
limited company with just one shareholder. In this case, the company is called a (4) -member
company. A public limited company must have a (5) af twa shareholders, but usually has a lot
more. Another big difference between the twa types of company is the amount af share capital that the
companies must have in arder to incarparate and register them. Sameone may register a private Iimited
company with a very small amount of share capital, maybe only £1, but in arder to register a public limited
company it must have a substantial amount of share capital. This amount varies, but at the mament it is
£50000. The shareholders of a company have (6) liability, in other words they will not lose any
more than the nominal value of their shares.
When someone wants to incorporate a new company they must (7) -- certain dacuments at
Companies House. There are twa very important documents that every company has. These are the
(8) of association and the articles of assaciation. Far companies incarporated on ar after
1 Octaber 2009 the first document is a short dacument which contains the names and signatures of the
subscribers wha are farming the company, together with their commitment to take at least ane share each
in the campany. The articles of associatian set out the internal (9) of the company.
There are a lot af statutory regulations that a company must (10) with. lhe mast recent
legislatian that gaverns companies in England and Wales is called the Campanies Act 2006.
Example public
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
GOLa] 1 F 289
.4 Listening
1'.
EÃercise 4
Listen to what Paul Evans says about setting up his business and answer the foliowing questions.
1 Why did Paul Evans leave his previousjob?
2 Paul calculated how long he could live without earning any money. How long did he decide?
3 What type of business structure did Paul choose to set up?
4 What did Paul consider buying from a company formation agent?
5 What is the name of Paul's company?
6 Who are the directors of the company?
7 Does the secretary of the company currently work as a lawyer?
8 Paul talks about two share capital values. One is the authorised share capital. What is the other?
9 Where is the registered office of PauI's company?
lOWhat did Paul receive from Companies House four months ago?
290
Modern Letter WrIting
Unit 8/Foundation/Higher
::
MODERN LETTER WRITING 00
'1
o
==
o-
0)
THE LAYOUT OF A LETTER o

=
Exercise 1 =-
Look at the Iayout of the Ietter below. This layout is used when you are writing a Ietter on a blank sheet of
paper. !dentify these parts:
The salutation The body of the Ietter Recipient's details

The date Printed signature biock Sender's address
The complimentary dose The signature Subject une
c
b
Notes to remember
Sender's address: you don't need to include your name here, just your address.
Recipient: this is the person you are writing to.
Recipient's details: you should include the person's name, job titie and address, or as many of these
detalis as you know.
CIojI FrjJ 293

Exercise 2
=
a Look at the /ayout of the /etter below. This /ayout is used when you are writing a Ietter usir?g your OWn
== headed paper, or your com panv's headed paper. 1dentii tfiese parTs:
a
1
The salutation The body of the Ietter Subject une

=
The date The signature Printed signature biock
The Ietterhead Recipient's details

The complimentary dose Reference
b
d
c
Notes to remember
Letterhead: this is already printed on the paper.
Recipient's details: you should include the name. job titie and address, or as many of these details as
you know.
294
DATES
Dates can Iead to probierns. There isn't a right or wrong way of writing the date - you can choose the style o
that you prefer. But you must rernember that American writers write the date with the month first, then the o-
day, then the year. Engiish writers put the day first, then the rnonth, then the year.
o
US MM/DD/Y'
UK DD/MM/YY
So for example, Iets say that today's date is 8 May 20XX. This can cause a lot of confusion when using
abbreviated dates:
US - MM/DD,YY 05.08.XX
UK - DID/MIM/YY 08.05.XX
They are both the sarne date, but they 100k compieteiy different.
Exercise 1
Look at the following ways this date (8 May 20)0<) can be written and decide whether it has been written in
the American forrnat (US) or the English forrnat (UK).
a 8/5120XX us UK
b 05/08/XX US UK
c May 08, 20XX US UK
d 08/051)0< US UK
e 05.08.20)0< liS UK
f 08MayXX liS UK
g 8th May 20XX US UK
h May8th,2OXX US UK
i 8May20XX US UK
j 08.05.20)0< US UK
k May8th2OXX US UK
Ali of thern are exactiy the sarne date hut if you dont know that the US and UK have clitferent ways of
writing then problems may occur. Our advice to you is to always write the name of the month in fuil.
For example, 8 May 20XX. Abhreviated dates can cause real conÍusion.
In the UK, the rnodern forrnat of writing dates no longer inciudes any punctuation. For exarnple, modern
writers put 8 May 2 DXX instead of 8th May, 20XX.
GoIL 295
4? SALUTATIONS
=
=o This is the part of the letter that always starts with the word Dear. This should be the easiest part of your
letter but it often causes real problems.
==
o Rules
You must learn these rules to make sure that you use the correct salutation.
==
Recipient Salutation
A law firm, company or institution Dear Sir or Madam

Dear Sirs
Man, name unknown Dear Sir
Woman, name unknown Dear Madam
A person, name and sex unknown Dear Sir ar Madam
Man, name known Dear Mr Thorley
Woman, name known, married* Dear Mrs Ratcliffe
Woman, name known, single* Dear Miss Singh
Woman, name known, marital status unknown* Dear Ms Pinto
Married ar unmarried couple, name unknown Dear Sir and Madam
Married couple, name known Dear Mr and Mrs Clarkson
Unmarried couple, names known Dear Mr Rice and Ms Matthews
2 men, names unknown Dear Sirs
2 women, names unknown Dear Mesdames
A person, name and particular title known Dear Dr Gregson

Dear Judge Fax
Dear Professor Silvestri
Friend ar colleague Dear Alison
*A warning about writing to women! The use of Mrs, Ms and Miss

lt is sometimes difficult to know how to address a woman. You have to think about the person you are
writing to. Unfortunately, there are no exact rules about this. Many married women like to be addressed as
Mrs (Name). However, it is not correct to assume that you can use this title for alI women. Single women
may be offended by this. Also, it is often the case that women qualify as lawyers ar in some other
profession under their maiden name (that is the name they used before getting married) and continue to
practise under this name, although they use their married name outside their professional life. So, a
woman may be Ms Carruthers at work and Mrs Marston in her private life.
Similarly, it is wrong to use Miss for alI women as this is thought by many women to be unsuitable for their
age and status. The modern titie of Ms is the preferred form of address by many women in the UK and the
USA and is a safe form of title to use if you dont know much about the recipient.
296 ii L
=
American Enguish
•'I
o
American English follows the sarne rules as American English includes a period, which is o-
above, but when writing to a law firm or called a full stop in British English, after most o
company, the salutation Gentlemen:' is often titles (but not after Miss), like this:
used. If you use this, do not put Dear before
Dear Mr. Adams
Gentlemen:'
Dear Mrs. Berkely
/ Gentiemen:
Dear Ms. Reauld
)( Dear Gentlemen Dear Prof. Hicks
Dear Dr. Cains
Dear Miss Kingston
Email language
Your first email to a person should follow the salutation rules that you have learned. After that, rf you
are having an ernail conversation, you dont need to continue using a salutation as it is not
necessary and sounds unnecessarily formal.
In some countries the salutation 'Dear Colleagues' is used when writing to a law firm. However,
don't use Dear Colleagues' when writing a formal letter to UK recipients because it is not
considered to be acceptable. You can use this in an email if you want to, as it is more informal.
Exercise 1
Write the correct saiu tation to start your /etter to each of the foilowing recipients.
Example: John Smith (a new client) f Martin Barley (a doctor)
Dear MrSmith - Dear
a Deborah Slater (a new client - you dont g RSGK Bank plc (you want to write to their legal
know if she is married) department)
Dea r Dear
b Lowe and Steele solicitors (you don't know h The ToolHire Company (you want to write to its
which solicitor is going to be dealing with Managing Director)
this case)
Dea r
Dea r
i Jeremy and Patricia Simpson (new clients, they
c Mattheis Schrnit (a familiar client you are are a married couple)
on good terms with him)
Dear
Dear
j BelIa Robson (you know she is married and she
d Maria Gabanna (a lawyer in America) uses her married name)
Dear Dear
e Rebecca WaIlis and Patrick Donaghue k Owner of Links Ltd (you know it is a woman, but
(new clients, brother and síster) you don't know anything else about her)
Dear Dea r
Globi 1 1 egal i- npl 1 1 297

COMPLIMENTARY CLOSE
It is important that you match the complimentary dose with the salutation that you use.
Rules
You must Iearn these rules to make sure you use the correct dose to your Ietter. An easy way of
remembering is to check if you are using the recipients name. If you are, you must end with Vours
sincerelv'. If vou don't know the recioient's name, vou have to end with Yours faithfully'.
Salutation Complimentary dose
Dear Sirs Yours faithÍully

Dear Sir or Madam
Dear Sir Yours faithfully
Dear Madam Yours faithfully
Dear Sir or Madam Yours faithfully
Yours faithfully
Dear Mesdames Yours faithfully
Dear Mr Thorley Yours sincerely
Dear Mrs Ratcliffe Yours sincerely
Dear Miss Singh Yours sincerely
Dear Ms Pinto Yours sincerely
Dear Mr and Mrs Clarkson Yours sincerely
Dear Mr Rice and Ms Matthews Yours sincerely
Dear Dr Gregson Yours sincerely
DearJudge Fox Yours sincerely
Dear Professor Silvestri Yours sincerely
Dear Alison Yours sincerely
Eercise 1
Write the correct complimertary dose to end your Ietter to each of the foliowing recipients. Rernernber, if
you know their name you need to end Yours sincerely'. lfyou don't know their riame, you must end
Yours faithfully'.
Example: Dear Mr Smith d Dear Ms Gabanna h Dear Judge Barley
Yours sincereI
a Dear Ms Siater e Dear Sir i Doar Madam
b Dear Sir or Madam f Dear Sirs
c Dear Mattheis g Dear Mr and Mrs Simpson
298
=
American English
"1
e
In Arrierican English the dose to the Ietter often Formal Yours truly, Truly yours, Very truly =
o.
deperids ori how formal the letter is. yours
=
e
Very formal - Respectfully yours. Yours Less formal/more personal Yours =

respectfully sincerely, Sincerely yours. Sincerely
Email language
You dont need to use such a formal way of Kind regards

ending your email. Polite, acceptable ways of Rega rds
closing your email are:
Best wishes
REFERENCES
What's a reference?
Most law firms include a reference on their letters so that they can quickly and easily identify the lawyer
dealing with that particular matter and the corresponding file.
For example, Riccardo Cailini may use bis initials and a number to identify his files like this:
RC 112
RC 113
In his correspondence with other lawyers he will include his reference like this:
My ref: RC 112
This will usually appear under the date block in the letter.
If you receive a letter from a lawyer whtch states a reference you must remember to use this on your reply.
You can also include your own reference. Let's say that Francesca Sanitta is replying to Riccardo. The
references on her letter might 100k like this:
YoLJr ref: RC 112

My ref: FS 3.4R
E: :- 299
SUBJECT LINES
=
e
e
Read these questions and answers and tiy to memorise the information.
e
e What is a subject une?
e
1
cio
It is like a heading to a Ietter.
e
Do 1 have to include a subject une?
Yes. The modern style of writing always includes a subject Hne.
Why do 1 have to include a subject une?

The purpose of a subject une is that when the recipient picks up the Ietter, he or she wiH immediately
know what the Ietter is about.
Where does it go?

The subject une can go either:
a above the salutation, for example:
Saie of shares in Moon Ltd
Dear Mr Price
or;
b between the salutation and the first paragraph of the Ietter, for example:
Dear Mr Price
Saie of shares in Moon Ltd
1 have sometimes seen 'RE:' before the subject une. Should 1 use 'RE:'?
No. RE: here means 'regarding'. The modern style of writing does not use RE: before the subject une.
It is a little old-fashioned now. Make your type bold font instead.
/ Contract between Mrs Bracken and Mrs Orders
K RE: Contract between Mrs Bracken and Mrs Orders
How much detail do 1 need to include in the subject une?
Very little. The subject une should be short and concise with just enough detail to allow the reader to know
what the letter is about.
/ Catering contract between Mrs Bracken and Mrs Orders
X Catering contract (too little information)
X Contract between Mrs Bracken and Mrs Orders concerning the catering arrangements for a
reception on 8 Juuy, which was not fulfilled (too much information)
300 Egish
=
Exercise 1
Here are three subject tines. Look at t/ie first paragraph of the followir?g /etters and write in the correct
subject tine.
o
a Outstanding invoice dated 2 June 20)0K
b My client: G Harrison
Your client: R Dickens
c 46 Nightingale Way, Birmingham, BH5 4RF
Letter 1
Dear Ms Hargreaves
1 have been instructed by Guy Harrison in connection with a dispute between Mr Harrison and
Richard Dickens. 1 understand from my client that you act for Mr Dickens.
Letter 2
Dear Mr and Mrs Rojas
1 am pleased to inform you that HFRC Bank has now formally confirmed its mortgage offer and we
are now in a position to proceed with your purchase of the above property.
Letter 3
Dear Mr Lancaster
1 note from our records that our invoice (number 422) in respect of website design services
remains unpaid. The sum of £76350 was due on 2 August 20XX.
Email language
The subject line should go in the subject box at the top of your email. Use the sarne arnount of
detail as you would in a formal letter.
© Giobi Legul Engiish 301

THE BODY OF THE LETTER
=
Read these questions and answers and try to memorise the information.
o
=
•0
Why are you writing this ietter?
o What is the purpose of your letter? You should think about this throughout your letter and make sure
1
that it is clear to the person who will read your letter.
Am 1 using the appropriate style and language for the recipient?

Always think about the person who is going to be reading your Ietter. The register of the letter is
important. Register means the tone and grade of language. If you are writing to another lawyer, the
register of your letter will be drfferent to a Ietter you are writing to a client who has no legal knowledge at
alI. Whatever style you choose for your letter, you must remember to use the sarne style throughout the
letter. Don't mix the style in the sarne letter, as this is confusing. Be consistent. We will look at register
in more detail later in this unit.
Have 1 inciuded the right amount of detail?

Again, think about the person who will be reading the letter. lf you are writing to a client with no legal
knowledge, you will need to explain any legal vocabulary that you use. You should not need to do this if
you are writing to another lavyer.
is ali the information relevant, accurate and clear?

If you are writing a letter of advice, check whether you have covered ali the main points. Have you
answered any questions that have been raised? Your letter should be clear and unarnbiguous. Dont
mnclude a lot of unirnportant details.
Am 1 using the appropriate tone? For exampie, is the ietter friendiy, formal, heipfui, forceful?
This is another part of register. In the sarne way as you use different tones of voice when you speak to
someone, depending on whether you are pleased, angry, disappomnted, informative etc, so the tone ot your
letters will vary. You have to make sure that you are using the right tone for the purpose ofyour letter.
Have 1 set out my letter in short, concise biocks?

If you just write one or two long blocks of information, thrs is difficult to read. It is much better to divide
the information into short paragraphs, with one main idea to each paragraph.
Am 1 using a iogical order of sentences and paragraphs?

You need to check that there is a natural flow throughout the letter. There should be logical lmnks
between the sentences and paragraphs.
Are my sentences the right Iength?

If your sentences are too long, the reader will lose some of the detail. You should aim to use a
maximum of 25 words in each sentence.
Have 1 used accurate grammar and punctuation?

Remember to check your letter carefully before it is sent. Accuracy is very important for la'ers. Look for
spelling errors, correct use of prepositions, accurate tenses. It is very important in a formal letter not to use
contractions or short forms, for example, Im, dont, isn't, etc. Always write the two separate words in full.
)( Irn K Dont )( Didnt X Ive

/ 1 am / Do not / Did not / 1 have
Remernber this as a checklist for your letter:
PLI rpose
Register To help you rernember your checklist:

Order People Rarely Order Champagne
Clarity PROCALL After Losing Litigation!
Accu racy
Layout
Length
302
PUTEING A LETTER TOGETHER =
=
co
Exercise 1 o
1
Here are the parts of a /etter which have beenjurnbled up. It is a /etter to a bank from one ofthe banks ==
customers. Put them into the correct order.
o
=
r
a It appears that this amount of £38992 has been incorrectly debited from my account. This
resulted in my being overdrawn on my account at the end of the month. You have then
charged me a fee of £25 for an unauthorised overdraft.
b 27 Limetree Avenue
C h atsworth
CH4 7JL
c G Hardwick
d It shows a debit of £38992 on 2 May 20XX. This transaction did not take place. However, 1
did use my debit card on that date to pay for a shirt which cost £3899. 1 enclose a copy of the
debit card receipt, which clearly shows this transaction.
e Yoursfaithfully
f 5Junc20XX
g 1 am not pleased about this. Please rectify this error immediately and retund the £25 overdraft
fee to my account.
h DearSir
My Account number 6387290
1 look forward to hearing from you with confirmation that this error has been corrected.
The Manager
HBCR Bank PIc
1 High Street
Chatsworth, CH1 4GP
con tio ued
1 303
= k iq 'deu
=o
=o
1 am wnting with reference to my bank statement dated 31 May 20XX. which shows the account
as being overdrawn. However, on checking the statement it is clear that it contains an error.
1 3 5 7 9 11
2 4 6 8 10 12
THE REGISTER OF LETTER WRITING

Register refers to the style and tone of your letter. The register that you use will change depending on who
you are writing to. If you are writing to another law'er, you will use legal vocabulary in your letter and write
in a more formal style. If you are wnting to a client who has no legal knowledge, you will use a different
register. In this case, you will need to explain any legal vocabulary and perhaps use a more personal style.
Whoever you are writing to, remember to use a modern style of English.
Exercise 1
Look at these three sentences. A Iawyer is writing a Ietter to another Iawyer about the sa/e of a house. The
sentences each contain the sarne information, expressed in differerit ways. Match each sentence with the
different styles Iisted in the b/ue box.
a 1 have the pleasure of enclosing herewith the draft saie and purchase agrcement in respect ofthe
property hereinafter known as 25 Laurel Way, Chatsworth, for your perusal.
b With mis letter 1 have included the first version of the saie document regarding the house 25 Laurel
Way, Chatsworth.
c 1 am pleased to enclose the draft contract in respect of 25 Laurel Way, Chatsworth (the Property)
Modern, plain EngIish as used by professional Iawyers (1)
Simpie, unprofessional sentence (2)
OId-fashioned, overlong sentence (3)
304
Exercise 2
o
in Uc following oxnm pies. wbich is the modern. professional stylc of writing? =
o .
o
a =
1 1 act for Frank Edmunds. /
r
2 Im working for Frank Edmunds. / )(
3 1 have been appointed to represent Mr Frank Edmunds. /
b
1 i'm writing to ask you about the cost of your accountancy services. / X
2 The purpose of this letter is to make enquiries about the levei of the / X
fees that you charge pertaining to accountancy services rendered.
3 1 am writing to enquire about your fees in respect of accountancy services. /
uó-
1 Please provide me with the following documents: / X
2 Kindly furnish me with the following documents: /
3 Can you send these documents: /
d
1 Regarding your ietter written on 15 November that's setting out / X
accusations about my client.
2 With reference to your communication of 15 inst, which pertains to /

alleged activities by my client.
3 1 refer to your letter of 15 November 20XX, which contains various

allegations against my client.
e
1 1 await hearing from you with ali expedition. / X
2 Please contact me as soon as possible. /
3 Can you calI me please? / x
305
w
Exercise 3
o Read the following /etter which contains a mix of styles. Look at the underlined phrases. Some phrases are
-c
too informal and others are too old-fashioned. Rep/ace each of the underliried phrases with mie of the
o
1
© phrases from the b/ue box so that the register of the /etter is a consistent. modern style. There is ao
example at the begirining (*)•
=
Dobson & Dean

li ( arliol Street
M rpcth
MPI 21)1)
Mr and Mrs J Coogan 25 October 20XX

1 The Meadows
Morpeth Ref: CD 554
MP2 7GH
Dear Mr and Mrs Coogan
Your dispute with Total Kitchens
1 have now received a response from Total Kitchens to the Ietter that - you tolcl meto write
for yOLl. 1 am afraid that the manager of the company has denied your allegation that they
have (a) broken their promise to you. Under the circumstances 1 suggcst that we (b) start a
case in the court in order to (c) ask for some money for your losses. Having looked at the
evidence that you have given me 1 (d) deem that the court will concurwith you and find in
your favour.
1 must tell you that according to current civil procedure roles (e) weve got to send Total
Kitchens what is known as a letter before action' before we actuslly begin any legal
proceedings. This letter gives them one final chance to acknowledge your claim and make
us an offer to settle the matter. If they (f) do not avail themselves of this opportunity to act
in this wy then we are able to proceed with our claim.
() }todiy furnish me with your confirmation that 1 should send this letter before action.
Please do not hesitate to (h) ring me or visit me ifI can be of further help.
Vours sincerely
Christopher Dobson
l wrote on your behalf we must (3) contact me (6)

consider that the court breached their contract Please confirm your
will agree (1) with you (4) instructions (7)
claim damages (2) fail to respond (5) take legal action (8)
a b C d e f g h
306
Exercise 4
Look at thesc sentenccs which are from letters written by a /aer. The under/incd word or phrase in cach
senterice is (ou o!d-fashioned. Rep/ace it with a good alternative.
o
a We deem that you are not acting in accordance with your undeakings.
b lhe parties named hereinbefore agree as Íoilows:
c 1 am writing pertaining to your ietter dated 15 July 20xX.
d We respectfully reguest that you telephone us.
e 1 have received a ietter from the solicitors acting for the vendees confirming that their clients can now
proceed with the purchase of your property.
f Please contact me with ali due haste.
a d
b e
c f
Exercise 5
Now /ook at these sentences which are from Ietters written by another Iawyer. The underlined word or
phrase in eacb sentence is too informal. Rep/ace it with a gooci a/terna tive.
a My client says that this point is true.
b In your letter oÍ 10 December you definitely gave up your right to repayment.
c Your actions amount to an unequivocal break of the contract.
cl You havent paid any morgy in the last three months and your mortgage account is now in arrears oÍ £2400.
e The total sum due to reoole that you owe money to is £6527.
f We consider that you are fully to biame for the injury suffered by our client.
a d
b e
c f
307
THE CONTENT OF THE LETIER
=
=e Often the hardest part is thinking how to start each sentence of your Ietter.
-e
e
=e
Exercise 1
e Look at the foliowing extracts from sentences. Com pie te each phrase with appropriate words.
a
Starting the main body of a Ietter
We writing confirm that...
you for Ietter 12 June.
reference our telephone conversation. -.
b
Giving the recipient some good news
We are to you that. - -
am to you that...
c -
Giving the recipient some bad news
We to you that...
am
d
Askíng the recipient to do something
We be if
1 would it you could...
e
Apologising for something that you have done, or failed to do
about the delay replying.
We for any
Please our
f
Enclosing documents with your Ietter
find
308
g -
Ending the Ietter and referring to future coritact, either a meeting or a reply to your Ietter
you have any please to us.
lfwe help way, let
1 look to you.
TYPICAL SENTENCES IN LEGAL LETIERS

The following phrases are useful when you are writing a letter on behalf of your client. You should try to
memorise them.
Opening Lines
We are instructed by Joseph Adams and understand that you act for Elliot Fletcher.
Thank you for your letter of 7 July. We confirm that we act for Elliot Fletcher.
1 act on behalf of
1 refer to your letter dated 16 August.
Explain why you are writing
1 am instructed that
We have seen your letter of 14 September to our client
1 am writingto
We will take our client's instructions and will contact you again soon.
Explain what you want the recipient to do
Please sign the enclosed agreement in the place marked with a cross, and return it to me by 21 June.
We would be grateful if you will take your clients instructions as soon as possible.
Refer to future contact
If 1 do not hear from you within 14 days of the date of this letter, 1 am instructed to start legal
proceedings immediately.
1 look forward to hearing from you as soon as possible.
If you have any questions, please do not hesitate to contact me.
CIobji L_I 1 309

w
Exercise 1
=o
Put orie of the phrases that you have /earned on the previous page irito each space 1r this Ietter.
==
o
CO
= Kyle and Co
10 Kings Square
Liverpool
Li 9RF
Mr Peter Denby 10 August 20XX
48 Eastgate
Liverpool
L2 5AA Ref: VH 2.02
Dear Mr Denby
Letter before action
(a) Deborah Hasting and am writing in connection

with the building contract that you entered into with my client on 14 March 20XX.
(b) the foliowing coritractual obligations remam

outstanding;
complete the fmtting of a new kitchen by the agreed date of 26 June 20XX
carry out repairs to a garden wall to a satisfactory standard at Mrs Hasting's home
clear rubhish and building material from Mrs Hasting's driveway.
(c) notify you that you must take immediate action to

remedy these matters. (d)
(e) and hope that this
matter can be resolved without the need for further actmon.
Yours sincerely
t77iQ'
Vanessa Hope
Coliocation bank
Clients consult Iawyers Lawyers represent clients Lawyers start legal

proceedings (no article 'the'
Cheits íristruct iwyers Lawyers act on behaÍf
before legal proceedings)
of clients
Layers act for clients
La'ers commence legal
Lawyers take clients'
Lawyers advise clients action (uncountable floLmn -
1 nstructions
no article the' or a' before
legal action)
310
Preposition bank
1
e
==
to act for someone within a period of time
1 am acting for Ms Francesca Peroni 'If we do not hear from you within 14 days o
=
of the date of this Ietter...
to act on behalf of someone =-
'We act on behalf of Treadmili plc. until a date (to set out a timescale)
'You have until 12 January to file a response.
to be instructed by someone
'We are instructed by Mr and Mrs Ross. to look forward to something
1 look forward to meeting you.
to do something by a date (to impose a
deadline) to hear from sorneone
'Please return the agreement to me by 2 '1 look forward to hearing from you.
November.'
LETIER WRITING CLINIC

The ten most common problems when non-native speakers of English write letters in English
Some mistakes are comrnon to almost every nationality when people write in English. When you write a
Ietter, you can improve it by asking yourself if some parts of it are:
1 Too informal. A letter should be professional even when written in a pIam English style. The more
informal style of an email for example, is not acceptable in a letter.
2 Too old-fashioned. A letter should be formal but this does not mean using language that is out-of-
date. Out-of-date language includes what a native English speaker might refer to as 'flowely'
phrases from previous centuries.
3 Too abrupt. Most languages are more direct than English. You can improve a letter by being
sensitive to the way that certain things are expressed when they are written in English.
4 Using archaic words. Modern letters should not include words such as 'hereunder or
'abovementioned'.
5 Using contract vocabulary. Some formal, general English words are acceptable in contracts and
other legal documents hut are not natural when used in letters.
6 Using uncountabie nouns incorrectly, or even inventing nouns that don't exist at ali.
Be aware of which nouns in English are uncountable. If you are unsure of a noun, chcck your
dictionary.
7 Confusing a verb with a noun. Are you sure, for example, of the difference between 'advice' and
'advise'? A computer will not necessarily correct this type of mistake for you.
8 Using articies incorrectly or not at ali. Make sure that 'a' and 'the' are used correctly, especially
if your own language does not use articles.
9 Using the wrong coliocation. For example, a lawyer 'acts for' a client and does not 'work for' a
client. This is an example of accurate verb/noun collocation.
10 Using the wrong preposition. A normal, one-page letter can contain 50 or more prepositions. If
lots of the prepositions are wrong, unÍortunately it will give a very bad impression to the reader.
311
w
= The dos and don'ts of Ietter writing

o
Do Don't
o / use plain Engiish X use unnecessarily dmfficult words or phrases
1
/ be consmstent in style X mix different styles, for example, change

=
from formal to informal
/ be formal but not old-fashioned
X use long sentences or long paragraphs
/ keep your sentences short
x use language appropriate to written
/ check your grammar and punotuation.
contracts in letters
)( be too abrupt. It can be considered impolite

to be very direct about some subjects,
particularly when writing mn English.
Exercise 1
Look at the Ietter on the next page. Some parts of the /etter are underlined. Read the Ietter and match the
underlined parts of it with the problems listed below.
Mistake with uncountable noun. (1)
L Mistake with preposition. (2)
L Mistake of confusing a verb with a noun. (3)
Mistake of using language that is too informal. (4)
Mistake with coliocation. (5)
Mistake of usmng an archaic word. (6)
Mistake of using a very 'fiowery', old-fashioned phrase. (7)
Mistake with an article. (8)
Mistake of using a word that is appropriate in a contract. (9)
Mistake of being too direct or abrupt. (10)
312
-I
o
Cooper & Co.
o.
Bario Ianc
o
Ne p( >rt I'agnel!
NI>2 1I)(;
m
Mr A Robertson 8 May 20XX
10 Pontlands Lane
Newport Pagnell
NP6 5HY
Dear Mr Robertson
Your contract with Stephen Colher
1 act for Stephen Colher. Mr Colher has consulted me regarding the dispute between you.
Mr Colher informs me that you entered into a contract with him in May of last year. It was
agreed that you wouhd act in the capacity of consultant for my client to assist him in his
business of irnporting goods into this country from Eastern Europe. My client tells me that
you have not fulfilled your obligations under (a) the aforesaid contract and that he is losing
income as a result.
1 am instructed that you assured my client that you had excellent business contacts in
Warsaw and Prague and could (b) furnish my client with goods from those areas at a much
more competitive price than he is currently paying. Mr Colher tells me that he covered the
costs of two (c) traveis that you made to visit Poland and the Czech Repuhlic in July and
September of last year respectively. He has provided me with ali of thc receipts (d) in resect
to these trips.
As my client has seen no benefit from these trips abroad and has no (e) ~ that you made
the trips, we request evidence of your activity on my client's behalf or a full reimbursement of
my client's outlay concerning this project. (f) My client wants to know how vou spent his money.
Naturally my client has no wish to continue his business relationship with your consultancy
firm and we require the immediate return of any paperwork or other confidential documents
that you may have in your possession with regard to my client's business affairs.
If we do not receive a satisfactory response from you within 14 days of receipt of this letter
then 1 have (g) said to my client that he has grounds to start proceedings against you
without further notice. Please note that if this matter comes to (h) the court then you will
(i) make additional costs.
(j) 1 would be most grateful if vou would acknowledge receiOt of this communication at your
earliost convenience.
1100k forward to hearing from you.
Yours sincerely
David Goidman
Giobai Legal Erighsh 313

o
Exercise 2
lmproving the letter. Think about what you kow about common mis takes lo letter wrítíng and complete
the sarne letter below in a more appropriate way. There are sam pie phrases lo the answer key, which give
you one way of completing this exercise. However, there is more thao one possible correct answer.
Dear Mr Robertson
Your contract with Stephen Colher
1 act for Stephen Colher. Mr Colher has consulted me regarding the dispute between you.
Mr Colher informs me that you entered into a contract with him in May of last year. It was
agreed that you would act in the capacity of consultant for my client to assist him in his
business of importing goods into this country from Eastern Europe. My client teus me that
you have not fulfihled your obligations under (a) contract and that he is losing
income as a result.
1 am instructed that you assured my client that you had excellent business contacts in
Warsaw and Prague and could (b) - ______ my client with goods from those areas at a
much more competitive price than he is currently paying. Mr Colher teus me that he covered
the costs of two (c) that you made to visit Poland and the Czech Republic in
July and September aí last year respectively. He has provided me with ali of the receipts
(d) these trips.
As my client has seen no benefit from these trips ahroad and has no (e) that
you made the trips, we request evidence aí your activity on my clients behalf or a fuli
reimbursement aí my client's outlay concerning this project. (f)
Naturaily my client has no wish to continue his business relationship with your consultancy
firm and we require the immediate return aí any paperwork or other confidential documents
that you may have in your possession with regard to my client's business aífairs.
If we do not receive a satisfactory responso from you within 14 days aí receipt of this letter
then 1 have () my client that he has grounds to start procecdings against
you without further nouce. Please note that if this matter comes to (h) - - then
you will (i) - additional costs.
- -
1 look forward to hearing from you.
Yours sincerely
David Goldman
314
CORRECTING COMMON MISTAKES IN LETEER WRITING =
00
Exercise 1
o
=
Too informal o .
o
Look at the foliowing sentences. They are aii too lo formal to bc included ir, a professiona/ /etter. Match =
each sentence with the more formal altemative from the blue box below. =-
ID
a 1 was hired by Mr Felton as his Iawyer.
b My thanks for your letter of 6 May 20XX. Our client has now told us what he wants to do.
c 1 think the judge will agree to what we suggest.
d Mr Felton wants to have back the money that he has spent on hiring lawyers for this case.
e Tell me if you agree to do what we say we want in this letter.
Please confirm that you are in agreement with this course of action. (1)
Thank you for your letter of 6 May 20XX. We have now had the opportunity of taking
our clients instructions. (2)
The court is likely to be sympathetic to our proposal. (3)
My client will be seeking costs. (4)
1 am instructed by Mr Felton. (5)
Exercise 2
Too old-fashioned
Look at the followiog ser,terices. They are ali too out-of-date to be included in a pra fessional letter.
Complete the more modero alternative that follows each sentence by fiuiing each gap with a suitable word.
a lo my most distinguished colleague, Ms Booth.
Ms Booth.
b 1 am most honoured to write to you as the legal representative of James Black, Esquire.
1 am hy James Black.
c My client larnents that his two previous letters have not received response nor payment.
Despite twa Ietters _________ payment my client has no
d 1 would be grateful if you would kindly acknowledge receipt of the docurnents enclosed herewith.
Please confirm that you have the documents.
e 1 advise that we initiate negotiations at your earhest convenience to resolve this issue in an
amicable fashion.
1 suggest that this matter can be through negotiation and that we th is

process as soon as possible.
Le E E 315
a,
Exercise 3
Too abrupt
Look at the fo/lowing sentences. They are ali too abrupt (impolite) to be included lo a professional letter.
Each sentence a/so coo tains a mistake, which is highlighted. Some of the mistakes are from the /ist of
common mistakes and some are not. First of ali, correct the mistake that each sentence contains.
a 1 need you to send me more informations about this.
b If you do not pay us now, we will take you before the court.
c 1 don't think what you told about my client's behaviour in this situation is correct.
d 1 have more things that 1 want you to explain me.
e Your client definitely said that my client could starting building on this land.
Exercise 4
Below there are some polite alterna tives to the sentences in Exercise 3. Match each sentence with the
correct polite alterna tive sentence.
1 need further information and would be grateful if you could forward the foliowing; (1)
1 am writing with some additional enquiries. (2)
We cannot accept your interpretation of our client's conduct in this matter. (3)
Your client gave his express permission for building work to begin. (4)
If we do not receive payrnent immediately we will issue proceedings without further notice. (5)
Exercise 5
The foliowing sentences ali use archaic words. It is not appropriate to include words like this in a rnodern
letter. it used to be true to say that archaic words made Ietters more formal. However, lo the twenty-first
century, modern law firrns doo 't use archaic words in corres pondence wit/i other Iaw firms or clients.
Underiine the archaic word or words lo each sentence.
a 1 hereby advise you that 1 am instructed by Mrs Shirley Malloy.
b My client informs me that you have failed tn respond to the ahovernentioned letter.
c Due to your conduct in this matter, we have no option but to issue proceedings forthwith.
d 1 attach a copy of the contract hereto.
e Please supply me with the information that 1 request hereunder.
316
Exercise 6
Archaic words can often be deleted and it will make no difference to the meaning of tbe sentence.
Sometimes it is necessaiy to write the sentence iri a slightly different way to make sure it is po/ite and
grammatically correct. Write the sentences in Exercise 5 again by fi/ling each gap in the sentences below
with an appropriate word.
a 1 on behalf of Mrs Shirley MaIioy.
b My client informs me that you have not responded to letter.
c Your leaves us with no choice but to issue proceedings
d Ihave a copy of the contract.
e Please supply me with the information in this letter.
Exercise 7
Lawyers often use very formal words when drafting contracts. However, many of these words are not
appropriate when writing a letter. The underliried words in the foliowing sentences can be replaced with
a word or phrase from the box below. Choose the correct word or phrase for each sentence and write it
in the space provided.
consider start obtain According to

people agreed ended clear
If perform provide connected with
a Kindly furnish me with the foliowing information.
Answer:
b in the event tht 1 am unable to attend the meeting cm 4 January, 1 will inform you by email at ieast 24
hours in advance.
Answer:
c Pursuant to the local planning regulations, l do not think that you will get permission to build 00 land
that is so dose to the river.
Answer:
d My client will procure ali necessary documents by the end of this month.
Answer:
e Your client has failed to execute his obligations under the contract.
Answer:
f This case has had a negative effect upon a great many persons.
Answer:
g We drn it necessary to carry out an independent audit of the company accounts.
Answer:
continued
Giotil 1 fai Engsb 317

h Your client determined the contract on the 28 July
Answer:
i Mr Smith undeook to complete the building work within three weeks.

o
00 Answer:
=
j We will instigate legal action without further notice.
Answer:
k Please send me a copy of ali documents oertaining to this matter.
Answer:
1 Your client gave his express consent to allow my client access to ali of the partnership's
financial information.
Answer:
Exercise 8
Uncountable nouns
The followirig senterices contain nouris that are used incorrectly because they are uncountable. Underline
the uncountable noun in each sentence.
a My client has suffered many damages due to this breach of contract.
b 1 am writing to request advices about starting a new business in the USA.
c You should buy an insurance in case you are sued under the indemnity clause of the contract.
d She doesn't have many evidences 1.0 support her case.
e My client has a valuable evidence to support her case.
f My client requests compensations for the earnings that she has lost as a result of the breach of her
employment contract.
g Do you have any proofs to support what you are alleging?
h 1 have carried out many researches into this matter on your behalf.
318
Exercise 9
-n
Herc aro thc soa tences from Excrcisc 8 again. Complete each senteaco with the correct word or phrase o
=
from the hluo hox be/ow.
o
a lot of proof piece of a great deal

co
some policy compensation much
a My client has suffered damage due to this breach of contract.
b 1 am writing to request advice about starting a new business in the USA.
c You should buy an insurance in case you are sued under the indemnity clause of
the contract.
d She doesnt have evidence to support her case.
e My client has a valuable - evidence to support her case.
f My client requests for the earnings that she has lost as a result of the breach of
her employment contract.
g Do you have any to support what you are alleging?
h 1 have carried out of research on your behalf.
Exerclse 10
Some nouns are more difficult to remember than others. Look at this list of verbs and circle the correct
nouri for each verb.
Example: veri): alie

foLia: aieJallegement
a verb: disturh e verb: respond
noun: disturhment/disturbance noun: response/responclment
b verb: admit f verb: abate
noun: admittatron/admission nono: abatement'ahation
c verb: amend g verb: distinguish
noun: amendance/amendment noun: distinction/distinguishment
d verb: dismiss h verb: lose
noun: dismission/dismissal nono: losement'loss
GcbI LeF, EngIis 319

= Exercise 11
Confusing a verb with a noun

==
The foliowing senterices use a verb when they should use a noun. For each sentence write the correct
noun in the space provided.
=
a Please send me your advise about this problem.
Answer:
b 1 look forward to your resond.
Answer:
c My to England was by plane.
Answer:
d The euro is weak against the doilar at the moment and thís has had a bad affect on business.
Answer:
e Do you have p rove of what you say?
Answer:
Exercise 12
Using articles incorrectly
Look at the following sentences. Each sentence contains an article. Decide if each sentence /s corrcct
or incorrect.
a How long was the yesterday's meeting? / x

b 1 have an appointment with Anthony Costelio in the morning. /
c The clause 5 of this contract deals with termination. /
d The force majeure clause is at the end of the contract. / X
e The court in Dobson Street was built in 1855. / X
f If you do not pay my bilI 1 will see you in the court! /
g The damages awarded to my client amounted to £15 ,000. /
h My client was awarded £15,000 in the damages. /
320
c
Exercise 13
o
=
Using the wroiig coilocatiori
Look at the fo/lowing sentences. Each sentence contains two collocations that are not correct. Choose the e
=
correct words from the box below to complete each sentence with accurate col/ocations.
r
denies take out due rate outstanding

waste dispute find incur pay
a What interest levei can you offer us if we borrow the loan?
What interest can you offer us if we the loan?
b My client does not wish to lose more time on this matter, nor to spend any further expense.
My client does not wish to more time on this matter, nor to any
further expense.
c Payment for these goods was owed on 21 April and we request payment of the late amount
immediately.
Payment for these goods was on 21 April and we request payment of the
amount immediately.
d The legal puarrel between your client and the bank arose because your client did not reimburse his debt.
The legal between your client and the bank arose because your client did not
1 ll ULJ1.
e My client refuses your allegations and if you pursue this matter further we think the court will in
our favour.
My client your allegations and if you pursue this matter further we think the court will
in our favour.
Exercise 14
tJsing the wrong prepositiori
The sentences below each contain a mistake in the use of prepositions. Each sentence contains one
mistake. Underline the preposition that is not correct in each sentence.
a Thank you for instructing Morton and Partners to act for your behalf.
b 1 am a partner in this firm and will have overall responsibility of your case.
c We are obliged to add VAT to our charges, currently of the rate of 20%.
d AlI payments you make to this firm will be placed at a client account in your name.
e This firm is audited from external auditors from time to time.
f We cannot accept responsibility of intercepted emails or viruses and we will assume safe arrival of
emails 24 hours after they are sent.
321
= Exercise 15
Complete the sentences below with the correct preposition.
=
U.. a Thank you for your Ietter 10 December.
b Further _____ our telephone conversation this morning 1 am pleased to confirm my clients
acceptance of your offer.
c Our client will also be seeking compensation his loss of salary calculated from the
date of the accident.
d You will be able to claim certain other expenses incurred a result of the accident.
e Perhaps you could let me know if our proposal is acceptable you.
Exercise 16
lo the sentences beiow circie the correct preposition from the two options offered.
a The most important provisions in/for the agreement are as foliows:
b Clause 7 covers the saie for/of partnership assets.
c Clause 8 covers partnerships at/with other entities.
d Clause 9 covers restrictions on transferring shares to/for third parties.
e Please let me know if there are any other matters for/on which you require advice.
322
Exercise 1
Look at the letter below. A /aer has written it to his client. Pas of the letter are written in an
inappropriate way. They are under/ined. Rewrite the underlined words in a more appropriate way.
There is an examp/e at the beginning (*).
Hayden, Hind and Co

1 Waterloo Square
Lo n don
N36 1LL
Ms Julia Payne 1 July 20)0K

11 Olivier Mews
London
N36 1BQ
(*) Most esteemed Julia Payne
Your dispute with Callaghan & Sons Ltd

1 have now had a response to the Ietter that 1 sent to Callaghan & Sons Ltd (1) for you on
14 June. 1 am afraid that the manager of the company, Paul Callaghan, has (2) refused
your claim that they (3) have dishonoured the contract that they entered into with you in
March of this year. 1 enclose a copy of Mr Callaghans letter, which we received yesterday.
The company's attitude to your claim is much as we expected. Mr Callaghan seems to be
relying on the fact that he had no formal written contract with you, to escape his
(4) responsibilitv for the (5) bad work that he carried out at your home.
Under the circumstances 1 suggest that we issue Callaghan & Sons with a letter before
action, in which we will state that you intend to (6) go to the court without (7) saying more
if this matter is not dealt with to your satisfaction. Having looked at the evidence that you
have given me, including the photographs of the work that Callaghan & Sons did in March
and April, 1 have every confidence that your claim will (8) win.
1 would be grateful therefore if you would consider how you wish to proceed and let me
know (9) puickly.
Please do not hesitate to (10) cail me or visit me ifi can be of further assistance.
1 100k forward to hea ring from you.
YOUrS sincerely
Miles Holman
() DearMsPayne
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
Global Legal Logi 323

Exercise 2
Look at the Ietter below. A Iawyer has written it to another Iawyer. Parts of the Ietter are written in an
inappropriate way. They are underlined. Rewrite the underlined words in a more appropriate way. There is
an example at the beginnirig (*).
Martineau & Emery

7 Bishop's Market
Liverpoo 1
Li 8SM
Mr Martin Lowe 16 July 20XX
Beli Bainbridge, Solicitors
Dickens Square
Liverpool
Li 7JK
Dear (*) Coileague
Taylor v Abernathy Sports & Leisure Ltd

1 refer to your Ietter addressed to my client (1) which has the day 14 July 20XX written on it .
This letter is in connection with the (2) law suit that has been made against my client,
Abernathy Sports & Leisure Ltd, by your client, Mr Taylor. Mr John Rogerson at my client's
head office has been dealing with this (3) qurrJ to date, and he has supphed me with
copies of ali of the relevant documents.
To begin with the (4) legal reasons for Mr Taylor's claim, 1 understand that his complaint is
in respect of an injury to his neck that your client (5) had during a session in my client's
Liverpool gymnasium and fitness centre. Your client claims that he was using a new weights
machine and that (6) no-one from my client's emnloyees was available to give Mr Taylor
instructions as to the safe use of the machine before he was allowed to use it. As a result of
this Mr Taylor injured his neck and claims my client was in breach of the duty of care owed
to him. In short, Mr Taylor claims that my client was (7) not careful.
1 see from the claim form that Mr Taylor is claiming for loss of (8) his money from working
as well as for (9) moral damage.
My client intends to file a defence to this allegation on the basis that several employees can
provide strong evidence to the contrary. In addition, my client will seek to recover from Mr
Taylor any (10) money for lawvers and court expenses arising from this matter. Perhaps your
client would like to reconsider his claim in the light of this information.
1 100k forward to hearing from you.
Yours sincerely
s -Pj~~
Beth Aitchison
(*) Mr Lowe
(1) (6)
(2) (7)
(3) (8)
(4) (9)
(5) (10)
324
é' 19V i, /
!SYJJ( /0 iv!
• , , .,
anguage o ompany Law

THE LANGUAGE OF COMPANY LAW =
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WHO RUNS A COMPANY?
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Exercise 1
Jessica Ryder is a law student at the University of Chatsworth. She must write a short paper about the
peo pie who are connected with a com pany. The most important words are in the key vocabulary below.
Read the text and answer the questions below using a fuil sentence.
Key vocabulary
shareholders employees directors creditors
company accountant auditor debtors

secretary
When the founders of a new company register the invoices from suppliers. Companies usually empioy an
company at Companies House, Lhe company exists accountant to deal with ali this financial paperwork.
as a separate legal entity. This is important as it Other paperwork is in connection with the legal
means that the company is separate from its administrative duties of a company. This includes the
owners, who are the shareholders of the duty to send an annual retum each year to Companies
company. Shareholders are also known as the House, containing up-to-date information about the
members of the company. The people who work for company, together with annual financial accounts. It is
the com pany are the employees. often the duty of the company secretary to make
sure that the company com plies with these
lhe people who have the power to run the
requirements. If this person faiis Lo send the correct
company are the directors. The companys articles
documents to Companies House at the correct time,
of association give the directors this power.
then he or she may have to pay a fine.
Together, the directors are called the Board of
Directors. They make ali Lhe decisions about the Each year, a qualified accountant, called an
management of the com pany. auditor, must inspect ali the financiai records of
rnost companies. The auditor has to look at the
There is a lot of paperwork in connection with a
creditors and the debtors of a company. Creditors
company. Some of this is financial paperwork, for
are Lhe people, including banks and other
example dealing with the payroll, which means
companies, who the company owes money to.
calculating salaries and wages for the employees. It
Debtors are ali the peopie who owe money to the
also invoives sending invoices Lo people who buy
company. lhe auditor must be satisfied that the
goods or services from thc company, and paying
annuai financiai records are accurate.
Example: Who uru Lhe sharehoiders?
Answer: lhe shareholders. aiso knoen as thr mervbers. are tiie ovners of lhe companv.
a Who are the employees?
b What do the directors of a company do?
c What does an accountant do?
d What does a company secretary do?
continued
;hiii LcgiI Er ir1 327

=o e What does an auditor do?
==
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C) f What are creditors?
g What are debtors?
Exercise 2
Look at the following statements. Ali of the staternerits are made by people or orgarisations that have a
connection with a com pany cailed Foxtrot Ltd. Complete each statement by using the correct word from
the key vocabula,y in Exercise 1.
a Kerry Knight
1 invested £5000 in Foxtrot Ltd by buying shares in the cornpany. 1 am a - of
the company. 1 am also known as a member of the company.
b The manager of the Royal Chatsworth Bank

Foxtrot Ltd took out a ioan from us six months ago. They owe us £4200. We are a
of Foxtrot Ltd.
c Harry Orm
1 am a of Foxtrot Ltd, together with two others, Mary Parker and Josh Copeland.
Mary and 1 are also shareholders, but Josh does not own any shares in the company. Together we make
ali the decisions about the company and we are responsibie for running the company.
d Mary Parker
1 am a director of Foxtrot Ltd and 1 am also the company . This means that
in addition to my duties as a director, 1 have the important task of making sure that 1 foHow ali the
statutory requirements connected with a company, for example, sending notices of meetings to
sharehoiders and sending documents to Companies House.
e Samuel Dickenson
1 am an accountant and 1 work for a íirm cafled AB Chartry & Co. Most of my clients are medium-size
private hmited companies. One of my clients is Foxtrot Ltd. 1 have to check thc company's financial
accounts and make sure that they are accurate and show the true financial position of the company.
1 am Foxtrot Ltd's
f Eliza Taylor
1 work for Foxtrot Ltd as their - . 1 deal with ali the financial transactions of the
company. For example, 1 send invoices to peopie and pay our suppliers. 1 also deal with the payroll
each month to make sure that ali of our employees receive their correct monthly salary.
g Ron Baxter
1 bought some goods from Foxtrot Ltd three weeks ago. The cost of the goods is £79520. 1 have an
invoice for these goods, which 1 must pay next week. 1 am a of Foxtrot Ltd.
h Jane Wilkinson
arri orie of Foxtrots 1 wori< in tne saies ciepartment. 1 irke working bere. 1
receive a good salary and 1 also receive a commission on any new saies.
328 G Lr
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HeIp desk w

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suppliers people ar companies that provida an invoice a picce of paper that shows what o
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goods or services to other people or companies, you are buyirig and how much you must pay.
often on a regular basis.
AREAS OF COMPANY LAW

Exercise 1
EI/soa Garwood /aw firm want to recruit a /awyer to work ia their com pany and commercia/ departrnent.
They put the fo/lowing advertisement in a legal magazine. The most important words or phrases are ia the
key vocabulary. Read the advertisement and put the correct words or phrases from the key vocabulary jato
each sentence below to complete the definition.
Key vocabulary
Restructuring companies Shareholders' agreements Insolvency
Raising finance Directors' duties Directors' service
Acquisitions Incorporating companies agreements
Joint ventures Mergers
Elison GarwoodLLP
Chatsworth Iaw firm seeks dynamic company Iawyer with at Ieast twa years PQE.
You will be advising our corporate clients in the foliowing arcas:
• Com pany incorpora tion • Joint ventures

• Raising finance • Shareholders' agreements
• Com pany restructuring • Directors' service agreements
• Mergers • Directors' duties
• Acquisitions • lnsolveacy
Applv with C.V. and covering Ietter to Ms Fiona Bailey. Eilson Garwood LLP. lhe Parde, Chatsworh. CH1 6FP
or email Fiona ah f.baiieyH)ellsongarwood.co.uk
a are contracts of work between a company and a director. They are

similar to coritracts aí employment. The agreement contains ali of the details of the director's position,
for exampie his or her remuneration, obligations, any restrictive covenant that applies, and a
confidentiality clause.
b is a situation where a company does not have enough money to pay

its debts.
c take place when two companies join together to form one company.
d Obtainirig rnoney from banks, private individuais, or investment institutions is known more formally
as
e occur when one company buys another company. They are also
calied takeovers,
continued
Gn 329
=0 f is ali of the legal work invoived in setting up a new company.
== g is changing the existing structure of companies with the aim of

O
improving their performance.
= h Situations where two or more companies work together on a particular project for a limited period of
time are called - Each company remains independentfrom each other.
Agreements between the members of a company are called They are

mportant as they contain the members' obhgations to the company and to each other. For example,
they state what happens when a shareholder wants to sell his or her shares.
j Ali of the obhgations and requirements of a director are caUed
Exercise 2
Peter Hapworth saw the advert!sernent and wrote a Ietter to Fiona Hailey. Peter's Ietter is mixed up.
Put the parts of the /etter in the correct order by writing your answers in the boxes numbered 2 9 below.
There is an exam pie at the beginning, which is the start of the /etter.
14 Gilbert Street
Chatsworth
CH7 5KL
Ms Fiona Bailey 24 Juiy 20XX

Elison Garwood LLP
The Parade
Chatsworth
CH1 6FP
(a) Upon qualification, Hedgsons offered me a position in the company law department.
i now have eighteen months' PQE, specialising in this arca. 1 have an exceilent working
relationship both with clients and other memhers of the company department team.
(b) Position of Company Lawyer
(c) 1 look forward to hearing from you.
(d) Following successfui completion of the Legal Practice Course at Oxton, 1 undertook my
training contract with Hedgsons LLP. 1 gained experience in civil litigation, hanking,
property and company law.
(e) Dear Ms Bailey
(f) Peter Hapworth
() 1 read your advertisement for a company Iawyer in the Legal Gazette (20 July 200X) with
interest. 1 would like to apply for this position.
(h) Vours sincereiy
(i) Whilst 1 enjoy my current position, 1 beheve that ElIson Garwood would ofter a wider
client base and that 1 could acquire further skills and experience. 1 enclose my C.V. for
your information and would welcome the opportunitv to meet you. 1 am abie to attend
an interview next month.
(1) e (2) (3) (4) (5) (6) (7) (8)
330
Help desk '.0
What do these words mean? e
PQE - an abbrcviation for post qualification to acquire further skills - to get more practice e
experience. That means how many years a in doing something so that you become better at
iawjer has worked foliowing the date of his or her doing that thing.
qualification as a Iaer. PQE is used frequently
client base - the number and type of peopie
in job advertisements for Iawyers.
and companies that a iaw firm provides a
undertook in this context, it mearis did' service to.
DIRECTORS
Exercise 1
David Merrirnan is talking about his job as a director of a com pany. The rnost important words are
highlighted in the text. Read what David says and then complete the seritences on the next page by
matching the first half of each seritence with the correct ending.
My name is David Merriman. I'm one of the shadow director is a person who is not officialiy a
directors of Hailoway & Riggs Ltd. Our company director of the company, hecause the sharehoiders
produces mobihty equipment for peopie who did not appoint him or her as a director, but this
cannot waik properiy. Hailoway & Riggs Ltd has a person gives instructions to the other directors and
board of five directors. Four of us are executive the directors usuafly do as they say. Executive
directors. That means that we are the peopie who directors, non-executive directors and shadow
make ali of the day-to-day decisions about running directors ali have the sarne duties and
the company. We also have one non-executive responsibihties to the cornpany. Directors have a
director. caiied Jack Drury. As a non-executive duty to avoid a conflict of interest. in other
director, he is not invoived in the daily running of words, we're not allowed to he in a position where
the company, but he gives us advice on new our personai interest may ternpt us to do
designs for our equipment. something that wouid not be in the best interests of
the company. If a director has a personai interest
When the sharehoiders of Halloway & Riggs Ltd
that may confhct with the interests of the company,
appointed me as a director of the cornpany six
then the director must tell the other directors about
years ago, the ruies about the duties of directors
it. in other words the director must disclose that
were not reaily very clear. There wasn't a statute
interest so that everyone knows about it.
dealing with the duties of directors. lhe law carne
from the comrnon mw. The main duties of a 1 hope to remain in my position of director of
director were the duty to act with care and skiii, Hafloway & Riggs Ltd for many years. My service
and the fiduciary duty of good faith, Because a agreernent with the company expires in twa years.
director knows so much about a company, the but 1 hope that the sharehoiders wifl reappoint me.
sharehoiders rTlList trust the director aiways to act 1 can rernember oniy one occasion, which was
in the best interests of the cornpany. For exampie, three years ago, when the directors and
we. as directors, arent aiiowed to make a secret sharehoiders were 50 dissatisfied with the
profit by using our knowiedge of the company for performance of one of the directors, that the
our own benefit. sharehoiders had to remove that director. That
means they dismissed him. 1 wouid be devastated if
However, since the Companies Act. 2006 carne into
that happened to me. im very proud of the
force, the iaw about tho duties of directors is a little
company and its products and 1 firmiy beheve that
clearer. lhe Act includes some provisions about
this company has a great future. 1 wili do my very
directors. it taiks about executivo directors and
best to ensure that 1 exercise my powers as a
non-executive directors, which 1 mentioned earlier.
director to the best of my abilit.y.
it also taiks about shadow directors. Basicaiiy, a
GIçh F- 331
a Executive directors... a situation in which you are in a position of trust
cc
towards another person, often in a professional
==
o capacity, and if you take a particular action, this will
II-
b Non-executive directors. give good results to you, whiie at the sarne time
= giving bad results to the other person. (1)
c Appointed means... advise the company about particular matters, but
they do not take part in the daily decision-making. (2)
d A fiduciary duty is.. use that power. (3)
elected or chosen for a particular position. (4)

e A shadow director is...
dismiss that person frorn his or her position as a
director. (5)
f A conflict of interest is... run the company and make ali the decisions
about the company. (6)
g To disclose information means to... give that inforrnation to someone or teM
someone about it. (7)
h To remove a director means to. - - a duty to act in the best interests of someone
because that person trusts you, (8)
i To exercise a power means to... someone who, even though he or she has no
official position of authority, gives instructions to
the official directors. (9)
Exercise 2
Read what David Merriman says again and decide if the following statements are true or false.
a David Merriman is a member of the board of directors of Halioway True False

& Riggs Ltd.
b Jack Drury is a member oT the board of directors of Halioway & Riggs Ltd. True False
c David Merriman has been a director of Hailoway & Riggs Ltd for six years. True False
d The directors are ailowed to make a profit from their position but they True False
rnust not tell anyone about it.
e David Merriman wants to retire in two years. True False
f Three years ago, the sharehoiders removed David Merriman from his
position as a director. True False
HeIp desk
mobility equipment - this is equipment which the best of my ability - to do something to the
heips people to move. For exampie, wheelchairs, best of your abihty is to do it as well as you
crutches and waiking sticks. possibiy can.
good faith - honesty and sincerity, loyaity. devastated - extremely upset.
332 C;;cbui Legui Engiish

COMPANY MEETINGS =
Exercise 1
'1
o
Christine Martin works at the Chatsworth Business Advice Bureau. This is an office that gives advice and ==
information to people who want to start a new business. Christine is writing an information sheet about
o
company meetings. The most important words or phrases are in the key vocabulary be/ow. Read the first =
page of the information sheet and answer the questions that fo//ow using a fuil sentence.
Key vocabulary
company annual general extraordinary proxy
meetings meeting general meeting show of hands
board meetings chairperson quorum poll
minutes convene adjourn
Chatsworth Business Advice Bureau

Company meetings
If you want to set up a private limited company convene a meeting simply means to cafl a
ora public limited company you need to know meeting. In other words, the company sends
about company meetings. There are board a notice to ali the shareholders telling them
meetings and company meetings. Board when and where the meeting will take place.
meetings are meetings of the directors of the
There must be a quorum at a meeting. A
company. Company meetings are meetings
quorum is the minimum number of people
ofthe sharehoiders ofthe company.
who have to be at the meeting in order to
The company must hoid regular meetings. make an ofíiciai decision. Each company
The directors make ali the decisions about the decides how many people will constitute the
com pany so they need to meet often. You quorum. if the quorum is not present, then
need to keep a written record of each meeting. the meeting cannot continue. You will have
lhe written record of each meeting is cafled to stop the meeting and arrange a new date
the minutes of the meeting. lhe person who for it. in other words, you must adjourn the
controis a meeting is cafled the chairperson. meeting, which means to postpone it.
The shareholders meet at the company's if a sharehoider cannot go to the meeting,

annual general meeting. it is usually cailed
maybe beca use he or she is on hohday,
the AGM. This meeting takes place once he or she can ask someone cisc to go
each year. lhe Iaw changed on the the meeting and vote for him or her. lhat
1 October 2007. lhe new iaw, which comes person is cailed the sharehoider's proxy.
from the Companies Act 2006, requires oniy Peopie vote at a company meeting either by
pubiic hmited companies to hoid an annuai raising their hands, or by making their vote,
general meeting. If it is necessary for the either on paper or electronicaily. The first
shareholders to meet again, the company method ofvoting is more formaHy called a
wili convene an extraordinary general show of hands and the second method of
meeting, which is called an EGM. lo voting is caHed a poil.
page 1
a Who attends board meetings?
Answer:
b Who attends company meetings?
Answer:
continued
CFud Er 333
o c What are the minutes of a meeting?
== Answer:
o
1
d What does the chairperson do at a meeting?
Answer:
e How often does an annual general meeting take place?
Answer:
f What does the abbreviation EGM mean?
Answer:
g There must be a minimum number of people attending a meeting before that meeting can continue.
What is this minimum number of people called?
Answer:
h What are the two methods of voting at a company meeting?
Answer:
Eercise 2
Use the correct words or phrases from the key vocabu/d!y iri Exercise 1 to complete the following seritences.
a We need at least five people to attend the meeting before we can make any decisions. There are only
four people here, so we do not have a present.
b If you want to read what happened at a meeting, you should look at the of
the meeting.
c The companys takes place in March of every year.
d Meetings of the shareholders are generally known as
e Im afraid there is not a quorum at this meeting. We will the meeting now and
hold it again next week.
f lhe AGM of Great Finance plc will take place next month. One of the shareholders. Daphne Mercier,
will be in France when the meeting takes place. Daphne asked her friend, Teresa, to be her
and vote on her behalf at the meeting.
g One method of voting that is very often used at company meetings is where each shareholder raises his
or her hand, in other words, voting by a
h Granger Ltd held its AGM last month. Now it is necessary to hold another meeting. This time it will be
an
1 The directors hold regular at which they discuss the position of the company
and make decisions about the company.
j There are a number of matters that we must discuss. We need to a company

meeting as soon as possible.
334
k Ali the shareholders voted by completing the voting Íorm. This written vote is cailed a =
'1
o
1 Two of the shareholders became very angry during the meeting and started tu shout at each other. The ==
o.
had to ask them to he quiet.
o
Exercise 3
Here is the second page of the information sheet about com pany meetings. Tbe rnost importatit words or
phrases are in the key vocabulary below. Read the information sheet and decide if the statements on the
next page are true or false.
Key vocabulary
resolutions carry written resolutions ordinary
motion unanimously notice resolutions
pass special resolutions
Chatsworth Business Advice Bureau

Company meetings
Both the directors and the sharehoiders You do not aiways have to convene a meeting
make their decisions at meetings. These in order to pass a resolution. Shareholders
decisions are caiied resolutions. If can make lots of decisions by using written
someone has a proposal that they want to resolutions, but only if the company is a
discuss at a meeting, this proposal is called private limited company. This saves thc time
a motion or a proposed resolution. The and cost of hoiding formal meetings.
shareholders discuss each motion and then
There are a lot of rules about holding company
vote to decide whether or not to accept that
meetings. Some ofthese roles are statutory,
proposal. When the shareholders accept or
which means the Companies Act 2006
agree to a motion, we say that the
requires companies to have these roles. In
shareholders pass a resolution' or carry a
addition to these statutory rules, each
resolution. This is another way of saying to
individual company imposes its own roles. The
approve of, or agree to, the decision.
mies of each individual company are in that
There must be enough peopie voting in company's articies of association. For
favour oÍ a resolution in order to formally example, if you are a director, you cannot just
accept it. If everyone agrees to the motion, announce that you will hold a company
then the resolution is passed unanimously. meeting today! The company has to send a
Unanimously means that everyone who is formal notice of the meeting to the
present at the meeting is in complete sharehoiclers. That means you have to officiaily
agreernent. However, you do not need announce to the shareholders that a company
everyone to agree. It depends on what you meeting wili take place. Vou also have to make
are voting about. Some motions need a sure you give the shareholders the correct
simpie majority of over 50 O/ of people who number of days' notice. You rnust study a
are voting to agree in order to pass them. company's articies of association very carefully
These decisions are cailed ordinary to make sure that you follow alI these roles.
resolutions. Other motions need a majority
Our advice is to ask a so/icitor to expiam
of at least 75% of people who are voting to
your com pany's articies of associa tion to
agree in order to pass them. These
you so that you fuiiy understand ali of the
decisions are called special resolutions.
procedures concerning meetings.
page 2
Giobai Legal i-ngIsh 335

=
c a A proposed resolution is cailed a motion. True False
-
==
b In order to pass a resoiution, ali the sharehoiders must aiways agree
= unanimousiy. True False
c Ordinary resolutions need over 50% of peopie voting in favour of them. True False
d Sharehoiders can only pass resolutions at a formal meeting. True False
e Ali of the roles about company meetings are in the Companies Act 2006. True False
Exercise 4
Rewrite each of the serterices be/ow, using thc correct word or phrase trom the key vocabu/a,y ia Exercisc
3 to replace the underlined word or words.
Example: lhe sharehoiders passed a decision to issue 100 ncw shares.

The sharcholders passed a resolution to issue 100 new shares.
a We wili now discuss the foflowing proposed resolution, proposed by Jane Edwards.
We wifl now discuss the foliowing proposed by Jane Edwards.
b The sharehoIders açcerjted a resolution to change the name of the company.
The sharehoiders a resolution to change the name of the company.
c This resolution is a decision which reouires over 50% of the votes to be in favour of it in order for it to succeed.
This resolution is an
d lhe company sent a forrnalannouncement to ali of its sharehoiders informing them that the company
is convening an EGM, which will take piace on 12 June.
lhe company sent a to ali of its sharehoiders informing them that the
cornpany is convening an EGM, which wiM take place on 12 June.
e lhis resolution is a decision which reciuires at ieast 75% of the votes to be in favourof it in order for it
to succeed.
This resolution is a
f lhe shareholders passed the resolution with comiete agreement.
The shareholders passed the resolution
g For most matters, the shareholders of Restart Ltd do not need to meet, as they are happy to use
decisions rn writing.
For most matters, the sharehoiders of Restart Ltd do not need to meet, as they are happy to use
IJI. .1.I.
1 1 IIá
a voting form - a paper that sets out the possible to raise your hand - to put one cd your harlds
choices. You decide which ofthese choices you high into the air above your head.
want, then write a cross (X) next to your choice.
336
COMPANY FINANCE - A CASE STUDY
w
»
Exercise 1
Look at this case study of a priva te limited com pany. Some of the words are high/ighted. Without using a
dictioriary try to decide whether the highlighted words are verbs or riouns
Farmfoods Ltd is a private limited company which supplies animal food to farms for sheep, cows
and other animais. The company traded successfully for the past four years. The company's most
valuable asset is its factory where the company manufactures the animal food. The directors
decided to expand the husiness. Farmfoods Ltd needed to borrow a lot of money to finance this
expansion. The directors applied for a large loan from the Royal Chatsworth Bank. The bank
considcrcd the application and agreed to lend the company the money. However, the bank wanted
a guarantee from Farmfoods Ltd that the company would repay the loan. The bank demanded a
fixed charge over Farmfood Ltd's assets. The directors agreed to grant a mortgage to the bank
over Farmfoods Ltd's factory. The bank now has security over the factory. If Farrnfoods Ltd
defaults on the loan repayments, the bank can take the factory from Farmfoods Ltd.
Verb Noun
Exercise 2
Here are tlie highlighted words again. Fui each gap lo the fo//owing sentences with the correct word from
the hlue box below to complete the definitiorls that follow.
asset loan repay mortgage

borrow lend charge security
finance guarantee grant defaults
a To money means to take money from someone else for an agreed period of time
and then pay it back.
b To money means to give money to someone cisc for an agreed period of time.
That person must then give the money back to you.
GIob] Legdl Englis 337

c A is a sum of money that you borrow from another person. You must pay back
that money, usually with interest.
d To money is to pay back the money that you borrowed from someone.
e An is something that you own which has a value. It can have a very 10w value, for
example a CD, or a very high value, for example a house.
f To a project means to obtain money in order to be able to pay for that project.
gA is a promise to do something.
h is a guarantee that you will pay back to someone the money that you owe to
them. It is often 'fixed' to a particular asset, which means that if you don't pay back the money, that
person will take the asset that you used to guarantee payment.
1A is one example of security. It is a legal document which gives a house or a

huilding as security for a loan. If the owner of the house does not pay the loan back, then the person
who lent the money can take the house and seil it in order to get his or her money back.
j If someone on payment it means that he or she fails to make that payment.
k A is a type of security. A fixed charge is attached to a particular asset and gives the
chargeholder the right to take that asset if the borrower does not pay the money that it owes. An example of
a fixed charge is a mortgage. There are other types of charge, which are less important than fixed charges.
1 To a mortgage over your property is to use that property as security for a loan.
Exercise 3
Look at the second part of the case study. Decide in each case which is the correct prepositiori from the
two possibilities.
Unfortunately, Farmfoods Ltd experienced a very bad year (*) of/in trading last year. (a) UntiI/After
a period of terrible weather which ruined the crops. Farmfoods Ltd had to increase its prices
(b) with/by 15% and its customers found other more competitive suppliers. The companys plans
(c) for/to expansion did not receive approval (d) from/to the planning authorities. lhe company
cannot pay the instalments (e) for/on the loan from [he Royal Chatsworth Bank and last month the
bank demanded fulI repayment ( of/to the loan. Farmfoods Ltd is insolvent. The company is
unable to pay its debts.
Answers
Example o a b c d e f
338
Exercise 4
The directors of Farmfoods Ltd are looking at the /ist of its creditors. Creditors are either secured creditors
or unsecured creditors. Socured creditors have some sort of security or guarantee of repayment, whi/e
unsecured cred/tors have no guarantee of payment. Read the information about Farnifoods Ltd's croditors
and decide if each creditor is a secured creditor or ao unsecured creditor.
a Print It Ltd. This is a company that supplies printing services to Farmfoods Ltd. Farmfoods Ltd did not
give any guarantee for payment of any amount.
Answer:
b Chatsworth Royal Bank. The bank has a mortgage over Farmfoods Ltds factory to guarantee repayment
of this loan.
A n swe r;
c HGFT Bank. Farmfoods Ltd also took out a loan from this bank. HGFf Bank holds a charge over some of
Farmfoods Ltds assets.
Answer:
d Spin Electric plc. This company provides Farmfoods Ltd with electricity. Farmfoods Ltd has not paid any of
its electricity bills for five months. Farmfoods Ltd did not give any guarantee for payment of any amount.
Answer:
e Grotell & Co. This is a partnership that supplies packaging to Farmfoods Ltd. There are two invoices
from Grotell & Co that are waiting to be paid. There is no guarantee for payment of any amount.
Answer:
CLOSING A COMPANY
Exercise 1
Saro Clark is a /aw student at tbe University of Chatswoth. He must write a short summary about closing a
coro pany. Here is Saros summary. The most important words or phrases are in the key vocabulary below.
IRead the information and answer the questions that follow usirig a fuil sentence.
Key vocabulary
strike off solvent members' voluntary realise
dissolved wind up liquidation insolvent
liquidate liquidator insolvency
practitioner
Closing a company
Because a company is a legal entity, the directors cannot sirnply stop business and dose
the company. There are rules in connection with closing a company. The directors must
follow the correct procedures, which vary depending on the reason why the company is
closing. There are a number of reasons why a corripany doses:
The company is no longer trading. The Registrar of Companies House has the power to
remove, or strike off, a company from the central register of companies if the Registrar
believes that the company is not carrying on business. This will happen if, for example,
COO tinued
(Ioha LegI Engish 339

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the comriany does not submit any annuai accounts or annual returns to Comoanies
House and faiis to repiy to any Ietters from Companies House. When the Registrar strikes
off a company, that company no longer exists. We say that the company is dissolved.
o The sharehoiders wish to dose the cornpany. Maybe, for example, the company was a
family business and the family no longer wishes to carry on that husiness. Or maybe the
sharehoiders set up the cornpany for a particular project, which is now finished. in these
situations, the shareholders must liquidate the company. To hquidate a company means
to forrnally dose the company. If the directors beheve that the company is solvent, in
other words the company has enough money to pay ali its debts, the sharehoiders can
follow a process called a members' voluntary liquidation. The liquidation starts when the
shareholders pass a resolution to wind up the company voiuntarily. To wind up a company
means the sarne as to liquidate or to dose a company.
A person is then appointed to hquidate the cornpany. He or she is cailed the liquidator of
the company. This person is a quahfied insolvency practitioner, which means that he or
she has the necessary qualifications to deal with closing companies. The job of the
Hquídator is to wind up the company. The liquidator must realise the assets of the
company. This means that he or she rnust sell ali the assets of the company. The
liquidator then has to give the money from the saie of the assets to the creditors of the
cornpany. If any money rernains, the hquidator distributes it amongthe sharehoiders of
the cornpany. At the end of this process, the Registrar dissolves the company.
lhe company has no rnoney. The other reason for closing a company is because it does
not have enough rnoney to pay its debts. In other words the company is insolvent. Again,
there are many ruies to follow if a company is insoivent. However, it is important to
remember that not ali insoivent companies must dose.
a What does to strike off a company mean?
An swer:
b What does to hquidate a company mean?
Answer:
c What adjective describes a cornpany which is able to pay ali of its debts?
Answer:
d Which phrasai verb has the sarne meaning as to iiquidate?
Answer;
e Who has the task of winding up a cornpany?
Answer:
f What does to realise assets mean?
Answen
g What is an insolvent cornpany?
Answer:
340
Exercise 2
Use the correct words or phrases from thc key vocabu/ary in Exercise 1 to complete the following sentences.
o.
a It you want to be an _______________________ you must have special quahfications which ailow you to
=
deal with the process of ciosing companies.
b 1 am pieased to report that after a very difficuit year of trading, this company is now
and we are in a position where we are able to pay ali of our dehts.
cA is a procedure where the sharehoiders of a soivent company decide to

dose the company.
d When iawyers taik about closing a company they either use the verb to 'a
company or the phrasai verb 'to a company. These verbs have the
sarne meaning.
e As Hawksend Ltd faiied to respond to any ietters or demands from Companies House, the Registrar is
going to Hawksend Ltd from the register of companies.
f FoMowing a terribie year of trading during which Klarx Ltd made massive iosses, Klarx Ltd announced
that the company is and does not have the money to pay ali of its creditors.
g When a company is in hquidation, the is the person who has to wind up

the com pany.
h To an asset means to seli that asset in order to raise some money.
1 At the end of the process of hquidating a company, the company is and does
not exist any more.
HeIp desk
to vary - to change, to alter. to carry on business - to trade.
massive extremeiy big.
341
INSOLVENT COM PANIES
Read this information about what happens to a company when it is insolvent and then do the exercises
that follow.
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Introduction
If a company cannot pay its debts when they are due, the company is insolvent. Directors have a duty not
to allow a company to continue to trade when they know that the company is insolvent, lhe directors rnust
decide what to do. They must consider which of the available insolvency proceedings will benefit the
company. Insolvency proceedings are formal ways of dealing with the debts of the company. There are
different types of company insolvency proceedings. The most common insolvency proceedings are:
Administration
A company is in administration when either the directors, a secured creditor, or a court appoints an
insolvency practitioner to be the administrator of the company. The administrator takes control of the
company and has to manage the company for the benefit of the creditors of the company. The aim of
administration is to try to rescue' the company so that it can continue to trade as a going concern, or,
if that is not possible, to seU the companys assets for the best possible price.
Receivership
A company is in receivership when a creditor, whose deht is secured by a charge over the companys
assets, appoints a receiver. The receiver can selI the assets subject to the charge and use the money he or
she receives to repay the creditor.
Creditors' voluntary liquidation

This can take place when the company cannot pay its debts. lhe company has to pass a resolution stating
that the company cannot continue in business due to its dehts. A liquidator is appointed to wind up the
company. The liquidator has to realise the assets of the company and give the proceeds to the creditors.
lhe proceeds are the money that you receive from selling something. If any money is Iett after payment of
the creditors, the liquidator will give that money to the shareholders. At the end of the liquidation process,
the Registrar at Companies House dissolves the company.
Compulsory liquidation
This takes place when a creditor presents a winding-up petition to the court, on the grounds that the
company cannot pay its debts, and the court makes an order for the company to be wound up. Foliowing
the order, the Official Receiver becomes the liquidator of the company. At the end of the liquidation, the
com pany is dissolved.
Exercise 1
Choose the correct word from the introduction sectiori above to complete the fo/lowing seoterices.
a If a debt is , it means that it is time for you to pay that debt now.
b If a company is unable to pay its debts, in the UK we say the company is In the
USA they say that the company is hankrupt.
is the state of not being able to pay your debts.
d A tawyer who specialises in insolvency can advise which of the available insolvency
would be the best to use in a particular situation.
342
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=
Exercise 2
Choose a word or phrase troei the administration section on the previous page te complete the fo//owirjg
seo tences. =o.
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a The person who has the power to run a company which is in administration is calied the
This person must be a qualified insoivency practitioner.
b To a company means to run a company.
c if you do something for the of someone, this means that you act in that person's best
interests to get the best result for him or her.
dA is a business that is actively trading.
Exercise 3
Choosc a word or phrase frorn tho receivership scction on the previous page to complete the fo/lowing
sentences.
a A- is an amount of money that you owe to someone.
bA -- is a form of security to ensure that a company or person repays money which it

owes to someone.
c A is the person who must take control of a company's assets and tFy to recover enough
money to pay back a particular secured creditor.
d In this context, the expression means covered by'.
Exercise 4
Choose a word or phrase from the creditors' voluntary Iiquidation sect/on on the previous page to
complete the fo/lowing sentences.
a If a company makes a formal decision at a company rneeting, it passes a
b The phrasal verh 'a company means to formally dose the company.
c To assets means to selI assets in order to obtain rnoney.
d A formal way of referring to the money that you gel from seliing something is to say the
of saie.
Exercise 5
Choose a word or phrasc from the com pulsory Iiquidation section 00 the previous pago to complete the
fo/lowing sentences.
a When a person - -- a document he or she officiaily gives that document to someorie

or files the document in a particular place.
bA is a document that starts the process of liquidation. lt is a request made to the

court to liquidate a company.
c A formal way of saying for the reason that' is to say 'on the that'
d If a company is in compulsory liquidation, the becomes the liquidator of

the company.
Global Lega Engliso 343

UNIT 9A VOCABULARY CHECK liquidator
== m ajo rity
These are the important words that you have manage
material
meeting
Unit 9113.
members' voluntary liquidation
accountant merger
acquisition minutes
adjourn mortgage
ad mi n istration motion
administrator
non-executive director
annual general mecting
notice
appoint
official receiver
auditor
ordinary resolution
ba n kru pt
pass
board
petition
cail
p011
carry
present
chairperson
proceeds
charge
propose
client base
proxy
company secretary
q uo rum
compulsory liquidation
conflict raise
convene r eal i se
creditor receiver
receivership
debtor
remove
declare
resolution
director
restructu re
dissolve
secured creditor
elect
serve
employee
service agreement
executive director
shadow director
exercise
shareholders
extraordinary general meeting
shareholders' agreements
fiduciary duty
show of hands
finance
solvent
fixed charge
special resolution
good faith strike off
grant su pp li e rs
insolvency takeover
insolvency practitioner
unanimously
insolvency proceedings
undertake
insolvent
unsecured creditor
joint venture
wind up
liquidation written resolution
344
'.0
Exercise 1
Look at the groups of words below. lo each group, three of the words be/ong to thv sarne suhlect area. but
there is one word that does not be/ong. Put a circie around the word that is the odd or'e out. Do not circle
more than one answer for each sentence. There is ao exam pie at the beginning (*).
(A) A wind up B IiqLndate QirT D strike off
(1) A convene 8 hold C caN D debt
(2) A shadow B executive C creditor D non-executive
(3) A liquidation B profit C adrninistration D receivership
(4) A director B mortgage C security D charge
(5) A vote B merger C p011 D show of hands
Exercise 2
Here is a conversa tion between two /awyers. The conversatioo is rnixed up. Put the conversation lo the
correct order. Write your answers lo the boxes numbered 2 - 9 bclow. There is ao exam pie at the
begirining (*), which is the start of the conversa tion.
(*) Good morning Sarah. How are you?
a Another one? There seem to be so many businesses in financial trouble at the moment. Is this one a
large company?
b Im OK thanks. Hows life in the insolvency department? Are you busy?
c A familiar story, Im afraid. The company did really well at first and made a proíit. Then the directors
made some decisions about expanding the company, which didnt produce the results they wanted.
They borrowed a lot of money from the bank and now they can't make the loan repayments.
d No. Last week, the hank demanded fuli payment of the loan, which the company can't pay. There are a
Iot of other creditors, too. But after the bank gets its money back, 1 dont think there will be any money
Ieft for them. And certainly fone for the shareholders. The company will be wound up.
e No, its small. 15 employees 1 think.
f So what will happen? lsn't there any chance of saving the company?
g Very busy. Im just going to start work on a new matter. Another liquidation.
h 15 more people out of a job, then. What happened?
(1) (2) (3) (4) (5) (6) (7) (8) (9)
(obii LurI ErpjiIi 345

=
Exercise 3
Look at the sentences be/ow. Each sentence contains a mistake. The mistake is either ar) ir?correct worci
or a word that should not be there. Put a circie around the word. Do not circle more than coe answer for
each seotence. There is ao exam pie at the beginning (*).
Example
(*) We need to borrow some moneythe bank.
1 As a director 1 must to exercise the duty of care and skill.
2 In my opinion, this motion is not for the best interests of the company.
3 At the meeting the shareholders passed the resolution unanimous.
4 The bank will lend us the money but a wants security of the loan.
5 Our non-executive director knows about this and she will give us an advice.
346
çI 1
THE LANGUAGE OF COMPANY LAW
PEOPLE CONNECTED WITH A COMPANY

Exercise 1
Look at this /ist of people. They are ali connected with a corripany. Match each person lo the 11sf with the
correct description be/ow.
directors (1) accountant (5)
shareholders (2) employees (6)
company secretary (3) creditors (7)
auditor (4) debtors (8)
a Ali of the people who are employed by e The people vvho run and manage a company.
a company.
f A person who deals with a companys
b The people or companies that a company finances. This person usually has
owes money to. professional qualifications in accountancy.
c The owners of a company. They are also g The people or companies who owe a
called the members of a company. company some money.
d A person who checks the financial records h The person who is responsible for making
of a company to verify that the accounts sure that a companys statutory obligations
are a true reflection of the com panys are complied with.
financial position.
Exerclse 2
Use the correct words from Exercise 1 to ff1i the gaps lo the foliowing text.
•My name is Louise Nichols. 1 own 40% of the issued shares in Sanders & Nichols Ltd. The other
(a) ________ are Dennis Sanders and Kit Neilson. As well as being rnembers of the company,
we are responsible for running the company, as we are the (b) of the company. Kit
Neilson has an addrtional responsibility as he is the (c) -. He has to make sure that
ali the legal requirements in connection with filing documents at Companies House are complied with.
We have three (d) who work in our shop in Chatsworth. We use the services of an
(e) to keep our financial records up-to-date. We have regular meetings with her and
each rnonth we look at the list of people who havent paid our invoices. Of these (f)
we iook to see if there is a good reason why they havent paid us. If there is no reason, we contact them to
ask them to pay us immediateiy. In the sarne way, we look at the peopie that we owe money to. These are
our () . We pay rnost of these, hut if we have a query we will raise that with them.
Once a year it is necessary for an (h) to check the financial records and accounts of
our company. This is an independent check, to make sure that our annual accounts show the true financial
position of Sanders & Nichois Ltd.
349
WORKING IN COMPANY LAW
Exercise 1
Greg Harrison is a partner in the Iaw firm Taylor Wallis. He works lo the com pany and commcrcia/
department. Today Greg Harrison is speaking to a group of traínee Iawyers and giving them his opinion
about working as a solicitor in com pany Iaw. Fui the gaps lo the text with the words from the blue box below,
statutory raising formations

incorporating resolutions insolvency
employment dispute acquisitions
1 have always wanted to work in the area of company law because it is so interesting and there is so much
variety. You have to deal with non-contentious work, such as (a) a new company,
and contentious work, such as acting for a company which is in (b) with its suppliers.
We work closely with the other departments within the law firm. For example, if a company needs a service
agreement for a new director, we will ask the (c) department for assistance. lfthe
matter involves a company which is experiencing financial difficulties, we will ask for advice from one of our
lawyers in the banking and (d) department. If we are dealing with a situation where
one company is taking over another company, then we will invoive a tax lawyer.
1 have been with this firm for 14 years and in that time 1 have dealt with many aspects of company law.
These include;
Dealing with company (e) and restructuring a company
Drawing up and advising on shareholders' agreements
Drafting directors' service agreements
Advising on methods of (f) finance
Giving advice on complying with new legislation
Dealing with mergers and ()
Giving advice on voting procedures at meetings and drafting (h)
Advising on company insolvency procedures
Dealing with joint ventures.
So as you see, company law is a huge area of law, with many varied aspects. Some of the law regulating
companies is (1) and some comes from the cornmon law. In 2006 a new Act of
Parliament was passed, called the Companies Act 2006. This new legislation affects existing and new
companies and ali company lawyers have a lot of work to do in becoming familiar with the legislation and
advising their corporate clients on complying with it.
Exercise 2
lo Exercise 1, Greg Harrison gavo a )ist of different aspects of conipaoy /aw that de das dealt with during
bis 14 years at his Iaw flrm. Look at the following statements and match each statement with the correct
aspect of com pany law mentioned by Greg.
Example statement: A new statute lias been passed which will fully come loto force in 20XX. This will
have a huge effect ou company law and we must make sure that nor clients are aware of the changes i n
the !aw and how it afíeus their company.'
Aspect of Iaw: Giving advice on cornplying with new legislation.
a If a company needs money, there are a number of ways the company can obtain it. However, it is
important to consider both the short-term and long-term effects of each option and choose the one
that best suits the purpose and needs of the company.'
Aspect of law:
350
b 'You have instructed me in connection with the saie of your shares in Happy Times Ltd children's =
nursery. 1 need to see a copy of the contract that you signed, which deals with the arrangements
between ali the rnemhers of Happy Times Ltd.
Aspect of law:
c •During the hfetime of a company, many decisions wili be made and iots of formalities must he foflowed
when taking those decisions.
Aspect of law:
d You would like to appoint Janice Longman as your new Financial Director and you have instructed me
to draw up a document cleariy setting out the terms and conditions of this appointment.'
Aspect of iaw:
e 'Sadiy, many companies do not succeed in trading proÍitably and they make substantial losses. Some
of these companies have to dose down, others may benefit from an experienced person taking controi
of the company. There are a number of ways to help a company which is in financial difficulties.'
Aspect of law:
f '1 am often involved in situations where two companies are joining together or where one company
wants to gain control of another company.'
Aspect of law:
g At the moment 1 am working on a project which involves two independent companies working dlosely
together on a particular project for a specified period of time,'
Aspect of law:
h 'It is very important, when setting up a new company or changing the structure of an existing company,
to think about the consequences, both in terms of finance and the balance of power between the
shareholders.'
Aspect of law:
Coliocation bank
to work closely to raise finance to make a decision

to experience ditficulties a Iong-term effect to take a decision
Preposition bank
to be in dispute with someone to work on a project

E-
'Our clients have been in dispute for a SaIly and Jacob are going to work on the
long time.' NewStar project tomorrow.'
to advise on something to think about something

'1 am currently advising on the saie of a pub III think about that and give you an answer
in Manchester.' on Tuesday.'
in connection with something to be familiar with something

'Please calI me in connection with the '1 started work here two weeks ago and l'm
proposed transaction.' just beginning to be familiar with the
company's computer system.
to succeed in doing something
'Good news. We have succeeded in raising
£500.000 for the project.'
• Giobai Legal Enis 351

DIRECTORS
Exercise 1
Greg Harrison, one of thc partners of Taylor Waiiis, is preparing a seminar on the role and dities of
directors. Greg has written the following notes. which will be given to ali clients who attend the serninar.
Find the words in the notes that match each of the meanings given below.
Taylor Wailis
The role and duties of directors
Greg Harrison, Company and Commercial department
The owners of a hmited company are the shareholders. However, the shareholders do not
run the company. The directors do this. Ali private iimtted companies must have at ieast
one director. A pubhc limited company rnust have at least two directors.
Shareholders can choose who they want to appoint as a director. You will find the ruies
concerning directors in the cornpany's articles of association. The articles may say how
many directors there should be, how long they can serve as a director and what happens at
the end of their term. In many companies directors are required to retire after a specific
period of time, for example, three years, aithough the directors can be reappointed. If the
company is dissatisfied with the performance of a director, it can remove a director before
the period of his or her office has expired. However, the company may still be liable to pay
the removed director compensation or damages in respect of the termination of the
appointment as director.
In the Companies Act a director is defined as including 'any person occupying the position of
director, by whatever narne calied.' If you have been appointed as a director and you are
involved in the day-to-day decision making, you are called an executive director. If you have
been appointed as a director, but you do not have any involvement in the day-to-day
running of the company, you are called a non-executive director. As a non-executive
director, you will have the sarne legal responsibihties as other directors. If you have never
been appointed as a director, you rnay still be classed as a shadow director. A shadow
director is defined in the Cornpanies Act as a 'person in accordance with whose directions
or instructions the directors of the company are accustomed to act'. As a shadow director
you will have the sarne legal responsibilities as other directors.
As a director, you have many business responsibilities for ensuring the success of your
company, in areas such as health and safety, ernpioyrnent law and tax. In ali your actions
you are expected to exercise a degree of skill and care. The term 'fiduciary duty' is used a
lot when talking about directors. This means that you, as a director, are in a position of trust
and you rnust act in good faith and in the interests of the cornpany as a whole.
If a director acts irnproperly, this may iead to a fine, disqualification frorn being a director,
personal liabiiity for the company's debts, or a criminal conviction.
a To forrnally choose someone for a particular job or position.
The word is
b To be in the position of a director and to perform the duties required by that position.
The word is
352 H
c To dismiss a director from his or herjob or position.
The word is =
r
d Regarded as belonging to a particular group.
The word is
e To have become used to something.
The word is
f To use, to put something into effect.
The word is
g Dishonestly or illegally.
The word is
h The state of being stopped from being in a particular job, or from taking part in a particular activity.
The word is
Exercise 2
Greg has invited the participants at the seminar to ask any questions that they have. Read the notes in
Exercise 1 again and answer the participants' questions below using a fuii sentence.
a We're thinking about setting up a private Iimited company. How many directors must we have?'
Answer:
b Our company is unhappy with one of our directors and we want to fire him. Will the company have to
pay him any money?'
An swer:
c My father is a director of a company. He doesn't make decisions for the company, or have any say in
the running of the company, but he does give advice. He's more like a consultant. really. What sort of
director is he, and does he have any legal responsibilities to the company?'
Answer:
d Ive got a friend called Fred. He isn't officially a director of a company, but he tells the official directors
what to do and basically hes the person that runs the company. Is he a sort of director?
Answer:
e Can you please explain again what fiduciary duty means?'
Answer:
i egui i gs 353
Exercise 3
CO
Cm More of the participants have asked questions. Match the followíng questions with Gregs advice in the
blue box below.
a We are the directors of Fixit Ltd. We want to d lrn a director of Linx Ltd. 1 also own a lot of
keep our shareholders happy by declaring a shares in Freshthought Ltd. The two
large dividend. Is that always OK?' companies have entered into a contract and
as a result 1 expect to make quite a lot oÍ
b Im the director of Marsh Ltd. 1 also own 76% money from Freshthought Ltd. Can 1 keep
of the shares in the company. Surely 1 can do that rnoney and not tell anyone?'
what 1 want with regard to decision-making?'
e 1 am currently negotiating a new director's
c 1 own three houses. 1 want to sell one of service agreement with the company. 1 would
thern to the cornpany. Is that allowed?' like the agreernent to be for a fixed-terrn
period of eight years. Is that OK?
Greg's advice
By Iaw, you must declare any potential
Well, even though you are the majority
conflict of interest. You have to tell the
sharehoider as well as a director, you have
other directors about your interest in the
to gave equal consideration to ali ofthe
other cornpany and you mustn't vote on
cornpany's shareholders. Vou must consider
the deal. Aiso, you rnustn't use your
the interests of the shareholders as a whole,
position to make private profits in a way
including the minority shareholders.' (1)
that means the company loses rnoney. If
Yes, but remember that any director's you do, you may have to hand that profit
contract of ernployment with a term of two over to the company.' (4)
years or over has to be approved by the
it isn't always the best option, attractive
shareholders.' (2)
though it may seem. Vou must remember
'Yes, a company is permitted to purchase that the cornpany is a separate legal entity
property from a director of that cornpany. from its directors, sharehoiders and
However, substantial deals ofthat sort have ernpioyees. What may be the best for the
to be approved by the shareholders.'(3) rnembers, may not be the sarne as what is
in the best interests of the cornpany. Your
action may lead to a cash shortage, which
would conflict with the interests of the
company.' (5)
LISTENING
Exercise 1
Listen to Greg Harrison. He is giving the second part of his seminar about directors. In this part of the
seminar, Greg is outliriing the duties of directors. Answer the foliowing questions.
a Greg Harrison says that the role of a director developed from two sources. One was statute. What was
the other source?
Answcr:
b Why do directors have a fiduciary duty to the cornpany?
Answer:
c In what year were the duties of a director codified?
Answer:
354
d Why did the new Companies Act include a statutory statement of directors' duties?
(.D
Answer:
e How many duties for directors are specified in the new legislation?
Answer:
f According to section 172, what do the directors have a duty to promote?
Answer:
g What is the factor which decides how much skill and care that directors must exercise in carrying out
their duties?
Answer:
h The fifth duty is contained in section 175. What must directors avoid?
Answer:
i In section 177, what must a director declare in relation to a proposed transaction?
Answer:
j What is the possible punishment for failing to comply with the duty contained in section 177?
Answer:
Coilocation bank E,
to appoint a director to act improperly a conflict of interest
to remove a director to declare a dividend to give advice
good faith to give consideration to
Preposition bank
to have at Ieast a particular number to act in the interests of someone

'A public Iimited company must have at We are acting in the interests of the
least two directors.' company.'
to appoint someone as a director to lead to something

'They decided to appoint BelIa Martin as If you are late in filing your tax return, this
the new director.' may lead to a fine.'
to be satisíied/dissatisfied with something to be disqualified from something

The shareholders were dissatisfied with the He was disqualified from driving for
explanation given by the directors. two years.'
to be classed as something to act in good faith

Truepaint Ltd is classed as a medium-sized Directors must always act in good faith.'
enterprise.'
E Global LegF E' 355

COMPANY MEETINGS
=
Exercise 1
Elison Garwood solicitors have written some briefing notes for their corporate clients. Tho notes cieal vi/tu
=
com pany meetings. The first page of the briefing notes appears below. Fui each of the gaps in the notes
with the correct word from the list in the blue box.
pass extraordinary elect p011

show proxy have proposed
convene resolution unanimously taking
Elison Garwood solicitors

Briefing notes
Company Meetings
The two main types of company meeting are the annual general meeting and the
(a) general meeting. These meetings are often referred to by their
abbreviations, AGM and EGM. lo general English, we use the expression to
(b) a meeting'. lo legal English, we use a more formal expression,
which has the same meaning. Lawyers say to hold a meeting or to (c)
a meeting.
Any meeting which is not an AGM is an EGM. An EGM can take place any number of times.
Until 2007, every company had to convene an AGM every calendar year. This is still true for
public limited companies. However, foliowing the introduction of the Companies Act 2006,
private limited companies are no longer ohliged to hold an AGM. The purpose of the AGM is
to consider the accounts and reports of the auditors and directors, to declare any dividends
and to (d) new directors or auditors.
The rules on voting at a meeting are found in a company's articles of association. Voting at
company meetings is usually by a (e) of hands, with each member
having one vote. The other method of voting is by a (f) In this case, a
written record is kept and each member has one vote for every share that he or she holds.
A () is a decision made hy the directors or shareholders of a company. In

general English we taik about making a decision or (h) a decision. In
legal English we say to (1) a resolution or to carry a resolution.
A (j) resolution is called a motion. If the necessary majority is not

obtained, then the motion fails. lfthe necessary majority is obtained, the resolution is
passed. If everyone present at the meeting agrees to the resolution, it is passed
(k) . When a resolution is passed the company is bound by it. This
means that ali the shareholders and the company must abide by the terms of the resolution.
If a member is not able to attend a meeting in person, he or she can appoint a

(1) to attend and vote on his or her behalf.
-1
356
=
Exercise 2
Here is the second page of tbe briet7ng notes about meet;ngs. Rcad the information and decide if the
staternents that fol/ow are true ar fa/se.
Elison Garwood solicitors

Briefing notes
Company Meetings
Ali the shareholders must be given the required Iength of notice of a general meeting. The
usual period of notice is either 14 days or 21 days, depending on what the meeting is about.
When the meeting takes place there must be enough shareholders present to form a
quorum. That minimum number is specified in the company's articles of association. lhe
required number is often twa. If there are not sufficient people present who are entitled to
vote on the business being discussed, then no decisions can he taken and the meeting
must be adjourned to a later date.
Decisions made at meetings are caHed resalutions. There are a number of different types of
resolution, but the three most cammanly used are:
Ordinary resalution. This requires a simple majority aí members voting in favour, either
personally present ar voting by proxy. Most company decisions are taken by ordinary
resolution.
Special resolution. This requires a majority aí 75% aí those voting in favour, either
personaily present ar vating by praxy. There are several purposes for which a special
resolution must be passed. These include changing the companys name ar altering a
com panys articles af assaciation.
Written resolution. Foliowing the introduction aí the 2006 Companies Act, private Iimited
companies can now use written resolutions for mast decisians. A written resolution avaids
the necessity aí holding a meeting. lhe aim aí the legSiation is to reduce the need for
formal general meetings for private limited campanies, while still imposing a higher set aí
obligations an public limited companies.
At the meeting, someone will be asked to take the minutes of the meeting. lhe minutes
are a written record of proceedings at each general meeting.
There are standard ternp/ates that you can use to help yau produce com pany notices and
minutes. El/san Garwood can advise you on yaur particular requirements. For more deta//s
contact Fiona Bailey on 07865 433388 ar emai/ Fiona at f.bailey@ellsongarwood.co.uk
page 2
a lhe notice periad for a company meeting is always at least 21 days True False
b lhe minimum number af members who must be at the meeting sa True False
that the meeting can take place is always two.
c If there is na quarum, the meeting has ta be postponed. True False
d There are just three types af resolution. True False
continued
I__ 1 357
a)
e An ordinary resolution requires over 50% of people who are voting True False
to vote in favour of the resolution.
f The new companies legislation in the UK tries to reduce the necessity True False
of holding meetings for private Iimited companies.
g The minutes of the rneeting explain how long the meeting lasted True False
Exercise 3
Booktell Ltd is a pri vate limited com pany that distributes educa tiona/ books around the world. The
shareholders of Booktell Ltd have each received this notice of the companys annua/ general rneeting.
Ei!l the gaps in the notice with the correct word from the box below.
member proxy p011 Registered

accounts auditors directors held
BOOKTELL LIMITED
Company No. 2753958
(the Company')
NOTICE OF ANNUAL GENERAL MEETING
The annual general meeting of the Company will be (a) at

The Burlington Hotel, The Parade, Chatsworth, CH1 5J1V1 on 18 July 20XX at 2.00pm
for the following purposes:
1. To receive the report of the directors and the audited (b) for the
year ended 31 March 20XX.
2. To re-appoint AB Chartry & Co as (c)
3. To authorise the (d) to fix the remuneration of the auditors.
By order of the Board.
Secretary
Date: 21 May 20XX
(e) office: 5 East Side, Blagfields industrial Estate, Chatsworth, CH8 7HN
Note:
A (f) entitled to attend and vote at the meeting is entitled to appoint a
() to attend and, on a (h) or on a show of hands vote
instead of him. A proxy need not be a member of the Company.
358
=
Coliocation bank
to hold a meeting to pass a resolution

=
to form a quorum
to convene a meeting to carry a resoiution a simple majority
to make a decision to obtain a majority to take the minutes
to take a decision to appoint a proxy to adjourn a meeting
Preposition bank
)
to have a meeting wtth someone to vote by proxy

We need to have a meetrng with our 1 can't attend the meeting so iii vote by proxy.'
accountant soon.'
to give notice of something
the ruies on/about something The members were given notice of the EGM.
You must compiy with the ruies on voting
to vote in favour of something
at company meetings.
Wouid ali those peopie voting in favour of
a show of hands the motion piease raise their hands?'
We'Ii vote on this motion by a show of hands.'
to take the minutes of a meeting
to attend in person Harry, piease wifl you take the minutes of
im afraid 1 cant attend the meeting in this meeting?'
person as 1 will be in Canada.
INSOLVENCY
Exercise 1
On the next rwo pages you can see some not/ces which have been publisbed lo a newspaper. These
notices refer to a number of companies that are in financial difficu/ties. ln the box below are some words
that are used in the notices. Match each of the words in the hox with the correct meaning provided below.
Liquidator (1) Administration Order (4) Official Receiver (7)
Members' voluntary Administrator (5) Compulsory

liquidation (2) liquidation (8)
Winding-up order (6)
Receiver (3)
a This is when the sharehoiders of a company e This is a person who supervises companies
decide to dose the company and there are which are in administration. This person has
enough assets to pay ali the debts of the passed speciai examinations to becorne an
company. authorised insoivency practitioner.
b This is when the sharehoiders of a com pany f This is a person who supervises the closing
decide that they must dose the company, of a company which is in hquidation.
because there are not enough assets to pay g This is a person who is appointed hy a
ali the debts of the company.
creditor of a company to take control of that
c This is an order made by a court for a company in order to seM its assets and pay
company to he closed. the money it owes to that creditor.
d This is an order made by a court that gives h This person is a government officiai who is
a company some time to try to resolve its appointed to dose a company which is in
financial difficulties or seM its assets in order financial difficuities.
to pay its creditors.
359
=
= Exercise 2
C) Firid a word lo the notices that rnatches each of the fo//owirg mearings.
a lhe type or category of something. e A formal application made to a court to request

a specific legal action. Here, the action asked
lhe word is
for is to put a company into liquidation.
b An abbreviation that means insolvency The word is

practitioner'.
f An old-fashioned word that means the things
The word is
that belong to someone.
c An abbreviation that means 'number'. The word is
lhe word is
g A formal phrasal vem that means to give to
someone.
d An abbreviation that means care of.
lhe word is
lhe word is
Appointment of Liquidators
Company Number: 099974622. Liquidators' Names and Addresses: Nigel Orm,
Name of Company: LANCO LIMITED. 1 Station Road, Linchester, LN3 7VX and Alistar
Dean, 3 Prince Street, Linchester, LN1 4FF.
Nature of Business: Manufacture of food
Office Holder Numbers: 97983 and 97291.
products.
Date of Appointment: 2 August 20XX.
lype of Liquidation: Members voluntaiy
liquidation. By whom Appointed: Members.
Address of Registered Office: Fine House,

Sharpes Road, Linchester LN32 7BA.
Appointment of Receivers
Company Number: 085743. Receivers' Names and Addresses: Helen Woods
Name of Company: BARTSON LIMITED. and Simon AlIen of Jackson LLP, 4 Arcade
House, Chatsworth, CH1 9DV. IP Numbers:
Nature of Business: Manufacture of paper
97983 and 97291.
products.
Date of Appointment: 2 August 20XX.
Address of Registered Office: Unit 3, Frosham
Industrial Estate, Chatsworth, CH5 4KM. By whom Appointed: Royal Chatsworth Bank.
Administration Orders
lo the High Court of Justice No 1221 of 20XX Admiriistration Order made: 29 July 20XX
MODEL RAIL LIMITED P B Norris (OfÍice Hoider No 87699), Taylor
(Company Number 888564732) Wailis, Newater Street, London EC5 91-IN, and
Registered Office: Hanover Hall, 6 Reginalci 5 J Pederson (Qffice Holder No 36528), 21
Street, Oxton, Hapshire OX1 6QD. Footgate Park, London EC9 6FF, Joint
Nature of Business: Educational Toys. Administrators.
360
=
'.0
Appointment of Administrators
in the High Court of Justice (Chancery Divison) Nature of Business: Computer Related Activities.
Chatsworth District Registry No 111 of 20XX Date of Appointment: 7 August 20)0K.
Comp Professional Limited Joint Administrators Names and Address: Kim
(Cornpany Number 2727164) Watts and Keith Price (iP Nos 6103P and
Registered Office of Company: c/o Hedgsons 7583H), both of Hedgsons LLP, 1 High Street,
LLP. 1 High Street, Chatsworth, CH1 6GT. Chatsworth, CH1 6GT.
9 August 20)0K.
Winding-up Orders
Name of Company: Yeloo Services Ltd. Dato oÍ Filing Petition 18 May 20XX. No. of
Company Number - 1827540385. Matter 0003958 of 20XX.
Address of Reistered Office - 4 Gover Way, Date of Winding-up Order 25 July 20XX.
Elierton, EL8 6EJ.
Official Receiver - 4th Floor, Tower House,
Court -- High Court Of Justice. 4 The Parade, Oxton. Hapshire 0X6 7RX.
Notice to Creditors
Treeland Property Services Limited assets of the Company must dehver them up to
(in Compulsory Liquidation) me and ali dehts due to the Company must be
paid to me. Creditors who have not yet proved
In accordance with Rule 4.106, 1, Kim Watts, of
their debts must do so by 10 August.
Hedgsons LLP, 1 High Street, Chatsworth, CH1
K Watts, Liquidator.
6GT, give notice that 1 was appointed Liquidator
of the Company on 23 July 20XX. Ali persons 3 August 20)0K
having in their possession any oÍ the effects or
Exercise 3
F?ead tbe notices again and decide if the fo/lowing staternents are true or fa/se.
a Lanco Ltd is insolvent. True False
b The Royai Chatsworth Bank is a creditor of Bartson Ltd. True False
c Two peopie have been appointed to supervise Modei Rail Ltd. True False
d The petition to wind up Yeioo Services Ltd was presented on 25 July 20XX. True False
e Anyone who thinks that Treeiand Property Services Ltd owes money to True False
them must inform Kim Watts.
361
= Exercise 4
In or into. it is sometimes difficult to know which of these prepositions to use when you are taiking about
liquidation or administration. To help you to decide, we usuaiiy use in' to describe the state ofthe company
which is in liquidation or administration and into' to describe the proceciure of putting the company into
liquidation.
Complete the foliowing sentences with in or into.
a 1 am writing in connection with Groves Ltd, which is administration.
b 1 am writing to notify you that Justex pic has been placed administration.
c It was announced yesterday that Beans Ltd has gone _______ liquidation.
d 1 am acting for the creditors of a company caiied Larkson Ltd which is receivership.
e Sound Music Ltd went compuisory liquidation last year foliowing a series of bad decisions
taken by the directors.
f The members of Highfold Ltd have decided to put the company _______ iiquidation.
WHO GETS THE ASSETS?

Exercise 1
Read the fol/owing summary of the liquida tion process. Ei!l each of the gaps in the text with the correct
word from the box below.
exist raise pay

prevent sell collect
The effect of the liquidation of a company is to (a) ______ that compuny from trading as a cornrnerciai
entity. The hquidator has to (b) _____________ ali the company's assets and then (c) them.
The aim is to (d) as much money as possibie. This process is cailed realisation of the assets.
The proceeds of the saie of the assets are then used to (e) as many peopie as possibie who
are entitied to this money. it is often the case that not everyone wifl get the money that they are owed. The
liquidator pays peopie in a particular order of priority.
This order of priority is:

the costs of winding-up (including the other secured creditors
hquidator's own fees and expenses) unsecured creditors
creditors with fixed charges interest on dehts
preferential creditors (for exampie, wages and sharehoiders
saiaries owed to employees, and money due
to the government in respect of tax)
When thc winding-up is complete, the company is dissolved and it does not (f) any ionger
as a legal entity.
362
=
Exercise 2
Here is the licjuidator's Iist oi' people or costs that the Iiquidator rntist pay. Match cach cateory ofpeop/e
or costs with the correct defioition io the b/ue box be/ow.
a The costs of winding-up e Unsecured creditors
b Creditors with fixed charges f lnterest on debts
c Preferential creditors g Shareholders
d Other secured creditors
These are the people who own the These are people or other companies who
com pany. (1) the company which is in liquidation owes
These are people or other com panies who money to. However, these people or
the company which is in liquidation owes companies did not take any security from
money to, usually because the company the company which is in liquidation to
borrowed money from them. These people guarantee payment of the money. (5)
or companies took security (for example, a These include people who are owed money
mortgage) from the company which is in by the company which is in liquidation and
liquidation to guarantee repayment of the who are considered to have priority over
loan. Thjs security was secured against the other creditors, even though they have no
fixed assets owned by the company, for security to guarantee payment. It includes
example real estate or machinery. (2) money due to the government in respect of
This is the amount of money that you have tax, and wages owed to employees. (6)
to pay as a fee or a sort of penalty for These are people or other companies who
money that you owe to someone. It is the company which is in liquidation owes
usually expressed as a percentage. (3) money to. These people or companies took
This includes the liquidator's fees and some sort of security from the company
expenses as well as any legal costs. (4) which is in liquidation to guarantee
payment of the money. However, the
security was not secured against the fixed
assets owned by the company. (7)
Coliocation bank
to go loto Iiquidation/ to put/place a company to realise assets

rcccivership /adminlstration into liquídation/receivership/
secured/unsecured creditors
administration
to be iri liquidation!
to dissolve a company
receivership /administration to present a petition
Preposition bank
:1
to go into iiquidation/receivership/ to he in hquidation/receivership/
administration administration
Have you heard? Lextext Ltd has gone 1 regret to inform you that Vantage Ltd is
into administration.' now in liquidation.
the proceeds of saie

What are you going to do with the proceeds
of the saIe of your house?
Global Legal Erigii 363

o USING YOUR KNOWLEDGE
Coliocation review
Complete these seotences with a co/location thatyou have seeri.
a We are a meeting, which wili be heid on 5 October.
b At the company meeting the members a resoiution to change the name of the
company to Jedexpress Ltd.
c We need to iook at ways of finance, as we need more money if we want to go ahead

with this project.
d The creditors presented a requesting that the company be wound up.
e The chairperson asked me to the minutes ofthe meeting.
f The shareholders no longer want Mr Fox as a director of the company. They think that Mr Fox is not
performing his duties properiy. They will discuss the motion to this director at the
meeting next week.
g 1 am unabie to attend the meeting next week, so 1 have a proxy to go to the meeting
and vote on my behaif.
h 1 am sorry but we wifl have to this meeting to Monday of next week.
i Kingsford Electronics Ltd was into administration iast week.
j The Officiai Receiver is the liquidator and he is in charge of __ the assets of the company.
That means he must sell the assets and use the money from the saie to pay the creditors.
Vocabulary review
Complete t/iese sentences with a word that you have seen.
a A proposai which is being discussed at a meeting is cafled a
b The of a meeting provide the details aí what happened at that meeting.
c The of saie of something means the money that you get when you sell that thing.
d Can the meeting go ahead? How many peopie are here? Do we have a present?
e The are coming next week to check the financial records of the company. You wifl
need to be here in case they have any questions.
f One of the rnethods of voting at a company is by way of a written vote. This is cafled a
g This person has not been appointed as a director. However, he is the person who teUs everyone what to
do. He is known as a director.
h A situation in which two companies decide to join together permanentiy is a
364
A formal word for the purchase of a company is an Inforrnally, people often refer to it
as a takeover.
j Directors who are closely involved in the day-to-day decision-making of a company are known as
directors.
Preposition review
Complete these senterices with the correct preposition.
a After six years of trading, Baxters Ltd went liquidation.
b Caroline Thomson has been disqualified being a director of any company for five years.
c We need least tive shareholders to attend the meeting in order to form a quorum.
d 1 can't attend the meeting person, so 1 will vote by proxy.
e 1 am a lawyer in the corporate department. At the moment 1 am advising a newjoint

venture project.
f We will need to arrange a meeting __ a tax specialist soon.
g Directors have a duty to act the best interests of the company.
h How many people are favour of this deal?
i Well done everyone. Our client will be extremely satisfied the outcome ot
the negotiation.
j This action may Iead a claim being made by our suppliers.
365
Exercise 1
There is a word or phrase missir?g frorn the following sentences. For each sentence circ/e the word which
best t7ts into the space frorn the options provided below. There is an example at the beginning (*).
Example: Each yeair, our companys financial rocords are cecked hy na indupendent accountant called
1 Directors have to act in the best interests of the company as a whole. This is known as their
(1) duty.
2 At the extraordinary general meeting last week, the shareholders (2) a resolution to change
the company's name.
3 There was no quorum present, so the meeting was (3) It will take place on 14 October.
4 Following his failure to submit the companys annual return to Companies House or respond to any
letters, he was finally (4) from being a director for two years.
5 The directors and shareholders agreed that the company was making huge losses and they had no
other choice but to put the company into (5)
6 The shareholders voted to (6) William Ashby as a new company director for a fixed term of
tive years.
7 Jane Abhots formally declared that she had a personal interest in the transaction that was being
discussed, which may (7) with the interests of the company. She did not vote on that
transaction.
8 An (8) director is actively involved with the day-to-day decision making of the company.
9 There is a lot of work in the mergers and (9) - department at the moment. 1 am currently acting
for a corporate client which is buying ali the shares in another company.
10 After payment of the secured creditors, the liquidator must pay the (10) creditors, for example
any tax owed to the goverrirnent.
(*) A examinar 8 assessor Cor D inspector
(1) A goodwiH B fiduciary C ioyalty D good faith
(2) A voted B decided C passed D agreed
(3) A deiayed B suspended C stopped D adjourned
(4) A disquahfied B stopped C prevented D unauthorised
(5) A hquidation B winding up c ruin D insolvency
(6) A select B hire C employ D appoint
(7) A dispute B conflict C clash D contradiet
(8) A managing B exclusive C executive D non-executive
(9) A acquisitions 8 takeovers C purchases D companies
(10) A special B preferred C guaranteed D preferential
366
Exercise 2
Fead the fo/lowing minutes of a rneetíng of a company. The rnissirJg words are in the Iist below. For each
gap clioose the word wíiich bost fits into the space from tho options provided. Use each optíorl only once.
Write your answers in the box below. There is an exam pio at the beginning (*)
W&SLIMITED
MINUTES of an Extraordinary General Meeting of the Company
held at 34 Hengrove Street, Chatsworth, CH5 811FL
on 15 May 200X at 10.00am
Present:
Neil Wright (Chairman)
Katrina Spence
Josie Abbots
David Peters
1. The Chairman announced that (*) to the Meeting being held at short
notice had been received from ali the members of the Company having a right to attend
and (1) at the Meeting.
2. The Chairman announced that a (2) was present.
3. The Chairman (3) the resolution in the notice. The Chairman put the
resolution to the meeting, took the vote on a (4) of hands and deciared
the resolution (5) unanimousiy as an ordinary resolution of the Company.
4. There being no further business the meeting terminated.
Neil Wright
Chairman
(AA) consent (B) quorum (D) vote

(A) show (C) carried (E) proposed
*i AA (1) (2) (3) (4) (5)
Listening
Exercise 3
A Iawyer is spcaking lo a group of trainee soIicitors, who are startirig tbeir work experience iri her
department. Some of lhe words are missing. Listen caro fully and fiji in the missing words. Write your
ariswers in the box beiow.
Helio and welcome to the Banking and insoivency department. My name is Kim Watts and im very
pieased to meet you ali.
This is quite a large department, doing a lot of varied work. 1 speciaiise in insolvency. Most of our clients
are either banks or companies. The banks have generaily made a large loan to a company, often secured
by a debenture, and now the company is faihng to make its repayments on the loan, because it is in
367
financial (1) The bank instructs us to assist with the recovery of the debt. Our other clients
represent the other side of the com. They are companies who are facing insolvency and they come to us
for advice on the best way forward.
The most common description of insolvency is that a company cannot pay its debts when they become
due. There are various insolvency procedures that are available to companies. Id like now to briefly outline
these procedures, as they often cause confusion until you become more familiar with them.
First is the compulsory Ilquidation of a company. This is when the court orders the company to be wound up.
Winding up usually starts by a creditor making a petition on the (2) that thc company cannot pay
its debts, The Official Receiver, who is an officer of the court, becomes the liquidator of the company and he
or she has a duty to investigate the companys affairs and the causes of its failure, including the conduct of
the directors. A director can be disqualified from acting as a director for a period of time if, for example, he
or she made the position of the creditors worse by continuing lo trade when the company was insolvent.
When the winding up is complete, the company is formally (3) and it no longer exists.
Next is administration. This is a court order made to appolnt an administrator lo (4) the
company's affairs. A court may make an administration order when the company is unable to pay its debts
and the court considers that by making an administration order, the whole or part of the company may be
saved as a going (5) The company, its directors or its creditors start the procedure by makirig a
petition against the company. While an administration order is in force, lhe company cannot be wound up
and legal proceedings against the company cannot be started except with lhe approval of the court. The
administrator takes control of alI lhe property of the company and makes proposails for the creditors to
consider. lhe administration order continues until the court decides that the order is no longer needed and
formally discharges it.
Another insolvency procedure is receivership or administrative receivership. A receiver is appointed by the

holder of a debenture of the company secured by a floating charge. Usually this is a bank. The company is
said to be "in receivership". The receiver has the power to sell lhe asseis covered by the floating charge
and give the (6) to lhe charge-hoider.
A further procedure is a company voluntary arrangement. We call this a CVA. This is when a company makes an
agreement with its creditors in order lo (7) - its debts over an agreed period of time lhe agreement
has to be approved by lhe court. Meetings ofthe company and creditors are called to approve the proposed
arrangement. Once approved, alI creditors who had notice of lhe mecting and were entitled lo vote are bound
by the terms of the arrangerTienl. The company can continue trading during the OVA and afterwards.
Finally, there are Iwo types of voluntary liquidation. Members' voluntary liquidation means that the directors
have made a statutory declaration of solvency - in other words, lhe directors believe that a company is
solvent. This happeris when a family husiness is sold off, for example, or if lhe purposes of the company have
come lo an end. The liquidation slarts when lhe members, in a general meeting, (8) _________ a resolution
to wind up lhe company volunlarily. Remember, if il is a voluntary liquidation, lhe company is foI insolvent.
In lhe case of a creditors' voluntary liquidation, the company cannot pay its debts. lhe process is started
by lhe directors, not the creditors. The company carnes an extraordinary resolulion to say that it cannot
continue in business because of its liabilities and that it is advisable to wind up. A liquidator is appointed to
wind up lhe company's affairs. The liquidator does this hy (9) _____ -- the company's assets and paying
its creditors. II anything is left over, lhe members of lhe company receive II.
In hoth types of voluntary liquidation, when lhe company's affairs are fully wound up, lhe formal dissolulion
of lhe company occurs and it(10) lo exist.
Well, 1 hope that this helps just a little. 1 am sure that you will gain some experience 01 ali these
procedures during, yniir six-month pAriOd with this deparim ent. We h.ave a great team here and everyone
will be very happy lo answer any questions you have, so please feel free to come lo any of us aI any time.'
(1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
368
o
o
=
SOME MORE TYPICAL CONTRACT CLAUSES
o
Read this text about some of the typical clauses you will f7nd lo commercial coritracts. The most irnportant
words are in the key vocabulary below. Complete the exercises that follow.
Key vocabulary
term termination disclose inteliectual property

expiration confidential copyright commissions
author creative work freelance non-disclosure
At the beginning of most cornmercial contracts company. The advertising company agrees to create
there are sections that deal with information such an advertising campaign for a new kind oÍ medicmne
as the names of the parties, the background to the that the drugs company produces. The contract will
contract and the defined terms. After these include a clause that obliges the advertising
sections you will find the main body of the contract. company not to tell or disclose certain information
The main body of the contract is made up of to any third party about the drugs company's
clauses. There are some types of clause that you products, production methods or financial
will find in most commercial contracts. information. This clause is often known as the
confidentiality clause or the non-disclosure clause.
A commercial contract usually contains, for
example, a clause that states what the term oÍ Many modern contracts also have a clause that
the contract will be. lhe term of the contract is the deals with inteilectual property rights. This is very
duration of the contract. It means the period of common in contracts under which someone such
time for which the contract is valid. There will also as an author or a seIÍ-crnployed, freelance
be a termination clause. This clause contains designer produces creative work for a third party
information about the expiration of the contract. such as a publisher or a company. For example,
Expiration means end. So, the agreed date of Anna is a good artist. She designs birthday cards
expiration of a contract is the agreed date upon for children. lhe Cinderella Card Company
which the contract will end. A contract of commissions Anna to create two new designs for
employment, for example, might have a terrn of its birthday cards. To commission someone means
one year. The termination clause teus the employer to formally ask that person to do something or
and the employee how the contract can end after a produce something, usually of a creative nature.
shorter period of time, before the agreed date The contract should make clear who is the owner of
of expiration. the design after the company prints the cards. Is it
Anna or is it the card company? Can the card
There is often a clause in a contract that deals with
company use Annas designs on other goods? The
information that must remain secret. This clause
design is inteliectual property and it can be very
usually obliges one of the parties to keep
valuable. Most contracts make clear who has
confidential certain information connected with thc
copyright in inteliectual property. To have copyright
other party. For example, let's say an advertismng
in a design, for example, means that you are the
company enters into a contract with a drugs
owner of that design.
E': 371
=o
-o
== Exercise 1
1
o Match these words from the key vocabulary with the more informal word that has the sarne meaning.
a Term means... .. and. (1)

=
b Expiration means... .. ,self-employed. (2)
c Confidential means... ... end. (3)
d Disclose means... .. .secret. (4)
e Freelance means... - .duration. (5)
f Author means... . . .writer. (6)
g Termination means... . . .tell. (7)
Exercise 2
Complete these definitions with the correct word frorn the key vocabulary.
a is work that requires some imagination, such as a painting, a book or a song.
b To have in creative work, such as a book or a song, means to have legal

ownership of that work.
c The writer who writes a piece aí work such as a book or a song is usually referred to in a contract as the
of that work.
d To be a worker means to be self-employed, usually in a creative area of work

such as design.
e Sometimes large businesses freelance workers to do creative work for them,

such as designing a cornpany logo.
f A clause states the way in which a contract can come to an end.
g -- information is information that is private and must be kept secret.
h The parties to a contract often agree not to any confidential information to any
third party.
i Another word for the duration of a contract is the of the contract.
j The aí a contract is the end of that contract.
k A clause states that one party to the contract is not allowed to telI anyone
certain confidential iníormation concerning the ather party.
1 An clause states which of the parties to a contract has copyright in creative work.
372
SOME IMPORTANT COMMERCIAL VOCABULARY =
•g
Exercise 1
Look at this /ist of questions. Each question asks about the rneanirig of a word that is important in
understanding cornrnercia/ contracts. Match each question with the correct ariswer. o-
o
=
a What are períshable goods? g Why are some buildings called premises?
b What kind of goods can 1 describe as h What does it mean if 1 pay for something
merchandise? in instalments?
c What kind of building is a warehouse? 1 What is the job of a liquidator?
d What is a budget? j What does it mean if a husiness is insolvent?
e What does it mean if 1 owe money to k What is an invoice?

someone?
1 Why do some businesses put a serial
f What does store mean? number on their goods?
It means to pay for something in several It means that you have an obligation to pay
regular paymerits over a period of time. money to that person. (7)
Sometimes businesses pay for goods in
this way. (1) They are goods like meat, fish, milk or fruit.
These things are impossible to use or to
It means to keep goods in a particular selI after a certain time because they
place where the goods will be safe uritil you become dangerous for people to eat. (8)
are ready to use them or you are ready to
selI them. (2) It is very similar to a bilI. It is a list of goods
or services that a seller supplies to a buyer
These are goods that the public can buy and it names the price that the buyer must
from shops. They might also be described pay. It often says how many days the buyer
as consumer goods'. (3) has to make the payment, for exam pIe,
30 days. (9)
It is a very specific amount of money. It is
the exact amount of money that a person Some businesses do this so that they can
has available to spend in order to do a identify their goods in the future. It helps
particular thing. (4) the business in situations where they want
to have their goods returned because the
Because this name is often used for buyer did not pay. (10)
buildings and land which are for businesses
to use and not for people to live in. (5) It is a large building where a business
keeps goods for a period of time before it
It is a person who sells the assets of a sells them. (11)
business in order to pay the business's
creditors. This person is sometimes called It means that the business does not have
'a receiver'. (6) enough money to pay its debts. (12)
373
=o
ct
-c
== Exercise 2
o
Here are thc words from Exercise 1 again. These words are very comnon lo commercial coo tracts.
especia/ly contracts for the saie of goods. Some of the words are connected with the subject of money and
payment. The other words are connected with goods. Decide which area the words are connected with,
=
= money and payrnent or goods. Write your answers under the headings below.
insolvent (adjective) warehouse (noun) premises (noun)

perishable (adjective) liquidator (noun) store (verb)
invoice (noun) merchandise (noun) owe (verb)
budget (noun) instalments (noun) serial number (noun)
Money and payment Goods
Exercise 3
Complete these sentences with a word from Exercise 2.
a The buyer will pay for the goods in six equal monthly
b The agent has an advertising of £10000 to advertise the company's products in

Italy and he must not exceed this amount without written permission.
c My company produces goods in China and we need a place to the goods for three
weeks before we transport them to England.
dA is a large building that businesses often use to store their goods.
e Meat and fish are goods and will go off very quickly if they are not stored correctly.
f This contract will terminate immediately if the buyer becomes or has any other
serious financial difficulty.
g How much money do we to our supplier?
h We enclose our with the goods, which gives a fuli description of the goods that
the buyer ordered and the amount of money that the buyer must pay.
1 If the buyer becomes hankrupt and a - is appointed to deal with the buyers
creditors, then the seiler has the right to terminate the contract.
374
j The business for saie consist of a factory, a separate office buiiding and a warehouse =
Nó
k it is easy to identify our companys goods if someone steals them because every item has a »
'1
o
stamped on it hefore it ieaves the factory. o
o-
o
The shop was fuil af at the time af the fire and the retailer had ta make a ciaim =
on his insurance paiicy for ali af the goods that were destroyed.
HeIp desk
What do these words mean? a creditor a person ar campany that yau

must pay hecause they suppiíed yau with goods
to exceed (something) - to go above the
ar services.
amount that is aliowed.
a factory - a huilding where goads are
to go off when food such as fish ar meat
manufactured. A factory is sametimes calied
gocs off it means that you cannot eat the food
a piant'.
because it is decaying.
a retailer a person ar company that seUs
stamped on - put on ar piaced on, usuaHy by
goods to the pubiic.
a machine.
TERMINATION CLAUSES
Exercise 1
Read this text about termina tian cia uses. Complete the text by fihling each gap with the correct word from
the box below.
money end stops terminated

serious protect commits lose
writing small gives
Ali modcrn comrTerciaI contracts contain a termination clause. This clause teus the parties the
circumstances under which the contract can (a) before the agreed date. A terminatian
clause aften hsts three ways in which this can happen. When a contract ends before the agreed date we
say that the contract is (b)
lhe first way in which a contract can terminate is that one party (c) notice to the other.
This is a period of warning that one party is about ta end the cantract. It is usual for a termination ciause
ta say that notice must be mn (d) . A typicai notice period in an empioyment contract, for
exampie, is faur weeks.
The second way in which a contract can terminate is in circumstances where one af the parties
(e) a material breach afthe contract. A material breach isa significant breach. The
breach must have a major effect an the injured party. it is nat usuafly passibie ta terminate a contract
because of a minar breach. A minor hreach is a (f) and more insignificant breach. A
court in the UK does not consicler this type af breach (g) _ enough to end the contract.
The third way in which a contract can terminate is in circumstances where one af the parties has serious
prohiems concerning (h) . Many termination ciauses state that if ane partys business
goes inta hquidation and a hquidatar is appainted ta set the assets of the business, this wiM terminate the
contract. This is to (1) the party who may (j) maney if the contract is
atowed to continue. Many termination ciauses aiso state that if one party's business ceases trading,
which means it (k) ______________ aperating as a business, then the contract wifl terminate immediateiy.
L4 1 375
=o
- o
o Exercise 2
=
o Here are some questions and answers about termination ciauses. Match each question with the
o correct answer.
'-4
==
What is the correct way to say that one What is a minor breach? (5)
party is warning the other party that a
contract is about to end? (1) Is a minor breach sufficient to terminate a
contract according to UK Iaw? (6)
A termination clause usually requires the
parties to give notice in a specific way. What is a liquidator? (7)
What is the usual way to give notice? (2)
What are assets? (8)
How long is a typical notice period
What does cease trading mean? (9)
stated in the termination clause of an
employment contract? (3) Who are creditors? (10)
What is a material breach? (4)
a It is a very serious breach, They are the things that a business owns,
such as equipment or machinery.
b It means to stop operating as a business.
h No.
c It is usually four weeks.
It is called giving notice.
d They aro poople or companies that you
must pay. j It is a person who must seli the assets of a
com pany in order to pay that companys
e It is a breach that is not too important. debts.
f It should usually he in writing.
Exercíse 3
Here is a simp/e exarn pie of a termina tion cia use. Complete the cia use by fulling the gaps with a word from
the blue box below.
material ceases written Agreement
7. TERMINATION
Either party may terminate this (a) by
7.1 giving six weeks' notice to the other; or
7.2 giving notice where there is a breach of terms; or
7.3 giving notice where one of the parties to trade or is unable to pay its dobts.
376
INTELLECTUAL PROPERTY CLAUSES
Exercise 1 o
Read the fo/lowing text about intel/ectual property clauses. The most important words are /n the key e
=
vocabulary below. Ariswer the questions that fo//ow using a fuil seritence.
e
n
Key vocabulary
assignor grant public dornain inteliectual
infringe licence encumbrance property rights
assign licensor infringement

assignee Iicensee
An inteliectual property (IP) ciause in a contract give the second company the right to use it too.
deais with inteliectual property rights. This Granting a licence is often a good idea. The creator
means that the contract cieariy states which of the of the work can make money from his or her work
parties owns any creative work, such as writing, but continues to own the work.
music or designs. When a iayer drafts an IP
A person who assigns his or her IP rights is cailed an
ciause he or she must be sure of the wishes of the
assignor in a contract. in our case the assignor is
parties. Does the party who created the inteilectual
the songwriter. The person or company who buys the
property really want the other party to have
IP rights is cafled the assignee. A person who grants
ownership of it? Or does he or she want the other
a licence to use his or her inteilectual property is
party only to have permission to use the inteliectual
calied a licensor. lhe person who is aflowed to use
property for a particular project, but not to own it?
the inteflectuai property is cafled the Iicensee.
Let's look at an exampie. A songwriter sends a new
When an assignor assigns his or her IP rights to a
song to an advertising company. The company agrees
third party, the assignor usuaily has to make certain
to pay the songwriter £5,000 to use his song in a
guarantees to the assignee. One of these is that
television advertisement for coffee. The songwriter
the inteflectual property assigned is free of any
accepts. Two years later, the manager of a different
encumbrance. An encumbrance is the right that
advertising com pany contacts the songwriter. This
some third party has in the inteflectual property. in
advertising manager wants to use the sarne song in
our case the songwriter must guarantee that his
an advertisement for a car. Can the songwriter give
song is compieteiy his own work and he is legafly
permission to the second advertising manager to use
abie to assign it to the advertising agency.
his song? The answer is that it depends on the terms
of the contract with the first company. A contract clause that deais with IP rights usuafly
states what wiM happen when there is an
Did the contract with the first advertising company
infringement of the rights. To infringe an
state that the songwriter agreed to assign ali IP
inteflectual property right means to break the law
rights to the cornpany? Assign means to transfer
concerning that right. We breach a contract but we
ownership. if the answer is yes. then the
infringe copyright.
advertising company owns the song. The songwriter
cannot give permission to anyone else to use his When an assignee buys IP rights he or she usuafly
song. He does not own it. This is bad luck for the requires a guarantee from the assignor that the
songwriter and for the second company. work, for exarn pie, a book, a piay, a song, is not in
the public domam, In the public domain means the
However, rnaybe the songwriter oniy agreed to
puhlic can find the work easily because the work is
grant a licence to the first company to use his
on the Internet or copies of it exist. in our case the
song. in this case, this means he gave the first
songwriter cannot give this guarantee. His work is in
company permission to use his song, but he
the pubiic domain because it was on television.
remains the owner. Therefore, he can probabiy
a Wtiat rnust a lawyer be sure of when he or she drafts an inteilectual property clause?
Answer: He or she rnust be sure of
b What does to assign ownership of IP rights mean?
Answer: To assmgn ownership of iP rights means to
GobI 1 egal FaglisI 377

=o c In situations where 1 want to give a company permission to use my inteliectual property for a particular
project what must 1 do?
=
o
Answer: In situations such as this 1 must
d What is an assignor?
Answer: An assignor is a person or company that
e What is an assignee?
Answer: An assignee is a person or com pany that
f What is a licensor?
Answer: A licensor is a person or company that
g What is a licensee?
Answer: A licensee is a person or company that
h What is an encumbrance?
Answer: An encumbrance is a
1 What does to infringe an IP right mean?
Answer: To infringe an IP right means to
j Where do we say inteliectual property is when inteliectual property is easily available to the public?
Answer: We say that intellectual property is in
Exercise 2
Complete the fol/owing seritcnces with a word frorn tíe key vocabLllary in Exercise 1.
a Who owns the in this piece of writing?
b My client is interested in buying your designs and he wants permanent ownership of them. Are you
willingto _ your IP rights to him?
c My client is a publisher and she wants to use your designs as an illustration in a new book. However,
she does not want to buy the IP rights to the designs. 1 have instructed her that to do this she needs a
from you.
d Our client does not want to assign copyright in her design to anyone but she is willing to
a licence to you to use it.
e Your use of our company logo on your products is an of our intellectual property
rights and we will take legal action against you.
f Our client owns the IP rights in the design. When she grants a licence she will be described in the
contract which grants the licence as the
g Our client is selling the IP rights in the design. When she seUs the rights to you she will be described in
the saie contract as the
h We want to use a piece of music in our new advertisement. However, we must first check that this will
not anyones IP rights.
1 My client paid £10.000 for the rights to the music and he is now the owner. In the saIe contract he is
described as the
378
j My client paid £1000 to use the music in his new radio advertisement. He is not allowed to use the
music again without a new licence. In the contract which grants the licence he is described as the
o
•'l
o
k It is important to the publishing corTlpany that no one has seen your new book. Are there any copies? Is o-
any part of the book in the o

=
1 The contract guarantees that you assign your work to the buyer free from any Th is
means that no third party has any interest in the work.
RETENTION OF TITLE CLAUSES

Exercise 1
Read this tvxt about reteutior) of title. Dec/de if the staternents that follow are true or falso.
Retention of titie clauses

In a contract for the saie of ordinary goods which the furniture company uses the leather to make
do not involve IP rights, there is a question about chairs just seven days after receiving it. Who is the
when titie in the goods passes from one party to legal owner of the leather? When does ownership
the other. To have titie to or in goods means to be pass from the seiler to the buyer?
the legal owner of those goods. Lawyers also refer
Lawyers often include a retention of titie clause in
to having titie in goods as having property in
contracts for the saie of goods. This is a sensible
goods. The two phrases mean the sarne thing.
precaution. A precaution is something that prevents
Having titie in goods or having property in goods
trouble in the future. A lawyer must anticipate the
means to have legal ownership of those goods.
pitfalls that his or her client might experience in the
In a contract for the saie of goods there is often a future and try to protect the client from such
clause called a retention of titie clause. lo retain problems when drafting the contract. A pitfall is a
something is to keep it. Let's say that there is a problem that is very likely to happen in the future in
contract between a company that produces leather connection with a particular activity. For example,
and a cornpany that makes furniture. The leather getting injured is a pitfall of playing football. A
company signs a contract with the furniture retention of title clause protects a seiler from the
com pany. The leather company agrees to provide pitfall of a buyer who does not pay. The clause says
the furniture company with good quality leather, that the seiler retains title to the goods until the
suitable for making chairs. lhe invoice states that selier receives fuil payment. In our example the
the furniture company must pay for the leather selier continues to own the leather even after the
within 30 days of delivery of the leather. However. buyer uses it to make chairs.
a To have property in goods and to have titie to goods mean the True False
sarne thing.
b The correct heading that lawyers use in a contract is a retain of True False
title clause.
c Retain means keep'. True False
d A precaution and a pitfall are the sarne thing. True False
e A retention of titie clause in a contract is to protect the selier from a buyer True False
who does not pay.
f After the seiler delivers goods to the buyer, the selier can remain the True False
owner of the goods according to a retention of titie clause.
379
=o
== Exercise 2
o Complete these seritences with a preposition from the box below.
o
-4
within to from of until
a A retention of titie clause deals with when ownership of goods passes the selier tu the buyer.
b lhe seller will retain title __________ the goods until the buyer makes payment in fulI.
c The selier will retain ownership the goods until the buyer makes payment in fuil.
d lhe buyer must pay the selier for the goods 30 days of receiving those goods.
e A retentiun oftitle clause uften states that the selier continues to own the goods he ur she
receives payment.
WARRANTY, INDEMNITY AND FORCE MAJEURE CLAUSES

Exercise 1
Read this text about warranty, indemnity and force majeure clauses. Complete the text by fihliig each gap
with the correct preposition from the box below.
from under for in on
You will see clauses dealing with warranty, contract will say that the hirer must take out' a
indemnity and force majeure in most commercial policy of insurance. Take out means buy. In the
contracts. USA an indemnity clause is sornetimes called an
indemnification clause.
A warranty is a guarantee that une party gives tu
the other. It is a statement of fact. In a contract A force majeure is something that happens that
(a) the hire of an industrial machine, the stops one of the parties from fulfilling his or her
hirer will warrant to the owner that he will return the contractual obligations. It rnight be a problem with
machine (b) the sarne condition and very bad weather, or something like a terrorist
(c) the date stated in the contract. attack. A force majeure clause protects the parties
from these unexpected circumstances. It describes
An indemnity is a promise that one party makes to
the force majeure as an 'unforeseeable' event.
the other. It is a promise by une party to
Unforeseeablc means that the parties did not and
compensate the other if there is a loss that arises
could not imagine that such a thing could happen.
from' the contract. Arises from means comes from.
This clause states (e) what unexpected
lhe process of indemnity is sometirnes called
circumstances the parties are free from fulfilling a
covering' someone against a loss. In the example
contractual obligation. In the above example, the
above, une party hires a machine (d) the
hirer of the machine prumises tu return it on a
other and warrants that he will return it in the sarne
certain date. What happens if there is a serious fire
condition. What happens if he does not do that?
at the owner's premises? The police will not allow
lhe ínrIn~ity c!ause statcs that thc hrcr must
the hirer tu enter the premises. The hirer will nut be
compensate the owner for his luss. An indernnity
in breach of cuntract because the force majeure
clause usually requires the party who gives the
clause will prutect him.
indernnity to buy a policy of insurance tu make sure
that he or she can keep his prumise tu pay. The
380
c
=
Exercise 2
Jumbfed words. Look at the definitions be/ow. Some of the words from the text ahove are mixcd up. Put '1
the /etters in the correct order to spe// the words and complete the definitions. The first letter of each word =
is there for you.
o
Example: A cL :.hich aio purty rnakes certairi guarantees to the other party.
WARRANTY ARRTYNAW)
a A clause in which one party says that he or she will compensate the other party for certain losses that
may happen as a result of entering into the contract.
(DEMINYFIN)
b A phrase that means comes from or as a result of sornething.
A F (RIASES) (ROMF)
c A word that means to pay someone money so that they do not suifer the effects of a loss.
C (PENTASMOCE)
d A phrase that means to buy something, especially insurance.
T O (AKET) (TUO)
e The formal name for an insurance document.
P (LICYPO)
f The word that American lawyers sometimes use instead of indemnity.
(MNIEDINCATIFONI)
g An international term that describes an event that stops a party from fulfilling a contractual obligation.
F M (ORECF) (JEUREAM)
h A word that means could not he imagined in advance.
U (FOREUNABSEEEL)
Exercise 3
Put a word or phrase from Exercíse 2 into these sentences.
a In the clause of this contract the hirer guarantees that he or she will comply with
the terms and conditions it conta ins.
b The clause requires your client to cover any loss that my client suffers as a result
of entering into this contract.
c Your client agrees to my client for any financial loss that he suffers as a result of
entering into this contract.
continued
Clol o Lendi 1 oji .1 381

o d It is necessary to insurance when you enter into this contract. This means the
-o other party knows that you have the money to compensate him for any Ioss that he suffers.
=o
1
e Do you have a of insurance? It is an important document and you should keep it in
o
a safe place.
==
f When a Ioss a hreach of the terms of a contract, the indemnity clause usuaily
covers the injured party against that loss.
g Our New York office has sent us a contract that uses the clause heading i nstead
of indemnity.
h Events that are usualiy classified as a inciude war, revolution, and terrorism.
1 The terrible storm on 10 July was an event and therefore can he classified as a
force majeure.
MORE ABOUT FORCE MAJEURE CLAUSES

Exercise 1
Read this information about force majeure clauses. The rnost important words are in the key vocabulaty
be/ow. Complete the sentences that follow by matching the flrst half of each sentence with the
correct ending.
Key vocabulary
excused supervening Act of God
force majeure unforeseeable relies on
It is usual for a contract to contain a clause that there is a supervening event that is preventing the
teus the parties under what circumstances they wiii contract from being carried out. A supervening
be excused from fulfilling a contractual obiigation. event is something that is unexpected. it stops or
Excused means the party is free of the obligation. interrupts an event or situation.
The obligation no longer exists. However, the
The force majeure clause states that if a
circumstances under which this can happen are very
supervening event happens that is compieteiy out
limited. A party can usuaily be free of a contractual
of the control of the contracting parties, such as a
obligation only because something unusual happens
strike, then the party who is unable to fulfil his or
that stops him or her from fuifilling the obligation.
her obligations wiil not be liabie under the contract.
The clause in a contract that mentions the ways in
Lawyers describe an event like this is as
which this canceMation of an obligation can happen
unforeseeable'. In other words, neither party
is caiied the force majeure clause.
could have predicted or imagined it. Other force
Let's say that one party to a contract agreed to majeures include things like computer failure, war,
dei iver goods hy plane to the other party. However, revolution, earthquake or fire. Lawyers sometimes
on the delivery date agreed in the contract the refer to a force majeure, especiafly an event that is
delivery company's local air traffic controilers not connected to human activity, as an 'Act of
decided to have a strike, which contmnued for more God'. Fire, hurricane, flood or earthquakes can
than a month. it was impossible to dehver the each be described as an Act of God. When a party
goods on the agreed date because the airports wants to use a force majeure clause to avoid being
were closed. Under circumstances hke these, there in breach of contract, we say that he or she relies
is normaily no breach of contract. This is because on' the force majeure clause.
382
a To be excused from fulfilling an obligation • . .an event that interrupts the performance of a =
means... contract. (1)
o
• .a situation where many people stop working, o

c
b A force majeure clause is...
usually hecause they have a dispute with
o
their employer. (2)
c A supervening event is...
• .the parties could not predict when they signed
the contract. (3)
d An event that is unforeseeable is something
that... • . .that you are no longer responsible for fulfilling
that obligation. (4)
e An Act of God is...

.a type of force majeure such as a natural disaster. (5)
f To rely on a cia use means... • . .to use or depend on that particular contract
clause. (6)
g A strike is... • a clause in a contract that states that neither of

the parties wili be in breach of contract if certain
things happen. (7)
Exercise 2
Here are some /awyers speaking on beha/f of their clients. Each layer mentions a force majeure cia use.
Complete what each lawyer says by fiuiing the gap with a word from the key vocabu/ary lo Exercise 1.
a My client is not in breach of contract. Under certain circumstances a contracting party is

from fulfilling his obligations. This means he is free of the obligation. My client is
free of his obligation due to a force majeure.'
b 'My client agreed to provide his hotel garden for your wedding. 1 am sorry that you were unable to have
the ceremony there after ali. However, the storm that happened on 15 July was completely
Even the government's weather office did not predict such a terrible event!'
c My client contracted with you to keep your goods in his warehouse. There was a gas explosion at the
warehouse iast week, hefore you deiivered your goods. The warehouse was destroyed. This is clearly
what a lawyer calls a event. My client is not in breach of contract.'
d My client contracted to deliver goods to you by lorry. There was a flood that hlocked alI of the roads in
your town and the iorry could not get there. We are not in breach of contract. He wiil
the force majeure ciause in the contract if you try to sue him.'
e My client is a traveI agent. You booked a holiday on a Caribbean island with his company. There was a
hurricane that damaged ali ofthe hoteis on the island. Your holiday is canceiled. My client is not in
breach of contract as this is the type of natural disaster that we describe as an
f My client owns a nightclub. You booked the nightclub so that you couid have a party to ceiebrate your
birthday. There was a fire at the ciub last night. Piease look at your contract with my client. You will see
that there is a clause that covers situations such as this.'
Ciotk Lgj Lrgis 383

=o
Exercise 3
Here is a sim pie exam pie of a force majeure clause. Complete the ciause by fif/ing the gaps lo the text with
a word from the box beiow.
notify control delay breach
5. FORCE MAJEURE
5.1 For the purpose of this Agreement Force Majeure means an event outside the reasonable
(a) of a party affecting his or her obligations under this Agreement.
5.2 If either party is affected by a Force Majeure he or she must immediately (b) the
other party in writing.
5.3 A Force Majeure does not entitie either party to terminate this Agreement and neither party
shall be in (c) of this Agreement by reason of any (d) in performance
or non-performance of any of its obligations due to Force Majeure.
384
UNIT lOA VOCABULARY CHECK =
These are the important words that you have -1

e
studied in Unit lOA. You should make sure that =CL
=
Unit 10113.
Act of God non-disclosure

arises n oti ce
asseis owe
assign
perishable
assignee
pitfall
assignor
p olicy
author
precaution
budget
premises
cease public domam
commission
rely on
co m pensate
retailer
confidential
retain
copyright
retention
creative work
serial number
credítor
store
disclose
su perven 1 ng
encumbrance
take out
excoed
term
excused
termination
expiration
títle
force majeure trading
freelance
unforeseeable
grant
warehouse
indemnification warranty
1 ndem n ity
infringe
infringement
insolvent
instalrnents
intellectual property rights
invoice
licence
licensee
licensor
liquidation
li qu id ator
material breach
merchand se
minor breach
orr L'I 385

o TOLES FOUNDATION EXAM PRACTICE
(5
•0
= Exercise 1
o
Read tíe followirig pairs of sentences. For each pair of sentences there are two possibilities, A or B.
o Decide wbich sentence uses the correct preposition. Write your answers in the box below. There is au
exam pie at the beginning (*).
Example
(*) (A) To pay for something in instalments means to make several regular payments.
(B) To pay for something to instalments means to make several regular payments.
1 (A) A termination clause infarms the parties aí the circumstances under which a contract can end.
(B) A termination clause informs the parties of the circumstances at which a contract can end.
2 (A) The SelIer retains title in the Goods until the Buyer pays for full.
(B) lhe SelIer retains title in the Goods until the Buyer pays in fuil.
3 (A) A force majeure prevented my client to fulfilling his obligations.
(B) A force majeure prevented my client from fulfilling his obligations.
4 (A) Copyright in the design belongs to the artist.
(B) Copyright for the design belongs to the artist.
5 (A) lhe Hirer agrees to comply with the terms and conditions of this Agreement.
(B) lhe Hirer agrees to comply to the terms and conditions of this Agreement.
(*) A (1) (2) (3) (4) (5)
Exercise 2
Look at this list of words. They are ali verbs. Put the correct word into the foiiowing sentences. Write your
answers lo the boxes numbered 1 10 heiow. There is ao exam pie ai lhe heginning (*).
(AA) give (C) indemnify (F) keep (1) infringe

(A) store (D) assign (G) draft (J) owe
(B) disclose (E) grant (H) commit
Exarriple: ! iii thc ):r..( :c( notic:c

fl \vritin(.
1 1 (1) - money to twa people. 1 must pay Mary £20 and 1 must pay Andrea £10.
2 This information is confidential and you must not (2) it to anyone.
3 Please (3) this information strictly confidential.
4 When 1 (4) a breach of contract it means that 1 do not fulfil my obligations under that contract.
5 (5) my goods in a warehouse in Manchester.
6 1 agree to (6) a licence to your client to use my design on his merchandise for a period aí one year.
7 lo use someone's artwork without his or her permissian is to (7) that persons copyright.
386
8 1 will (8) a new termination clause for my clients contract as he is not satisfied with the
current clause.
9 lhe author agreed to (9) her inteliectual property rights to the puhlishing company, so the
author no loriger has legal ownership of those rights.
o
10 When 1 (10) someone against a loss it means that 1 prornise to compensate him or her for that loss.
(*) AA (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10)
Exercise 3
Read the text be/ow. It is from a contract. Sarne aí the words in the text are underlincd. Thc rnear?ings of
these words appear in the list be/ow, but they are not ia the sarne arder. Match the underlined words in
the text with the correct rneariings by writing the letters (A, B, C, etc). in the list below. There is an example
at the beginning (*).
FROM A TERMINATION CLAUSE
1 This (AA) Agreement shall (A) commence on the 25 June 20XX and shall continue for a
(B) term of one calendar year.
2 Each party to this Agreement may at his or her own discretion and without heing required to
pay (C) compensation (D) terminate the Agreement by (E) serving two months written notice
in advance.
3 Each party to this Agreement may by giving written notice to the other party terminate the
Agreement immedíately as follows:
3.1 If the other party has committed a (F) material (G) brea ch of this Agreement
3.2 lt the other party goes into (H) volunjjy or compulsory liquidation
3.3 If the other party is insolvent or unable to pay his or her (1) debts when they become due
3.4 If a receiver is appointed over the whole or any part of the (J) assets of the other party.
(* ) AA contract
sending a document in the correct, formal way
money to pay sorneone for a loss
amounts aí money that a person owes to other people
serious. significant
sta rt
violation
duration, the period of time for which a contract is valid
intentional, something that a person chooses to do
end
property, including money and equipment
GFcili11 Lugal EngIi 387

L 1'
m,
21-,~~ ,-
,-
-
o
RISK AND TITLE

Risk
ri a contract for the saie of goods, the parties usually agree which of them wili carry the risk of the goods
being lost or damaged before delivery. In other words, which of thc partios has liability in this situation. It is
important to he sure who has iiability hecause this can affect what insurance each party needs to take out.
Let's say, for example, that there is a contract between a book publíshing company and a printing
company. lhe contract states that the printing company will produce 10,000 copies of a book for the
publishing company. The printing company also agrees to store the hooks in its warehouse until they are
required. What happens if there is a fire in the warehouse? Whose responsihility is it to pay for the
insurance of the books? Who takes the risk if there is any loss or damage at alI before dekvery?
Titie
Titie means ownership of the goods or products. Lawyers sometimes reter to having ownership ot something
as having titie to' the products. Lawyers also refer to having ownership of something as having property in'
the products. Title is irnportant because when you are the buyer of products you need to be certain about
when titie passes from the selier to you. Perhaps as the buyer, you want to soli the products to a third party.
At what point do you have the legal right to do so? lf you are the selier, you might want to retain title untii you
have been paid. lhe clause in a contract that deals with títle is often called a retention of title' or ROT clause.
lt is a ciause that says ownership ot the products remains with the seller until the buyer has paid for them.
Exercise 1
Read the foliowing text about using a retention of titie c/ause lo a contract. E/li the gaps in the text with the
correct word frorn the box beiow.
property particular retains protect

debtor premises saie instaiments
ln rnost contracts for the (a) of goods or products it is a good idea to inciude a retention
of title clause. This clause is intended to (b) the seHer from a buyer who does not pay for
the goods, or oriiy pays in part. The ciausc wili state that the goods remam the (c) of the
seller until the buyer has actually paid for them. lf the buyer does not pay for the goods he or she is a
(d) - which is a person who owes money to someone. A retention of title clause will also
usually give the seiler the right to enter onto the dehtors (e) and take back goods that
have been dehvered hut not paid for. However, sometimes a particular difficulty arises in this situation. What
happens if the debtor was paying for the goods in (f) ? Let's say the debtor has paid half
of the total price of the goods and insists that he or she therefore has a legal right to keep half of the
goods? lhe answer for the selier is to include what is called an ali monies' provision in the contract ot saIe.
This is a provision which states that untii a buyer has paid everythirig that he or she owes to the sefler, then
the seller () ownership ot ali of his or her goods in the huyers possession. This means
that the seller can take back goods even in cases where the bLiyer ciaims that he or she has paid for those
(h) goods.
GioI Lcgi Eng' 389

Exercise 2
Here are some briefing notes pub/isted by a firm ofsolicitors. The firm publishes briefing notes Lo gie
advice to its commercial clients. These briefing notes aim to help clients to reach decisions about what
= they want to include in their contracts. Read the briefing notes and find the words in the notes to match
the def7nitions that follow.
Hall & Co
Solicitors
Briefing notes for clients
Retention ofTitle Clauses
We are often asked, How can a seHer of • When a huyer does not pay for goods, it
goods protect his or her business against a is otten because his or her business is
buyer that does not pay?'. One answcr is to insolvent. Are you prepared for a battle
incorporate what is called 'a retention of with the iiquidator to get your goods
titie' clause, sometimes called a ROT clause, returned or your money back?
into your company's terms and conditions of
saie. This is a ciause in a contract that For many businesses however, including a
allows the seNer to retain ownership of the ROT clause in your contract is a sensible
goods until the goods are paid for. It is precaution to take. There are a few points to
useful to know that you can include a ciause remember. They are:
that makes this the case even in situations
t This type of clause must be expressly
where you have delivered the goods to the
stated. Neither common law nor statute
buyer. It means that you, the selier, can
will imply a ROT clause if you do not
demand that goods are returned to you if the
include one in a contract.
buyer does not pay. Another advantage?
Many ROT clauses also give the seNer the A ROT clause must be incorporated into a
right to enter onto the buyers premises to contract and notjust written on an
recover the goods if necessary. invoice. A court would take no notice of
a ROl clause appearing on an invoice for
In general, this type of ciause sounds like a the first time, as it wouid be considered
good thing. What could possibly be negative to be a post-contractual term.
about including a clause like this in your
o Try to put an identifying mark on goods,
terms and conditions if you are the selier of
such as a serial number. It will be
goods? You might think that nothing could
irnportant to be able to identify the goods
possibiy go wrong. Well, think again. There
when you want to recover them.
are several pitfalls to using a clause like this
and you need to consider if a ROT clause is A buyer might say that the goods have
right for your business before going ahead. been mixed with another product to
create a new item that cannot be
• What is it that you selI? If you selI a returned. Recover goods quickiy!
perishable product such as bread do you
really want to have it back if the invoice is
not paid within 28 days? Remember,
penshable products go 0ff!
390
a To include something as part of a design, a plan or a document.
The word is
b Problems that are likely to happen when you are taking part in a particular activity.
The word is
c A word used to describe goods that are likely to decay quite quickly, such as fruit or fish.
The word is
d A person who deals with the winding up of a company. His or her job is to make sure that the
company's creditors are paid.
The word is
e Something that you take to prevent something dangerous or problematic from happening in the future.
The word is
f Clearly and unmistakably stated. In a contractual situation, it usually means written as opposed to spoken.
The word is
Exercise 3
Read the briefing notes again and answer the following questions using a fuii sentence.
a What is a retention of titie clause?
b What additional right does a retention of titie clause often give the selier of goods to assist him or her in
recovering any unpaid goods that are on the buyer's premises?
c If a buyer has not paid for goods what do the briefing notes say is often the reason for it?
d What is the pitfall of including a retention of titie clause in a contract if you are the selier of
perishable goods?
e Does statute assist a seiler who has not included a retention oÍ titio clause in a contract for the
saie of goods?
f If a seiler wrote a retention of titie clause on an invoice how would a court describe the clause?
g How do the briefing notes suggest that a seiler makes his or her goods easily identifiable?
h The briefing notes suggest that if any goods are not paid for then the seiler should get those goods
back very quickly. What is the reason for this?
Gichai Legal 391

Coilocation bank
o
to carry a risk to recover goods clearly stated
to take out insurance a sensible precaution to enter onto someone's

prem ises
to retain titie in goods to take a precaution
Preposition bank
to pay for goods to incorporate a clause into a contract

She paid for the goods with her credit card It is a good idea to incorporate a retention
of titie clause into a contract.'
to pay in/by instalrnents
The seiler agreed to allow the buyer to pay to mix one product with another
for the goods in instalments. We cannot recover the glue that we sold
them as it has been mixed with other
to protect against non-payment products mn the manufacture of furniture.
There are several things that a selier can do
to protect himself against non-payment.
Exercise 4
The clause below deals with both risk and titie. Pie c/ause is from a contract between a printing company
and a publishing com pany. In this case the goods mentioned in the contract are books. Decide whether
the statements that follow the clause are true or false.
The property and risk in the Goods shall pass from the Selier to the Buyer upon Delivery. Where ali
or part of the Goods are retained by the Seiler but the Buyer has paid the agreed price, the
property in such Goods shali pass to the Buyer upon payment but the risk in such Goods shali
remain wmth the Selier until Delivery takes place.
a When books that the buyer has paid for are delivered to the buyer, he True False
or she then becomes the legal owner of those books.
b If books that the buyer has not paid for yet are mistakenly delivered to True False
the buyer, the risk for those books stays with the selier.
c If the buyer has pa,d for books but the books are kept at the selier's True False
warehouse until they are needed, then the buyer has the risk.
392
Exercise 5
Lookat the following clause. Complete the clause withtheprepositiors fromtheblue box.
Property (a) -- the Goods shall not pass (b) - the Buyer (c)
payment is made by the Buyer to the Company (d) the agreed price.
of in until to
Exercise 6
Look at the fol/owing clause. Complete the clause with the prepositions from the blue box.
Property in the Goods remains (a) the Company (b) ali times in the case
of a hire agreement and until payment is made (c) fulI in the case of saie
(d) the Goods,
at of with in
Exercise 7
Look at the foliowing clause. Complete the clause with the prepositions from the blue box
The Company guarantees that it has the authority to transfer title and that titie (a) the
Goods when transferred to the Buyer is Iawful. The Goods are free (b) any security
except as otherwise agreed (c) the parties (d) writing.
by to in from
Global lega nghsl 393

= Exercise 8
Look at this exampie of a reterition of titie clause. it is a typicai ali monies c/ause as rnentioned in
Exercíse 1. Fui each gap in the clause with the correct word from the biue box.
(a) dehvery and the passing of risk in the Goods or any other (b)
of this agreement (c) to the Goods shall not pass to the Buyer untii the Seiler
has received the fuil (d) of the Goods and ali other goods soid or agreed to he
soid by the Sefler to the Buyer for which payment is (e)
price provision titie due Notwithstanding
INTELLECTLJAL PROPERTY AND CONFIDENTIAL INFORMATION

Inteilectual property
If a contract is for the saie of goods there is often no need to be concerned with the seiier's inteMectual
property rights (iP rights). However, in a contract where one party is providing a service to the other, then
protection of iP rights can be very important. Lets say that a designer is commissioned by a record company
to design a cover for a new music M. The CD seus millions of copies and the record company then wants to
use the cover design on merchandise such as T-shirts. Who owns the design? is it the designer or is it the
record company? it is important that the contract between the two parties makes this ciear.
Confidential information
Confidentiahty protects information not capabie of IP protection. This includes commercial information.
trade secrets and processes used by a business in its everyday operations. This type of information is
sometimes referred to as know-how. This information can be very valuabie indeed in the hands of a rival
organisation. The business needs to inciude a confidentiahty clause, sometimes cafled a non-disciosure
clause, in ali of its employees' contracts. This wouid prevent any empioyee from, for example, giving
information from the database of clients to any third party.
Sometimes it is not aiways ohvious to a business how valuable its inteflectual property or confidential
information might be. Many iaw firms now offer the service of carrying aut what is calied an IP audit' for
companies. The iaw firm wifl identify what inteflectual property and confidential information a business has
and give advice on how to protect it.
Eiercise 1
Look at the foilowing two clauses. They are from a contract between a company that needs a website
and a website designer. Decide which clause is the non-disciosure ciause and which is the inteilectual
propert'y c/a use.
a The Designer acknowiedges that copyright and any other rights of any nature that may currentiy
exist or be created in the future in respect of any aspect of the Website and any associated
material in connection with which the Designer is providing her services shafl helong abso!uteiy
to the Company.
This is the ciause.
394
=
b Where the Designer is approaching third parties for contributions or assistance in respect of the 1
Website then the information to he divuiged shall he kept to a minimum and a representative of
the Cornpany shall attend ali such meetings with the Designer.
This is the ciause.
Exercise 2
Look at the two clauses ia Exercise 1 again. Decide if the following staternents are true or false.
a The Designer is completely forbidden to give any information at ali True False
about the Company to any third party.
b The Designer agrees to transfer copyright in the Website to the Company. True False
c if the Designer needs to have a meeting with another designer to get True False
heip or advice then the Com pany has the right to send someone
from the Company with her.
d if any new iP rights develop ia connection with the Website in the True False
future, those rights wili belongto the Designer.
Exercise 3
Read the text below. lt is from a seminar for students studying Iaw at the Vniversity of Chatsworth. The
sem mar is about a dispute between twa parties to a contract for services. The dispute happened because
the parties did not include a c/ause ia the agreement about ownership of inte/lectual property rights.
Complete the text with the prepositions from the box below.
with for onto from to

of as in at between
Lydia Bariow works (a) -a Niaii rneets Lydia to piari a brochure to advertise his
seif-empioyed graphic designer here in Chatsworth travei company. He wants her to design a coiour
Her speciaiity is the design aí marketing material brochure (c) 40 pages. He teus
for new companies. NiaM King hasjust started a Lydia that his budget for the design is £12.000.
new husiness. Niali's husiness is a travei company They siga a contract for services. NiaH provided the
aimed (b) _ people aged 21 to contract. A month iater Lydia provides NiaM with the
25 who wish to travei in the free time they have brochure and an invoice (d)
between finishing university and starting work. £12000. NiaM is dehghted and pays Lydia the
The name of NiaHs business is Pure Adventure £12.000 immediately.
Travei Ltd.
coa tinued
LI F 395
Six months later, Niali puts some of the text and usuaIly has to guarantee to the buyer, known as
= pictures from the brochure (e) the assignee, that the rights are sold free from any
o his website. Lydia sees the website and contacts encumbrance. An encumbrance is a third party
Niali. She says that she did not give permission interest in the rights and might mean that the rights
for her work to be used in this way and she do not belong solely to the seiler. In this case, the
requires additional payment. Now the two partíes right to start legal proceedings for infringement of
(f) the agreement are inteliectual property rights belongs to the assignee.
() dispute. How couId this
Licensing can be more advantageous to the supplier.
dispute have been avoided?
He or she continues to own the intellectual property
If you are the buyer of work that is creative in but makes money (j) allowing
nature you need to make sure that you have the others to use it, subject to certain restrictions. A
right to use any inteliectual property connected with good checkiist when granting a licence is;
the work. There are two ways to do this:
Is the licence limited to a particular territory?
make sure that the supplier transfers ownership
Is the licence exclusive or non-exclusive?
(h) the inteliectual property to
you at the time of payment. This is often called How long will the licence last?
an assignment of rights How much and when does the licensee have
if there is no assignment, make sure that the to pay?
suppIier gives you permission to use the What other restrictions are there on the use of
inteliectual property. This is usually known as a the material?
licence. When you have a licence to use
something you are known as the licensee. The best option in the case above would have been
for Niall to have included a clause in his contract
What is the difference (i) an with Lydia under which she assigned ali of the
assignment of IP rights and a licence to use the intellectual property rights in the design work to him
inteliectual property? The assignment of IP rights to use in any way that he wished.
rneans the absolute transfer of those rights in
return for payment. The owner of the IP rights
Coilocation bank
to provide a service to be free from any to transfer ownership

encu m brance
a rival organisation
Preposition bank
to be contracted by someone to do to have copyrighVlP rights in something

someth 1 ng The Beatles have sold copyright in much
1 have been contracted by the City of of their music.'
London environment department to remove
graifiti from this area. at the time of payment
Ownership transfers to the buyer at the
in the hands of a rival organisation time of payment.'
1 am sure that our client list is in the hands
of our greatest com petitor.'
396
e.
Exercise 4 o
Read the text in Exercise 3 about the dispute between Lydia Barlow and Niall King again. Answer the
fol/owing quest/or?s by matching them with the correct answers from the list below.
What is Lydia Barlow'sjob? (1) What is the name of the permission that a
suppiier such as Lydia may give to use the
What is the name of Niali King's new IP rights, even though there is no transfer
business? (2) of ownership? (6)
What is Niali King's budget for producing What is a licensee? (7)

his new brochure? (3)
Can an assignee sue for infringement of IP
What does Lydia Bariow require if Niali King rights? (8)
wants to use her design work on his
website? (4) What question does the licence checklist
ask about the term of a licence? (9)
What is the name of the process by which
a supplier such as Lydia transfers What would have been the best option for
ownership of IP rights to the buyer at the Niali King? (10)
time of payment? (5)
a Pure Adventure Travei Ltd. f It asks how long it will last.
b A licence to use inteliectual property g She wants more money.
c Yes. h She's a seif-employed graphic designer.
d To have included a clause in the agreement i A person who has permission tu use
that assigned him ali of the inteilectual inteilectual property, even though he or she
property rights in the brochure. is not the owner.
e An assignment of rights. j £12000.
397
-t
± Exercise 5
Let's say that Lydia Bariow and Niali King inciuded the foliowing clause in the contract between them.
Read the clause, and using information that you already have about the situa tion between the part/es,
answer the questions be/ow using a fui! sentence.
In consideration of the fee specified in Scheduie A hereto the Supplier assigns to the Company ali
present and future copyright in the Product for use in the media throughout the worid including, but
not Iimited to advertisements, newspaper and magazine articles, DVDs, website and internet
reiated material and marketing material in any form.
a Who is the suppher referred to in this clause?
b What is the name of the company referred to in this clause?
c Where must 1 look to find out how much money the company wifl pay to the suppher for producing
the brochure?
d Does the clause give the company fuM ownership of the copyright material orjust temporary use
of the material?
e Which particular word in the clause helped you to answer question (d)?
f is the company hmited to using the copyright material in the piaces hsted in this clause?
g Which phrase in the clause helped you to answer question ( O?
h if the company wants to use the copyright material in an advertisement on the side of a train, does this
clause permit it?
Exercise 6
ifi orde, tu lEOLeLt /ns cu11l7u'iiLiai i!Iruwd(Iu/i, Nidi/ kJH CUL//d a/so hãve ,iciuded a ciause iie the one Oi wtf
opposite page in hís contract with Lydia Barlow. Complete the c/ause with the words frorn the blue box be/ow.
third expiration disclose Iimited whatsoever
398
=
The Suppiier agrees that she shall not (a) - to any (b) pa rty
any confidential information (c) acquired during the existence of this Agreement
e,
including, but not (d) to:
f. the current or future business pians of the Company
e data
marketing strategies
financial information
from the date of this Agreement and for a period of one year foliowing its (e)
WARRANTIES AND INDEMNITIES

Warranties
A contractual warranty is a promise or a guarantee contained in a contract. There are different types of
warranty depending on what type of contract you are looking at. In a contract for the suppiy of goods or
services for example, a warranty usualiy takes the form of a promise that the goods or services wifl be of a
certain standard. A iawyer might say that thc selier warrants the quahty of the goods to the buyer. Some
warranties do not need to be written. ihey are presumed to exist or more correctly they are imphed'. This
is especiaily true of warranties in contracts between companies and consumers. For exampie, in the UK, a
statute cailed The Saie of Goods Act (1979) imphes warranties about the quahty of goods that are soid to
consumers. in many commerciai contracts between companies however, the warranties are cieariy and
expressly stated.
Indemnities
An indemnity clause in a contract. somebrnes calied an indemnification clause in the USA, takes this
process of guarantee one stop further. it is a promise by one party to the contract to compensate the other
party if certain losses occur. This compensation couid be for a breach of warranty but it couid be for some
other kind of ioss. Lets take, for exampie, a contractuai situation where a consultant works for a short
time with a company to heip the company with its marketing pian. lhe consuitant then breaches his
contract with the company by disciosing confidentiai information to a third party and the company suffers a
ioss as a resuit. The company wili usuaHy be protected by an indemnity ciause. The clause wifl state that
the consuitant 'indemnifies' the company against any ioss or damage arising from this type of breach.
indemnity usuafly covers Ioss arising from any act, omission or negiect'. Many professionais take out
insurance in case a ciaim is made against them under an indemnity clause.
Exercise 1
Look at the following two contract clauses. They are frorn a contract between a publishing com pany and a
book il/ustrator. Read both clauses and decide which is the indemnit-y clause and which is the warranty.
Complete each clause by choosing the correct words trom the hox to fui the gaps.
caused indemnifies warrants dísclosed
1 lhe Designer (a) that the Hiustrations provided under this contract are original
and have not been (b) to any other party and are not in the pubhc domam.
GiobLli Legul Engrsl' 399

= 2 The Designer hereby (c) the Publisher against any loss, injury, or damage
o arising from any breach by the Designer of any undertakings in this .Agreement, howsoever
= (d)
Coilocation bank
an implied term tu disclose information an expressly stated
L * to imply a warranty to suifer a Ioss

contract term
)
Preposition bank
to be of a certain standard oss arising from a breach

These goods are not of the expected 1 am indemnified against any loss arising
standard. from a breach of contract.
a warranty made by one party to the to indemnify someone against Ioss or

other party damage
This contract contains a warranty made by The consultant agreed to indemnify the
the seller tu the buyer' company against any Ioss or damage.'
Exercise 2
Loulsa Capaldi works as au 1/lustra tor of children 's books. She is self-emp/oyed, describing berse/f as 'a
freelance 1/lustra tor, and enters luto contracts with pub/ishing com panies several tirnes a year. She is a
member of an organisation called 'The Society of Ii/ustrators' and often visits the Society's website for the
!atest news and advice. She has just found this artic!e on the website. It is about the need for lllustrators to
be care fui when entering into contracts.
Read the article from the website be/ow and answer the questions that fo!iow.
www.TSOI.co.uk/le g ai/contracts
Beware of warranties and illustrations for a book or a magazine will

indemnities! probably ask you tu sign a written contract.
In that contract you will he defined as 'the
by Corinne Birch Illustrator' or maybe by a more formal
London-based member of the Society, and name, such as 'the Supplier'. The person
former lawyer Corinr,e Birch writes about who has asked you to provide an illustration
the dangers hidden in your innocent-/ooking for a book or some other publication will
contract. usually be referred to in a contract as the
Commissioner'.
Illustrators beware! The days of casual
agreements between illustrators and As well as dealing with the question of who
publishers are gone. These days any ownsthe_copyright in your work, the
publisher who commissions you tu provide contract is very likely to contain what the
coo tinued
400
lawyers cail vnrrantics, and, what is even the contract. This is the indemnity clause.
more worrying, a promise of ncicmnity' to This clause acts as a guarantee to the
support not only those warranties, but also commissioner that any breach of the
ali of the other terms that you agree to warranties that results in a financial loss to
under the contract. After one or two ruinos him or her will be paid for - by you! This
financaI experiences for Society members means that if you provide an iflustration to a
as a result of indemnity clauses, 1 can only pubhsher, and some thrrd party decides to
conclude that you should regard your sue the publisher for breach of copyright,
commissioner's law'or in the sarne way as then the commissioner can come after you
Harry Potter regards Voldemort - an evil for any loss or damage that they might
presence that can probably be defeated, but sutfer and demand to be reimbursed.
only with a great deai of care and attention!
There is, however, an important point to make
A warranty is a promise from you that each about your Iiabihty under warranties or
iflustration that you are providing comes free indemnities. A sensible commissioner will
of any probiems. Typical warranties that you know that illustrators are not the richest
wifl be asked to give as an iflustrator inciude: people in the world and that getting the
money from you to pay a third party under an
that the iflustration you are providing
indemnity clause may be time-consuming and
is not ç tptcey in any way
difficult, perhaps even impossible! For this
that the iflustration is your own work reason, most of them have habihty insurance
and is completely original and may very well rely on that insurance if a
that you, the iflustrator, have the right claim is made against them by a third party.
to grani a licence or assignment to
The conclusion is, please read the
the commissioner. warranties and make sure that you are
If you receive a wntten contract from a happy to enter into them. if not, ask for
publisher make sure that you read it carefufly them to be struck out ofthe contract. I'm
and are happy to agree to the warranties that afraid it's rarely possible to refuse to
it contains. Don't be afraid to amend a indemnify the com missioner. However, you
warranty or even ask for it to be struck out of can negotiate a little and try to 'soften' the
the contract, which means deieted, if you are indemnity clause in any way that you can.
in any doubt. The best advice of ali is to make sure that ali
of your iHustrations are original and 100%
The warranty clause is often foflowed by a
yours to offer for saie, then you really can
section of the contract that requires even
sleep at night without worry.
more thought before you agree to enter into
The b/ue links on this website that take the reader to more information on certain subjects are underlined.
Which link should Louisa click on to read more about the following?
Example: Information about people who are not party to Pio contract dat may take Iega[ action.
Link: thirr.1 party.
a Information about illustrators who have lost a lot of money.
Li n k:
b Information about who is the owner of the intellectual property in the illustrations.
Li n k:
c Information about making changes to clauses contained in contracts.
Link: -
(;rohi LegI EngWsh 401

d Information about giving someone permission to use your illustrations without giving that purson
ownership of the iliustrations.
9 Link:
e Information about what is libellous.
Li n k:
f Information about transferring ownership of copyright completely to the commissioner.
Link:
g Information about certain guarantees that an iliustrator may be required to give to the commissioner.
Link:
h Information about the prornise an iliustrator may be required to make regarding any financial loss the
commissioner suffers as a result of a hrcach of contract.
Li n k:
Exercise 3
Read the article in Exercise 2 again and decide if the fol/owin4 statements are true or falso.
a Most illustrators are asked to sign a written contract. True False
b Some illustrators who are members of the Society have lost money True False
in the past as a result of indemnity clauses in their contracts.
c If a warranty is 'struck out' of a contract rt means that particular True False

guarantee is deleted from the contract.
d An iliustrator will never have to pay for a commissioner's losses if True False
the commissioner is sued by a third party.
e Many commissioners have insurance against being sued by third True False
parties because they know that illustrators may not be able to pay
any damages that might be awarded.
Exercise 4
Here is a warranty given by au 1/lustra tor to a commissioner. Complete this warranty by choosing a word
from tbe box be/ow to fui each gap iri the c/ause.
disclosed domain warrants further assigned
The lilustrator (a) to the Commissioner that the lilustrations provided are original
and have not been (b) ______ to any third party except to the Commissioner and its
advisers and employees. The lllustrator (c) - -- warrants that she has fulI rights in the
Illustrations and that the Iliustrations have not been previously (d) or licensed in any
form in any part of the world and are not now or ever have been in the public (e)
402
Exercise 5
Here is ao indemnity giveo hy ao if/ustrator to a comm/ssioner. Complete this indemoity c/ause by choosing
a word from the box he/ow to (iii each gap lo the c/atise.
costs party aliegation indemnified injury
lhe Iliustrator agrees to indemnify and keep (a) the Commissioner (and any
ather (b) that the Commissioner shall in the normal operation of its business
agree to indemnify) against Ioss, (c) ar damage, including legal
(d) in consequence of any breach aí the warrantles given herein or arising aut
aí any claim regarding an (e) - aí hreach af capyright or defamation.
Exercise 6
Here is a warrant-y giveri by the author of a book to a publishing com pany. Complete the warraoty by
choosirig a preposition frorn the box bclow to flul each gap lo the cia use.
in of to as under
The Author hereby warrants that the Book is the Author's original wark, has not been published
befare, and is not currently (a) cansideration for publication elsewhere. Further, that
the Book contains no libellaus ar unlawful statements and that it (b) na way infringes
the rights (c) athers, and that the Author, (d) the owner aí the copyright,
is entitled (e) make this assignment.
Exercise 7
Here is ao iodernriity giverJ by the author af a baak ta a publishing cornpany. Complete the indemn/ty
e/aLise by choosirig a preposition fram the box below to ml each gap iri thc cia use.
from as of by against
lhe Authar hereby agrees ta indemnify the Publisher (a) any loss ar damage
resulting (b) any hreach by the Authar (e) - any warranty, undertaking
ar term in this Agrcement and against any legal casts ar damages incurred (d) the
Publisher (e) a result aí any breach by the Author under this Agreement.
GohI Legal EnghsJ , 403

TERM AND TERMINATION
=
= Term
The terrn oÍ a contract is the period of time for which the contract is vand. It means the sarne as the
duration of the contract. The term of the contract is usually stated at the beginning of a written contract.
However, it is also often mentioned again in the termination clause.
Termination
Almost ali contracts contain a clause that specifies the circumstances under which a contract can be
brought to an end before the agreed expiry date. This means that the agreed term of the contract will be
shortened. Under what circumstances might a contract be terminated by one of the parties? The most
common reasons are:
Agreement. The parties agree that either of them can terminate the contract by giving an agreed period
of notice to the other
Breach of contract. One party can terminate the contract if the other party commits a material breach of
one ar more of the terms and conditions of the contract. However, it usually needs to be a material or
significant breach for a court to allow the injured party to terminate rather than accept damages for the
loss. The party ia breach usually has na agreed period of time to remedy the breach before the injured
party can insist upon termination
Insolvency of a party. Most commercial contracts contain a provision ia the termination clause that
allows one party to termmnate the contract if the other party becomes insolvent or goes into liquidation.
Exercise 1
A lawyer has been asked to expiam thc rensons why it is important to include a termination clause ia a
commercial coo tract. Here is his first reason. Read what he says and complete his explanation by fi/ling
the gaps with the words from the box below.
agree run enter giving states negotiate
It is absolutely essential to include a termination clause in a contract. There are several reasons
for this.
The Íirst reason is a very simple one. Let's imagine that you (a) a retail husiness,
such as a shop that sells luxury chocolate, ia the centre of London. You (b) ato a
contract with a supplier of chocolate ia Beigium. The contract Id that the supplier in
Belgium will deliver a certain quantity of goods to you every month. Both parties expect the contract
to continue for a certain period of time before it has to be renegotiated and they (d)
upon the term of the contract as 12 months. What will you do if no one buys your chocolate and
after three months your business is ia trouble? You do not want to be obiiged to go on with the
contract for another nine months! Therefore, when you (e) the terms and conditions
of thc coatract it is essential to say that either party can terminate by (f) notice to
the other. A reasonable notice period in a situation such as this is probably four weeks.'
404
Exercise2
The sarne lawyer r7ow gives his sccond rcason as to why it is irnportant tu inclucie a terrnination ciause.
Read what he says and answer the questions that follow usir?g a fuji sentence.
To move on to the second reason for including a termination clause, if you are a party to a
contract you must always make sure that you can terminate it if the other party is in serious breach
of his or her obligations to you. A court would reter to a serious breach as a 'material breach. A
breach of a less serious kind, a minor breach, will only give rise to a claim for damages, not
termination. Most clauses of this type state that you have to give the other party a chance to solve
the problem. In tlie legal profession we reter to this problem solving as 'providing a remedy for the
breach'. If we imagine a situation where one party is in breach and has not remedied that breach
then the injured party might seek to terminate the contract on those grounds. So, what constitutes
a material breach? This is a complicated question. A court will examine the parties' intentions
when they signed the contract, as well as the effects of the hreach, in deciding whether or not it is
material in nature. in general, however, a material breach must be very serious indeed. It must be
a threat to the very purpose of the contract and not just an inconvenience.'
1 How does a court reter to a very serious or significant breach of contract?
Answer:
2 What is a minor hreach?
Answer:
3 What right does a minor breach normally give rise to for the injured party?
Answer:
4 What is the correct legal name for the solution that the party in breach gives when he or she solves the
problem caused by the breach?
An swe r:
5 In order to be described as a material breach, what must the breach do with reference to the contract?
Answer:
Exercise 3
Here is the lawyer's final reason for including a termina tion clause in a contract. Complete his explanation
hy choosing a preposition from the hox below to P11 each gap in the text.
to of as in for
Finally, the third reason for including a termination clause in any commercial contract is the
possibility that the other party may have financial troubles. Most contracts these days state
(a) the termination clause that if one party stops trading (b) a business or even
threatens to stop trading, then it wili bring the contract (c) an end. This is (d)
the protection of the other party. Other particular circumstances that are usually listed in a
termination clause are one party beingthe subject (e) dissolution, winding up,
receivership or any other insolvency proceedings. Ali of these circumstances can bring a contract to
averysuddenend'
Cobi Lcgii Erigiis 405

a)
Coliocation bank
- the term af a contract a material breach to give notice

=
the expiry date af a contract a minor breach to enter into/go into
liquidation
to commit a breach to remedy a breach
L
Preposition bank
2
the circumstances under/in which to be in breach of yaur obligations
something can happen The supplier is in breach of her obligations
Under what circumstances can 1 terminate under this agreement.
this contract?
ta give rise to something
to insist upon/on sornething lhe ather party's actions will give risc to au
1 insist upon a remedy for the hreach within award af damages.'
30 days.'
Exercise 4
Hcre is a termina tion clause. It is cantained in a contract between a customer and a com pany that makes
hand-made furniture. Read the termination clause and find a word or phrase in the terrninatian claLise that
matches the foliowing definitians.
TER MI NATIO N
Without prejudice to any other right ar remedy available to the Company it shall be entitled ta
terminate the Contract between the Company and the Customer ar suspend any further work due
under the Contract between the Campany and the Customer without any Iiability to the Customer,
and in the event that work has been carried out but remains unpaid for, the price shall became
due immediately notwithstanding any previous agreement ta the contrary in the event af:
1 the Custamer committing a breach of this Agreement pravided the Company has notified him af
the breach and in the case of that breach being capable of remedy, the breach has not been
remedied within seven days of receipt of SUCh notice
2 the Customer goes into liquidation ar having a receiver appainted over any af its assets ar
becoming subject to an administratian arder ar any ather insalvency praceedings ar, (being au
individual ar partnership) the Custamer becomes apparently insolvent, bankrupt ar the Custamer
makes any agreement with its creditors ar ceases ar threatens to cease to carry on business.
406
a Ïhings that a company owns that have a value. f Receiving.
lhe word is The word is o
b A phrase that means not having any effect upon g To stop doing a particular activity for a period of
something at a later date'. time with the intentiori that you might or might
not start the activity again later on.
The phrase is
The word is
c A solution for a breach of contract.
h Stops.
The word is
The word is
d Despite, in spite of.
i Owed.
lhe word is
lhe word is
e lhe people or organisations to which a person
owes money. j A phrase that means being the object of
something.
lhe word is
The phrase is
Exercise 5
Rcad the termination cia use again and decide if the foliowing staterncnts are troe or false.
a If the company terminates this contract because the customer True False
commits a breach of the agreement then the company cannot
possibly claim any other remedy in future.
b If the company terminates this contract because the customer True False
commits a breach then the customer is obliged to pay
immediately for any unpaid work that the company has done.
c lhe customer has seven days to remedy any breach and the seven True False
days start on the day the customer breaches the contract.
d The com pany has the right to terminate the contract if the customer True False
makes an agreement with the other people to whom the customer
owes money.
e If the customer says that he will probabiy wind up his business very True False
soon, the company has the right to terminate the contract.
Lj . 407
FORCE MAJEURE
Vou need to know about...
o
= Engiish-speaking lawyers use the French phrase force majeure, because it is internationally understood.
The transiation into Engiish would be greater torce'. A force majeure is a very strong, externai force ar
event that is outside the influence of the parties that prevents one of them from carrying out their
obligations under the contract. The interpretation of the phrase according to English law goes a little further
than this. Generaily speaking, a force majeure is an unforeseen event that prevents one of the parties from
carrying out his ar her obligations, which could not have been avoided by exercise of duty ofcare. In other
words, a force majeure clause will not necessarily protect one of the parties if he ar she was negligent.
A typical force majeure clause will cover:
Natural disasters connected with weather, such as floods, earthquakes ar hurricanes. This type of event
is often referred ta as an Act of God'.
Disasters connected with human activity such as war ar revolution.
Problems caused by the failure of a third party, such as a supplier, to fulfil their contractual obligations
to one of the cantracting parties. if, for example, 1 am based in London and 1 agree ta supply gas to a
major company in London. 1 now have a contract with that company. However, if my gas supplier in
Russia goes out af business and does not provide me with the gas, 1 cannot fulfil my contractual
obligations in London. 1 could perhaps rely on the force majeure clause in my cantract with the London
company to avoid actian against me for breach aí contract. Cases in the UK have established the
principie that a contract suddenly becoming too expensive for one of the parties to carry aut does not
constitute a force majeure.
Exercise 1
in the box below is sarne of tbe vocabulary that you wii/ ofteri see in a force majeure clause. Ali of the
events listed ia the box cari preverit one of the parties frorn carrying out their contra ctual obligations. Look
at the events and decide what type of event they are.
rebeilion acts of terrorism electronic failure
earthquake communications failure civil war
war sabotage avalanche
riot epidemic criminal acts
flood hijacki ng arson
civil unrest drought
mechanical failure strike
a Natural disasters/Acts of God
b Problems caused hy modern technology
c Problems caused by human activity
408
=
Exercise 2
Here IS O typica/ force rnajoLlro clause. Complete the clause by choosing a preposition from the hox beloví
tu ff11 each gap in thu tex(.
from of to for under
No party shall be liable (a) any failure to perform its obligations (b) this
Agreement in the event that such failure results (c) flood, earthquake or any Act
(d) God, riot, civil unrest, war or any other cause beyond a party's reasonabie control,
including electronic or communications failure but excluding failure due (e) any breach
of duty of care or a party's financial condition.
Exercise 3
Look at this force majeure cia use. Complete the cia use with the correct words from the box below.
terminate Iimited notice control performance
In the event that this Agreement or any part of it can not be performed for any reason beyond the
reasonabie (a) of the Company or the Supplier including but not
(b) to such events as Acts of God, war, strikes or civil disturbances, then such
non-(c) shail not be deemed a breach of this Agreement. in the event that the
obligations under this Agreement cannot be fulfilled for any reason beyond the control of the
defaulting party for a continuous period of three months then the other party is entitled to
(d) this Agreement at the end of that three-month period by giving
(e) in writing.
Coliocation bank
an unforeseen event to rely on a clause to establish a principie
Preposition bank
to he outside someones influence to go out of business

•The hurricane in the USA was an event My supplier went out of business a few
outside the influence of the contracting weeks ago.
parties.
Global Legal Erglv) 409

USUNG YOUR KNOWLEDGE
'-4
Coilocation review
Complete these setitences with a co//oca tian that yau have seen.
a lhe Seiler warrants that the property is sold of any encumbrance.
b Contracts contain what are known as express terms that are clearly stated in the agreement but they
may also have terms, which a court will presume to exist even if they are not stated.
c It is possible for one aí the parties to a contract to terminate on the grounds of breach but it must he a
breach and not a minor breach or an mnconvenience.
d You are notifmed that you are in breach of contract and yau have 14 days to the
breach. If you fail to do so we will terminate our contract wrth yau without further notice.
e The Seiler will titie to the goods until the fuli price aí the goads has been recemved by
the Selier.
f The service that yau __ to os under thms agreement was not satisfactory.
g This is confidential information and you must not it to any third party.
h It is always a good idea to __ insurance in case a claim is made against you under an
mndemnity clause. If you had to find the money fram your own packet it could ruin you financmally.
i The of this contract is defined as two years.
j We intend to upon the force majeure clause of this contract and we deny that we are
in breach aí our obligations.
Vocabulary review
aA of titie clause often gives the selier the right to entcr anta the buyers premises to
recover goods that have not been paid for.
b lo _____ _ goods ar inteilectual property rights to someane is to transfer ownership to that

person completely.
c lhe Author that the Article is her own original work and that no third party has any
right in the Article whatsaever.
d An Inteliectual Property is a service that many Iaw firms offer to their clients. The Iaw
firm will check ta scc what valuable mntellectual property a business has and give advice on haw ta
pratect it.
e If you have mn goods it means that you are the awner aí thase gaads.
f An ali ' provision in a cantract aí saie pratects the selier. It means that ownershilD of
the goods does not pass ta the buyer until the buyer has paid everything that he ar she owes under
the contract.
g In the USA an indemnity clause is often referred to as an clause.
h If there is a warranty in a contract that you do not want to agree ta, you can ask the ather party to
it out of the contract.
410
i A clause in a contract states the circumstances in which a contract can be ended =
before the agreed expiry date.
o
j A majeure clause in a contract deals with the circurnstances in which the parties may
be excused performance of their obligations due to some unforeseen event SUCh as a fire or a flood.
Preposition review.
Complete these seritences with the correct preposition.
a The designer sent an invoice £2000 to the company that had commissioned her work.
b When you are paying for design work you should aiways make sure that the designer transfers the
inteilectual property rights in the work to you __ the time of payment.
c The Author hereby agrees to indemnify the Company any ioss or damage arising from
any breach of the terms and conditions of this Agreement.
d A force majeure clause deais with events that are _______ - ______ the control of the contracting parties.
e Who is your new travei business aimed ? is it only for peopie under the age of 30?
f Piease pay the goods that you have received by 3 Juiy.
g i have heen commissioned - a fashion magazine to take some photographs for their
next edition.
h Were the goods that you received iast week the standard that you expected?
i lhe author warrants that the article no way infringes the inteliectuai property rights of
anythird party.
j if one party to a contract stops trading a business. theri the other party can usually
terminate the contract immediateiy.
411
Exercise 1
2 Read the contract clausc be/ow. The missing prepositions are in the iist below. For each gap choose the
preposition which best fits frito the space from the options provided. Use each option oniy once. Write your
answers in the box beiow. There is an exam pie at the beginning (*)
FROM AN INDEMNITY CLAUSE
The Licensee agrees (*) indemnify the Proprietor and shail be liabie (1) ali losses,
costs and expenses, inciuding but not hmited (2) legal fees (3) a fuil indemnity
basis, arising (4) _______ any breach (5) the Licensee of any of the warranties or
agreements made hereunder.
(AA) to (A) from (B) on (C) to (D) by (E) for
(*) AA (1) (2) (3) (4) (5)
Eercise 2
Read the foliowing extract from a contract for the saie of goods. Some of the words or phrases are
underiined. Explain the meaning of these underiined words or phrases. You car write one word iri piam
Enghsh ora short expianation. Write your answers beiow. There is ao example at the beginning (*).
FROM CLAUSES DEALING WITH THE PURCHASE OF GOODS
The (*) property in the Selier's Products shail remam (1) solely and absoiutely with the Seiler until
such lime as the Buyer pays the fuU purchase price for ali Products which the Buyer has contracted
to purchase from the Selier. The Selier may, for the purpose of (2) recoverv of its Products enter
onto any premises where the Products are (3) stored and may repossess the Products.
The Selier (4) warrants that titie to the Products when transferred to the Seiler is vand and that the
Products are transferred free ol any security interest or (5) encumbrance except as agreed
between the parties in writing.
(*) legal ownership of
(1)
(2)
(3)
(4)
(5)
412
ANSWER KEY =
'a
ID
"a
UNIT lA t. The correct carne for this rnone Land Iaw

is darnages. lease (ii and and bLiildings
THE LEGAL PROFESSION
g. The carrect name for this lan d lord
WORKING IN LAW arrangernent is a no win na fee tenant
arrangernent. conveyancing
Exercise 1 (p9) real estat.e
Barrister
Exercise 2 (p14
a.
b. Attorney a. suing Exercise 7 (p18)
c. Solicitar b. negjigence a. mmiaternity leave
d. Lav,er c. damages b. unfair dismissal
d. allegations c. sick pay
Exercise 2 (p9) e. grounds d. discriminate
a. frue e. redundancy
Exercise 3 (p14
b. frue
c. Falsa a. Mary Exercise 8 (p18)
cl. frue b. Michael a. íorrnatian of a business
e. False c. Tom b. capital
d. Cary c. insalvent
MAKING A CLAIM IN THE e. PaIly d. merger
CIVIL COURT í. Kayleigh e. partnership
g. Sunitta
Exercise 1 (p10) h. David
Exercise 9 (p18)
a. civil i. Jenniíer a. tennant
h. civil j. Alistair b. coriveydncing
c. criminal o. lease
d. civil Exercise 4 (p16) d. landlord
e. criminal a. criminal law e. real estate
b. merged
Exercise 2 (p11) c. inteilectual property law TOLES FOUNDATION
a. frue d. drafting EXAM PRACTICE
b. False e. the law af equity and trusts
c. True Exercise 1 (p20)
f. based in
d. True g. family law 1. Whee a student finishes his ar
e. False h. goods her legal studies he ar she has
f. False i. the law of tort ta make a two-year training
j. valid cantract with a law firm.
Exercise 3 (p12) 2. lhe law aí tort says that
a. (3) Exercise 5 (p16) everyone rnust to be careful
b. (6) a. insolvent and not harm other peaple.
c. (1) b. merger 3. 1 will start my training contract
d. (2) c. tenant with the Taylor Wallis in
e. (7) d. Convevancing September.
í. (5) e. discrirninate 4. If we issue a claim against yau
A. (8) f. Unfair dismissal we will ask for a very high
h. (4) g. Sick pay damages.
h. lease of lund and huildings 5. He breached the cantract and
Exercise 4 (p12)
i. formation of a husiness 1 will prosecute hirn in the
a. issues civil COurt.
j. partnership
b. fee
k. Maternity leave
a. serves Exercise 2 (p20)
1. Capital
d. respond 1. False
rn. Redundoncy
e. hear 2. frue
n. landlord
í. find 3. False
o. Real astuta
g. order 4. frUe
h. bailiff Exercise 6 p1 7 5. frue
AREAS OF LAW Employment Iaw Exercise 3 (p21)

unfair clismissal
1.
Exercise 1 (p13) muternity louve
2. c
a. Lawyers say to hreach a duty discriminate
3. a
aí care. sick pay
4. d
h. In England and the USA thc lov. redunclancy
5. í
aí tort is an area aí civil lav. Business Iaw h
6.
c. A tort is a type aí civil wrong. formation of a husiness 7. b
d. TUe name of this tort is negtgencc. capital 8. g
e. Suing means starting insolvent 9. e
proceedings against someone partnership
in a civil court. me rger
oiii Lepai Eng,,liJi 415

UNIT1B AREAS OF LAW f. running
g. practise
THE LEGAL PROFESSION Exercise 1 (p29) h. suffered
a. criminal i. damages
THE IMPORTANCE OF
b. civil j. take
COLLOCATIONS c. civil
Vocabulary review (p34)
Exercise 1 (p23) d. criminal
a. tenant
a. (A) e. civil
b. redundant
b. (B) f. civil
c. partnership
c. (A) g. civil
d. insolvency
h. criminal
d. (D) e. conveyancing
e. (0) Exercise 2 (p2 9) f. mcd iation
a. Intellectual property law g. negligence
THE IMPORTANCE OF
b. The law of equity and trusts h. barrister
PREPOSITIONS i. goods
c. Family law
Eercise 1 (p24) d. lTlaw j. attorney
a. in e. lhe law of real Preposition review (p35)
b. against pmoperty/conveyancing a. on
c. for/to f. Contract law h. from
d. in g. lhe law aí tort c. with
e. in h. Employmenhjlabour law d. in
f. at 1. Business and cornpany law e. against
j. Maritime law f, into
Exercise 2 (p24) g. over
a. in Exercise 3 (p3 O)
h. to
b. for a. Contract law i. for
c. drafting b. Business and company law into
j.
d. for c. lhe law of equity and trLlsts
e. acting for/representing d. The law oí tort TOLES HIGHER
f. breach e. Family law EXAM PRACTICE
g. grounds f. The law of real
property/conveyancing Exercise 1 (p3 6)
SOLICITORS AND BARRISTERS g. Maritime law 1. (0)
h. Employment law 2. (D)
Exerclse 1 (p25)
3. (C)
a. solicitor THE REGISTER OF LETÍER 4. (B)
h. attorney WRITING 5. (A)
c. qualify 6. (D)
d. client Exercise 1 (p31)
7. (D)
e. practices a. Firstly
8. (0)
f. partnerships b. issuing a clairn
9. (D)
g. associate c. drafting
10. (A)
h. partner d. conveyancing
i. court e. sue Exercise 2 (p37)
j. issued f. riegligent 1. practise
k. audience g. mediation 2. chamhers
1. jucige h. reduridant 3. partnerships
i. Finally 4. employed
Exerclse 2 (p2 6) sole practitioners
j. 5. pleading
a. David Ross & Co k. sick pay 6. advocate
(0771 222 0046) 1. maternity leave 7. drafting
b. Marion Kaye (0771 777 5454) 8. owe
c. Judy Barclay (0771 3339989) LISTENING 9. proceedings
d. Patel & Co (0771 333 2323) 10. darnages
Exercise 1 (p33)
Exercise 3 (p28) a. solicitor Exercise 3 (p38)
a. negligence b. insolvency 1. For over ten years.
h. conveyancing c. barrister 2. Economics.
c. redundancy d, corporate
3. One year.
d. charity e, drafting 4. Because lawfirms like diversity
e. insolvency f. acting and to employ people with a wide
f. tenant g. conveyancing range of skills and knowledge.
h, tenant S. lhe UK Bachelors degree in law.
Exerclse 4 (p28) i. inteliectual 6. lhe skill of speaking on hehalf
a. True j, qualify nf
a nlpcnt in mi irt
0. aise (this law Firrn specialises
USING VOUR KNOWLEDGE 7. Negotiation skills and client
in suing schools and colieges
interviewing.
for negligence) Coliocation review (p34) 8. Maths.
c. False a. making 9. Because universities produce
d. True b. breach
e. True too many law gradLiates.
c. drafting 10. It's a list of solicitors who are
d. qualify
allowed to practise law.
e. setting up/forming
416
UNIT 2A g. 7 TOLES FOUNDATION
h. 1
THE LANGUAGE OF EXAM PRACTICE
1. 3
BANKING Exercise 1 1 p52 x
cv
k. 10 1. (D)
A NEW BANK ACCOUNT
2. (B)
Exercise 1 (p41)
WORKING IN A BANK 3. (D)
Verbs: to issue, to withdraw. E.xercise 1 (p47) 4. D
to n(,.posit, to transfer a. 5.
lhe hank likes to have new
Nouns: charges, statement, customers hecause they make Exercise 2 (p52)
balance, hilis, fees. overdraft money for the hank. 1. 1 B
Adjectives: eligible, current b. The hank can open a business 2. (B)
account for them.
Exercise 2 p42) 3. (A)
c. lhe hank offers an interest rate 4. (A)
a. halaro:e
of 4.3% on its SmartSave
b. deposit 5. (A)
account.
c. current
d. A debit card takes money out of Exercise 3 (p53
d. issue
someones account a. The head office of the Glen
e. overdraft
immediately. Royal Bank is in Edinburgh.
f. hill
e. To default on a loan means that b. lhe Chatsworth hranch opened
g. fee
you do not pay the money back. lo 1988.
h. withdraw
f. If a stranger has your address c. They cornplained hecause some
1. transfer
and credit card details they can UK hanks were charging their
j. eligible
use your money to buy things or customers more than £100 for
k. charges
take nioney out of your going over their agreed
1. statement
a ccou nt. overdraft limit.
Exercise 3 (p4 3) d. [lia Moran took legal action
Exercise 2 (p48)
1. () hefore the Office of Fair Irading
a. False
2. b made its report because she
b. False
3. f was too angry to wait for them
c. Irue to help her.
4. a
d. False
5. c e. Elia Morans agreed overdraft
e. False limit was £500.
6. e
7. g LOANS f. [lia Moran's overdraft
accidentaliy reached £560
Exercise 4 (p43) Exercise 1 (p48) hecause her pay arrived at the
a. DEBIT a. Alison Goldsmith hank three days later than usual.
b. INCOME b. lhe Royal Chatsworth Bank g. Chatsworth solicitor Barry
c. OUTGOINGS c. Her house Henshall acted for Elia Moran
d. LEND d. 22 Bluebell Crescent, Chatsworth in court.
e. BORROW e. She is single h. [lia Moran won her case very
f. OWE f. £5000 easily because the bank did not
g. DEBT g. No file a defence.
h. RED h. By instalments i. lhe bank had to pay £565 to
i. 3LACK [lia Moran to pay hack the
Exerclse 2 (p49) unfair charges and to cover
Exercise 5 (p44) a. Yesterday legal costs.
a. reci b. When she cornpleted the j. Consumer law says that hanks
h. debits application forrn must not use penalty charges to
c. horrow c. Alison's personal details make a profit.
d. lend d. lhe hank approved it
e. debts e. By letter
f. owe f. lhe loan agrccmcnt UNIT 2B
g. income g. 36 months
h. credits h. No
THE LANGUAGE OF
i. hlack BAN KI NG
oiitgoings Exercise 3 (p49)
j.
a. from A BANK ACCOUNT
Exercise 6 (p4 5) b. for
Exercise 1 (p56)
a. within C. to
h. at a. Inlernet banking for quick and
d. in
c. for easy transactions
d. at Exerclse 4 (p50) b. Convenient telephonc hanking
e. from a. debt c. Secure PIN number
f. vith b. arrears d. Free legal information helpline
c. arrears e. lnterest-free overdraft facility
Exerclse 7 (p4 6) d. accruc f. Competitive loan rates
a. a e. deht
h. 4 f. accruing
c. 6
d. 8
e. *
f. 2
GIuiI L' Lnglish 417

Exercise 2 (p57) E.xercise 2 (p61) 3. take
across a. comply 4. instalments
o, 2. default b. clisclose 5. interest
= c, inform 6. hranch
7. interest rate
8. cheque d. suspend 7. currency
9. withdrawal e. authorise 8. rato
10. income f. attribute 9. balance
11. balance g. cancel 10. transfers
13. horrowing h. deems
E.xercise 2 (p68)
14. marital status 1. render
j. process 1. CC)
down 2. (A)
1. credit card Exercise 3 (p62) 3. (E)
3. approved a. 2.2 4. (B)
4. accruing b. 2.4 5. (D)
5. hranch c. 2.5
6. statement Exercise 3 (p69)
7. instalments THE REGISTER OF LETTER 1. (C)
12. lender WRITING 2. (A)
3. (D)
AN EMAIL FROM THE BANK Exercfse 1 (p63) 4. (A)
a. inform 5. (D)
Exercise 1 p58)
h. fallen into arrears 6. (B)
a. ) . OO out 7. (D)
b. (8) d. instalments 8. (A)
c. (9)
e. collect 9. (C)
d. (7)
f. accruing 10. (B)
e. (1)
g. charged
f. (10) Exercise 4 (p70)
h. standard
g. (2) 1. True
1. response
h. 2. True
j. in dcfault
1. (4) 3. True
j. (6) USING YOUR KNOWLEDGE 4. True
Coilocation review (p65) S. False
LISTENING
a. open 6. False
Exercise 1 (p59) h. rate 7. True
c. made 8. True
Section 1
d. withdraw 9. False
Purpose ofthe loan: humo
e. check 10. False
improvements
Loan amount: £6000 í. range
g cover
Repayment period: 60 rnonths/ UNIT 3A
tive years. h. consolidatirig
i. process THE LANGUAGE OF
Section 2
Titie: Ms
j. took out CONTRACT LAW
Forename: Alison Vocabulary review (p65)
A CONTRACT CASE
Surname: Finch a. branches
Middle Initial(s): nono h. overdraft Exercise 1 (p73)
Date of Birth: 06.01.1979 c. password a. Client details
Email address: d. suspended h. General inforrnation
Alison.Finch79@hotmail.com e. accruing c. Facts aí the case
Number of dependant children: une f.instalments d. What 1 need to do
Marital status: divorced g. default
h. charges Exercise 2 (p74)
What sort of application: single
Any other name: No i. red a. False
j. stalerrierit b. True
Section False
Preposition review (p66) c.
House name/number: 39 False
a. with d.
Postcode: CH5 9QJ
h. frorn e. True
Residential status: owner
Time at current address: twa years c. for In some legal systems Charlotte
and one month d. aí may have made a contract with
Home telephone number: (area e. aI. Chatsworth CitiTravel. According to
cade) 0771 (number) 6520309 f. by English law she has not. We will look
Mobile telephone number: g. aí at thc reasons in this unit.
08991670325 h. over
i. withiri
Exercise 3 \f
THE LANGUAGE OF CONTRACT j. thraugh a. (5)

b. (1)
Exercise 1 (p61) TOLES HIGHER c. (2)
a. Password EXAM PRACTICE d. (6)
b. Online Service e. (4)
C. Customer Exercise 1 (p6 7) f. (3)
cl. User 1. credit
e. Bank 2. red
418
Exercise 4 (p75) (dl REVOKED GOING TO COURT
a. contract The offeror is: Mia Thomas
lhe offeree is: Andrea Stewart Exercise 1 (p8 7)
b. obliged
c. preccdont a. Falso m
WIIAT IS CONSIDERATION? h. Truo
d. acceptance
e. offer c. False
E.xercise 1 (p81)
f. offeror d. False
a. inten liori e. True
g. case b. provide
c.precedent(s) E.xercise 2 (p8 7)
MORE ABOUT PRECEDENT
d. forbearance a. 4
Exercise 1 (p75) e. reciprocal b. 5
a. Falso f. henefit c. 1
h. True g. detriment d. 6
c. Falso e. 2
Exercise 2 (p82)
d. Falso f. 3
Soe page 438 at Lhe erid of the
e. Troo
Answer Key. Ejrercise 3 (p88)
Exercise 2 (p76) a. deíechve
a. cornrnon
CONTRACT AND STATUTE b. direct
h. proccdent Exercise 1 (p82) C. sue
o. rabo decidendi a. Parliament d. defendant
d. hinding h. MPS e. consequential
e. instance c. A statute/an Act of Parilamont f. claimant
Exercise 3 (p77) d. Elected TOLES FOUNDATION

1. g e. Legislation
f.
EXAM PRACTICE
A general election
2. d
3. f Exercise 1 (p90)
Exercise 2 (p83)
4. e 1. (D)
a. True
5. a 2. (C)
b. False
6. h 3.(B)
c. True
7. b d. False 4.(D)
8. i e. False 5. (D)
9 C
ExercIse2p90)
Exercvse 3 (p84)
THE ELEMENTS OF A 1. (A)
Verbs: covers (to cover),
CONTRACT 2. (B)
places (to place)
3. (B)
Nouns: terms, transactions
Exercise 1 (p78) 4. (A)
restrictions, Ilability
lhe answer key does not provide an 5. (B)
answer to this question. This is Exercise 4 (p 84)
Exercise 3 (p91)
hecause the question asks for your a. transaction
opinion. 1. (A)
b. cover
c. restriction 2. (D)
Exercise 2 (p78) 3. (E)
d. liability
lhe eloments of a contract ifl 4. (E)
e. terms
English Iaw are: intention, offer, 5. (H)
í. piace
acceptance and consideration 6. (B)
Exercise 5 (p84) 7. (1)
Exercise 3 (p79)
a. terras 2 8. (G)
a. ofíer 9. (J)
h. term 2
h. consideration 10. (C)
. trn 1
c. intention
d. terms 1
d. acceptance
READING CONTRACT LAW UNIT 3B
Exercise 4 (p
lhe answer key does not provido an Exercise 1 (p85) THE LANGUAGE OF
answer to this question. This is a. False CONTRACT LW
because the question asks for your h. Troe
OpifliOn. WHERE DOES CONTRACT LAW
c. True
d. True COME FROM?
THE END OF AN OFFER e. False Exercise 1 (p93)
Exercise 1 (p80) Exercise 2 (p 86) a. MP
(a) LAPS[D b. drafted
a. capacity
The offeror is: DDS Furniture Ltd seal C. administrative
The offeree is: David Jackson h, sum
C. d. approves
(b) COUNTEROFFER e. arriendments
d. discharged
The offeror is: Julie Smith f. rejects
e. enforceable
The offeree is: Alex Harrison f. injured party g. elected
(c) REJECTED g. voluntarily h. formaliti
The offeror is: Jamie Hammond h. contrary to 1. ifltO force
The offeree is: Ben Wardie . j. legislation
j. comply with
LLi-I LrlOii 419

Exercise 2 (p94) Exercise 2 pJ.Ol j. ngatnst
a. common a. sued
Exercise 2 (p107)
b. judge h. extent
c. prccedent c. term a. to
(1. b. f
d. judgment hold
e . with
e. guidance spouses
f. hinding d. against
Exercise 3 p101) e. as
g. instance
h. distinguish a. True f. by
b. False g. for
Exercise 3 p95 c. True h. from
a. Írom d. True
EKercise 3 (p108)
b. of
c. as OFFER AND ACCEPTANCE a. are aware
for b. notice
d. Exercise 1 (p102)
e. through c. replacement
a. counter-offer d. admitted
f. Ofl
b. lapse of time e. inconvenience
g. to
e. revocation f. grounds
h. into
d. death of the offeror/offeree g. breach
READING A STATUTE e. rejection h. issue proceedings
Exercise 2 (p103) 1. compensation
Exercise 1 (p9 7) as soon as possible
j.
a. 2 a. 4
b. 3 h. 1 STARTING A CLAIM FOR
c. 1 e. 3 BREACH OF CONTRACT
d. 5 4. 5
e. e. 2 Exercise 1 (p110)
a. contracted
Exercise 2 (p98) CONSIDERATION . ieective
a. purports to exclude Exercise 1 p104 O. cover
b. arising in the course ot d. dispute
•
c. occupation of any premises
4. detrinient Exercise 2 (p111)
d. void in any case
c. suifer See page 439 at the end ofthe
e. havenoeffect
d. reason
f. rncorporate the term AnswerKey.
e. reciprocai
Exerclse 3 (p98) f. contrary USING YOUR KNOWLEDGE
a. under g. unqualified Coliocation review (p112)
4. above h. consent
a. suggest/make
c. to 1. terms
h. stages
d. of j. donations
c. hinding
e. of Exerclse2(p105) d. failed
a. e. common
THE ELEMENTS OF A consideration
4. í rovtded f. provide
CONTRACT g. handed
C. sum
h. heard
Exerclse 1 (p99) d. íOViSIOfl
i. awarded
1. Consideration
LISTENING j. appeat
2. Offer
3. Intention to create a legal Exercise 1 p106) Vocabulary review (p112)
relationship a. lopse
a. no
4. Acceptance b. counter
b. Texas
c. oral
e. on a handshake
READING A CONTRACT CASE d. statute
d. Texaco
e. offeror
Exercise 1 (p100) e. S10.6 hillion
f. overruled
a. This case was heard in the f. written contracts
g. reciprocal
Court of Appeal. g. a seal of red wax
h. detriment
b. Mr Balfour was a civil servant at h. a contract for the saie of land
i. bilateral
the time of the case. i. bilateral
j. deed
c. The claimant did not return to J. unilateral
Ceylon with her husband
Preposition review (p113)
CONTRACT LAW IN PRACTICE a. e
hecause her doctor advised her
b. by
to stay 'n England. Exercise 1 (p107)
C. urider
d. Thejudge in the court of first a. in d. until
iristance decided tliat bie b. over
e. through
parties had a contract. c. into f. on
e. Thejudge in this case was Lord d. for
g. on/upon
Justice Atkin. e. to h. between
f. at i. by
g. ot j. from
h. from
i. through
420 ........,
TOLES HIGHER Exercise 3 (p121) Exercise 3 (p127)
EXAM PRACTICE a. for a. redundant ID
h. in b. Rcdundancy
Exercise 1 (p114) o. at o. payrnent ID
1. (B) cl. to d. training

2. (C) e. at
3. (A) Exercise 4 (p127)
f. from
4. (C) a. dismissed
5. (A) Exercise 4 (p122) h. nisconduct
6. (D) a. apply c. procedure
7. (B) h. enclosed 4. sacked
8. (D) c. cashier
Exercise 5 (p128)
9. (C) d. skills
e. enthusiastic a. leaving
10. (A)
f. free b. fixed
Exercise 2 (p115) g. opportunity c. period
1. binding h. position d. rriontti
2. writing
Exercise 6 (p128)
3. interitiori AN EMPLOYMENT CONTRACT
a. fruir
4. terrns
Exercise 1 (p122) h. of
5. offeree
a. Rernuneration c. on
6. counter
h. Confidentiality d. for
7. precedents
c. Term of the contract e. in
8. consideration
d. Working hours f. of
9. exception
e. Disciplinary procedure g. for
10. deeci
f. Perisiori h. on
Exercise 3 (p116) g. Job titie i. of
1. False h. Holidays j. on/upon
2. True i. Termination
3. True j. Grievance procedure ACTING FOR AN EMPLOYEE
4. Faise k. Non-competition Exercise 1 (p128)
5. True 1. Sick pay
a. (3)
6. True b. (6)
E,ercise2(p124)
7. False C. (4)
a. terrn
8. True d. (2)
b. provisions
9. Faise e. (8)
C. titie
10. True f. (7)
d. hours
e. salary g. ()
h. (1)
UNIT 4A f. hoiictay
g. SICk pay
THE LANGUAGE OF h.
Exerclse 2 (p130)
terminate
EMPLOYMENT LAW a. discrirnination
Exercise 3 (p124) b. constructive
BEING AN EMPLOYER a. Non-competition c. tribunal
h. Rernuneration d. appraisal
Exercise 1 (p119) unfair
c. Grievance procedure e.
a. Peter Connolly owns shoe shops.
d. Job titio
h. Peter Connolly cmploys 12 staff. ACTING FOR AN EMPLOYER
e. Sick pay
o. Two staffwork in thc officc.
f. Term Exercise 1 (p130)
d. The payroll shows Peter
g. Pension a. (2)
Connofly who works for the
h. Holidays b. (6)
husincss and what
ConfidentiaIit' c. (1)
remuneration each person
Discip hnary procedure d. (8)
receives from him each rnonth. •
k. Working hours e. (7)

e. Remuneration means payment.
Termination t. (3)
f. Peter Connollys staff are paid
monthly. g. (4)
HOW CAN AN EMPLOYMENT
g. Peter Connollys fuf-tirne staff h. (9)
CONTRACT END? 1.
work for 35 hours a week.
Exercise 1 (p127) J (10)
Exercise 2 (p120)
a. resign Exercise 2 (p131)
a. wef rnotivated
b. resignation a. legislation
ti. maternity cave
o. noce
ti b. regulations
c. C.V.
d. handing o. seminars
d. team
e. wide range Exercise 2 (p127) d. dLity of care
f. temporary e. contentious
a. retire
g. applicant Í. aliegations
b. retirernent
h. covering letter g. docked
o. pension
1, closing date h. on-the-spot
cl. pian
track record i. trade union
j.
j. strike
Globui Lcgoi Eghsh 421

AN EMPLOYMENT CASE UNIT 4B c. An employer is more likely to
use PauI's services because an
Exercise 1 (p132) THE LANGUAGE OF ernployer is more likely to be able
= a. He has an estate agercy. EMPLOYMENT LAW to afford legal representation.
h. Jue Murphy was a receptioíiist. d. An employment lawyer needs
c. Yes, Julie Murphy did have a FINDING A JOB
some of the sarne skills as a
good relationship with the other Exerclse 1 (p137) family laier because emotions
people in her office. are involved and clients feel
a. legislation
d. Julie Murphy had two days away very strongly about the issues
b. grievance
from work. concerned,
c. absence
e. Mr Penhaligon advertised the e. Paul describes the rights of
d. remuneration
job of assistant manager in the workers and obligations of
e. training
local newspaper. employers that arise from Acts
f. temporary
f. There were 16 candidates for of Parliament as statutory rights
g. track record
the job of assistant manager. and obligations.
h. recruitment
g. Mr Penhaligon refused to f. Paul has heen working for
interviewiulie Murphy for the job. Exercise 2 p137) Freeman Smith for 12 years.
h. Mr Penhaligon would prefer to a. generate g. More employment lawyers have
employ an older woman or a b. range been needed in recent years
man as assistant manager. c. applicant because employees are more
i. Julie Murphy is very angry about d. essential aware of their rights.
Mr Penhaligon's decision. h. Paul says that employers feel
j. The grounds for the claim are Exercise 3 (r139)
unhappy about current
discrimination. a. True employment law.
h. Falso
TOLES FOUNDATION c. True LISTENING
EXAM PRACTICE d. False
EKercise 1 (p143)
e. True
Exercise 1 (p134) a. force
1. Your skills are the things that Exercise 4 (p39) b. promotion
you can do good. a. Íroni c. staff
2. Your employer did not make b. on d. recruitment
the correct procedure when he c. of e. graduate
dismissed you. d. on f. applicants
3. Could you please confirm me e. as g. currently
that you agree to pay my client h. two-day
for his work? WORKING IN i. related
4. Marco explained me at our EMPLOYMENT LAW j. financially
meeting yesterday that his
E.xercise 1 (p140) SOME CLAUSES FROM AN
company dismissed him
because he is a foreigner. a. tribunal EMPLOYMENT CONTRACT
5. 1 would like to discuss about h. confidential
c. representation Elxercise 1 (p145)
my salary for next year.
d. employcrs a. under
Exercise 2 (p134) e. statutory b. of
1. notice f. governed c. into
2. grounds g. judgments d. on
3. claim h. complying e. In
4. factors i. safety
Exerclse 2 (p145)
5. procedure j. paternity
6. writing k. data a. remuneration
7. trade 1. legislation b. reimbursed
8. appeal c. incurred
Exercise 2 p141) d. accordance
9. spot
10. sue a. advising on family-related e. force
issues such as maternity and
&ercise 3 (p135) Exerclse 3 (p146)
paternity rights
1 bad or unacceptable b. acting on behalf of clients at a. provisions
behaviour employment tribunaIs b. neglect
J telI, reveal C. data protection c. otherthan
H end d. advising on pension rights d. adversely
B the duties and conditions e. drafting contracts of employment e. misconduct
contained in a contract f. health and safety at work issues f. imposed
D to have the right to somethinn aclvising on alI aspects of g. without prejudice to
A a person or company who cliscrimination at work li. in respect Of
si gns a contract i. convicted
Exercise 3 (p141) j. subject
E a period of time a person is
away from the place they are a. It is ciifficult to describe a typical
Exerclse 4 (p146)
expected to he ernployment case because the
work is very varied. a. Falso
G money that a person receives b. True
after he or she stops working b. Paul chose to practise in the
area of employment law c. True
E to give because you choose d. False
give and not hecause you must because the work is varied and
interesting. e. True
O payment
422
AN EMPLOYMENT TRIBUNAL Exercise 2 (p154) g. to
a. awarded h. agairist
Exercise 1 (p147)
h. manager i. Over
a. arises c. suspondcd 0ff
J.
E). sort out
d. admitted
c. get e. distressed
TOLES HIGHER
d. accept f. resigned EXAM PRACTICE
e. hold g. hearing
f. issue Exercise 1 (p15 7)
h. alleged
1 (C
Exercise 2 (p14 7 i. dismissal
2. (A)
a. conciliation j. earnings
3. (D)
h. response Exercise 3 (p154) 4. (B)
c. defauitjudgment a. Maggie Redrnan was a manager 5. (E)
d. case management at Casa. Exercise 2 (p15 7)
Exercise 3 (p148) h. Maggie Redmans yearly salary
1. True
a. [alse at Casa was £30000.
2. False
b. True c. Michael and Sarah Roeder were
3. True
c. False the owners of Casa.
4. False
d. True d. Maggie Redman had been
5. Fase
o. True working at Casa for two rnonths.
6. True
e. Michael Roeder waS foi
7. False
Exerclse 4 (p149) sympathetic when Maggie
8. False
a. do Redman toid him that she was g True
h. with pregnant.
10. True
c. Can f. Maggie Redman said that she
d. How was too distressed to be able Exercise 3 (p158)
o. When to work efficiently after her 1. reíer tu
conversation with Michael Roeder. 2. consulted
Exerclse 5 (p149) g. Mr and Mrs Roeder punished 3. in this matter
a. An ernployment tribunal hears Maggie for alleged offences by 4. contrary
cases and makes decisions Ofl docking her salary. 5. grievance procedure
matters connected with h. No, Maggie Redman was not 6. premises
employment. firod from herjob at Casa. 7. gross misconduct
b. You can get a fuli list of the i. Maggio Redmans grounds for 8. dispute
categones of complaints that bringing a case against her 9. unfair dismissal
employment tribunais deal with employors woro constructive 10. fourteen days of the date of
from the Chatsworth Tribunal and unfair dismissai and sexual this letter
Office ar from the tribunal office discrimination.
website. J. lhe tribunal awarded Maggie
c. lhe staff at an employment Redman damages of £60.000. UNIT 5A
tribunal office cannot give
legal advice. USING YOUR KNOWLEDGE
THE LANGUAGE OF THE
d. The tribunal office gives your Collocation review (p155)
LAWOF TORT
employer 28 days lo respond to a. highiy WHAT IS THE LAW OF TORT?
your initial ietter of complaint b. incur
before you can bring a claim. c. previous Exercise 1 (p161)
e. lhe three-month period begins d. applied a. TrLie
with the date that your e. keep b. False
employrnent ended ar when the f. adversely c. False
event that you are complaining g. material d. False
about took place. h. convicted e. True
Exercise 6 (p150) 1. contributed
j. imposes Exercise 2 (p162)
a. ern ployment matters a. compensate
b. uníair dismissal Vocabulary review (p155)
h, laje
c. seek help a. applicant
c. intention
d. bring a claim h. leavo
ci. negligence
e. complete a claim form c. termination
e. damage
d. dismissai
AN EMPLOYMENT CLAIM e. discriminate Exercise 3 (p162)
f. SiCk a. A tort is conduct that causes
Exercise 1 (p151)
g. tribunais harrn to another person.
a. David Cainley h. equal b. The heads oftoff are the
b. Dan Beale i. contenqous ciifferent categories of tort that
c. Simon Cole J. satoty exist in English iaw.
d. Arthur Bentley
Preposition review (p155) c. To hring an action ia tort means
e. Anna Kingston
a. with to suo someone on the grounds
f. Alex Harmon
b. on that 1 havo suffored harm.
g. Brian Hediey
by d. A remedy is something that
h. Maggio Redman .
d. with cornpensates me for my ioss ar

i. JackWaish
e. into that stops the harm from
i. Deborah Clark
f. Under happening again.
GioSal Legal Engiish 423

e. The usual remedy for a tort is MORE ABOUT NEGLIGENCE Exercise 3 (p1 73)
da mages. 1. False
f. Lawyers give the narne Exercise 1 (p167)
'a
2. Irue
= 'tortfeasor' to the person vho a. (4) 3. False
com mitS a tort. h. (5) 4. True
C. (1) 5. True
d. (6)
e. (3)
E.xerclse 1 (p163)
f. (2) UNIT 5B
a. with
h. against A FAMOUS CASE IN THE LANGUAGE OF THE
c. into ENGLISH LAW LAW OF TORT
d. as
e. int.o Exercise 1 (p168) AN INTRODUCTION TO THE
a. lhe McLibel case lasted for LAW OF TORT
E.xerclse 2 (p163
nine years and six rnonths,
a. To trespass means to interfere Exerclse 1 (p1 75)
b. The claimant in this case was
with something or someone. McDonalds. a. remedy
h. The two types of trespass are c. lhe two defendants in this h. wronged
trespass to land and trespass to case were Helen Steel and c. redress
the person. David Morris. d. care
c. No, the law of tort does not d. Helen and David were worried e. hreached
always stay the sarne. about the way that certain large f. proof
d. Lawyers usually divide the corporations were hehaving lo g. damages
heads of tort into torts that relation to the environment. h. incurred
cause harm to people and torts e. Helen and David told the public 1. distress
that cause harm to land. about their worries by giving out j. deterrent
Exercise 3 (p163) leaflets. Exercise 2 (p1 76)
f. Helen and David claimed that
a. negligence a. wronged
McDonald's was partly to hlame
b. dutyofcare b. care
for the destruction of the
c. false imprisonrnent c. breached
rainforests.
d. assault d. damages
g. McDonald's did not need proof
e. hattery e. deterrent
of damage because libel is
f. trespass to the person f. proof
actionable per se.
g. defamation g. redress
h. The court of first instance held
h. siander h. incurred
that Helen and David were
i. libel i. distress
guilty of libel.
j. remedy
E.xerclse 4 (p165) i. The European Court decided
a. permission that Helen and Davids defence WHAT IS TORTIOUS LIABILITY?
h. walking was not so well prepared as
McDonald's' claim because Exercise 1 (p177)
c. objects
d. enjoy Helen and David could not pay a. Irue
e. Claimants for an expensive legal team. b. Irue
f. factory j. The European Court of Human c. False
g. committed Rights also ruled that Helen and d. False
h. grounds Davids right to free expression e. True
was violated.
Exerclse 2 (p1 78)
THE DUTY OF CARE
TOLES FOUNDATION a. dutyofcare
Exercise 1 (p165) h. tortious liability
EXAM PRACTICE
a. (5) c. trespass to land
h. (6) Exercise 1 (p1 71) d, omission
c. (3) 1. )*) e. vicarious liability
d. (8) 2. f f. negligence
e. (1) 3. h g. strict liability
f. (2) 4. a h. tortfeasor
g. (7) 5. d 1, remote
h. 4, 6. b j. libel
7. g
Exercise 2 (p166) SOME CATEGORIES OF TORT
8. e
a. TrLJC 9. e Exercise 1 (p180)
b. False
c. False Exercise 2 (p1 72) a. 61
d. True 1. heads ti. (4)
c. Falsc c. (2)
3. nuisance d. (3)
Exercise 3 (p16 7) e. (5)
4. conduct
a. upon/on 5. failure f. (8)
h. for 6. care g. (1)
c. under 7. foreseeable h. (7)
d. in 8. cornpensate
e. at 9. rernedy
10. tortfeasor
424
LISTENING court because there was no legal 5. True
precedent for such an action. 6. False
Exercise 1 (p181)
j. This case establrshed that there 7. False
a. the law of obligations is a duty aí care belween 8. False
b. to remedy a wrong manufacturers and consumers. 9. True
c. monetary compensatiorvdarnages 10, False
d. injunction USING YOUR KNOWLEDGE
e. the tort of interfering with Coliocatiori review (p186)
another persons enjoyment of a. awarded UNIT 6A
their land b. Ioss UNDERSTANDING
f. tortious Iiahility c. acts
g. the duty of care
CONTRACTS (1)
d. imposes
h. not to harm a persons e. owed THE STYLE OF WRI1TEN
reputation f. assumes CONTRACTS
i. detective goods/a detective g. establish
product h. suffered Exercise 1 (p193)
j. the dustbin or the garbage i. foreseeable a. lhe English of contracts is more
can of the Iaw of obligations j. chairi difficult than general English,
Vocabulary review (p186) h. A typical sentence in a contract
THE TORT OF NEGLIGENCE
a. drstress written in English coe he 100
Exercise 1 (p182) b. tortious words or more.
a. agree c. vicarious c. No. Lo'ers sometimes use a
h. ask d. strict different word order when they
c. owe e. tortfeasor draft contracts.
d. contribute f. nuisance d. Lawyers use long lists of
e. argue g. defarriation synonyms when they draft
f. expect h. trespass contracts because they think
g. do i. rernedy/redress about the fact that a judge will
h. establrsh j. rernote interpret the contract if there is
a dispute.
Exercise 2 (p183) Preposition review (p18 7)
e. People give the nome legalese'
a. Troe a. for
to the style of writing that
b. False b. to
lnv'ers use.
e. True c. on/upon
f. Modern lawyers are encouraged
d. True d. to
to write in a style called 'pIam
e. False e. troei
English.
f. by
Exercise 3 (p183) g. on/upon Exercise 2 (p194)
a. upon h. of a. 5
b. under i, in h. 4
c. of j. for c. 7
d. by d. 6
e. At
TOLES HIGHER
e. 2
EXAM PRACTICE f. 1
THE MOST FAMOUS TORT CASE
Exercise 1 (p188) g. 3
Exercise 1 (p184) h. 8
1. (C)
a. Mrs Donoghue was frorn 2. (D) Exercise 3 (p195)
Glasgow. 3. (A) a. 3
b. lhe address aí (he café was 1 4. (D) b. 1
Wellmeadow Street, Paisley. 5. (B) e. 2
c. No one was able to see the 6. (B)
contents oí the bottle hecause 7. (D) UNDERSTANDING FORMAL
the bottle was opaque. 8. (C) EXPRESSIONS
d. Mrs Donoghues friend clairned 9. (0)
(o have found the partly 10. (C) Exercise 1 (p195)
decornposed remains aí a snail a. soon
in the bottle of ginger beer. Exercise 2 (p189) h. now
e. Mrs Donoghue was treated for 1. (C) c. if
gastro-enteritis soon after her 2. (B) d. while
visit to the café. 3. (D) e. until
f. Mrs Donoghue was treated at 4. (D) f. hy
the Glasgow Royal Infirmary. 5. (A) g. hecause
g. Mrs Donoghue claimed that the 6. (C) h. at least
incident had also caused 7. (B)
8. (A) Exercise 2 (p196)
nervous shock.
h. Mrs Donoghue's friend could 9. (C) a. While
have sued Mr Minchelia if he ar 10. (A) b. If
she had drunk the ginger beer e. untrl
Exercise 3 (p190) d. Because
because there was a contract
1. True e. soon
hetween them,
2. False f. now
i. ltis surprisingthat Mr Leechrnan
3. True g. by
decided to take this case to
4. False h. at least
GlojLer Egi sh 425

Exercise 3 (p197) e. hereunder Exercise 2 (p208)
- a. inasniuch as a. Pie defined terms/definitions
Exercise 3 p203
b. notwithstanding b. the parties
a. thereby
c. notwithstanding c. the delivery of goods/seniices
b. thereto
d. inasmuch as d. the recitais
c. therein
e. the operative provisions
Exercise 4 (p198) d. thereinafter
a. beíore (4) e. thereon Exercise 3 (p209)
b. depending Ofl (1) a. parties
Exerclse 4 (p204)
c. invoived in, doing 2) b. scratch
a. invoice
d. including (5) c. recitais
b. dehvery date
e. narned, calied, mentioned d. bank
c. deiivery note
e. delivery
Exercise 5 (p198) d. defective goods
a. inclusive of TOLES FOUNDATION
b. referred to
UNDERSTANDING SOME
EXAM PRACTICE
c. engagedin COMMON WORDS
d. prior to Exercise 1 (p211)
Exercise 1 (204)
e. subjectto 1. (A)
a. Prernises
2. (B)
UNDERSTANDING b. Copyright
3. (B)
TECHNICAL WORDS c. import duty
4 (A)
d. Carriage
5. (A)
Exercise 1 (p199) e. Staif
a. 6 f. trademark Exercise 2 (p211)
h. 3 g. paterit 1. iG
c. 4 h. Iri transit 2. iE
d. 2 i. hirer 3. (C)
e. 1 j. invention 4, (A)
í. 5 k. On hoard 5. (H)
i. owner 6. (J)
Exercise2pl99
Exerclse 2 (p205) 7. (E)
a. oLitiet 8. (B)
b. invoice A contract for the hire of a hotel
9. (D)
e. defective for a company's conference:
10.
d. manufacture prernises, staff, hirer, owner.
e. sum A contract for the transport of Exercise 3 (p212)
i. retailer goocis by ship: iniport duty, B contract
carriage, in transit, on board. C amount of money
Exercise 3 (p200) A contract concerning a F receiving
a. fERM company's inteiiectual property D written, specified
b. GIVE NOTICE rights: copyright, tradernark, patent, E the currency of the United
c. EXPIRATION invention. Kingdom; pounds.
d. PROCUREMENT J agreed date when something
e. AGGREGATE Exerclse 3 (p206)
must be done
f. UNDERTAKE a. owner
G grow, accumuiate
g. INCUR b. hirer
A provided
c. prornises
Exercise 4 ip200 H iate
staff
i if
a. expiration
h. aggregate Exerclse 4 (p206)
c. undertake a. on hozird
UNIT 6B
d. procurement h. carriage
e. give notice c. import duty UNDERSTANDING
f. term (1. iri trunsit CONTRACTS (1)
g. incur
Exercíse 5 (p206) THE DIFFERENT PARTS OF A
UNDERSTANDING a. invontion WRITEN CONTRACT
ARCHAIC TERMS h. copyright
c. patent Exercise 1 (p215)
Exercise 1 (p201) d. trademark a. the operative provisions
a. archaic b. the recitais
b. iegai THE STRUCTURE OF A c. the defined terms
e. deiete CONTRACT d. a scheduie
d. preposittcn e. the partes
Exercise 1 (p208)
e. clause f. the deiivery of goods/services
f. mentioned ,.. -
g. hereinafter
h. 4 PARTIES AND RECITALS
h. thereon c.
7 Exercise 1 (p216)
d.
Exercise 2 (p202) e. 3 a. referred
a. hereinafter f 5 b. and
h. heretofore g. 6 c. Buyer
c. hereby d. engaged
d. herein e. retaiier
f. subject
426
Exercise 2 (p217) Exercise 6 (p222) Exercise 7 (p227) »
=
a. 5 a. coritrary a. of CD
b. 6 h. seniants h. by
c. 1 c. headings c. with 'e
d. 3 d. principal
e. 4 e. field
f. 7 Exercise 8 (p228)
g. 8 THE OPERATIVE PROVISIONS a. payahle
h. 2 b. reviewed
Exercise 1 (p223)
c. increase
Exercise 3 (p21 7) a. Hirer d. Included
a. on b. Schedule e. Additional
b. in c. set out f. Overnight
c. at d. Premises
d. of e. sum Exercise 9 (p229)
e. by f. consideration a. on
f. to g. hereto b. by
h. hereby c. at
E.xercise 4 (p218) i. hereinafter d. of
a, nineteenth/19 e. after
Exercise 2 (p224)
h. July f. In
c. BPP Distribution Ltd a. The nomes of the parties have a g. within
d. 3456789 capital letter whenever they are
e. The English Educational Press Ltd used in this contract hecause Exercise 10 (p230)
f. 6789012 they are deflned terms. a. Term
g. Puhlisher b. lhe wine importing company b. Schedule
has been given the term 'the c. consideration
Ecerclse 5 (p218) Hirer' in the definitions section d. defective
a. registered of this contract. e. deposit
b. setout o. lhe hotel has been given the
c. hereinafter term London Bridge Hotel' in DELI VERY OF GOODS OR
d. chain the definitions sectiori ofthis SERVICES
e. WHEREAS contract.
Exercise 1 (p230)
f. engaged d. lhe Hirer should 100k in the
Schedule to find out how much a. (C)
DEFINED TERMS the hire of the rooms in the b. (C)
hotel will cost. e. (A)
Exercise 1 (p219)
e. The Hirer also has the right of d. (C)
a. 3 e. (C)
b. 2 access to the rooms by the
c. 4 usual routes. Exercise 2 (p231)
d. 1 f. In later clauses of this contract
a. 1 will find the list of goods that
the three rooms are referred to
are being sold under this
Exercise 2 (p220) as 'the Hired Premises'.
agreement in Schedule 1.
a. servant b. lhe name of the ship is 'the
Exercise 3 (p225)
b. employee Queen of the Liffey'.
c. professor 1. b,c.
2. ad. e. lhe SelIer is responsible for the
d. agent cost of transporting the goods
e. principal E.xercise 4 (p226) írom the factory where they are
Exercise 3 (p220) a. howsoever made to the ship.
h. execution d. lhe SelIer is liable for any taxes
a. In
b. for c. aforesaid that must be paid when the
c. by d. applied goods leave Ireland.
e. expiration e. lhe SelIer will suifer the loss if
d. to
f. deposit some of the goods are broken
e. with
f. of when they are heing removed
Exercise 5 (p226)
from a lorry to be loaded onto
Exercise 4 (p221) a. Term the ship.
b. aggregate í. lhe buyer will suifer the loss if
a. (2)
e. deíective some of the goods are broken a
h. (1)
c. (4) d. procurement few moments after they are
e. aflnurn loaded onto the ship.
d. (3)
Exercise 6 (p227) E.xercise 3 (p232)
Exercise 5 (p222)
a. Term a. SelIer
a. To he issued with sornething
b. Agreement b. liability
means to be given sornething in
the correct way or usirig the o. Techi Consulting C. notice
correct procedure. d. Customer d. receipt
b. Servants are employees. e. ScheduleA e. option
c. Hereof means of this contract. í. Office Hours f. delivery
d. Sums payahle means the g. Prernises
h. Schedule B Exercise 4 (p232)
amou nts of money owed.
e. Fields means areas. a, by
b. for
1 427
c. of UNIT 7A h. To dissolve a partnership means
d. tO to end the partnership.
ir e. from
THE LANGUAGE OF
f. BUSINESS LAW Exercise 4 (p244)
within
a. False
Exercise 5 (p233) SOLE TRADERS b. Faise
a. cover the costs C• True
Exercise 1 (p239)
b. which arises from d. True
Verbs/phrasal verbs: to set up, to
c. In the event that e. False
register. to manage.
d. be binding UPOfl f Fase
Nouns/compound nouns: sole
e. incurred by the Customer
f.
trader, proflt, option. investrnent. Exercise 5 p244)
48 hours of receipt
assets, expenses. a. drawirigs
Exercise 6 (p233) Adjectives: liable, self-employed, b. contribute
a. borne annunl. c. loss
b. liable d. notice period
Exerclse 2 (p240)
c. option e. retire
a. option
d. board f. expel
h. expenses
e. transit g. resign
c. investrnent
h. capital
USING YOUR KNOWLEDGE d. set uP
. managernent
e. sole trader
CoIocation review (í235) j. dissolved
f. self-emp ioyed
a. set out k. trade under
g, profit
b. served i. proportion
h. assets
c. entering
i. liable Exerclse 6 ip245
d. carry out/perforrn
j. register a. EQUITY
e. defective
k. manage h. SALARIED
f. set
1. annual c. SLEEPING
g. comply
h. bear Exercise 3 (p241) Exercise 7 (p245)
i. incurred a. 5) a. salaried
. Ioaded b. (4) b. sleeping/dormant/silent
Vocabulary review (p23 5) c. (3) c. equity
a. recitais d. (1)
b. retailer e. (2) A PARTNERSHIP AGREEMENT
c. servant
PARTNERSHIPS Exercise 1 (p246)
d. agent
a. What is the fulI name of each
e. consideration Exercise 1 p242 partner
f. terrn
a. ii b. What name wiil the partnership
g. aggregate
b. of trade under?
h. procure
c. between c. How much capital will each
i. transit
d. for partner contribute to the
j. essence
e. for partnership?
Preposition review (p236) d. How will the partners share the
a. on Exercise 2 p242)'
profits or the losses?
b. to a.
e. How much wiil each partners
c. tO h. 6
monthly drawings he?
d. to C. (4)
f. Who wili have authority to sign
e. for d. (2)
partnership cheques?
f. under e. (1)
g. How long will the notice period
g. on f
for resignation be?
h. betwecn h. What will the retirerneril age be?
Exercise 3 (p243)
i. Under
a. Francesca Rodd advises thern tO Exercise 2 (p24 7)
i ifl
have a panership agreement.
a. Sarnantha Suily and Kate Mace
TOLES HIGHER b. To contribute rnoney to the
b. Revitahse
EXAM PRACTICE partflership means tu invest
. £2500 each
money in the partnership.
d. 50:50
Exercise 1 (p237) c. Partners usualiy divide losses in
e. £500 a month each
1. IBI the sarne proportion as they
f. Either partner can sign cheques
2. (E) share the profits.
g. Three months
3. (D) d. Partners usually draw rnoney out
h. 55
4. (A) of the partnership bank account
S. iC for their own use each month. LIMITED LIABILITY
e. Tliu u1hi way is iesignaticri. PARTNERSHIPS
Exercise 2 (p237)
f. A notice period is the period of
1. (B) warning that a partrier has to Exercise 1 (p248)
2. (D) give to the other partners a. Lirnited tability partnershp
3. (C) before he or she ieaves the h. personai assets
4. (E) partnership. lirnited liability
c.
5. (A) g. To expei someone rneans to d. incorporated business
force that person to (cave the e. legal entity
partnership. f. rnemhcr
428
Exercise 2 (p249) PUBLIC AND PRIVATE LIMITED Exercise 3 p261)
a. for COMPANIES 1 True
h. at 2. False
Exercise 1 (p253) x
. to 3. True
d. on a. False 4. False
e. to b. True 5. True
f. to c. False
d. True
COMPANIES e. Falso UNIT 7B
f. Trie THE LANGUAGE OF
Exercise 1 p249
a. 7 Exercise 2 (p254) BUSINESS LAW
b. (4) a. Yes
C. (2) INCORPORATED AND
b. No
d. (6) c. No UNINCORPORATED
e. (10) d. Yes BUSINESSES
f. (1) e. No
g. (9) Exercise 1 (p263
h. (12i Exercise 3 p255) a. incorporated businesses: legal
1. (8) 1. cl entity, private iirnited company,
J. (5) 2. h share, clividend, member,
k. (11) 3. c limited liability partnership,
1. 3) 4. j corporation tax, public limited
5. a company, iimited iiability.
Exercise 2 (p250) 6. f b. unincorporated businesses:
a. To incorporate a company 7 e partnership, unlimited liability,
means to set up and register a 8. g partner, Joint and severai
new company in the proper way. 9, h liabihty, sole trader.
b. Ali companies in England are io.
registered with Companies Exercise 2 (p263)
House. INCORPORATING A COMPANY a. partnership
e. A new company can begin to b. public limited company
Exercise 1 (p256) c. private hmited company
trade in the company's name
when the narne appears on the a. off-the-shelf d.limited liability partnership
h. articles of association e. soie trader
officiaI register of companies.
c. certificate of incorporation
d. Another name for a legal
d. memorandum of association SOLE TRADERS
personality is a legal entity.
e. annual return
e. The people who own a company Exerclse 1 (p265)
are cafled the members or Exercise 2 (p25 7) a. Setting up
shareholders. a. COMPANY NAME h. Liabrlity
f. A dividend is a payment of a b. REGISTERED OFFICE c. Profits/iosses
companys profits to the c. STATEMENT OF COMPLIANCE d. Employing staif
shareholders. d. SHARE CAPITAL e. Tax
g. A sharehoider wont have to use e. SUBSCRIBERS f. Management
his or her own rnoney to pay the g. Capital
debts of the cornpany because Exercise 3 (p258)
the shareholders have the a. subscribers Exercise 2 (p266)
protection of iimited liability. b. registered office a. SOt UP
c. company name h. for
Exercise 3 p251)
d. share capital C. run
a. True e. statement of compliance d. with
b. True e. to
c. False TOLES FOUNDATION f. makes
d. False EXAM PRACTICE g. hear
e. True h. unhimited
f. False Exercise 1 (p260)
i. personal
1. j. trom
Exercise 4 p252
2. 1H) k. over
a. )1) 3. (C)
h. (3) 4. (F) PARTNERSHIPS
5 (1)
d. (5) Exercise 1 (p266)
6. (A)
e. (2) 7. lEI a. register
8. (D) h. legal entity
Exercise 5 p252)
9. (G) c. self employed
a. £4 d. profits
10. (B)
Ii. £1 e. joirrt and several
o. £3 E.xercise 2 (p261) f. creditor
1. W g. assets
2. Bi h. equity
3. (A) i, salaried
4. (0) j. sleeping
5. lAl k. dissolved
1. resigns
429
THE LANGUAGE OF DRAflING e. draw £500 a month each/take SHARES AND SHARE CAPITAL
monthly drawings of £500
Exercise 1 (p268) f. retirement age as being 60 Exercise 1 (p282)
= a. (2) g. expulsion from/expelling a a. £300000
b. (3) partner from b. £1
C. (1) h. dissolve C. 200.000
d. 100,000
Exercise 2 (p268) COM PAN lES e. 160,000
a. (2) f. 80p
b. (1) Exercise 1 (p274)
c. (3) a. iricorporated businesses LIMITED LIABILITY
d. (5) b. legal eritity PARTNERSHIPS
e. (4) c. disclose
d. members Exercise 1 (p283)
Exercise 3 (p269) e. limited lichility a. It hecame possible to set up a
a. schedule f. corporation tax limited liobility partnership in
h. whatsoever g. income tax the UK in April 2001.
c. Annexed h. directors b. Accountancy firms and law
d. context i. dividend firms like to use this particular
e. respective j, company secretary structure for their business.
Exercise 4 (p269) k. single-member company c. A limited liability partnership
1. share capital has to send an annual return
a. hereto
and accounts to Companies
h. hereof INCORPORATING A COMPANY House each year.
c. respective
Exercise 1 (p2 76) d. Someone knows that a business
d. annexed
is a limited Irability partnership
e. former a. saie
because the name of the
f. whatsoever h. liahility
partnership must end with LLP.
g. thereof c. entity
e. An LLP is taxed as a partnership.
d. incurred
Exercise 5 (p270) f. A limited liobility partnership
e. offthe-shelf
a. notice must have at least twa
f. incorporate
b. expulsion designated members.
g. memorandum of association
c. determine h. subscribers THE LANGUAGE OF DRAFTING
d. retirement i. registered office
e. provisions j. oeCtS Exercise 1 (p284)
f. by reason of k. articles ofassociation a. to
g. dissolution 1. compliance h. of
h. commencement c. in
1. ceases LISTENING d. with
j. resignation e. under
Exercise 1 (p277)
k. subject to f. at
1. duration a. Outback Adventures Ltd
01. rnajority
b. 15 London Road, Oxton, Exercise 2 (p284)
n. survivorS Hapshire, 0X5 41-1J a. (9)
c. No b. (5)
Exercise 6 (p271.) d. 01482 685341 c. (7)
a. True e. No d. (4)
b. False f. Alice Baker e. (1)
c. False g. 64 Green Lane, Lettford, f (6)
d. True Hapshire, 0X37 3FS g. (2)
e. False h. Ms h. (3)
f. True i. See page 442 at the end of ttre i. (8)
Arrswer Key.
Exercise 7 (p2 72) Exercise 3 (p285)
a. Proportions means ratios, PAPERWORK a. take effect
usually expressed as a h. determine
Exercíse 1 (p278)
percentage. c. suhsist
b. Determined means decided. See page 440 at the end of the
Answer Key. d. lntheeventthat
c. Entitled to means to have the e. prior
right to something. Exercise 2 (p280) f. benefit
d. To draw means to take money a name g. consent
froni an account. b. registered office h. ratify
e. Aggregate means total. c. objects i. indemnify
THE REGISTER OF LEITER o. Iiability
Exercise 4 (p285)
e. share capital
'vVRITiNG f. subscribers a. Faise
b. True
Exercise 1 (p2 72)
Exercise 3 (p281) c. True
a. contributing d. True
See page 442 at the end of the
b. share any profits e. True
Answer Key.
c. liable
d. partnershrp debts/debts of
the partnership
430
USING YOUR KNOWLEDGE 8. The issued share capital i. Yours faithfully =
Coilocation review (p286) 9. He uses his home address
10. The certificate of incorporation SUBJECT LINES
a. considcrcd
b. declarcd Exercise 1 (p301)
c. fluctuated
UNIT 8 a. Letter 3
d. unhiniited b. Letter 1
e. disclose MODERN LETFER o. Letter2
f. setUed WRITING
g. go PUTÍING A LEUER TOGETHER
h, issued/allotted THE LAYOUT OF A LETFER
Exercise 1 (p303)
1. take Exercise 1 (p293)
j. record 1. h
a. Senders address 2. f
Vocabulary review (p286) b. The date 3.
a. expel c. Recipients details 4. h
b. invest d. Subject line/the salutation 5. 1
c. certificate e. The salutation/subject une 6. d
d. nominal/par/face f. The hody of the Ietter 7. a
e. several g. The complimentary dose 8. g
f. incorporate/register h. The signature 9. 1
g. entity i. Printed signature biock 10. e
h. drawings 11. c
i. subscribers Eercise 2 (p294)
12. k
j. objects a. The letterhead
Preposition review (p28 7) b. The date THE REGISTER OF
a. in c. Reference LETÍER WRITING
b. as d. Recipient's details
e. Subject line/the salutation Exercise 1 (p304)
c. to
d. on f. The salutation/subject line a. (3)
e. of g. The body of the letter b. (2)
f. at h. The complimentary dose e. (1)
g. of m. The signature
Exercise 2 (p305)
h. to j. Printed signature block
a. (1)
1. to DATES b. (3)
i. on/upon
C. (1)
Exercise 1 (p295)
TOLES HIGHER d. (3)
a. UK e. (2)
EXAM PRACTICE b. US
c. US Exercise 3 (p306)
Exercise 1 (p288)
d. UK a. (4)
1. (C) e. US b. (8)
2. (A)
f. UK e. (2)
3. (E)
g. UK d. (1)
4. (D)
h. US e. (3)
S. (B)
i. UK f. (5)
Exercise 2 (p288) j. UK g. (7)
1. (C) k. US h. (6)
2. (A)
SALUTATIONS Exercise 4 (p307)
3. (E)
a. consider
4. (D) Exercise 1 (p29 7)
b. earlier/above
S. (B) a. MsSlater c. concerrimng/regarding
Exercise 3 (p289) h. Sir or Madam/Sirs d. ask that
c. Mattheis e. buyers
1. incorporated
d. MsGabanna f. as soon as possible
2. entity
e. Ms WaIlis and Mr Dongahue
3. members
f. Dr Barley Exercâse 5 (p30 7)
4. single
g. Sir or Madam/Sirs a. coníirrns this
5. minimum
h. Sir or Madam h. waived
6. Iimited
1. Mr and Mrs Sirnpsori c. breach
7. register/file
j. Mrs Robson d. have failed to make your
S. memorandum
k. Madam payrnen ts
9. ruIns
e. your creditors
10. comply COMPLIMENTARY CLOSE f. liable
Exercise 4 (p290) Exercise 1 (p298)
1. He was made redundant
THE CONTENT OF THE LETER
a. Yours sincerely
2. 24 months b. Yours faithfully Exercise 1 (p308)
3. A private Iimited company c. Yours sincerely a. We are writing to confirm that...
4. An off the-shelf company d. Yourssincerely Thank you for your Ietter
S. Exclusive Ad Ltd e. Yours faithfully of/dated 12 June.
6. Paul Evans and his wife. f. YOLJrS faithfully With reference to our
Judith Evans g. Yours sincerely telephone conversation...
7. No h. Yours sincerely
Cloai eai i-r:ish 431

b. We are pleased to inform you CORRECTING COMMON f. compensation
that.. MISTAKES IN LE1TER WRITING g. proof
1 am pleased to tell you that... h. a great deal
c. Unforunately/Regrettably... Exercise 1 (p315)
Exercise 10 (p319)
We regret to inform you that... a. 5
1 am afraid/sorry... b. 2) a. disturbance
d. We would be grateful if you c. (3) b. admission
could/would... d. (4) c. amendment
1 would appreciate it if you e. ii d. dismissal
could... e. response
Exerclse 2 (p315) í. abatement
Please/KindIy...
e. 1 am sorry about the delay a. Doar g. distinction
in replying. b. instructed, Mr h. Ioss
We apologise for any c. requesting, received. response
Exi 11 (p320)
inconvenience caused. d. received, enclosed
e. resolved/settled, start a. advice
Please accept our apologies.
b. response
f. 1 enclose... Exerclse 3 (p316) c. journey
Please find enclosed...
a. information d. effect
g. If you have any questions,
b. to e proof
please do not hesitate to
c. said
contact us. Exercise 12 p320)
d. explain to me
If we can help in any way, a. incorrect
e. start to build
please lot US know. b. correct
1 100k forward to hearing £xercise 4 (p316) C. mncorrect
from yOU... a. (1) d. correct
b. (5) e. correct
TYPICAL SENTENCES IN
c. (3) f. incorrect
LEGAL LETTERS d. (2) g. corroct
Exercise 1 (p310) O. i4 h. incorrect
a. 1 act on behalf of... Exercise 5 (p316) E.xercise 13 (p321)
b. 1 am mnstructed that... a. hereby a. rate, take out
c. 1 am writmng to... b. abovementioned b. waste, incur
d. If 1 do not hear from you within c. forthwith c. due, outstandmng
14 days ofthe date ofthis d. hereto d. dispute, pay
Ietter, 1 am instructed to start e. hereunder e. denies, find
legal proceedings immediately.
e. 1100k forward to hearing from E.xerclse 6 (p317) Exerclse 14 (p321)
you as soon as possible. a. act a. to act for your behalf (on)
b. hms/her/the h. responsibilmty Qf your case (for)
LETER WRITING CLINIC c. conduct, immedmately c. currently pf the rate (at)
Exercise 1 (p312) d. attached/enclosed d. placed at a client account (in)
e. requested e. audited from (hy)
a. (6
f. responsibility f (for)
b. (9) Exercise 7 (p317)
C. () a. provide Exercise 15 (p322)
d. (2) b. If a. oí
e. (1) c. Accordingto b. tu
f. (10) d. obtain c. for
g. e. perorm d. as
h. (8) f. people e. to
1. (5) g. consider
j. (7) h. ended Exerclse 16 (p322)
L agreed a. in
Exercise 2 (p314)
start b. of
a. the j.
k. connected with C. with
b. provmde/suppiy d. to
1. clear
c. trips e. on
d. for/in respect aí E.xerclse 8 (p318)
e. proof a. damage TOLES HIGHER
f. My client requests a fuil account b. advice EXAM PRACTICE
of how hms funds have been used, c. mnsurance
g. advmsed Exercise 1 (p323)
d. evidence
h. court e. evidence 1. no your behalf
i. incur f. compensation 2. denmed/refuted
j. Please confirm as soon as g. proot 3. have breached
possible that you have received h. research 4. liabmlity
this letter. 5. substandard work
Exerclse 9 (p319) 6. start proceedings
a. a lot of 7. further notice
b. some 8. be successful
C. policy 9. as soon as possibie
d. much 10. contact me
e. piece of
432
Exercise 2 p324) DIRECTORS COM PANY FINANCE -
1. date(i 14 July 20X.X A CASE STUDY

Exercise 1 (p331
2. clairn
3. dispute a. 6 Exercise 1 (p33 7)
4. grounds li. (2) Verbs: (o horrow, ta finance, to
5. suffered c. (4) lend. te repay, ta grant, to default
6. none of my clients staif were d. (8) (defaults)
7. negligent e. (9) Nouns: asset, loan, guarantee,
8. earnings f. (l) charge, mortgage, security
9. emotianal distress g. (7)
h. (5) Exercise 2 (p33 7)
10. costs
i. a. horrow
b. lend
Exercise 2 (p3 32)
UNIT 9A c. loan
a. True d. repay
THE LANGUAGE OF b. True e. asset
COM PANY LAW c. Irue f. finance
ci. False g. guarantee
WHO RLJNS A COMPANY? e. False h. Security
Exercise 1 p327) f. False i. mortgage
a. lhe employees are the people j. defaults
COMPANY MEETINGS
who work for the company. k. charge
b, lhe directors are the people Exercise 1 (p333) 1. grant
who ruo the company. a. lhe directors of the company Exercise 3 (p338)
c. An occountant doais with thc attend board meetings.
a. Aíter
financial paperwork ofthe b. lhe shareholders af the company
b. by
compony. attend campany meetings.
e. for
d. A company secretary makes sure c. lhe minutes aí a meeting are the
d. from
that the legal requirements of the written record of the rneeting.
e. on
company are complied with. d. lhe chairperson controls the
f. of
e. An auditor inspects ali the meeting.
financial records of the e. An annuai general meeting Exercise 4 (p33 9)
company. takes place once each year. a. This is an unsecured creditar.
f. Creditors are the people who f. lhe abbreviation EGM means h. This is a secured creditar.
the company owes money to. extraordinary general meeting. c. lhis is a secured creditar.
g. Dehtors are the people who g. lhis minimum number aí d. lhis is an unsecured creditar.
owe money to the campany. people is called a quorum. e. lhis is an unsecured creditar.
h. lhe two methods of voting at a
Exercise 2 (p328)
company meeting are a show aí CLOSING A COMPANY
a. sbareholder hands and a p011.
b. creditor Exercise 1 (p33 9)
c. director Exercise 2 (p334) a. lo strike off a campany means
d. secretary a. quorum tu remove a com pany from the
e. auditor b. minutes central register af campanies.
í. accountant c. annual general meeting b. lo liquidate a campany means
g. debtor d. campany meetings to formafly ciase a campany.
h. employees e. adjourn c. lhe adjective that describes a
f. proxy company which is able ta pay
AREAS OF COM PANY LAW g. show of hands ali aí its debts is saivent'.
Exercise 1 (p329) h. extraordinary general meeting d. lhe phrasai verb that has the
i. board meetings sarne meaning as ta liquidate
a. Directors service agreements
j. convene is ta wind up.
b. lnsolvency
k. p011 e. lhe liquidatar has the task of
c. Mergers
1. chairpersan winding up a campany.
d. raising finance
f. lo reahse assets means ta seli
e. AcqLiisitions Exercise 3 (p335)
those assets.
f. lncorporatirig corupanies a. Irue g. An insolvent company is a
g. Restructuring companies b. False company which does not have
h. jaintventures c. Irue eriough money ta pay its dehts.
i. sharehoiders' agreernents d. False
j. directors duties e. False Exercise 2 (p341)
Exercise 2 (p330) a. insolvency practitianer
Exercise 4 p336i
h. solverit
1. e a. motian c. members valuntary liquidation
2. b h. passed/carried d. liquidate. wind up
3. g c. ordinary resalutian e. strike off
4. d d. notice f. insolvent
S. a e. speciai resalution g. liquidatar
6. i f. unanimously h. reahse
7. e g. written resalutions 1. dissaived
8. h
9. f
- .t 433
INSOLVENT COMPANIES UNIT 98 E.xercise 2 (p353)
THE LANGUAGE OF a. You must have at least one director
E.ercIse 1 (p3 42)
in a private limited company.
a. due COMPANY LAW b. The company may he liable to
h. insolvent
PEOPLE CONNECTED pay him some compensatiori
c. Insolvency
or damages.
d. proceedings WITH A COMPANY
c. He is a non-executive director.
Exercise 2 (p343) Exercise 1 (p349) He has the sarne legal
a. administrator a. 6,i responsibilities as other directors.
b. manage b. (7) d. Yes, he is a shadow director.
c. benefit c. (2) e. Fiduciary duty means that you
ci. goingconcern d. (4) must act in good faith and in
e. (1) the interests of the company as
E.xerclse 3 (p3 43) a whole.
a. cleht g. (8) Exercise 3 'p354)
h. charge h. (3)
c. receiver a. (5
d. subject to Exercise 2 (p349) b. (1)
a. shareholders c. (3)
Exercise 4 (p3 43) d. (4)
h. directors
J. resolution c. company secretary e. (2)
b, to wind up d. employees
c. realise LISTENING
e. accountant
d. proceeds f. debtors Exercise 1 (p3 54)
Exercise 5 (p343) g. creditors a. case law
h. auditor b. because they are in a position
a. presents
b. winding-up petition of trust and confidence in
WORKING IN COMPANY LAW
c. grounds relation to the company
d. Official Receiver Exercise 1 (p350) c. 2006
a. iricorporating d. so that the Iaw is made clear for
TOLES FOUNDATION b. dispute directors
EXAM PRACTICE c. employrnent e. seven
d. insolvency f. the success of the cornpany
Exercise 1 (p345) g. the individual directors levei of
e. formations
1. (D) f. raising specialist knowledge
2. (C) g. acquisitions h. conflicts of interest
3. (B) h. resolutions i. his or her interest
4. (A) 1. statutory j. a fine
5. (B)
Exercise 2 (p350) COMPANY MEETINGS
Exercise 2 (p345)
a. Advising on methods of Exercise 1 'p356)
1. *
raising finance
2. h a. extraordiriary
b. Drawing up and advising on
3. g b. have
shareholders' agreernents
4. a e. converie
c. Giving advice on voting
5. e d. elect
procedures at rneetings and
6. h e. show
drafting resolutions
7. c f. p011
d. Drafting directors service
8. f g. resolution
agreements
9. d h. taking
e. Advising on company insolvency
i. pass
E.xerclse 3 (p346) procedures
j. proposed
1. As a director 1 must to exercise f. Dealing with mergers and
k. unanirnously
the duty of care and skill. acquisitions 1. proxy
2. In my opinion, this motion is g. Dealing with jolnt ventures
not for the best interests of h. Dealing with company formations Exerclse 2 (p357)
the company. and restructuring a cornpany a. False
3. At the meeting the b. False
DIRECTORS
shareholders passed the c. Troe
resolution unanimous. Exerclse 1 'p352) d. False
4. The bank will lend us the rnoriey a. appoint e. True
but it wants security of the ioan. h. serve f. True
5. Our non-executive director c. remove g. Faise
knows about this and she will d. classed Exercise 3 (p358)
g!ve os an adv'ce. fl neei etr,rnor4
a. nela
f, exercise
b. accounts
g. improperly
c. auditors
h. disqualification
d. directors
e. Registered
f. member
g. proxy
h. poil
434
INSOLVENCY g. shadow f. termination
h. merger g. Confidential
Exercise 1 359 i. acquisitiori h. disclose
a. (2) executive 1. term
j. (0
-c
h. (8)
Preposition review (p365) j. exPiration
C. (6) k. non-disclosure
a. ifltO
d. (4) 1. inelIectuai property
b. from
e. (5)
f. (1) SOME IMPORTANT
d. in
g (3) COMMERCIALVOCABULARY
e.
h. (7)
f. with Exercise 1 (p3 73)
Exercise 2 (p360) g.
a. (8)
a. natLire h. in
b. (3)
b. IP 1. WIth
c. (11)
c. No. J. to d. (4)
d. c/o e. (7)
TOLES HIGHER
e. Petition f. (2)
f. effects EXAM PRACTICE
g. (5)
g. deliver up Exercisel(p366) h. (1)
Exercise 3 (p361) 1. (B) 1. (6)
2. (0) j. (12)
a. False
3. (D) k. (9)
b. True
4. (A) 1. (10)
c. True
d. False S. (A) Exercise 2 (p3 74)
e. True 6. (D)
Money and payment: insolvent,
7. (B)
Exercise 4 (p362) invoice. budget, liquidator,
8. (C)
instalrnents, owe.
a. in 9. (A)
000ds: perishable, warehouse,
b. into 10. (D)
merchandise. premises, store, serial
into
.
Exercise 2 (p366) number.
d.
e. into 1. (D) Exercise 3 (p3 74)
f. 2. (B)
a. instalments
3. (E)
b. budget
WHO GETS THE ASSETS? 4. (A)
c. store
5.
Exercisel(p362) d. warehouse
a. prevent Exercise 3 (p36 7) e. perishable
h. collect 1. difficulties 1'. insolvent
c. sell 2. grounds g. owe
d. raise 3. dissolved h. invoice
e. pay 4. manage i. Iiquidator
f. CXiSt 5. concern j. premises
6. proceeds k. serial number
Exercise 2 (p363) 1. merchandise
7. settie
a. (4) 8. pass
h (2) TERMINATION CLAIJSES
9. realising
c (6) 10. ceases Exercise 1 (p3 75)
d. (7)
a. end
e.
b. terminated
f. (3) UNIT lOA C gives
g. (1) UNDERSTANDING d. writing
USING YOUR KNOWLEDGE CONTRACTS (2) e. commits
f. small
Coilocation review (p364) SOME MORE FYPICAL g. serious
a. convening/calling
CONTRACT CLAUSES h. money
h. passcd/carricd
i. protect
c. raising Exercise 1 (p372)
J Iose
d. petition a. (5) k. stops
e. take b. (1/3)
f. remove c. (4) Exercise 2 (p3 76)
g. appointed d. (7) a. (4)
h. adjourn e. (2) h. (9)
1. putJplaccc] f. (6) c. (3)
j. realising d. (10)
g. (1/3)
Vocabulary review (p364) e. (5)
a. motion E.xercise 2 (p3 72) f. (2)
b. minutes a. Creative work g. (8)
C. proceeds b. copyright h. (6)
d, quorum c. author 1. (1)
e. auditors d. freelance j. (7)
f. p011 e. commission
(_i_i,i Lr!n 435

Exercise 3 (p376) f. INDEMNIFICATION H intentional, something that a
a. Agreement g. FORCE MJEURE person chooses to do
b. written h. UNFORESEEABLE D end
c. material J property, inciuding money
Exerclse 3 (p381)
d. ceases and equipment
a. \'arrantv
INTELLECTUAL PROPERTY b. inclemnity
CLAUSES c. compensate UNIT 1OB
d. take oLit UNDERSTANDING
Ekercise 1 (p3 77) e. poiicy
a. the wishes of the parties f. arises from CONTRACTS (2)
b. transfer ownership of those g. indemnification RISK AND TITLE
rights h. force majeure
c. grant a licence i. unforeseeable Exercise 1 (p389)
d. assigns IP rights a. saIe
e. buys iP rights from someone MORE ABOUT FORCE b. protect
f. grants a licence to use his or MAJEURE CLAUSES c. property
her IP rights d. debtor
Exercise 1 (p382)
g. is aliowed to use someones e. prernises
a.
inteilectual property for a f. instalments
b. 7
specific period of time g. retains
C. ti
h. right that some third party has h. particular
d. 13.i
in the inteilectuai property
e. (5) Exercise 2 (p390)
i. break the law concerning that
f. (6) a. incorporate
IP right
g i2i b. pitfalls
j. the public domam
c. permshable
Exercise 2 p383)
Exercise 2 (p378) d. liquidator
a. excused
a. intellectual propey rights e. precaution
b. unforeseeable
b. assign f. expressly
C. supervening
c. imcence
d. rely on Exercise 3 (p391)
d. grant
e. Act of God a. lis a clause in a contract that
e. infringement
f. force rnajeure aliows the selier to retain
f. licensor
g. assignor ownership of goods untii they
Exercise 3 (p384)
h. infringe are pamd for.
a. control
i. assignee b. Thc seller also has the right to
b. notify
j. iicensee enter onto the buyers premises
c. breach
k. public dorriain to recover the goods.
d. delay
1. encurnbrarmce c. if a buyer has foi paid for
TOLES FOUNDATION goods it is often because the
RETENTION OF TITLE CLAUSES buyers business is mnsolvent.
EXAM PRACTICE
d. The goods might go 0ff.
Exercise 1 (p379)
E.xercise 1 (p386) e. No, statute does not assist a
a. TrLie
1. (A) seiler who has not inciuded a
b. False
2. (B) ROT clause in his or her
C. True
3. (B) contract for lhe saie of goods.
d. False f.
4. (A) The court wouid describe this
e. True
5. (A) information as a post-
f. Troe
contractual term.
Exercise 2 p386) g. The hriefing notes suggest that
Exercise 2 (p380)
1. (J) a sefler pois a serial number on
a. from
2. (B) his or her goods.
b. to
3. )F) h. The buyer mmght say that the
c. of
4. )H) goods have been mixed with
d. within
5. (A) another product to create a new
e. untii
6. (E) tem that cannot be returned.
WARRANTY, INDEMNITY AND 7. (h
8. (G) Exerclse 4 (p392)
FORCE MAJEURE CLAUSES
9. (D) a. True
Exercise 1 (p380) 10. (C) b. ralse
a. for c. ralse
Exercise 3 ip387)
b. ifl
E.xerclse 5 p393)
C. on E sending a document fl the
correct, formal way a. in
d. from
C rnurmey tu pay sorimeurme For b. lO
e. under
a ioss c. Lmntii
E.xerclse 2 (p381) 1 amounts of money that a ci. of
a. INDEMNITY person owes lo other people
Exercise 6 (p393)
b. ARISES FROM E serious, signiflcant
a. with
c. COMPENSATE A start
b. ai
d. TAKE OUT G violatmon
c. ifl
e. POL1CY B duratmon, lhe period of time
d. oí
for which a contract is valid
436
E.xercise 7 (p393) d. kmited risc to a claim for damages. =
CM
a. to e. expiration 4. The correct legal narne for the
b. from soiution that the party in hreach
WARRANTIES AND givcis is a remedy.
c. hy
d. in INDEMNITIES 5. A hreach must he a threat to
the purpose of the contract in
Exercise 8 (p394) Exercise 1 (p3 99)
order tu be described as a
a. Notwithstanding Ciause 1 is the warrarity. material breach.
h, provision Ciause 2 is the indernriity.
c. titie a. warrants Exercise 3 (p405)
d, price b. disciosed a. in
e. due c. indemnifies b. as
d. caused c. to
INTELLECTUAL PROPERTY AND d. for
Exercise 2 (p400)
CONFIDENTIAL INFORMATION e. of
a. ruinous financial experiences
Exercise 1 (p394) b. who owns the copyright Exercise 4 (p406)
a. fhis is the IP clause o. amerid a. assets
h. fhis is the nori-disclosure clause d. grarit a licence h. without prejudice
e. defamatory c. remedy
Exercise 2 (p3 95) f. assigriment notwithstanding
d.
a. False g. warranties e. creditors
h. True h. indemnity f. receipt of
c. Troe g. suspend
d. False Exercise 3 (p402)
h. ceases
a. True i. due
Exercise 3 (p395) b. True
j. subject to
a. as c. True
h. at d. False Exercise 5 (p407)
c. with e. Troe a. False
d. for h. Troe
e. onto Exercise 4 (p402)
o. False
f. to a. warrants
d. True
g. in b. disclosed e. True
h. of c. further
1. between d. assigned FORCE MAJEURE
j. from e. domam
Exercise 1 (p408)
Exercise 4 (p39 7) Exercise 5 (p403) a. earthquake, flood, epidemic,
a. (2) a. mndemnified drought, avalanche
b. (6) b. party b. mechanical faiiure,
C. (8) c. injury commuriications faiiure,
d. (10) d. costs eiectroriic failure
e. (5) e. allegation c. rebeliion, war, riot, civil unrest,
f. (9) acts of terrorism, sabotage,
Exercise 6 (p403)
g. (4) hi-jacking, strike, civil war,
a. under criminal acts, arson
h. (1)
b iri
1. (7)
o. of Exercise 2 (p409)
j. (3)
d. as a. for
Exercise 5 (p398) e. tu b. under
a. The supplier referred to in this c. froru
Exercise 7 (p403)
clause is Lydia Barlow. d. ()f
a. against e. tu
b. The company referred to in
b. from
this clause is Pure Adventure
c. of Exercise 3 (p409)
Travei Ltd.
d. by a. controi
c. i must iook in Schedule A tu
e. as h. iimited
find out huw rnuch the
company wili pay to the suppher c. performance
TERM AND TERMINATION d. terminate
for producing the brochure.
d. The clause gives the company Exercise 1 (p404) e. notice
fuil ownership of the copyright a. ruri USING YOUR KNOWLEDGE
material. b. eriter
e. The word is 'assigns. c. states
Coilocation review (p410)
f. No, the company is not limited a. free
d. agree
to using the copyright material iri b. irnpiied
e. negotiate
the places listed in this clause. f. giving e. material
g. The phrase is not lirnited tu. d. remedy
Exercise 2 (p405) e. retain
h. Yes, this clause does permil L.
1. The court refers to a very serious f. provided
Exercise 6 (p398) hreach as a material breach. g. clisclose
a. disciose 2. A minor breach is a iess serious h. takeout
b, third kmrid of breach. 1. term
c. whatsoever 3. A minor breach normally gives j. rely
1 ep,i r1rlis 437

Vocabulary review (p410) TOLES HIGHER
a. retention EXAM PRACTICE
b. assign
c. warrants Exercise 1 (p412)
d. audit 1. (E)
e. property 2. C
f. monies 3. (B)
g. indemnification 4. (A)
h. strike 5. (D
i. termination
Exercise 2 (p412)
j. force
1. orily,exclusively
Preposition review (p411)
2. getting back, taking
a. for possession of
b. at
3. kept in a particular place for a
c. against
period of time
d. beyond/outside
4. guarantees, promises
e. at
5. a third party interest
f. for
g. by
h. of
1. Ífl
i. as
UNIT 3A
Exercise 2 (P82
NT E N D RBF P E AÍAIF L
H s 1 0 B 1 ::~j:E: C T D F E F 1
S O C O[N S 1 D E R[A T 1 O N
F S O U[ R C E 1 N T L A S R R
F A R A T 1 O Z S L A B 1 1 E
438
UNIT 38 (n
Exercise 2 (p111)
'e
Inthe
Chatsworth County Court
-
Claim Form
? 1 Iv
9irnNo 6QZ070C2
L Issue date 14 December 20XX
(Iainiarit Stephen Blakely

47 Rase Terrace
High Bennington
Chatsworth SI-AI.
CH8 5PG
I)eknihirit() Simply Kitchens Ltd
Rrietdei:iils Í1ihu The defendant contracted to fit a kitchen in Jurie of this year. lhe
defendant adrnits that the fridge that was supplied as part af the
kitchen was detective.
lhe fridge has broken down twice and the defendant refusos to
supply a new one. The claim is to cavar the cost of a second
company supplying and fitting a new fridge and for the cost of
food that was spoiled during the dispute with the defendant.
Valuc £650
£
De lendani s
naine and Sirnply Kitchens Ltd Aim , 11111 CtIilild £650
address
(Registered Office) ('uri Ic £70
Unit7
Soliciuw scot rione
Fratton Park Industrial Estate
H igh Boi don 1 otil imouni £720
Bradford
BR4O IDD
.ini 4 iii \iiiuiLi 1.. 1 num vim nuumnvImuurI .1 Ilmni nu ti Ii n u uni. uiç.t< alui tç t munir rui Imitei. Imu liv 1 liii 1 \l.nrir. uniu J II Iii .1, uruii 111111 iburi
lI.u:un unir i(I'R I':mul Ti III IIT f,ulmuj uuli li 4,df ii (/m ir-muI! .immn
Global Legal Engiisb 439

UNIT7B
Exercisel.p278
Please complete ,n typescrlpi,

fl
First directors and secretar\j and intended situation of

lo
o, o boid biacia capitais
registered otfice
CHWP000
Notes u' ccrnp ei .y arnears'n'ruro'.ge
Company Name in fuli Qutback Adventures Ltd
Proposed Reyistered Office 15 London Road

P0 Boa numbers onry ,'o "01 a,,cc0tab e
PostO. Oxton
COcnly / Ret]nu Hapshire Posicode 0X5 4HJ
Ii lhe rnemorandurn e dehnered by ar asrurnl
for lhe scbschber(s) ol lhe rnernorarrdorr,
rnark lhe box opposite and cjrve lhe agenis
carne and addres$
AgerrEs Narre
Add tens
Post town
County 1 Reguon Poslcode

_J
Number of conhnualnon sireuets altarthed

Q
You do cal bane to gue any contac.l
unforroatlorr in lhe boa opposnte boi ri Peter Craig
you do it w,ll trelp Corrrparuues Hoinse
lo contact you II there IS O q,uery cc
contactcuforreraton
;:
fel 01482 685341
searchers of tire publue reçord Dx 'nsrrbor X exsnnarge
Cnnniourses HIll, .,'.1in lo,: When you bane completed and nugned lhe iorrn pleasn send ilio ice
Fh,s form luas been prounudrrd ff00 o, charge Registrar of Corriparnes ai.
by Connpar,res i*,, c;ornyanicn Hnusc. Crnwn Way. Card,ff, CF14 3UZ DX 3300 Canddf
for COrnpa:lres requstered i r, England and Wales
1.03 Cornpannes Hosse 37 Casile Terrace Ed,eb,rgh EN1 2E8

for cornpa'lies reguslered ir Scoiland DX 735 Fdnrb.u'gb
or LP 4 Ednburgnr 2
Company Secretary
Csc:.nny carne Outback Adventures Ltd
NAME Slyle. T:tle M ; 'Horrocrs etc
• .,.,.
,.,, rureracre(s) Alice
Baker
Previcuos lurerrarre o.
tek 1h11 boa ii e,, rolou,, sunn:urr CO!

Bradman
meoic,,ddrsss lo, Address
64 Greeri Lane
Cont,danr:aloy Onde,
granI.d ,nderseel,en
723B olhe
Con,perree hei 1985
Prust iwrr Lettford
ia [h Co ly Regiun Hapshire Posicod 0X37 3FS
Scotinlr tIrar , 11 lhe
09010 Orne,, -°' Ir England
dress
1 sorsent 10001 OS secretary ai tine corsano "un - r':lcn 1 pdgr '
Consent signature - Date
440
=
Directors
i-caso ust dtçtOrs o alphab0009i ceder
NAME Style 1 Titio Dr Hocis etc
Freercame(s) Shane
Saname Bradman
Previflos foronarrc:s;
Pre.vicjs surname(s)
T,ok tino bo. ii th.
Address
ddrotnowrnt
1 1h
87 Hunts Road
-
fd :
gi.c
tiatti
Post towo Oxton
dO Co ty Rego Hapshire Postcode 0X2 6GP
:
fite. gvt hs COU,cVV
office address nay bem Voar -

Dele aI birth
1 40 7 1 9 7 _ 9j Nationality Australian 1
Busineso occupatuon Travei Consuitant
Other directorships None
1 conscnt to acI as director aí the compamny narned ori page 1
Directors --
Ie e]!doi-coepfleti.cecn
Mr Honors etc
- Foreriarnie(s) Peter Robert

Sijrrunie Craig
Previous íoreoarne(s) 15 London Road
Previous surncame(s) i
TiCk 1h15 CDX ii thø - -- --- -
addrns, shnwn is. Address
sorriso addr005 kho
ConfidonZiiy Ordon - -
Ar 10O5otln,rw.... Postiown - Oxton

Cou ty 1 Regiun Hapshire Postcode 0X5 4HJ
CouniPy England
ro giSter000r principal
sfficu 000r8OO. Day Monmr Year
Oatoofbirth
NationaIity
21 11 19 78
Busiress oCcUpation
Other directorshipo
1 consoei lo act as director 01 lhe cornpany named on pago 1
This section must be

Signed Date
signed by euther an
agent on behalf af ali
subscribers ar the Signed Date
subscnibers
(i.e those who signed
Signed Date
as members on the
memorandum of
associatiori). Signed - Date
Signed Date
Signed Date
Signed Date
c Global Legal Englisn 441

UNIT 7B
Exercise 1 (p277)
r
Directors detaiis Directors detaiis
Fuil name, including titie Dr Shane Bradman Mr Peter Robert Craig
Address 87 Hunts Road 15 London Road

Oxton Oxton
Hapshire Hapshire
0X2 6GP 0X5 4HJ
Date of birth 14 July 1979 - 21 November 1978
Nationahty Australian British
Occupation Travei Consultant Managing Director
Director of other compantes? No No
UNIT 7B
Exercise 3 (p281)

of
RP Computer Services Ltd
1. lhe companys name is RP Computer Services Ltd.
2. The company's registered office is to be situated in Engiand and Wales.
3. The objects of the company are to carry on business as a general commercial company.
4. The liability of the members is límited.
5. The company's share capital is £100,000 divided into 100,000 ordinary shares of
£1.00 each.
6. 1, being the subscriber to this Memorandum of Association, wish to be formed into a

company pursuant to this Memorandum and 1 agree to take the number of shares shown
opposite my na me.
Names and address of subscriber Number of shares taken by the subscriber

Raj Patel Twenty five thousand shares
2 Cherryholt Road
Chatsworth
CH3 6GH
Total shares taken Twenty five thousand shares
Dated XXJXXJ2OXX
442
Audio transcripts working as a solicitor for over ten to Iearn how tu cio that, do they?
years now, so Im prohably in a good L: Im not surprised that you have
UNIT 1B losition to give you a bit of advice. said that hecause its a common
THE LEGAL PROFESSION Who would like tu start? misconception that oniy harristers
Si: III start if 1 may. 1 would like to speak in court. But its actually not
UNIT LISTENING ask about the training that you had to true. Solicitors are required to do a
Trainee la'er: My name is Rob do to become a laier. 1 know that year of practical training after their
Jones and im a traince with a law you have to go to university and do a degree and that training includes
firrn. Ive always wanted to be a law degree. But what happens next? advocacy, which is the skill of
solicitor and 1 cant imagine doing L: Well, let's make it clear. When speaking on behalf of a client in
any otherjob. 1 started working here you taik about training to hecome a court. If you choose to he a solicitor
at Taylor WaIlis a year ago. Taylor lawyer you are talking about two you will have tu do this extra year of
Wailis is a global law firm with its different professions. If you want to training at university. lts called the
headquarters in the City of London. 1 work as a lawyer you must first of ali Legal Practice Course.
studied Iaw at Manchester University choose whether you want to be a Si: What skills do they teach on
but 1 wanted to do my training solicitor or a harrister. The training the course?
contract in London because Im for each profession is different.
interested in insolvericy law and L: A whole range of things. As we've
S2: RealIy? 1 thought that both already said advocacy. You need to
banking and 1 think the best
branches of the profession were be confident as a solicitor when
positions with the top law firms are
here. 1 think my parents were required to do a law degree and speaking in court. You are taught
disappointed that 1 didnt become a then barristers had to find a place in how tu draft documents correctly.
barrister and work in chambers and chamhers and solicitors had to do Some negotiation skills. And of
wear a wig in court, but 1 wasnt some training with a law firm. course client interviewing. Being
interested in that at ali! L: Not exactly. It might surprise you able tu interview a client well is
to know that it's not actually a extremeiy important.
With this Iaw firm the two-year
requirement in the UK for a Iawyer S2: That ali sounds good. But 1 have
training contract is divided into four
to have a Iaw degree. My degree is a worry about something. im not
periods. Each six-rnonth period is
in economics actually, although very good at rnaths. Will that be a
called a seat My first seat was in
the corporate department. That most of my coileagues in the office prohleni?
do have a degree in law. 1 studied L: Not really. The Legal Practice
really just means dealing with
economics for three years and then Course does cover business
companies and businesses. 1 was
1 took a one-year course at the rnanagement skills and you will be
involved in meeting clients, drafting
sarne university, now called the tested on your ahility to keep
documents and took part in some
Post-Graduate Diploma in law. It's a accounts. But thats something that
very high value deals. Of course 1
kind of conversiori course to law for youll Just have to learn if you really
had Iots of support from the
people with degrees in other want to be a solicitor. l'm not very
experienced people working on my
subjects. It was a difficult year. It good at that side of things either l'm
team, we cail them the principais,
but 1 was surprised at how much was very intensive but very enjoyabie afraid, but 1 soon got the hang of it.
too. 1 learned a lot.
responsibihty they gave me. Si: And after the Legal Practice
My second seat was in the property
Si: So a law firrn will be happy to Course, are you a qualified solicitor?
departrnent. This involved acting for employ me if 1 have a degree in
L: Im afraid not. You still need to
pyschology? Thats the subJect that 1
clients who were buying and selling get a training contract with a law
dornestic and comrnercial property, really would like to take but 1 didnt
firrn and for many students thats
much of it office buildings here in think it would be possible if 1 want a
career in Iaw. the difficult part. lhe truth is that
London. 1 was able to get some our universities produce more iaw
experience of conveyancing as well L: Yes, that's right. So long as you graduates than we need so getting
as a httle landiord and tenant law take the conversion course you'Il be a training contract with a law firm is
when we dealt with rentais. OK. Law firms like diversity. It gives a competitive business. lhe training
Next 1 will be moving into the them people with a wide range of contract gives you two years of
inteliectual property department. Im skills and knowledge. practical experience working as a
reafly pieased about that, as it S2: Thats interesting. But 1 want to solicitor. When the two years are
covers quite a few different areas of take a law degree and hecorne a completed you are a qualified
law and can involve famous clients. laver in the traditional way. If solicitor and your name is added tu
At the moment the department is sorneone wants to he a barrister, is the list of solicitors who are allowed
dealing with a breach of copyright a law degree the best qualification tu practise law - or, to give the list
case for a farnous musician. for them? its correct name the roli. lhe roli is
1 hope to stay with Taylor Waflis L: The usual route for both solicitors kept at the headquarters of the Law
when 1 qualify as a lawier next year. and barristers is to start with a Iaw Society of England and Wales, which
In fact, I'rn looking forward to being degree. The law degree in the UK is is in London. And une more thing.
based in London for rnost of my known as the LLB. This is the Remember, qualifying as a solicitor
legal career. Bachelo(s degree in law. The or as a harrister is expensive. The
Masters degree is called the LLM Legal Practice Course currently
EXAM EXERCISE LISTENING lhe LLB takes three years and is costs around £7000 so you will
L: Good morning everyone. My ideal for both solicitors and have tu pay that 00 top of the cost
name is Helen Reay and Im a barristers. After that the training and of your degree. But dont let me put
sohcitor in a local law firm. Im here the exams are different for the two you off a career in law. 1 found my
today because 1 understand that professions. training very hard and very expensive
some of you are interested in a but 1 havent regretted my choice of
Si: What do solicitors do after their
career in law and wouid like to ask career at ali.
first degree? Solicitors dont speak in
me some questions. l've been court, 50 1 suppose they dont need
443
>4
UNIT 2B of the monthly repayment of course. the moment actually. Theyre coming
The payments will be considerably ia look at ii thms afternoon. So youre
THE LANGUAGE OF
bigger over a shorter period aí time. better getting me on my mobile if
'o
BANKING AND FINANCE you need to speak to me today.
AF: Id like to repay it over five years
if 1 can. So that would he 60. Anway, my landline number is 0771
UNIT LISTENING
for Chatsworth, then 652 0309.
BM: Good morning Miss Finch. BM: Good. 60 it is. Now we move
Thank YOLI for coming in to see us on to personal details. Are you Miss BM: Thanks. And your mobile? We
taday. 1 Linderstand youd liRe to ar Mrs? shouldn't need it, butjust in case.
take aut a loan. AF: Actually, l'm Ms. Do you have AF: 0899 167 0325.
AF: Yes, thats right. id like to that title an the form? BM: Thank you. Well, that's ali the
borrow £6000. BM: Yes, we do. Ms. And your first info we need for the first page. Now
BM: OK. That shouldn't he a name please? for the next page.
problem. 1 just need to go through AF: Alison EXAM EXERCISE LISTENING
the apphcation farm with you and
BM: And your surname? RP: Good morning. It's 7am and you
get some information that well need
AF: Finch are listening to Central Radio, the
to process your loan.
radio statmon with the latest news
AF: OK. BM: Any middle name?
and travei information for central
BM: First of ali some general AF: No. Just plain Alison Landon this Thursday morning. This
details. We need to confirm that you BM: Good. That's nice and easy. is Karen MaIlay with our weekly 100k
are a fuli-time resident in this And your date of birth please, Ms at money and finance in the
country? Finch? Thursday Money Programme.
AF: Yes, 1 live here ia Chatsworth. AF: 6 ianuary 1979. Todays celebrity guest is that well-
known actress from the town aí
BM: Good. And do you have a bank BM: OK. And do you have an email Westbarough and London resident,
account? address? Julie Barrie. Good morning Julie and
AF: Yes, my account is here with AF: It's welcome ta Central Radio.
your bank. Ive had it for about four Alison.Finch79Çdhotrnail .com JB: Good morning Karen. It's nice to
years. BM: So there's a dat hetween the be here.
BM: Great. And do you have a Ahson and the Finch? RP: lts great lo have you as a guest
regular income? AF: Yes, that's right. 00 the money programme, Julie.
AF: Yes, Im paid on the 26 of each BM: Thanks. And your marital status Now, let's start at the very beginning
month. My pay goes directly loto my please, Alison? af yaur financial life. '(ou were bom
account. mn Westborough in the north of
AF: I'm divorced. I've heen divorced
BM: Good. We just needed to be England and your first job was ata
for twa years naw.
clear about those points before we local theatre. How much was your
BM: OK. Any dependant children? flrst salary?
start. Now, l've got the application
form up on the screen. This should AF: Yes, one. I've got a little girl. JB: '(ou couldnt really calI ii a
just take a few minutes and we can BM: So you're making thms salary, Karen, because 1 only worked
process your loan immediately. First application by yourself? There's no one day a week and 1 was paid every
of ali, what is the loan for? ather applicant? Friday. When 1 was 17 1 was still at
AF: lis for home improvements, AF: That's right. callege, but 1 got a Saturday job at
actually. 1 bought my house twa lhe local theatre. 1 was an assistant
BM: Have you heen known by any to the stage manager, which was
years ago and it was fairly cheap
other name aver the last five years, marvellous, because 1 was being
because it was in a bad condition.
Alison? paid for doing something that 1
id like to put in a new bathroom
and a new kitchen. And Id like to do AF: No, Fmnch is my maiden name. 1 loved. lhe pay was £4 a week,
something with the garden. It's in a didnt change it when 1 got married. which 1 thought was a lot of money!
bit of a bad state. Ive always been Alison Finch. 1 got it cash ia hand, which would be
BM: OK. And now it's just contaci unusual these days. 1 saved £2 a
BM: Home improvements. OK.
details. You own your own house week hy giving it to my dad to put
Thats fine. And what amount would
dont you? So you're not a tenant. into his bank account for me, and
you like to borrow? Did you say ten
How long have you been at your the rest 1 spent. 1 was quite sensible
thousand?
current address? with money as a young person, but
AF: No, just six thousand. less so now, unfortunately. These
AF: Two years and one rnonth
BM: That doesnt seem much for days, if 1 see something 1 want, 1
the list of jobs you mentioned. Will it BM: And your house number usually buy it!
cover everything yau have in mmd? please?
RP: And where did your open your
Our interest rate is very good at the AF: Number 39. first hank account? Youre on TV alI
moment so you could prohably go a AM: And your postcode? the time these days advertising the
little higher ifyou needed to. Glen Royal Bank so does that
AF: CH5 9QJ.
AF: No, six will be fine. l've got relationship go hack to your early
.-.tr.c. 4-e. - e.. ,e.. .4-1-...-.
.4 4-.-.-. .-.-,
BM: CH5 9QJ. Right. The computer '44' '44V4S1C44 ")
4-4.l4-JtL#OILJÍt. VLÍ 4-41111611 ¼Jl II II IC
is saying 39 BelIe Vue Avenue,
builder and six covers it. JB: My first current account was
Chatsworth. Is that your address?
BM: Fine. You can always apply for actually with the London National
AF: '(es, that's right. Bank. My local branch was ia the
more later on if yau find that you
need it. And what repayment period BM: Good. Were nearly done. The centre aí London. in a street very
wouid you like? You can make your last thing is yaur telephone number near Irafalgar Square. lts not there
repayments over 24. 36, 60 or 120 Do you have a home telephone? any more. 1 walked past it the ather
months. That will affect the amounts AF: Yes 1 do. But it's on the blink at day and the building is now a
444
nightclub. The bank has closed most Hollywood in 1987 and 1 was able to take. Not ali contracts are alike. lo
Ia
of its London branches because pay off my mortgage com pietely. the UK legal system and in the USA,
ID
people do so much Internet banking RP: That must have heen a rehef to a iegaily hinding contract can he
and teiephone hanking these davs. OLJ. Paying the rnortgage is most
created ri several different ways. For ID
'Ia
Its a shame. It was handy for rny peoples major financial worry. And exarnpie, a contract can he either
drama school in Shaftesbury how about savirig for your oral or written. Most legal systems
Avenue. 1 used to go in and clraw retirement? Do you have a lot of arourid the world accept the idea
out £20 every Friday in the company money for your oid age? Or do you that a spoken agreement can he as
of city businessrnen. it made me plan to work forever? valid as a written agreement. There
feel very rich and important even is a third way te create a contract
JB: 1 plan to keep on working for as
though 1 wasnt at ali! We had to go and that is in the form of a deed.
long as 1 am offered acting roles so 1
into the bank and queue to withdra\ Once we have established the form
hope to keep on earning rnoney for
money in those days. It was in the that a contract might take, we need
some time yet. Ive invested in
1970s, long before ATMs were to consider its scope. Contracts can
property ali my life so that is my
around, which makes me feel very be unilateral or bilateral in nature
security for my old age. 1 plan to
oid. Most of the £20 was spent on creating quite different obligations
keep my house i n London hut 1 have
rerit. After paying the rent, 1 had for the parties concerned.
two houses in France and one by
about £4 Ieft to live on for thc weck. AlI of thesc points require some
the sea in Brighton so 1 can sell ali
RP: Did you run up an overdraft? three houses if 1 need to. cxlii a nation.
Most students do. Let's begin with oral contracts.
RP: 1 see. And how about your
JB: Unfortunately. yes. When i got financial behaviour these days? Do An oral contract is a spoken
mv first real actingjob in the late you have a credit card. for instance? agreement. In most cases it's just
1970s i was quite hadiy in deht as a as vand as a contract in writing. 1 am
JB: 1 have an American Express
drama stucient. 1 had a ioan of often asked if an oral contract would
card. 1 cut ali my other credit cards
£3000, which 1 was paying off in be hinding if it were for a huge
up because the interest rates on
instalments. l seem to remember amount of consideration. Lets say a
them are so high. 1 also use my
they were £25 a month, which was rnillion pounds. The answer is, yes,
debit cards a lot instead of carrying
a lot. 1 also had an overdraft. My it would he hinding. It doesn't
cash with me. 1 dont think its safe
hmit was £100 so my ovcrdraft matter if a contract involves a large
for women to carry cash in hig cities
stood at £100 most of the time l amount of money or not: a spoken
nowadays. 1 was mLigged in New
think. On one occasion 1 got a nasty contract is equally as binding upon
York a few years ago, so now 1 tend
letter from thc bank bccause Id the parties as a written one.
not to have more than £10 in my
exceeded my limit hy £11. 1 never One of the most famous cases in
purse. 1 have a son, Jason, who is
seemed to have any money! this arca of law is from the United
18 this year. i used to keep money
RP: Not for long though. You got at borne in case he needed it but States. In December 1983 a Texas
your first actingjob in London at the now that hes 18 1 just transfer it company called Pennzoii agreed to
age of 21, didnt you? Your financial into his bank account. 1 normaily do huy another company calied Getty
situation must have improved that using my hanks Internet 011. The deal was done with a
somewhat. banking service. It's marveflous. i handshake but no contract was
JB: Yes it did. 1 got the part of Juliet often do my banking at 2am when 1 signed between the two companies.
ri a production of Romeo and Juliet can't sieep. Pennzoil then announced the
and suddeniy 1 earned a iot more acquisition of Getty 011.
RP: Yes. 1 think a lot of people do.
money. That must have heen in And one final questiori. Jute. Whats However, a few weeks later, a third
1978, the year 1 opened my frst heen your best purchase up until oil company called Texaco
savings account. It was with the now? The best thing youve ever arirrounced that it had bought Getty
Gien Royal Bank. 1 chose them hought? Gil. Rernember, no written contract
because their interest rates were had ever been signed to say that
JB: 1 would say a work of rnodern art
very gond and 1 opened a high Perrnzoii had already bought Getty
that 1 hought from an exhihition at
interest account. i was saving for a Gil. It seerns that the people at Getty
Goldsmiths Coliege in London. 1 had
house iri Lorrdon because the cost Gil íelt that a handshake wasnt
no money at thc time and 1 had to
of renting was disgraceÍui, even in eriough to seal such an irnportant
borrow £60 from my parents to huy
those days. 1 opened a savirrgs deal. However, when Pennzoil
the painting. It took me twn years to
account to get together the deposit 1 successfufly sued on the grounds
pay them back although luckily they
needed to buy the house, which was that Texaco had interfered in a iegally
were kind to me and they didrit
two and a haif thousand. It was hard bindirrg contract they were awarded
charge me interest. The painting is
but 1 think its even harcier now. 1 S10.6 billion in damages. This case
insured for a milhon pounds now.
dont know how young people can stiows that it would be a serious
That was definiteiy my best financial
afford to live in London at ali with rrustake to think that because there
move. ever.
prices the way they are. is rio written agreement then there is
RP: Juhe Barrie. thank you very rnuch. rio contract.
RP: And did you save enoLigh money
to get your house in London? JB: Thank you. To move rim now to written
JB: lndeed 1 did. 1 still live in tho contracts, they have been in use
Pouse that 1 hought in 1983 in since the time of the Romans, and
UNIT 3B with good reason. A written contract
Notting Hill. 1 got my mortgagc from
the Glen Royal Bank. lt was for
THE LANGUAGE OF helps avord disputes. When you
£75.000. which 1 thought was a CONTRACT LAW have a written contract, both sides
fortLrne at the time. The intcrest mte know the subject matter, terms and
was fixed at about 59/,, as 1
UNIT LISTENING conditions of their transaction. A
rcmernber for the first five ycars. Professor: The subject of toc]ay's written contract is usually very
After that it was going to go up. iecture is contract law and the detailed but will generally inciude
Luckily 1 got a part in a film in different forms that a contract can hasic information such as:
Guii Lcgu 1 [r1phsh 445

• the parties names to the story of a dispute between £1000. Mr Brown refuses. He says
• the parties obligations twa parties. Mr Brown is worried his original payment covers
about the environmenl. He is afraid everything. Is Mr Brown
= • anything that might happen
that poilution and global warming contractualIy ob[ged lo pay lhe
that will excuse performance
are destroying our pianet. Therefore, extra money?
of thc contract, and
he decides to do something aboul Si: I'm not sure. lhere are severai
• lhe result of a failure of one of his worries. He decides to hold an relevant cases on this subject and 1
the parties to perform. event lo publicise the probiem. He don't know which one appiies.
calls the event, Save the PlaneI
This is the most common type of P: Imagine Seilfast UK is your client.
Day'. He decides to hold bis event in
contract and the one that you will The manager wants lhe extra
St James's Park, near bis home in
come across most often in your £1000 he was prornised? Would
London, on the 5 April. He contacts
professional lives. you advise him to sue? As you
a marketing company in
know, a court is ohliged lo refer to
If we now look at deeds, a deed is a Manchester. lhe name ol the
case law. What is lhe relevant
contract that must be in writteri marketing company is Seilfast UK.
precedent case for a situation such
form in order to be legaily valid. it lheirjoh isto advertise the event
as this?
usually grants a right to do and to attracl companies to attend.
something or to have something. A Mr Brown has a telephone Si: 1 think the relevant case might
deed used to need a seal (often conversation with Sellfast UK. lhe he Stiik v Myrick? lhe principie of
made from red wax) to make it valid manager of SeilfasI UK telis Mr iaw seems lo he lhe sarne.
but these days a signature is usually Brown that the cosI of promoting P: Good. Go on. You are on lhe
enough. Any contract for the saie of the event is £5000. Mr Brown right track.
land must take the form of a deed. agrees lo pay this and pays a
Si: In lhe case aí Stiik v Íyyr'ic..k
And finaily. we must consider deposit of £500 by credit card over
some Engksh sailors hrought a claim
whether a contract is bilateral or the phone. So. a contract now exists
against their ernployer. lhe facls of
unilateral, lhe more common of the between Mr Brown and Selifast UK.
lhe case were lhat when a ship was
two is a bilateral contract. lhis is an Am 1 correct?
at sea, several sailors doserted -
agreement in which each oí the S2: Yes. Ali of the elements of a they just lefI lhe ship without
parties to the contract makes a contract are present. One of the perrnission. 1 think lhe year was
promise to the other party. For parties is a husiness, so according 1809: it was a iong time ago. lhe
example, in a contract for the saie to case law a court will assume that captain ofthe ship pariicked about
of a car, the buyer promises to pay there was an automalic intention lo getting hack lo Engiand with so few
the seller in exchange for lhe seliers create a legal relationship. men on hoard to do the necessary
promise to give ownership of the Si: And there was clear offer and work. He promised lhe remaining
car. In a unilateral contract, orily acceptance. lhe parties are clear as sailors that if they wouId lake the
one party to the contract makes a to the terms of the contract and ship safeiy home they wouid receive
promise. A typical example is lhe thcy have hoth agreed to them. a bonus as well as their normal pay.
reward contract: Anna proniises to In fact, 1 think he prornised to divide
P: And consideration?
pay a reward to Kit, if Kit finds lhe wages aI lhe deserting sailors
Annas dog. Kit is not obiiged to find S2: Yes, there has been an helween the sailors who stayed. The
the dog, but Anna is obliged lo pay exchange of consideration. Mr Brown sailors agreed and expected lo
the reward if Kit does find the dog. has agreed to pay a certain price. receive a honus upon their return to
And Seilfast UR has agreed lo carry England.
You will need to read about lhe
oLit a service in return. lherefore. the
forrnation of contracts in your S2: lhal's right. And upon their
parties have a contract.
textbooks in time for tomorrows return of course, lhe captain broke
seminar. Please look at pages P: Good. Let's move on and his promise. He told lhe sailors that
335 387 and be prepared to complicate the situation a little. they were paid to work on the shmp
answer queslions on this suhject LeIs say that SelIfasI UK does lhe and that they should not cxpcct
lomorrow. job very weli. Hundreds of people extra payrnent for carrying oul their
have prornised to come to the contraclual dutmes.
Thank you.
event, inciLiding a few big
Si: lhal seems unfair. 1 see hoth
EXAM EXERCISE LISTENING companies. lhe best news is that a
paints of vmew but a promise is a
P: Good morning everyone, lhe major catering company calied the
prornise. 1 think the court should
topic of todays seminar is Ethical Food Company is considering
have enforced lhe captain's promise
consideration in contract law. 1 hope providing free food for everyone who
Ia pay the men.
that everyone's read the relevant comes lo lhe event. Mr Brown is
delighted. He phones lhe manager P: Well, lhe court of 1809 disagreed
cases in your texthook. 1 asked you
of SeilfasI UK a week before the with you. One of lhe sailors sued. II
to read the 25 pages up to page
evenl. He teus lhe manager that he was heid lhat the sailors had
285. Lets begin with a simpie
is so pleased with the way that provided no consideratmon for lhe
question. Can someone please
things are going that he wifl pay a extra payrnent. lhey had simpiy
name the essential elemenls 01 a
bonus of £1000 if Seilfast UK can perforrned lhe dulies that they
contracl according to English iaw?
persuade the Elhical Food Company agreed to carri oul under lhe
Si: Intention to create a legal original contract. So, if we decide
tn come tn lhe event. Now Mr
reiarionship, offer, acceptance and lhat Slilk v Myrick is lhe relevanl
Brown has promised extra
co o si deratio n. case, and we follow lhe principie of
consideralion lo SelifasI UK, hasn't
P: Good. lo make a valid conlract he? A potentiaily complicated law Ihat it laid down, then Mr Brown
ali of those things must be present. situation for the parties, i'm sure will nol be obliged to pay lhe £1000
Over the past few weeks we have you'il agree. Sure enough, Seilfast honus lo Sellfast UK.
looked at three of those elements. UK persuades the Ethicai Food S2: Bul 1 don't think mt is the
Today we will look aI consideration. Cornpany to come lo the event. lhe relevanl case in this silualion. lhere
Let mc start by asking you lo listen manager aí Seilfast UK ciaims his is a niuch more recenl precedenl
446
fram 1991 that says if the you to consider as ernpioyers is the Now lets move on tu ernpioyees
ch
defendants in a situation like this language that you use in advertisirig who are curreritly working for you. A
rD
have received a real henefit, then job vacancies. When you are looking case was brought agairist ari
the extra payrnent wili be for new staíf you have to he very empioyer in Ireland last year by a
eriforceable. 1 dont think Stilk and aware aí the words you use in any female empiayee aged 61. Her
Myric realiy appiies here. newspaper ar Internet narne is Brenda Flanagan. Brenda
P: lhe name of the more recent acivertisement as wet as in any worked in the accounts department
case, please? internai merno you might write of a large chemicai cornpany and
advertising a new or vacant position there is a normal retirement age aí
Si: lhe claimant was called
within the company. 65 for people in her position. This
Williams. is it Williams v Roffey?
lo use another countrys particular lady did not wish tu retire
P: Good. Go on. Why is that case at 65 and intended tu make a
experiences as a guide for us here
relevant? request to continue working when
in the UK, our neighbours in the
S2: Because the judge held that so Repuhiic aí ireland introduced she received notice of her
long as there was rio duress or iegislation six years ago to prevent retirement. The employer arranged a
threat for lhe extra payment and ernpioyers discrirninating against two-day training course for everyone
that the offer aí extra rnoney was empioyees on the groLinds of age. in Brenda's department on a new
made wiliingly and voiuntarily, the Our research of how things have software package that they are going
extra benefit one aí the parties worked out in Ireland is interesting. to use. lhe employer toid Brenda
receives, in our case the atteridarice it teus us that most ciaims in that she wouid not he trained
of the Ethical Food Company, tribunais have heen hased on hecause she is reti ring soon and it
should be paid for with extra discriminatory advertising rather wasn't worth spending the money an
corisideralion from the other side. 1 than discrimination in the training her. Brenda took legal actian
think Sellfast UK wouid be workplace. in other words, tua many against her employer immediately.
successful if they sued Mr Brown. If employers are using discriminatory Another age-related case was
1 were their solicitor, 1 would cite ianguage in the recruitment brought on quite different grounds.
Wiiliarns v Roffey. process. So what do you need to he Michaei aged 55, worked in an
P: Agreed. Well done. That is a gaod aware of when you advertise a job? off ice where mast of the rest of the
exarnple of finding the correct Well, íirst you should remember not staif are aged 25 to 40. Everyane in
precedent to support your client's lo use certain words in your advert the office inciuding the manager,
case. Now, let's move on to the next thal sug,gest you only want people aí níten met for drinks on Friday
sitLiation. a certain age. You might for evenings hut they didn't ask Michaei
example, face legal actiori from older tu join them. Michaei discavered
people if you advertise for a young, that they discussed work issues an
UNIT 4B dynamic graduate' tu fui a position in those nights out and he felt
THE LANGUAGE OF your cornpany. These words young' undervalued and excluded.
EMPLOYMENT LAW and dynamic' have beeri interpreted In both cases above, Brenda and
as automatically excluding older Michael were successíul at
UNIT LISTENING people. On the other harid, be tribunais. Both successíully argued
Lawyer: Good morning, ladies and carefui of words such as 'senior', that lhey had suffered from age
gentlernan. First of ali, thank you mature' ar 'weil-experienced' as discrirnination at work. 1 carinot
very much for coming aiong to this they couid be seen as excluding stress tu you strongly enough how
hreakfast serninar at Freeman Smith younger people from appiying. impartanl it is lo be aware aí the
this morning. You are ali very As wet as heing carefui about the new regulations and not tu suífer
welcome. My name is PaUl words that you use you also need tu financiaiiy because aí compensation
Hoflingsworth and as rnost of you he carefui about making general payrnents tu empioyees.
know, Im a partner in the staternents in job adverts. For 1 have prepared a fact sheet for you
employrnent law departrnent here at exampie, reqLnring that ali to callect at lhe end aí the seminar
Freeman Smith. applicants for a particular job have a but we will naw have a questian and
lhe subject of this morning's taik is degree if it is not reaily necessary tu answer session based on the new
the Age Discrimination Act, a new do so, rnight he seen as legislation.
Act of Pariiarnent that carne into discrirninating against older people. lhank yau.
force a few days ago on 1 October, This is because younger people are
lhis new legisiation wili affect ali of more likely tu have had the benefit EXAM EXERCISE LISTENING
you as ernpioyers and one of the of a university edLlcation. L: Good afternoon Mr Winter. Please
key messages that 1 have for you Just tu rnake local ernpioyers here in take a seat.
today is the importance of Chatsworth fuliy aware of the C: Thank you.
cornpiying with it in order to avoid situation, 1 have with me a copy aí
heing taken to employment tribunais L: Haw can 1 help YOLi today? 1
Thursday's edituon of our local
hy unhappy empioyees. From now understand you have filed a ciaim
newspaper, the Chatsworth Herald.
on you shouid be very aware of how with ao ernpioyrnent tribunal. is that
As you ali know, the Herald carnes a
you treat employees with regard to night?
johs vacant section every Thursday.
their age. The new regulations wiii it might come as a shock tu you to C: Yes, 1 filed a claim a couple of
have an impact on every aspect of a discover that approximoteiy 25% aí days ago for unfair dismissal against
companys employment policies ali of the adverts in the newspaper my ernplayer. 1 vias an afficer wuth
inciuding pay and benefits, this week hreach the new legislation. the West Midiands Poiuce Force. 1
prorTiotiori, disrnissai, redundancy That means that ali aí these used to work mastiy in the centre aí
and retiremenl and even training advertisers are open ta claims from Birmingham. They sacked me twa
opportunities. potential empioyees who might feel weeks ago.
it might surprise you tu learn thal that they have been discrimiriated L: Oh dear. i'm sorry lo ficar that.
one of the most irnportant arcas for agairist on the grounds aí age. On what grounds?
Gohl Legii Ergiisr 447

a) C: They sacked me on the grounds C: My supervisor was a woman cafled are the aims of this area of law?'
of my attendzince rocord. Ivo heen Roz Shannon. She was extremely Why do we need te have a iaw of
a)
off work a lot tho iast few years. 1 unreesonabie. Not very sympathetic, tort, or as some people caf it, the
VI
= dont ergue with that. They said id to say the east! She told me after id law ef obligations, at ali? Those are
«
taken 770 days sick over the Iast been absent for e yeer that she was questions that reaty require e
four years, which is probably true. doing ali she could to heip me and Iengthy answer hecause the iew of
hadnt bothered to count the days, that i had another 12 months to tert covers 50 many different
to be honest with you. improve my attendance record. She situations in kfe. On a very general
L: That's an awful iot of time to he said that as long as i was employed levei however, we can say that the
off work sick. Why was tht? she couldn't rccruit ariyonc to lew ef tort is concerned with the
repiace me and my coteagues idea of redress.
C: Well, thts the unfair part. i was
needed help. It wes horrible. i was Students often esk me for a precise
very badiy injured when 1 was on
mede to feel very guiity. definition of 'redress', hecause it's
duty in June, four years ego. My
coileague and i were celled to a L: There's a good chance that she not a word that you hear used in the
house in Birmingham iate one night wiH say exactly that at the tribunal. street every day. 1 weuid say that
where there was a domestic it's a fair point to make, that they redress means to remedy a wrong.
dispute. it turncd out to he a very couldn't do without you for too long, Te restore the balance of things. A
serious argument hetwoen a especiafly once you had recovered person who has suffered a wrong
husband and a wife. i was kicked in from your initial injury. i'm afraid wants te be put beck in the situatien
the head by the man of the house that some employers are not too that they were in before. A member
during the course of the incident. 1 sympathetic about depression and of the puhiic will usually describe
iost my hearing in my ieft ear for believe that going hack to work is this as a process of compensation
months. it's stili not compietciy the hest solution to the problem. rather than redress. This is probably
better yet! C: That's exactly the attitude she because the claimarit, in the vest
had! She wrote me e ietter iast week rnajority of tort actions that come
L: 1 see. Thet sounds terribie! So yoti
saying that she would file a defence hefore the ceurts, is seeking
would agree that you have had a lot
saying id only managed to work for monetary compensation for the
of time away from work because you
six weeks in the last four years and wrong that he ar she has suffered.
were 1H but you would say in your
that 1 refused to return to work. Te those in the legal profession, this
defence that it's ali due to en
monetary compensation is more
incident that happened at work. And L: And is that true? Have you only
cerrectiy known as 'damages'. Se
on the basis of those facts you ciaim worked for six weeks since the
please don't cenfuse ttie two terms.
your dismissal is unfair? attack?
Redress and cernpensation are
C: Precisely! They are firing me for C: Yes. 1 wes recovering from the quite different things.
something thet is not my fauit. attack at work and becarne
Let's stick with the iciea of redress
Sureiy they can't do this to me? depressed. Then my ciosest friend
for a moment. We've established
L: WeM let's see, shaU we? it moved away to Australia and that
that menctary compensation is one
depends on what procedures were mede me worse. My mother
type ef redress. What cisc can the
fofowed and what the facts of thc became very iH. Everything seemed
courts offer te the injured perty?
case are fotowing the attack upon te be too much for mc. They offered
Weli, in many cases the claiment is
you four years ego. Let's start at the me the chance te go beck on e part-
not seeking meney at ali, but en
beginning. You say you were injured time basis aH first but 1 couldn't even
injunction te prevent the eccurrence
at work in June of that year? manege that.
ef harm in the future. If we take es
C: Yes, that's right. The attack ieft L: 1 see. Well Mr Winter, if your dii exaruple a case uí the tort of
me partiaiiy deaf. employer hes foilowed the cerrect nuisance, which is the tort of
procedures and has tried te support interfering with an individuais
L: Any other injuries? Any broken
you in your return to work, 1 don't enjeyrnent aí his or her land, you
bones?
reefy think you have much chance can clearly see that the defendant is
C: No. Just bruising to my face. The of success. You wif have to engaged in a continuing act. Let's
main probiem was with my ear. convince the tribunal that your say thc nuisance is one of noise.
L: i see. And did that improve? Did empioyer has acted unreasonahly Damages are available te the
your hearing rcturn? and l'm not sure that that's true in defendant hut are clearly net the
C: Yes, it did. After about six months this case. desired remedy for a claiment who
my hearing was much improved. But C: Reaily? So you agreo with them? is suffering over a long period aí
being away from work had left mc L: Not at ali, you have my fuil time. The ciaimant wants the
suftering from deprossion. i was sympathy. But l'm afraid the tribunal nuisance te stop and the obvious
alone et home day after day with has to hc reaiistic. On the hasis of remedy is therefere, injunction.
nothing to do. i hecame very whet you'vc told mc today 1 weuld Se, having estebhshcd that the iew
miserabie and i had to rcturri to the advise you to think again hefore of tort is cencerned with redress and
doctor for antideprcssant tahlets. proceeding with your claim. that this redress can take severel
L: But your initial injury was hetter? C: 1 soe. 1H think about it. Thank uou. forms, let's new turn te the questien
The inJury te your ocr. Am 1 r;b of hability in tert. We weuid correctly
saying that? term this, 'tortieus iiabiiity'. Whet is

C: it wasn't compicteiy honor hut UNIT 5B the scepe ef this liebility in eür legal
THE LANGUAGE OF THE system? 1H is ahseiutely impossible
the doctor said despite that, i was fit
for every act in seciety that causes
to return to work after six months. LAW OF TORT harm te anether te lead the victim
yes. it was my psychoiogicai
te demand a remedy. If, for
condition, not my physical condition, UNIT LISTENING
exemplo, 1 start a business such as
that left me unabie to work. Professor: Toclay's lecture is a
e café in an arca where there is
L: 1 see. And what ciid your empioyer general introduction te the iaw of tort.
aiready a café and 1 provide a better
have to say aboLit that? First oí ali, let's ask ourselves 'what service, then 1 have caused my
448
coimpelitor to suffer a loss. But law of tort exists for good reason father was outraged about it. But,
VI
should 1 be liable íor that loss? Of and it is an essential arca of luckily the headmistrcss agrecd with
course not! No reasonable person expertise for the rnodcrn lawyer. me. The boy was ordered out of the
would suggest otherwise. So it is schaol without taking any of his final
therefore a fairly easy rnatter to EXAM EXERCISE LISTENING exams. 1 helieve he works as a
establish that not alI lassos or L: 000d afternoori Mr Kelly. Please window cleaner these days.
harm that a person suffcrs can take a seat. L: And has this story been
be rernedied. C: Thank you. mentioned on the website? Because
In general, the scope of tortious L: 1 will need to take a few details if a story is true you know, we can't
liahility is as foliows. The law says about you in a rnornent, as you are usually deíend it. What happened
that 1 have an automatic dLity of a new client. You seem very upset. may have been unpleasant but if the
care towards other people in How can 1 help you today? íacts are correct then theres
general. It doesnt matter who they probably not rnuch we can do.
C: Ves, 1 am very upset. 1 was told
are or whether or not 1 have any C: No, not at ali. This story hasn't
hy a good friend of mine that you
kind of relationship with them. 1 been rnentioned. But Gary
are ao excellent libel laier, Miss
nevcrtheless have a civil duty not to Hetherington is a member aí the
Reay. 1 hope you can help me
harm them in any way. 1 am not FriendsAgain wehsite and he has
because my life has been absalutely
allowed hy law to hurt another written a lot ahout me that is most
destroyed by untrue rurnours. My
person physically or to harm their definiteiy not troe!
wife and 1 have even thought about
reputation. This duty is independent
moving to France to get away from it L: Has he really? That's a different
of any kind of contractual
ali. It's been a terrible time for us. matter. Can you teli me what's been
agreement. The duty exists in the
L: Oh dear. Im very sorry to hear written?
law itself and does not depend on
the consent of the parties as it does that Mr Kelly. We do have a good C: Actually, l've printed off his
in the law of contract. To give you reputation for our work on camments. 1 can email them as well
an example, the law of tort says that defamation cases at this firm. l'm if you like. Here... it fits anta ano
1 have an automatic duty not sure we can help you. Would you telI sheet aí paper hut it's devastating
trespass ao your land. An automatic me a few cletails about what has nono thc less.
duty. lhe duty exists because the happened ta you?
L: lhank yau. So he says, 'Does
law says so and not because 1 have C: Certainly. The rumours started ao anyone remember that miserable,
made any private agreement with the Internet. Have you heard af a horing Kelly? The big, fat idiot that
you to undertake such a duty. wchsite callcd FriendsAgain.com ? taught os French? Did you know
Of course, in practical terms there is lts a wehsite where peaple can get that he was thrown out of the school
oíten an overlap in any real-life back in touch with their old school in 1990? The headmistress found
situation between the law of contract friends. out that he vias having ao affair with
and the law of tort. If we take the L: Yes, 1 know of it. 1 think most one of his 16 year-old pupils and
example of a company supplying a people have heard about that fired him immediately.'
defective product to a group of website. When you join the website C: Thats exactly what he says. Of
consumers, this may result in you can chat to old school friends. course, 1 retired in 1990, everyone
concurrent liahiiity in contract and Am 1 correct? who vias at the school at that time
tort. in other words, the company C: Yes, that's the one. I'm not a knows that. But the people reading
may be liable in hoth areas of law at member myself but 1 was a teacher that website clearly don't knaw that,
the sarne time. The claimant may nat at St Bernadette's school in People keep on sympathising with
of course, recover damages twice! Middleton hetween 1975 and my wife. An old friend aí aurs rang
Sirnilarly, tort and crime overlap. 1990. l'rn retired now of caurse. from Australia Iast week ta say haw
There are some torts that are also sorry he was. 1 feel that 1 can't hald
L: 1 see. Please go on.
crimes, sometimes with the sarne my head up in this tawn at ali. is
C: Well as you can imagine. l've there anything we can da?
names in hoth areas of law, for
taught thousands aí pupils in my
example, assault. Assault is both a L: Yes, there is. There is a very
time. i was a moclern languages
crime and a tort. In some cases the recent precedent in English law that
teacher, rnostly French and German
evidence from a criminal trial is helps us enarrnausly with your
you know. l'm afraid l was a strong
used in a later civil action based on situation. In 2002 a very similar case
disciplinarian. 1 was strict with my
the sarne offence. Lets 100k at a carne befare the Caunty Caurt in
pupils hut they usually got good
criminal case involving a road traffic Lincaln. A teacher named Jim
exam results. But 1 wasnt very
accident, for example. The state will Murray had heen libelled hy a formar
popular with some of the kids. In
bring a criminal prosecution if the pupil on a very similar wehsite ta this
fact, ano of my worst hehaved
driver aí a vehicle caused an ane. In fact. the defendant in that
pupiis. Gary Hetherington, was
accident and he or she was breaking case strangely enaugh, is now a
expelled from the school. That must
the criminal law. lhe evidence from teacher himseif 50 it was pretty
have heen in 1980 or 81. 1 was
the criminal case may then later be unhelievable that he could have
present at a rneeting with him and
used as evidence aí negligence in made such stupid remarks.
his parents and 1 insisted that he
civil proceedings. C: You mean this has happeried
would not he aliowed back into my
lhe conclusion is to look at the law class. He hrought a knife to school, bofore? And the teacher sued?
of tort as part of the wider law. which vias totally unacceptable. 1 L: Precisely. On the grounds that he
Some legal commentators have had a terrible row with the boys .as the victim of a serious
somewhat unfairly termed it as the father at that meeting. He said ttiat defamation. And he won. lhe court
dusthin or the garbage can' aí the his son was a good lad and that 1 ordered the libeilous comments to
law of obligations. They mean it is was victimising him. They insisted be removed immediately and the
there simply to doai with cases that that the boy had the kriife oniy defendant was ardered to pay
other, longer estahlishcd arcas of because he was going fishing after £1.250 in damages and casts aí
iaw cannot deal with. 1 disagree. lhe school. It vias a nasty business. The £150. Of caurse, the local
(Viii LEEI 449

ai newspaper ran the story and that were specialising in trips to written down here you are. 64
everyone in the town could see that Austra lia. Green Lane, Lettford. ThaLs with a
the teacher was the victim of a libel. L: 1 see. So what we've got to do double T, L-E-double T- F-O-R-D.
= C: Can we start action immediately? now is check that the name is That's aiso in Hapshure. Postcode is
The sooner that this is over the avaiiabie for you. 0X37 3FS.
better. C: How do we do that? L: And does she prefer Mrs or Ms?
L: 1 have a feeling we wont need to. L: Oh. its an easy procedure. We C: Better put Ms.
Well make some enquiries to find search the register of names to see L: And when wili Ms Baker be able
out who the Internet Service if the name is aiready beung used. if to sign the form?
Provider is who hosts the website. it is, you won't be abie to use it. We
Well write to them and to Mr C: Sheli be coming in to sign it with
can make a search online. Here we Shane at lunchtime today.
Hetherington and say that if the are. Im putting in your proposed
defamatory com ments are removed name... ycs, yes, thats avaiiable. L: Good. Right the last thing we need
mmcd iately and there is a puhlic Good. Let me write that on Form is the directors dctaiis. 1 understand
apology then we will be willing to 10... Outback Adventures Ltd. that you and Shane wit be the
settle out of court. directors? Shanes surname is
C: Why have you added Ltd on the Bradman isn't it? We have to Iist the
C: Lets do that then. Could you end of the name?
start the process today? Im not directors in alphabetical order 50
interested in the damages so much L: Ltd stands for Limited. Ifyoure Shane's details need to go first. its
as making sure my good reputation setting up a private limited company Shane, spcit S-H-A-N-E and Bradman
is restored. If we can get some as you are, then hy iaw the name of speit B-R-A•D-M-A-N, isnt it?
money out of him III donate ali of iL the company must end either with C: Yep. He doesnt have a middie
to charity, then III have a much the word Limited, or the name. But he's actuaily a Dr. He did
ahhreviation, Ltd. a PhD clegree in ecotourism.
needed hoiiday! 1 wouid like my legal
costs to be covered though. 1 dont C: 1 see. Whats next? L: Rught. And his address?
see why 1 shouid have to pay for his L: 1 need your registered offuce C: 87 Hunts Roads, Oxton,
stupidity. address. The registered office is the Hapshure, 0X2 6G1 3 .
L: Certainly. And dont worry about piace where ali officual documents
will be sent, for exampie, tax L: And whats his date of burth?
this. The law in the UK says that
once an Internet Service Provider is docurnents, and communicatuons C: 14 Juiy 1979.
aware of a defamation they have a from Companies House. Aiso, if L: And his nationality?
legai duty to remove it immediately. someone sues the company, he or
C: Oh, he's an Aussie.
lf they dont remove it within a she can send the ciaim form to the
reasonable period of time they too registered off ice. L: OK, let mejust write that. There,
can be liable for damages. That ruie Australian. And his business
C: lii use my home address. lts 15
was established in this country as occupation is ... ?
London Road, Oxton, Hapshire.
long ago as 1996. 1 imagine the C: Put down travei consultant.
L: Hapshire is H-A-P-SH-l-R-E?
Service Provider wili insist that its L: And funaily, has he been a director
removed pretty quickiy once they C: Exactiy.
of any other cornpany in the last
receive our letter. Which wili L: And the postcode? five years?
hopefully be within a day or two. C: OX5 4HJ C: No.
C: Thank you Miss Reay. You have L: OK. The next section is oniy used L: Thank you. Now 1 need your
no idea what a relief this is to me. if an agent is acting for you, so we details. Mr Craig. ive got your name
L: Dont worry Mr Keily. Were here dont need to complete it. Next, are and address.
to help. Let's get some details froru the contact detaiis. You can choose
C: Yes, except my middie name.
you and we can get the bali roiling. ifyou want to complete this or not.
That's Robert.
lts so that if the staff at Companies
House have any questions about the L: And your birthday?
UNIT 7B form. they know who to contact. C: 21 November 1978.
THE LANGUAGE OF C: OK put my name, Peter Craig L: And your nationaiity is British?
BUSINESS LAW and my phone number, which is C: Yes.
01482 685341. Then 1 see the
UNIT LISTENING form has a space for DX number. L: Now we have to complete your
L: Good morning, Mr Craig. Ive got What does DX mean? business occupatuon.
ali the documents we need here to C: Oh, put Managing Director. That
L: That means document exchange.
set up your company. lii go through sounds very important!
lts a speciai type of postai service.
them with you and well fui them in lnstead of sending ietters by the L: Right, and have you been a
now, then youIl be able to sign director of any other company wuthin
normal postai service, iaw firms
them. First of ali, we must complete usualiy use DX it's quicker and the past five years. Mr Craig'?
this form. lts cailed Form 10 and it usualiy cheaper than the ordinary C: No.
gives information about the first
post. lil ieave it hiank, as it doesnt
directors of the company. First of ali L: Great, thats ali done. Ali it needs
affect you Now, the Company
the company carne. Its Outiand for you i5 to s!gn Just here... and
Secretary.
Adventures, isnt it? here, where it says signed by the
C: That's going to he Shane's sister. subscrubers. The subscribers are the
C: Well, that was the name we were
She works for a hig finance first sharehoiders aí the company.
using up to yesterday. But Shane,
company. Shes called Alice Good. And Shane and his sister cnn
who is the other person whos
Bradman, no, wait, that was her sugn it when they come in.
setting up this company with me,
maiden name. She got married last
and 1 have decuded that we want to
year, now shes. . .let me think... ah
caii it Outback Adventures, to show yes. Baker. Ive got her address
450
EXAM EXERCISE LISTENING Anyway. our solicitor asked us a lot the cornpany. Directors have this
Paul Evans: My name is Paul [vans. of questions and drew up a number fiduciary duty hecause they are in a
1 was rïiade redundant 12 months of documenls including the position of trust and confidence in
ago. 1 was very upsct when it Memorandmjm and Artmcles of relation lo the company. Directars
happened as 1 had worked for the Association. My wife, iudilh, and 1 have a general obligalion lo act o
company for 15 years. However, 1 are lhe oniy sharcholders and we good failh and in lhe best interests
got a good redundancy package and are both directors 01 the company. of lhe company anci not for any
this meant that 1 could survive for We had to appoinl a com pany improper purpose. They mustn'l, for
24 months without an income. 1 secretary too, and luckmly for me exampie. make a secret profll oul of
decided 1 would turn this into a Judith's friend agreed to he ocr their posilion.
positive experience and do what 1 company secretary. Shes a lawyer A director's duties were not clearly
have always wanted to do, which is although she doesnt practise now slated in slatule until 2006.
to become my own boss. 1 decided as she has two young children. We However, foliowing lhe Companies
to set up a husiness sourcing and had to decide on the amount of Act 2006, there is a now a statutory
selling goods from Asia and Africa. capital that the company has. There staternent of directors' duties. This
Not ali types of goods, but are two differenl capital values. the was done so thal lhe law is made
concentrating on art. Paintings, authorised share capital and the clear for directors. lhe codified duties
textiles and sculptures. in particular. issued share capital. l've learned o are contained in sections 170 to 177
Ali of my husiness is done onhine - lot in setting this cornpany up! aí the Ad. Section 170 makes it
have travelled extensively ali over Basically, the aulharised share clear that lhe dulies of a director are
the world and have made a lot of capital is lhe total nominal value aí owed lo lhe company and therefore
really good contacts, so 1 thought 1 shares thot lhe campany is allowed generally only the company can
could successfully combine this with lo issue and the issued share enfarce them. lhe Act then lisls
my computer skills. Also, working capital is the amounl lhe company seven specific dulies. lhe first duly is
with thc Internet meant 1 could work aclually does issue. 1 think that's lhe duty aí a director lo act within lhe
from borne without a lot of right! Our lawyer advised us on lhe carnpany's canstitulion and only
additional funding. amounts. Then we had to choose a exercise pawers for lhe purpose for
regislered office. We just use our which lhey are mnlended. lhe second
1 considered the type of structure
home address. Obviously if we renl duty found mn section 172 is lhe duty
that would he hest for my husiness
an office, which 1 think we will do to promote lhe success aí the
and decided to set up a private
soon, we might change the address company for lhe benefit aí ils
limited company. 1 wanted to give
of the registered office. The other mernbers as a whole. lhis new duty
the impression that it was a bigger
document which our lawyer drafted broadly replaces lhe common law
business than Just me working in the
for us. the articles of association, fiduciary duly lo act in lhe "besl
spare hedroom! By being a private
contains ali the roles and inleresls aí lhe company" lhal 1
limited company 1 can sign myself as
regulations of the company. It menlioned eariier. In fulfilling the
director on ali my correspondence
covers things like cornpany duty to promole lhe success aí lhe
with customers and suppliers.
meetings, notice periods, directors' company. lhe Act says lhal lhe
Peoples perceptions are reaily
payments, issuing shares and so on. dmreclors musl have regard to a iong
important.
lIs pretty cornplicated and to he lisI af specific faclors. These include
1 thought about buying an off-the- honesl 1 started to read it but soon lhe likely Iong-lerm consequence aí
shelf company from a company gove up because il is so any decision, lhe interesls of lhe
formation agent, but in the end 1 complicated! But our solicitor ran companys ernpioyees, lhe
decided to see a lawier because 1 through lhe most importanl points company's husiness relatmonships
dont know anything about the law with us. We had to pay a fee lo wilh supplmers, customers and others,
involved in setting up a company register the company, and two the mmpocl of lhe companys
and 1 wanted to make sure weeks after we sent ali the operalmons on lhemr communmly and
everything was done properiy. 1 also documents lo Companies Hause we lhe envmronmenl and so on. There
wanted to make sure the company received lhe cerlificate aí was consmderahle criticmsm of thms nevv
was set up exactly for our purposes. mncorporatian. lhat was four monlhs duty, wmth people expressmngfears
The lawyer acting for us did a great ago. Weve already got twa good that dmrectors will he more defensive
job and said we coulci incorporate orders from sarne big custorners. 1 mn themr actmons. This is hecause
lhe company under lhe narne of our know its foI gaing la be easy, but directors must consmder this long lmst
choice. There are a lot of rules its an excitmng time for us. of faclors wmth every aclion lhey take.
about names which surprised ne.
Time wmll tell whelher this happens
Ohviously you can't LiSO a nono
ar foI.
which might cause offence lo UNIT 9B
lhe thmrd duly is lo exercise
people, and you cant use a name THE LANGUAGE OF
that an existing company has, or independentjudgmenl, whmle
one thats very similar to it. There
COMPANY LAW seclian 174 deals wmlh lhe fourth
are also some words that you have duty, whmch is la exercise
UNIT LISTENING:
to get special permission to use in a reasonabie core, skill and dilmgence.
Lawyer: Good morning, ladies and An imporlanl fadar la cansmder ir ,
companys nome, such as English.
gentlemen. Thank you for coming lo lhis area is lhe individual directars
1 wanted to make sure that we could
this seminar. This morning's topic is levei of specialisl knawledge. lhe
use the nome as a domain nome on
the role of company directors cornmon law principies are now
the Internet as weli as using it as
following the recent introduction of clear, Directors who have specialisl
the campany name. We wanted lo
new legislation. This affecls ali knowledge musl exercise greater
calI ml Executive Art, but when 1 did
companies in the United Kingdom. core and skill lhan thase who do nol
an anime Companies House search
to see if the nome was availoble, mt The role and duly aí directors has have this particular knowledge.
wasn't. We finally chose Exclusive developed over the years from case Smrnilariy, different skills will he
Art Ltd. law and statute. '(ou are ali aware of expected of, say a finance director
the fmduciary duty of lhe director lo and a personnel director,
451
Section 175 provides for the fifth pay its dehts. The Official Receiver, voluntary liquidatian meons that the
duty, which is to avoid conflicts of who is an afficer of the court, directars have made a statutory
interest. A director must avoid a hecomes the liquidator of the declaratian aí salvency - in other
= situation in which he or she has, or company and he or she has a duty wards, the directors believe that a
can have, a direct or indirect to investigate the companys affairs company is solvent. lhis happens
interest that conflicts, or possibly and the causes of its íailure, when a family business is sald aff,
may confiict with, the interest of the including the conduct aí the for exampie, ar if the purpases aí
company. This duty is not infringed directors. A director can be the company have come ta an end.
however, if the matter has been disqualified from acting as a director The liquidation starts when the
authorised by independent directors, for a period of time ií, for example, members, in a general meeting,
so long as the director in question he or she made the position of the pass a resolutian ta wind up the
does not form part of the quorum creditors worse by continuing to company voluntarily. Remember. if it
making the decision. For those of trade when the company was is a voluntary uiquidation, the
you from companies having two insolvent. When the winding up is company is not insolvent.
directors with a quorum requirement complete, the com pany is farmally in the case of a creditors voluntary
of two be careful! dissolved and it no longer exists. liquidation, the company cannot pay
The sixth duty is not to accept Next is administration. This is a its debts. lhe process is started by
benefits, including bribes, from third court arder made to appoint ao the directors, not the creditars. lhe
parties, while the final duty is the administrator to manage the company carnes an extraordinary
duty in section 177 for a director to campanys affairs. A caurt may resaiution ta say that it connot
declare his or her interest in a make ao administration order when continue in business because of its
proposed transaction before the the company is unable to pay its liabilities and that it is advisable to
transaction is entered into. If a dehts and the court considers that wind up. A uiquidatar is appointed ta
director breaches this duty, he or hy making an administration arder, wind up the campanys afíairs. lhe
she commits an offence, which may the whale ar part of the campany uiquidatar does this by realising the
result in a fine. may be saved as a going cancern. campany's assets and paying its
l've prepared a fact sheet for you, lhe company, its directors ar its creditars. if anything is Ieft over. the
summarising your duties as a creditors start the procedure by members af the compony receive it.
director under the new legislation, making a petition agninst the In bath types aí vaiuntary
which you can take before you go. company. Whilc an administration liquidatian, when the companys
Now, are there any questions about arder is in force, the company affairs are fuuiy waund up, the formal
what Ive mentioned before we cannat be wound up and legal dissolution aí the company occurs
move on thc next point? proceedings agairist the company and it ceases ta exmst.
cannot be started except with
EXAM EXERCISE LISTENING: Weii, 1 hope that this heips just a
approval of the court. The
little. 1 am sure that you wiil gain
Heilo and welcome to the Banking administrator takes contrai oí ali the
some experience aí ali these
and lnsolvency department. My property of the company and makes
pracedures during your six-morith
name is Kim Watts and l'm very proposais for the creditors to
periad with this department. We
pleased to meet you ali. consider. The administration order
continues until the court decides have a great team here and
This is quite a large department everyone wiii be very happy to
that the arder is na longer needed
doing a lot of varied work. 1 answer any questions you hove, so
and formaliy discharges it.
specialise in insolvency. Most of our please feel free to come to any of us
clients are either banks or Another insoivency procedure is at any time.
companies. The banks have receivership or administrative
generally made a large loan to a receivership. A receiver is appointed
company, often secured by a hy the holder of a debenture of the
debenture, and now the company is company secured hy a floating
failing to make its repayments on charge. Usually this is a hank. lhe
the loan, because it is in financial company is said to he "in
difficulties. The bank instructs us to reccivership. lhe receiver has the
assist with the recovery of the debt. power ta sell the assets cavered by
Our other clients represent the other the fiaating charge and give the
side of the com. They are praceeds to the charge-halder.
companies who are facing A further procedure is a corïipany
insolvency and they come to us for voluntary arrangement. We cali this
advice on the best way forward. a CVA. lhis is when a campany
lhe most common description of makes an agreement with its
insolvency is that a company cannot creditors in arder ta settle its debts
pay its debts when they become over an agreed periad of time. lhe
due. lhere are various insolvency agreement has to be approved by
procedures that are available to the court. Meetings aí the company
companies. Id like now to briefly and creditors are called to approve
outline these procedures, as they the proposed arrangement. Once
oftcn causc confuson until you approved, a!! ereditors who had
hecome more familiar with them. natice oí the meeting and were
First is the compulsory liquidation aí entilled ta vote are bound by the
a company. This is when the court terrns of the arrangernent. lhe
campany can continue trading
orders the company to be wound
during the CVA and afterwards.
up. Winding up usually starts by a
creditor making a petition on the Finally, there are twa types aí
grounds that the company cannat valuntary liquidatian. Members'
452
The Lawyer's English Language Coursebook is an essential modem text for
any intemational lawyer or law student. This book is a complete course of study for students of the
TOLES Foundation and Higher exams in legal English. It is also an excellent book for anyone with
an interest in the language of the law, particularly for lawyers using English as a seond ranguage.
Ttie book can be used for self-study and contains a comprehensive answer key.
The Units
1 The legal Profession 6 Understanding Contracts (1)
2 The Language of Banking 7 The Language of Business Law
3 The Lariguage of Contract Law 8 Modem Letter Writing
4 The Language of Employment Law 9 The Language of Company Law
5 The Language of the Law of Tort 10 Understanding Contracts (2)
This book
assumes no existing knowledge of law and legal Engjish. It explains legal vocabulary
in a refreshingly clear way.
e builds skills and confidence in legal Englisti from a reallstic startlng polnt.
s keeps a genuine focus on the language of the law and does not ask students to
waste time on irrelevant material that they will not require in their chosen career.
• deals with demanding core subjects such as commerclal contracts and letter wrltlng
in a practical, in-depth way that global law firms require.
• chalienges mOre expesienced students to reflect upon deep-rooted mistakes in their
legal English and encourages self-correction at every stage of leaming. -
• is up-to-date. It takes into account recent language reforms and recent changes to
the legal system in the OK.
The author
Cathenne Mason currently teaches English to intemational legal professionals in Cambridge. She
teaches groups of law students, working lawyers, legal transiators and interpreters. More recently
she has been involved in working with solicitors in London to develop a first-class contract drafting
course for intemational lawyers. She is the author of several legal Englisli books and writes for the
TOLES examination panei. She has worked closety with the staff of organisations such as The
Bntish Council and The European Court of Justice.
The TOLES examination series

The TOLES senes is the wotld's market leader in legal Engtish examinations. If you would
like to know more about the TOLES senes, please contact us at www.toles.co.uk
This book is a complete course of study for the TOLES Foundation and Higher exams
in legal English.
T Te!: +44 (0)191 4920404

TOLES intb@toles. co . tik
rESI or LEGAL ENGLISII SKILLS
ISBN 978-0-9540714-6-2
Globol Legal English Ltd. Registered in Englond & Woles. Compony number 4101343
Suite 2, The Pino Troe Centre, Durhom Road, Birlley, Courrty Durhom, DH3 2TD, UK £34.00

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British Library Cataloguing-in-Puhlication Data

lA The Legal Profession 9 3A The Language ot Contract Law 73

Working in aw 9 A contract case 73

Using your knowledge 34 Where does contract Iaw come from? 93

213 The Language of Banking 55

Global Legal Enghsh

rincin a oh 137 lhe dfferen parts af a aritten ccu7a. 215

7A The Language of Business Law 239

5B The Language of the Law of Tort 175

What is tortious hability? 177 lncorporated and unincorporated businesses 263

6A Understanding Contracts (1) 193 Paperwork 278

GOuai Legal Englisli

Dates 295 Some important commercial vocabulary 373

Salutations 296 Termination clauses 375

References 299 Retention of titie clauses 379

Subject lines 300 Warranty, indemnity and force

9B The Language of Company Law 349

People conriected with a company 349

Global Legol English

Ni Claim form (CPR Part7)

Contracts (Rights of Third Parties) Act 1999

The Unfair Contract Terms Act 1977

Balfour v Baifour (1919) Court of Appeai

Ali images © Getty Images

Simon Battensby/2003763911Getty Images

Suzanne & Nick Geary/13C9729-001/Getty Images

John Fox)ç'71019301/Getty Images

John Fox/71042734/Getty Images

Antonio M Rosario/72 797 149/Getty Images

Robert Clare/200368565-001/Getty Images

Lambert/Archive Photos/J K723 7-001/Getty 1 mages

you are often expected to interpret or amend long commercial contracts

you receive letters and emails written in English on a daily basis

This coursebook is intended to be a complete course of preparation for the TOLES

Giodi Legal Ergiii

Solicitor Attorney Barrister Lawyer

GobI Lega' Engiis 9

c OnIy barristers can speak on behalf of clients in court. True False

MAKING A CLAIM IN THE CIVIL COURT

a Mr Belierby is opening a new factory. He d Mr Flynn owns a restaurant. He has a

criminal civil criminal civil

What do these words mean?

a Starting a claim means the sarne as starting proceedings. True False

b You can prosecute' someone in the civil court. True False

e It is free to start a claim in the County Court. True False

What do these words mean?

c (iobdI Lp,aI English 11

a To pay a fee means to... • .start a claim ri the civil court.

• . .Iisten to the details of the claim and listen to

a The claimant a claim in the County Court.

Example question: What is the duty of care?

a How do lawyers say lo break' a duty of care?

c There are different types of tort. In general, what is a tort?

GIo Lcp,l hngllsh 13

e What does suing mean?

a Iaw of contract f employment law

b company law g family law

c land law h immigration law

d lawoftort i inteilectual property law

e law of equity and trusts j criminal law