Станислав Коростелев.

Английский с Уилки Коллинзом. Женщина из сна / Wilkie Collins. The Dream Woman

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   Consideration consists of a mutual exchange of benefits and sacrifices between contracting parties. In the exchange, what is a benefit to the offeree is, at the same time, a sacrifice to the offerer. Likewise, the benefit bargained for by the offerer results in a sacrifice by the offeree. The legal term used for this sacrifice is detriment. A detriment is any of the following: doing (or promising to do) something that one has a legal right not to do; giving up (or promising to give up) something that one has a legal right to keep; and refraining from doing (or promising not to do) something that one half a legal right to do. This last type of detriment is known as forbearance. Consideration has three characteristics:
   • promises made during bargaining are dependent on the consideration to be received;
   • the consideration must involve something of value; and
   • the benefits and detriments promised must be legal. Unless an agreement has been bargained for, the law will not enforce it. An agreement involves a bargained-for exchange when a promise is made in exchange for another promise, a promise is made in exchange for an act, or a promise is made for a forbearance of an act. The concept of bargaining means that each party is hurt in some way if the other party fails to keep a promise. Conversely, each party gains something when the promises are kept and the exchange is made.
   It is important only that the parties freely agree on the value and the price. There is, however, an exception to this rule. Courts, at times, give a party relief when the consideration is so outrageous that it shocks the conscience of the public. A court may refuse to enforce a contract or any clause of that contract if it is considered unconscionable, that is, ridiculously inadequate, for example, when bargaining power between the two parties is greatly unequal.
   Consideration requires that the benefits and sacrifices promised between the parties be legal. Absence of legality renders the consideration invalid. Thus, a party cannot agree to do or promise to do something that he or she does not have the legal right to do.
   Most often, consideration takes the form of money, property, services, or benefits and sacrifices.
   A promise not to sue, when there is the right to sue, is enforceable when supported by consideration. Promising not to sue is a forbearance. A promise not to sue, in exchange for an amount of money, is a customary way to settle a pending lawsuit. Settlements of this type are often preferred to expensive and time-consuming litigation.
   Acceptance of an agreement not to sue, supported by consideration, terminates one's right to continue any lawsuit, at present or in the future, on the grounds described in the agreement. A promise not to sue is commonly called a release.
   When charitable pledges are made to fund a specific project, the pledgee's sacrifice is carrying out that project.
In this sense, pledges are considered unilateral agreements, enforceable only when accepted by commencement of the proposed project.
   Problems may arise when the consideration involved in a contract is money and the parties disagree as to the amount of money that the debtor owes the creditor.
   A disputed amount, or unliquidated amount, is one on which the parties never agreed. Final settlement of disputed claims may lead to misunderstanding, dispute, and lengthy negotiation. If a creditor accepts as full payment an amount that is less than the amount due, then the dispute has been settled by an accord and satisfaction. Accord is the implied or expressed acceptance of less than what has been billed the debtor. Satisfaction is the agreed-to settlement as contained in the accord. Only if the dispute is honest, made in good faith, and not superficial or trivial will the courts entertain arguments based on accord and satisfaction.
   An undisputed amount, or liquidated amount, is one on which the parties have mutually agreed. Although a party may have second thoughts about the amount promised for goods or services rendered, the amount that was agreed to by the parties when they made their contract remains an undisputed amount. A partial payment in lieu of full payment when accepted by a creditor will not cancel an undisputed debt.
   As a general rule, a contract is not enforceable if it lacks consideration.
   Some jurisdictions have eliminated the element of consideration in a few specifically named contracts. Typical agreements falling into this category include promises bearing a seal, promises after discharge in bankruptcy, debts barred by the statute of limitations, promises enforced by promissory estoppel, and options governed by national law.
   Persons discharged from indebtedness through bankruptcy may reaffirm and resume their obligations, as prompted, perhaps, by moral compulsion. The bankruptcy court must hold a hearing when a reaffirmation is intended, informing the debtor that reaffirmation is optional, not required, and informing the debtor of the legal consequences of reactivating a debt.
   Laws known as statutes of limitations restrict the time within which a party is allowed to bring suit.
   Under the doctrine of promissory estoppel, a promise may be enforceable without consideration. This doctrine is used, on occasion, to prevent injustice when a person changes his or her position significantly in reliance on another's promise and the promise is not fulfilled. The court will «estop» the person who made the promise from claiming that there was no consideration. Certain conditions must be met, however, before a court will apply this principle. First, the promise must be made to bring about action or forbearance by another person who gave no consideration. Second, the one who gave no consideration must have relied on the promise and must have changed his or her position in a significant way. Third, injustice can be avoided only by enforcing the promise.
   An option is the giving of consideration to support an offerer's promise to hold an offer open for a stated or reasonable length of time. The modern trade law has made an exception to the rule requiring consideration when the offer is made by a merchant; in such cases, an offer in writing by a merchant, stating the time period during which the offer will remain open, is enforceable without consideration.
   Certain promises, however, the courts do not enforce because they lack even the rudimentary qualities of valid consideration. Included in this category are illusory promises, promises of future gifts, promises of legacies, promises based on past consideration, and promises based on preexisting duties.
   An illusory promise is one that does not obligate the promisor to anything. A party who makes an illusory promise is the only one with any right to determine whether the other party will be benefited in any way. An illusory promise fails to provide the mutuality of promises required in establishing consideration.

   Exercise 1. Comprehension questions:
   1. Explain the term detriment.
   2. What does the concept of bargaining mean?
   3. When aren't the parties free to negotiate privately the amount of money to be paid?
   4. Which problems might arise with consideration?
   5. What does statute of limitation suppose?
   6. Explain the doctrine of promissory estoppel.
   7. When are charitable pledges used as consideration?

   Exercise 2. Find in the text English equivalents to the following:
   Согласие; встречное удовлетворение; ущерб; воздержание от действия; нереальное обещание; дискреционное право; предшествующее встречное удовлетворение; залогодержатель; ранее существовавшие обязательства; лишение права возражения на основании данного обещания; отказ от права; передача права другому лицу; документ об отказе от права или о передаче права; исполнение; закон об исковой давности; недобросовестный.

   Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:
   Встречное требование; зачет встречного требования; однородное требование; предпочтительное удовлетворение требований; встречное заявление; основное требование; встречное удовлетворение; удовлетворение в части; оставление без удовлетворения.

   Exercise 4. Be ready to talk on one of the following topics:
   1. Explain the term consideration and identify the characteristics necessary for valid consideration.
   2. Describe the attitude of the court when dealing with questions that involve the adequacy of consideration.
   3. Discuss the types of consideration that can be used to bind parties to one another in a contractual situation.
   4. Outline the procedure that a debtor and creditor may use to settle a claim by means of accord and satisfaction.
   5. Identify those agreements that may be enforceable by a court of law even though they lack consideration.

   Exercise 5. Make up your own dialog on the case:
   In Hanna v. Perkins, the buyer tendered a check with the notation «in full for labor and material to date.» The seller indorsed the check «Deposited under Protest» and deposited it. Seller sued for the balance of the contract price and buyer moved for summary judgment on the ground of accord and satisfaction. The New York court held for the seller and said that the defendant failed to allege the existence of an honest dispute about the amount due and thus there was no accord and satisfaction. The court held:
   If it were not that this court finds that triable issues of fact are present, this court would deny the motion by holding this particular section of the code would seem to favor plaintiff's overriding endorsement of «Deposited under protest» as a reservation of his right to collect payment of the balance.

   Exercise 6. Resume in industry buzz:
   Consideration (each party makes 1 consideratn supported prom.)
   1. 3 Tests for Consideration:
   a. Prom. must induce current perf. in exchange (bargained for exchange).
   b. Detriment from Promisor (offering detriment).
   c. Promise binding, not illusory (mutuality of the prom.).
   2. Promise Induced for Current Perf. in Exchange (giving $ or conduct):
   a. Promises based on moral feelings FAIL.
   b. Promises based on past acts & don't ask anything currently in exchange FAIL, EXCEPT:
   (1) debt barred by technical defense, new written promise to revive enforceable (amt stated up to debt).
   (2) Promisor requested act & promisee perf. w/ expectation of paymt, most enforce payment.
   3. Detriment From Promisor (detriment to Promisee) Doing something promisor not otherwise required to do or NOT doing something promisor has rt or good faith belief had rt to do (can be a legal disadv. – not smoking):
   a. Signif. MIN says if no detriment from promisor look for benefit to promisee.
   b. NOT a detriment if Promisor had PRE-EXISTING duty to do it.
   EXCEPT:
   (1) unforeseen difficulty so severe could walk away but promise to do anyway.
   (2) Good faith exception to disputed duties (misunderstand & new prom. to compromise; bona fide good faith dispute).
   4. Binding, Not Illusory Promise: can't have unrestricted or total discretion on whether to perform (mutuality of obligation):
   a. NOTE: Requirement & Output promises look illusory but not b/c Doe imposes reas. quantity requirement, nor are satisfaction conditions b/ c must be SUBJECTIVE good faith dissatisfaction.
   5. Consideration Substitutes (MAKE SURE PROMISE DOESN'T ALREADY HAVE CONSIDERATION FIRST!):
   a. Code Consideration Substitutes
   –> Merchant's firm offer to keep open enforced up to 3 mos. unless consideration then for time stated.
   –> For CODE, don't need consideration for modificatn IF MADE IN GOOD FAITH.
   b. Common Law Consideration Substitutes:
   (1) MIN accept Ks under seal w/o consideration, or
   (2) Prom. Estoppel: if promisee detrimentally, reas. & foreseeably relies on promise, it's enforceable though no good consideration (buy car based on prom. to pay when your thumb smashed).
   –> Make sure not good consideration 1st b/4 you apply these


   Договор действителен, когда в нем отражены все существенные условия, предусмотренные законом, и условия на которых настаивает сторона договора. Сделка может быть признана судом недействительной, например, если она не соответствует закону или иным правовым актам, либо совершена с целью, заведомо противной основам правопорядка или нравственности (глава 9 ГК РФ).

 //-- List of key terms and word combinations: --// 
   – conspiracy – сговор (о совершении преступления)
   – exculpatory agreement – оправдательное, оправдывающее соглашение
   – in pari delicto – равная вина
   – local option – право жителей округа контролировать или запрещать
   – public policy – публичный порядок
   – restraint of trade – ограничение свободы торговли
   – usury – ростовщичество

   An agreement may involve a valid offer, an effective acceptance, mutual assent, competent parties, and valid consideration and still be void because of illegality. Parties cannot be allowed to enforce agreements that are contrary to the law. The most obvious type of illegal contract is one in which the parties agree to perform some unlawful activity.
   Some activities that are neither crimes nor torts have been made illegal by specific statutory enactments. Chief among these activities are usurious agreements, wagering agreements, unlicensed agreements, unconscionable agreements.
   The illegal practice of charging more than the amount of interest allowed by law is called usury. To protect borrowers from excessive interest charges, jurisdictions have passed laws that specify the rate of interest that may be charged in lending money.
   Any agreement or promise concerning gambling or a wager is invalid and may not be enforced. States make exceptions when bets are placed in accordance with laws that permit horse racing, lotteries, church-related or charitable games of bingo, and gambling casinos regulated by government authority.
   Certain businesses and professions must be licensed before they are allowed to operate legally. One reason for requiring a license is to provide a source of revenue, part of which is used to supervise the business or profession being licensed. Another objective of licensing is to provide supervision and regulation of businesses and professions that might inflict harm on the public if they were allowed to operate without such controls. In this category are physicians, nurses, dentists, attorneys, engineers, architects, and others in public service who must be closely supervised for the protection of the public. Courts distinguish between a license for revenue and a license for protection of the public. If a license is required simply to raise revenue, the lack of a license will not necessarily void a contract. In contrast, if a licensing requirement is designed to protect the public, it is likely that unlicensed people will not be able to enforce their contracts.
   A court is not required to enforce a contract or any part of a contract that it feels is unconscionable. An agreement is considered unconscionable if its terms are so grossly unfair that they shock the court's conscience. If the court so desires and if it can do so to avoid the unfair consequences, it can also limit how the unconscionable clause in an agreement is carried out.
   The government has the power to regulate the health, safety, welfare, and morals of the public. Any action that tends to harm the health, safety, welfare, or morals of the people is said to violate public policy. Public policy is a general legal principle that says no one should be allowed to do anything that tends to injure the public at large. Agreements most commonly invalidated, as contrary to public policy are those to obstruct justice, interfere with public service, defraud creditors, escape liability, and restrain trade.
   Agreements to obstruct justice include agreements to protect someone from arrest, to suppress evidence, to encourage lawsuits, to give false testimony, and to bribe a juror. The category also includes a promise not to prosecute someone or not to serve as a witness in a trial. Any agreement promising to perform any of these activities would be void.
   Agreements interfering with public service are illegal and void. Contracts in this group include agreements to bribe or interfere with public officials, obtain political preference in appointments to office, pay an officer for signing a pardon, or influence a legislature illegally for personal gain.
   Agreements to defraud creditors, that is, those that may remove or weaken the rights of creditors, are void as contrary to public policy. Thus, a debtor's agreement to sell and transfer personal and real property to a friend or relative for far less than the actual value would be void if it were done for the purpose of hiding the debtor's assets from creditors who had a legal claim to them.
   A basic policy of the law is that all parties should be liable for their own wrongdoing. Consequently, the law looks with disfavor on any agreement that allows a party to escape this responsibility. One device frequently used to escape legal responsibility is the exculpatory agreement. An exculpatory agreement is usually found as a clause in a longer, more complex contract or on the backs of tickets and parking stubs. The exculpatory clause states that one of the parties, generally the one who wrote the contract, is not liable for any economic loss or physical injury, even if that party caused the loss or injury.
   The law tries to be a constant protector of the rights of persons to make a living and to do business freely in a competitive market. If persons enter into contracts that take away these rights, the law will restore the rights to them by declaring such contracts void. A restraint of trade is a limitation on the full exercise of doing business with others.
   Agreements made with the intent to suppress competition, fix prices, and the like are void as illegal restraints of trade.
   When the entire agreement is tainted with illegality, no valid contract results. Even though specific sections of the agreement may be legally enforceable if standing alone, illegality of any part of the entire contract renders it void.
   When an agreement is divisible and the illegal promises and acts are completely segregated from other sections that are not tainted by illegality, courts may enforce those parts that are legal and rescind those parts ruled illegal and invalid. Enforcement of parts determined to be valid and enforceable, of course, is tempered by the extent of illegality of the other divisible parts.
   When both parties to an illegal agreement are equally wrong in the knowledge of the operation and effect of their contract, they are said to be in pari delicto (in equal fault). In such cases, the court will not give aid to either party in an action against the other and will not award damages to either.
   When the parties are not in pari delicto, relief will often be allowed if sought by the more innocent of the two. Although this rule is not applicable when one party may be less guilty of premeditation (plotting or planning an illegal act) and intent to achieve a gain through known illegal acts, it may be applied when one party is unaware that a law is being broken and has no intent to do a wrong.

   Exercise 1. Comprehension questions:
   1. What is the most obvious type of illegal contract?
   2. Explain the term usury.
   3. What has been done to protect borrowers from excessive interest charges?
   4. What are the objectives of licensing?
   5. What does the term in pari delicto mean?
   6. What does the exculpatory clause state?
   7. What may be the consequences of illegal contracting?

   Exercise 2. Find in the text English equivalents to the following:
   Сговор; оправдывающее положение; равная вина; публичный порядок; ограничение свободы торговли; ростовщичество.

   Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:
   Оспоримая сделка; притворная сделка; мнимая сделка; последствия недействительных сделок; двусторонняя реституция; сделка совершенная под влиянием заблуждения; сделка совершенная под влиянием обмана; сделка совершенная под влиянием угрозы; ограничение полномочий на совершение сделки; выход за пределы ограничений; пределы правоспособности; цель деятельности юридического лица; лицензия организации; недействительность по иску.

   Exercise 4. Be ready to talk on one of the following topics:
   1. Distinguish between licenses designed to raise revenue and those designed to provide supervision and regulation of a business or profession.
   2. Determine the legal effect of a contract made by parties who are not licensed in a particular business or profession.
   3. Describe when the courts might consider an agreement unconscionable and indicate how a party might defeat a claim of unconscionability.
   4. Explain the legal principle of public policy and note how the courts usually treat agreements found contrary to public policy.
   5. Distinguish between the application and effect of in pari delicto when an illegal contract is entire and indivisible and when it is divisible.

   Exercise 5. Make up your own dialog on the case: In Toker v. Westerman, the defendant had purchased a refrigerator-freezer for a cash price of $899.98. The total price including interest, insurance, etc. was $1,299.76. At trial, an appliance dealer had testified that the freezer in question was known in the trade as a «stripped unit» and that a reasonable price at the time of the sale would have been between $350.00 and $400.00. The holding of the court rests exclusively on excessiveness of the price, and it reads as follows:
   Suffice it to say that in the instant case the court finds as shocking and therefore unconscionable, the sale of goods for approximately two and one-half times their reasonable retail value. This is particular so where, as here, the sale was made by a door-to-door salesman for a dealer who therefore would have less overhead expense than a dealer maintaining a store or showroom.


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