The practice of law Th e term 'civil law' contrasts with both 'common law' and 'crim inal law'.

h e term 'civil law' contrasts with both 'common law' and 'crim inal law'. In th e first
sense of t he term , civil law refers to a body of law 1 ) . ...... u.. . written lega l cod es

derived from fundamenta l normat ive prin ciples. Lega l 2) .............................. are settled by
reference to th is cod e, whi ch has been arrived at t hrou gh 3 ) ....................................... . Judges are
4) ....................................... th e written law and its 5 ) ................................. .
In co ntrast, co mmon law was origina lly developed t hro ugh 6 ) u • , at a t ime
before laws were written down. Common law is based on 7 ) ....................................... created by
PART 1: THE LEGAL SYSTEM j ud icial decisions, which mean s that past 8 ) ....................................... are taken into con sideration
when ca ses are decided . It should be noted t hat today co mm on law is also
9) i.e. in writte n fo rm .
Reading A: Bodies of Law
u • • ,

In t he seco nd se nse of t he te rm, civil law is distin guished f rom crimin al law, and refers
to t he body of law dea ling with 10) ....................................... matters, such as breach of contract.
1.1 Read th e exce rpts below fro m t he co urse cata logue of a Brit ish univers ity's
summer-sc hool programm e in law and answer t hese qu estions. 1.4 Whi ch body of law is th e basis of th e lega l system of yo ur jurisdiction?
1 Wh o is each co urse inte nded for?
2 Whi ch course dea ls wit h co mm on law? Reading 8: The adversarial and inquisitorial systems
3 Wh ich course studies th e history of Euro pea n law?
Afurther difference between the civil-law system and the common -law system lies in the
A B way proceedings are conducted.
LAW 121: Introduction to English law LAW 221: Introduction to civil law
2.1 Rea d th e t ext below comparin g th e two syste ms and answer th ese questions.
This course provides a general overvi ew of More individuals in the world solve their legal
English law and the common -law system. The problems in the framework of wh at is called the 1 Whi ch system is characteristi c of com mon-law co unt ri es?
course wi ll look at the sources of law and the civil -law system than in the An glo-Saxon 2 How does th e way evid ence in a tri al is gath ered and presented differ in t he two
law-makin g process, as well as at the justice case-law system. This course will introduce systems?
system in England. Students will be introduced to students to the legal systems of Western Europe 3 Wh at is th e ro le of th e attorn ey in ea ch system?
selected areas of Eng lish law, such as criminal that have most influenced the civil-law legal 4 In your opinion , whi ch system is best suited for arrivin g at th e trut h?
law, contract law and the law of torts. The systems in the world . It aims to give students an
relationship between the Eng lish common law insight into a system based on the superiority of
T he inqui sitorial sys tem, whi ch is empl oyed in most civ il -law juri sdi cti ons, can be defin ed by compari son
and EC law will also be covered. written law. The course wil l cover the application w ith th e ad versari al system used in the U nited States and Great B ritain. In th e adversari al system , two or
and development of Roman law in Eu rope to the more oppos ing pm:ties ga th er evidence and present it, and th eir arguments, to a judge or jury.
The course is designed for those international
making of national codes all over the world. T he judge or jury know s nothing of th e liti gati on until the parti es present th eir cases to the dec ision-maker.
students who will be studyin g at English universi-
Furtherm ore, in a crimin al tri al, f or example, the defendant is not required to give testim ony.
ties later in the academic year. Other students The course is intended to prepare students wh o
In the inqui sitori al system , th e pres iding judge is not a pass ive rec ipi ent of inform ati on. Rath er, he or
with an interest in the subject are also welcome are going to study in a European university for the
she is primarily responsibl e f or superv ising th e gath erin g of the ev idence necessa ry to reso lve th e case.
to attend, as the contact points between Eng lish different approach es to law that th ey are likely to He or she actively steers th e sea rch for evidence and questi ons th e w itnesses, including th e respondent or
law and civil law are numerou s. The seminars and face in their year abroad. defendant. Attorn eys play a more pass ive rol e, suggestin g routes of inquiry for th e pres iding judge and
all course materials are in English. fo llowing th e judge 's questionin g w ith questi oning of th eir own. A ttorney questi oning is often bri ef beca use
th e judge tri es to ask all relevant question s. The goal of both the adversarial sy stem and the inquisitorial
sys tem is to find the truth . But th e adversa ri al system seeks the truth by pitting the parti es aga inst each other
1.2 Match these bodi es of law (1 -3 ) with th eir definitions (a - c) . in the hope that competition will revea l it, wh ereas th e inqui sitorial sys tem seek s th e truth by questionin g
those most fam ili ar with the events in di spute. The adversari al system pl aces a premium on the indi v idual
1 civil law a area of the law wh ich deals with crimes and the ir punishments, rights of th e accused, wh ereas th e inqui sitori al system pl aces the ri ghts of the accused secondary to the
2 common law in cluding fin es and/or im prisonment (a lso penal law) search for truth.
3 criminal law b 1) lega l system developed from Rom an cod ified law,
established by a state for its regu lation; 2) area of the law 2.2 Underline th e verbs in th e text above th at appea r with th e nouns below (1 - 3). Th en
concerned with non-crim in al matters, rights and rem edies co mbin e t he verbs in th e box with th e three nouns to make word partn erships. Som e
c lega l system which is th e found at ion of th e lega l systems of of th e verbs go with more th an on e noun.
most of th e English-spea king countries of the world, based
on customs, usage and court decisions (also case law, dismiss gath er give hear prese nt provide recant
judge-made law) rej ect support uncover
1.3 Complete the text on the next page contrasting civil law, common law and crimina l
law using th e words in the box. 1 evid ence 2 test im ony 3 argum ents
2.3 Make sentences about th e rol e of the jud ge in th e inquisitorial system and th e ro le of
based on bound by codified custom disputes legislation th e attorn ey in the adversarial system using som e of the verb - noun coll ocations from
non-crimina l precedents provisions ru lin gs Exercise 2.2.

Unit 1 The practice of law ~

 Reading C: Types of Law Speaking A: Explaining what a Law says
The word law refers generally to legal documents which s.et forth rules governing a particular
kind of activity.
There are several ways to refer to what a law says. Look at these sentences:
3.1 Read th ese extracts, which each co nta in a wo rd used to talk about types of law.
The law stipulates that corporations must have three governing bodies.
Wh ere did each appea r? Mat ch each ext ract (1-5) wit h its so urce (a-e).
The law provides that a witness must be present.
1 ,----------------------------, 2 ,-------------------------~
The patent law specifies that the subj ect matter must be 'useful'.
The new EU Working Hours Directive is When a statute is plain and unambiguous, the These verbs can also be used to express what a law says:
reported to be causing controversy amo ngst court must give effect to the intention of the
the med ical profession. legislature as expressed, rather than detennine
The law states 1 sets forth 1 determines 1 lays down 1 prescribes that ...
what the law shou ld or shou ld not be.
3
The purpose of this Ordinance1 is to 4 Choose a law in yo ur ju risd icti on th at yo u are fa mil iar wit h and explain what it says using
regulate traffic upon the Streets and Public These workplace safety and health
regulations are designed to prevent th e verbs listed in th e box above.
Places in the Town of Hanville, New
Hampshire, for the promotion of the safety personal injuries and illnesses from
and welfare of the public. occurring in the workplace.
Reading D: Types of court
5
Mr Speaker, I am pleased to have the oppo rt uni ty to prese nt th e Dog Co ntro l
Am end ment Bill to the House. It is a fu rther mil esto ne in meetin g th e changin g
Courts can be distinguished with regard to the type of cases th ey hear.
exp ectation s we have about what is re spo nsibl e dog ownershi p. Matc h each of t hese types of court (1 - 9) with th e explanat ion of what happens
th ere (a- i).

1 (UK) by-law/ bye-law

1 appellate court (or co urt of a This is where a perso n un der t he age of 18 wou ld be tri ed.
a court ruling c newspaper e brochure for empl oyees appea ls, appea ls co urt) b This is t he co urt of prim ary ju risd iction, where a case is
b loca l governm ent document d parliamentary speech 2 crown court hea rd for th e first tim e.
3 high court c This is where small crim es are tried in t he UK.
3.2 Find wo rds in th e extracts in Exercise 3.1 whi ch match t hese definiti ons. 4 juvenile court d This is where law students argue hypotheti cal cases.
1 ru les issued by a govern ment agency to ca rry out t he intent of t he law; authorised 5 lower court (or co urt of f irst e Th is is whe re a case is reviewed which has already bee n
by a st at ute, and genera lly providin g more detail on a subj ect t han th e statute insta nce) heard in a lower co urt.
2 law enacted by a town, city or co unty govern ment 6 magistrates' court f This is where cases involvin g a lim ited amount of money are
3 draft docum ent befo re it is made into law 7 moot court handled.
4 lega l device used by t he Europea n Union to establish policies at th e Europea n level 8 small-claims court g This is where se ri ous crimin al cases are hea rd by a jud ge
to be in corporated into th e laws of th e Member States 9 t ribunal and a jury in t he UK.
5 form al written law enacted by a legislative body h This is where a group of specially chose n people exa min e
lega l probl ems of a particul ar type, such as employment
3.3 Compl ete th e se ntences below usin g th e words in th e box.
disputes.
This is usually t he highest co urt in a j urisdiction, t he court of
bill directive ordin ance regu lati ons st atutes
last resort.

1 Th e Town Council will con du ct a public hearing rega rdin g a proposed ..

co nce rnin g prope rty tax.
2 Acco rdin g to th e ..... ............ co nce rnin g working tim e, ove rt im e wo rk is work whi ch is
Speaking 8: Civil-court systems
offi cially ord ered in excess of 4 0 hours in a wo rkin g wee k or in excess of eight Work in small groups and disc uss t hese qu esti ons.
hours a day.
3 Ea rl y this yea r, th e governm ent introduced a new ... ................ on electronic comm erce 1 Descri be th e diffe rent types of co urt in your jurisdiction and th e areas of law th ey
dea l with .
to Parli ament.
4 A number of changes have been made to t he federal u • governin g th e seizin g 2 Select one type of co urt in yo ur jurisdiction and expl ain wh at kinds of case it
dea ls with .
of computers and th e gath ering of electroni c evid ence .
5 Th e European Union .. u •• on Dat a Protect ion established lega l prin cipl es aim ed
at protectin g person al dat a privacy and th e free flow of data.

Unit 1 The practice of law ~

 8.2 Match th ese doc um ents (1-9) with th eir definiti ons (a- i).
Reading E: Persons in court
1 affi davit a a document informing so meone that th ey will be involved in
Co mplete t his diagram with th e word s and definition s below (a - f). 2 answe r a lega l process and instru ctin g th em what th ey must do
3 brief b a document or set of documents containing details
4 complaint about a court case
5 injunct ion c a document providing notificat ion of a fact, claim or
public official who has 6 motion proceeding
the authority to hear and
7 notice d a forma l written statement setting forth th e cause of action
decide cases
8 pl eading or th e defence in a case
9 writl e a written statement th at som ebody makes after th ey have
sworn officially to tell th e truth , which might be used as proof
in court
f an app li cation to a court to obtain an ord er, ruling or
decision
g an official ord er from a court for a person to stop doing
so mething
h in civil law, the f irst plead in g fi led on behalf of a pla intiff,
person who has
whi ch initiates a lawsuit , settin g forth t he facts on wh ich th e
specialised knowledge
claim is based
of a particu lar subject
who is call ed to the principa l plead ing by th e defendant in respon se to a
5) testify in court comp laint
1 Since the 1999 re form rules, the term claim form is used in the UK.

8.3 ~:: Listen agai n and tick the docum ents that the lawyer mentions.
employee who takes person who
records, files papers 6) .. appeals a deci sion 1 affidavit D 4 co mpl aint D 7 notice D
and issues processes to a higher court 2 answer D 5 injun ction D 8 pl ea ding D
3 brief D 6 motion D 9 writ D
8.4 Match each verb used by the lawyer (1 - 5) with its defin it ion (a-e).
a expert witn ess
b appe ll anF 1 to draft a document a to deliver a lega l document to someo ne, demanding
1
c person who is sued in a civil lawsuit 2 to issue a document that they go to a court of law or that they obey an
d officer of th e co urt whose duties in clu de keeping order and assisting the j udge 3 to file a document with an authority order
and jurors 4 to serve a document on someo ne b to produce a pi ece of writin g or a pl an that you
e person who pl eads cases in court (or to serve so meone with a document) intend to change later
f hypothetical person who uses good jud gment or co mmon se nse in handling 5 to submit a docum ent to an authority c to deliver a docum ent formally for a decision to be
practical matters; such a person 's actions are t he gu id e in determining wh ether an made by others
individual 's actions were reasonab le d to officially record so mething, especially in a co urt
1 (US) usua lly pla intiff of law
2 (US) also petition er
e to produce so meth ing official
8.5 Decide wh ich of the documents in Exercise 8 .2 can go with th ese verbs. The f irst one
Listening A: Documents in court has been done for you .
1 draft ~ ~we,v; ~ k?vie-f ~ covnp!t'UV~-t ~ V\'\Oti.:M, ~ ple.MliVI1J
8.1 ~ ::
Listen to a lawyer tellin g a cli ent about some of the documents involved in his
2 iss ue
case and answer th ese questions.
3 f il e (with) ·
1 What claim has been filed aga inst the client? 4 se rve (on someone)
2 What does th e lawyer need from the client to be abl e to prepare his defence? 5 submit
3 Will the case go to trial?

Unit 1 The practice of law ~

 Reading F: Legal Latin
Lawyers use Latin words and expressions when writing le!!Jal texts of every kind, from
statutes to emails. The excerpt below is from the legal document known as an 'answer'.
It was submitted to the court by the defendant from Listening A.
9.1 Und erlin e th e common Latin word s and phrases in th e exce rpt. Do you know wh at
th ey mea n?
PART II: A CAREER IN THE LAW
Listening 8: Lawyers
10.1 -4 ~ Listen to this discussion between Javier, a Spanish student taking part in a
university's summer school programme in the UK, and Robert, an English student. Match
the words to describe lawyers (1 - 5) with the definition s (a- c) and usage notes (d - f).

1 advocate DO 4 lawyer D D
2 attorn ey DO 5 solicitor DO
T he cla im fo r breach of contract fa i Is inter a!ia to state fac ts suffic ient to consti tute a cause 3 barrister DO
of action, is uncertain as to w hat contract pl ainti ffs are suing on, and is uncertain in that it
cannot be determined whether the contract sued on is written, ora l or impli ed by conduct. Definitions
The complaint all eges breach of contract as follows: ' At all times here in mentioned , a general term for som eone wh ose j ob is to give advice to peopl e abo ut t he law
pl a intiffs were a part [sic] to the Construction Contract, as we ll as intended beneficiari es and speak for th em in court
to each sub-contract for th e construction of the house. ln li ght of the facts set out above, b more specific term for someone who is trained to prepare cases and give advice
defendants, and each of them, have breached the Constru ction Contract. ' on legal subjects and can represent people in lower courts
On its face, the claim a lleges only that defendants ' breached the Construction Contract' . c more specific term for someone who is qualified to give specialist lega l advice
But LongCo is not a party to the Construction Contract. Therefore LongCo cannot be li abl e and can argu e a case in both higher and lower law courts
for its breach. See e.g. GSI Enterprises, Inc. v. Warn er (1 993).
Usage notes
d mostly US term
9.2 Match each Latin word or expression (1 - 8) with its English equivalent and th e · e used in Scottish law
explanation of its use (a - h). f mostly UK/AustralianjCanadian term

1 ad hoc a thus (used after a word to indicate the original, usua lly incorrect, 10.2 Look up the terms counsel, counsellor and paralegal and the ir definit ions and
2 et alii (et al. ) spelling or grammar in a text) usage. Complete this tab le that Javier drew up after ta lking to Robe rt.
3 etcetera (etc.) b for example (used before one or more examples are given)
Word Definition Sample sentence Usage notes
4 exemp li gratia (e.g.) c for th is purpose (often used as an adjective before a noun)
cou nsel tvubl to ~ve, <Mivice,, Co~AN\!?e-1 foV" tM de-few:e. co\loev~.tiol'l>: ' \~ co~AN\!?e.\' ~be, w;,ed to
5 id est (i.e.) d aga inst (abbreviated to 'v.' in case citations, but to 'vs.' in all other
instances) Y.>peci&U\1& i~'~> I~ ~tte-V""'; &W~ ~t kl"' c\ie-l'l>t wN?- ye,fe,y to 01'\.e- OV" WIOYt!- b&WV"i"'te,y"' p\evtuli~
6 per se
(I'\.OIM-\) ~ \~y w\w plevtul"' I'\.Ot ~In&· ~ uv;,e,. otte-1'1> w;,ed to MdY~ ~ \~V"
7 sic e and others (usua lly used to shorten a list of people, often a list of
~ii'I>COWt i~'~> cowt i~'~> tM tkiYd pu~l'l>: 'Co~AN\!?e.\ ~
8 versus (vs. or v.) authors, appellants or defendants)
pY~t tM e-videw:e.'.
f and other things of the same kind (used to shorten a list of similar
counsellor
items)
g by itself (often used after a noun to indicate the thing itse lf) paralegal
h that is (used to signa l an explanation or paraphrase of a word
preceding it) 10.3 Another type of lawyer found in many civil-law j urisdictions is ca ll ed a notary. Below is
a brief comparison of the civil-law notary with its US counterpart, the notary public,
9 .3 Match each Latin term (1 - 10) with its English equivalent (a - j ).
which appeared on the website of a law f irm. Complete it using the verbs in t he box.
1 de facto a among other things
2 ipso facto b per year adm inister authenticating drafting executes performs
3 inter alia c number of shareholders or directors who have to be serving take verify
4 per annum present at a board meeting so that it can be va li dly
5 pro forma conducted
6 pro rata d in fact A notary in civil-law systems - notario in Span ish -speaking countries, nota ire in French-speaking
7 quorum e of one's own right; able to exercise one's own lega l countries, symvoufographos in Greece - 1) ... ..... .... a very different function than does a notary
8 sui juris rights public in the United States. The civil-law notary is an attorney who has undergone special training
9 ultra vires f proportiona lly and performs th e following three basic functions: 2) .. .......... legal documents such as wills,
10 videlicet (viz.) g by that very fact itse lf contracts and deeds; 3) .... ........ lega l instruments; and 4) .... .. ... ... as a public repos itory of lega l
h as a matter of form instruments. By contrast, a notary public in the US need not be an attorney. The functions of a US
nota ry public are basica lly to 5) ... .. ...... . oaths, 6) .. .. .... .. .. sworn statements and to 7) ............ th e
as fo ll ows
identity of a person who 8) ......... ... a lega l document.
beyond the lega l powers of a person or a body

Unit 1 Th e practice of law ~

10.4 Discuss these questions. Speaking C: Legal education
1 Does your native language have more than one word for lawyer? Do they
correspond to the different English words for lawyer mentioned on the Describe the education of a lawyer in your country and in clude these points.
previous page? If not, how do the concepts differ? o Prerequisites for studying law o Bar exa mination
2 What is each type of lega l practit ioner in your jurisd iction entitled to do? o Main subjects cove red at law school o Student clerkships
3 Wh at English term do you use to describe your job or the job you would like to do?
4 Wh at lega l services can a notary render in your jurisd iction?
Listening D: Law-firm structure
10.5 Combin e th e nouns in the box wit h t he verbs below (1-6) to make comb inations to
describe the work lawyers do. Some of the verbs go with more than one noun. 13.1 ._ ~ A young British lawyer, Linus Walker, has appli ed for a posit ion at a law f irm.
Listen to his job interview and answer t hese questions.
cases clients co ntracts corporations decisions defendants
1 What does Mr Nichols say about th e atmosphere of the firm?
disputes law legislation 2 What are the fu ll partners responsible for in the f irm?
3 What does Linus say about the size of the f irm?
1 advise
2 draft 13.2 ._~ Listen aga in and co mplete th is organigram of th e firm usin g th e words in the box.
3 litigate
Associate Fu ll partners Mr Robertson Para lega l Rea l Property
4 practise
Sa laried Lawyer
5 represent
6 research
1) ... , Mr Michaels
10.6 Choose t hree 'verb+ noun ' pa irs from Exercise 10.5 and write sentences using them . Senior Partners

10.7 Choose the words from th e box wh ich can be comb in ed with the word lawyer to I
describe differe nt types of lawyer. Say what each one does. Ms Graham , Mr Nichols
( 2) ...
I
bar co rporate defence governm ent patent practit ioner
pub li c sector sole tax t rial Secretary ~

( (
Listening C: Legal education Associate 5) ...

In English-speaking countries, the Bar is a term for the legal profession itself, while a
bar association is the association which regulates the profession. A person who qualifies to
( 6) ..............................
~ ( Paralegal ~
practise law is admitted to the Bar; in the US, a law-school graduate must pass the (
Associate
(
Associate
\.
bar examination.
You are going to hear a German law student speaking to a group of other students at a US
law school. He describes the education and training a law graduate must complete to enter
Paralegal
~ l Paralegal ~
the legal profession in Germany. (
Associate J
11.1 ._ ~ Listen and decide wh ether th ese statements are tru e or fa lse.

1 In Germany, a student requ ires a university degree to study law. Speaking D: Describing a Law firm
2 Attendance is ob li gatory at t he introductory lectures at a German law faculty.
3 Germ an students of law learn to apply th e relevant statutes to the cases th ey 14.1 Look at these phrases used by Mr Nichols to describe the firm in Listening D. Which
analyse in their co ursework . can be used to speak of a department or company, and which of a person? Which
4 In Germany, th e bar exa min ation is ad mini stered in two parts. ca n be used for both?
11.2 Disc uss these questions. ... is/a re headed by ... ... is/are responsibl e for ...
1 Is lega l education in your co untry more similar to th e US or th e German model? ... is/are assisted by... ... isja re in charge of ...
2 What does th e spea ker mean by 'the Socratic method '? Wh at do you think th e .. . is/are managed by ... ... report to ...
advantages and disa dvantages of using this method might be? 14.2 Using th e phrases in Exercise 14.1, describe th e structure of a law firm with which
yo u are familiar or th e one just described in Listening D. Refer to the positions and
duties of the personnel.

Unit 1 The practice of law ~

 Listening E: Practice areas
15.1 ~ ~ Listen to f ive lawyers ta lking about the ir firms, practice areas and clients. Tick
the information you hear about each speaker.
Speaker 1 ...
1 has a few years' work ing experience.
2 works as a clerk at a mid-size co mmercial law f irm.
3 will get to know other departments of the f irm .
4 meets with clients regularly.
5 plans to specialise in com mercial litigation.
Speaker 2 ...
1 is a sole practit ioner.
2 wo rks in th e area of employm ent law.
3 dea ls with wage disputes.
4 represe nts clients in mediati on.
5 has many clients who are small businesses.
Speaker 3 ...
1 works in th e area of secured t ra nsa ctions.
2 carries out trade-mark registrat ions.
3 assists clients who are in artist ic professions.
4 serves as an expert witness in co urt.
5 is a partner in a large IP f irm.
Speaker 4 ...
1 is a senior partn er in a mid-size law f irm .
I
2 specialises in competit ion law.
3 represents clients before t he employment tribu nal.
4 deals with infringements of th e Competition Act.
5 has clients in th e te lecommu nications sector.
Speaker 5 ...
1 owns shares in his firm.
2 argues cases in court.
3 works in th e area of real property law.
4 represents land lords but not tenants.
5 teaches courses on litigation at th e law uni ve rsity.
15.2 Discuss t hese questions.
1 Wh ich kind of f irm do you work in or wou ld you li ke to work in?
2 Which areas of th e law have you specialised in or wou ld li ke to specialise in?
Listening F: Law-firm culture
16.1 Read t his excerpt from an article in a law-school newspaper about law-firm cu lture.
Wh ich type of f irm wou ld you prefer to work for? Why?
D A small law firm, which typically engages
D
D
D
0 ne factor which plays an important
role in the culture of a law firm is its
size. Law firms can range from a one-person
from two to ten lawyers, is sometimes
known as a ' boutique firm', as it often
specialises in a specific area of the law. A
D solo practice (conducted by a sole practi- mid-size law firm generally has ten to 50
tioner) to global firms employing hundreds lawyers, while a l arge law finn is considered
of attorneys all over the world. to be one employing 50 or more attorneys.
D
D
D 16.2 ~~ You are going to hea r Richard Ba il ey, a law stud ent, talking to a group of first-
D year law students at an orientat ion event at law school. He te lls th em about his
D experience as a clerk in different law f irms. Listen and answer th ese questions.
1 Why do th e professors enco urage stu dents to do wo rk experience?
2 How lon g have Richard 's clerkships generally lasted?
D 3 What kind of work did Richard do at th e larger law firm s?
D 4 Wh at is Ri chard's f inal pi ece of advice?
D
D 16.3 ~~ Listen aga in and t ick th e advantages of small and large law firms Richard
D ment ions. In some cases, he says both types of firm have the sam e advantage.
Advantages Small firms Large firms
D more autonomy and responsibility
D opportunity to work on prestigious cases
D chance to rotate th rough different practice areas
D asked to write briefs and letters
D allowed to conduct research and manage court books
opportunity to make ma ny contacts
more train ing offered
D made to feel part of a team
D invited to participate in social events
D
D fa mily-like atmosphere
D made good use of time
16.4 Discuss th ese quest ions.
1 Do you have any experience working as a clerk in a law firm? In what ways was it
sim il ar to ·or differe nt from Richard's experience?
2 What ki nds of tasks and responsibiliti es do clerks in your f irm have?
3 Do you agree with th e way Richard characterises sma ll and large law firm s?
Unit 1
To improve your web-based research skil ls, visit www.cambridge.org/eltjile2, click on Research
Tas ks and choose Task 1.
Unit 1 The practice of law ~
 2 Company law: company supervisory control of the affairs of the company. A manager's duties to the company
are generally more burdensome than those of the employees, who basically owe a duty
formation and management of confidentia lity to the company. A company's auditors are appointed at general
meetings. The auditors do not owe a duty to the company as a lega l entity, but, rather,
to the shareholders, to whom the aud itor's report is addressed.

5 The duties owed by directors to a company can be classif ied into two groups.
Reading A: Introduction to company law The first is a duty of care and the second is a fiduciary duty. The duty of care
requires that the directors must exercise the care of an ord in ari ly prudent and
This text provides an introduction to the key terms used when talking about companies as
diligent person under the relevant circumstances. The fiduciary duty stems from
legal entities, how they are formed and how they are managed. It also covers the legal duties
the position of trust and responsibility entrusted to directors. This duty has many
of company directors and the courts' role in policing them.
aspects, but, broadly speakin g, a director must act in t he best interests of the
Read the text below quickly, th en match these phrases (a - f) with the paragraphs (1-6). compa ny and not for any co llatera l purpose. However, the courts are genera lly
a directors' duties c company definition e partnership definition reluctant to interfere, provided the relevant act or omission involves no fraud,
b management ro les d co mpany hea lth f co mpany formation ill ega lity or conflict of interest.

6 Fina lly, a company's state of hea lth is refl ected in its accounts 1 , including its
balance sheet and profit-and-loss account 2 . Hea lthy profits might lead to a
1 A company 1 is a business association which has the character of a legal person,
bonus or capitalisation issue3 to the shareho lders. On the other hand , continuous
distinct from its officers and shareholders. This is significant, as it all ows th e
losses may resu lt in in so lvency and the company go in g into liquidation.
company to own property in its own name, continue perpetually despite changes in
ownership, and insulate the owners aga inst personal liability. However, in some 1 (US) financial statements
instances, for example when the co mpany is used to perpetrate fraud or acts ultra 2 (US) profit-and-loss statement or income statement
3 (US) stock dividend
vires, th e court may 'lift2 the corporate veil' and subject the shareholders to
persona l liability.

2 By contrast, a partnership is a business association which, strictly speaking, is

Key terms: Roles in company management
not considered to be a legal entity but, rather, merely an association of owners.
2.1 Some of the important roles in company management are discussed in Reading A
However, in order to avoid impractical results, such as th e partnership being
above. Which roles are mentioned?
precluded from owning property in its own name, certa in rules of partnership law
treat a partnership as if it were a legal entity. Nonetheless, partners are not 2.2 Here is a more comprehensive list of roles in company management. Match the roles
insu lated against personal liability, and the partnership may cease to exist if a (1-10) with their definitions (a - j).
chan ge in ownership occurs, for exa mple when one of the partners dies.
1 aud itor a person appointed by a shareho lder to attend and vote at a meeting in
3 A company is formed when a certificate of incorporation 3 is issued by the 2company secretary his/her place when the shareholder is unable to attend
appropriate governmental authority. A certificate of incorporation is issued when 3director b director responsible for the day-to-day operation of the company
the constitutional documents of the company, together with statutory forms, have 4liquidator c person elected by the shareholders to manage the company and decide
been filed and a filing fee has been paid. The 'constitution' of a company consists 5managing director its genera l policy
of two documents. One, the memorandum of association 4 , states the objects of 6officia l receiver d person engaged in developing or taking the initiative to form a company
the company and the details of its authorised capital, otherwise known as the 7promoter (arranging cap ital, obtaining personnel, making arrangements for fi ling
nominal capital. The second document, the articles of association 5 , contains 8proxy corporate documentation)
provisions for the internal management of the company, for example shareho lders' 9receiver e person appointed by the company to exam ine the company's accounts
annual general meetings6 , or AGMs, and extraordinary general meetings 7 , th e 10 shareholder and to report to the shareho lders annually on the accounts
board of directors, corporate contracts and loans. f company's chief administrative officer, whose responsibilities include
4 The management of a company is carried out by its officers, who include a accounting and finance duties, personnel administration and
director, manager andjor company secretary. A director is appointed to carry comp liance with employment legislation, security of documentation,
out and control the day-to-day affa irs of the company. The structure, procedures insurance and intellectua l property rights
and work of the board of directors, which as a body govern the company, are g member of the company by virtue of an acquisition of shares
determined by the company's articles of association. A manager is delegated h officer of the court who commonly acts as a liquidator of a company
being wound up by the court
4 (US) arti cles of incorporation or certificate of incorporation
1 (US) corporation
2 (US) pierce 5 (US)
person appointed by creditors to oversee the repayment of debts
bylaws
3 (US) Generally no official certificate is issued; 6 (US) annual meetings of the shareholders person appointed by a court, the company or its creditors to wind up the
7 (US)
com panies are formed when the articles/certificate special meetings of the sharehold ers company's affairs
of incorporation are fil ed (see footnote 4).

Unit 2 Company law: company formation and management ~

 Entity Liability of owners Capital contributions
Listening A: Company formation Management

\ 1) ...... Unlimited personal liability for Capital needed is contributed by Business is managed by the sole
Lawyers play important roles in the formation of a company, advising clients which entities the obligations of the business. sole proprietor. proprietor.
are most suited to their needs and ensuring that the proper documents are duly f iled. 2) ...... Generally no personal liability of No minimum share capital Company is managed through
the members for obligations of requirement. However, capital its managing director or the
You are going to hear a con versation between an American lawyer, Ms Norris, and her client,
the business. can be raised through the board of directors acting as a
Mr Herzog. The lawyer describes how a specific type of corporation is formed in the state of
issuance of shares to members whole.
Delaware. or through a guarantee.
3.1 .- :: Listen to the conversation and tick th e documents required for formation that the 3) ...... No personal liability; liability is The minimum share capital Company is managed by the
lawyer mentions. generally limited to shareholder of £50,000 is raised through board of directors; shareholders
contributions (i.e. consideration issuance of shares to the public have no power to participate in
1 DBA filing D for shares). andjor existing members. management.
2 articl es of in corporation D
4) .. .... Unlimited personal liability of Partners contribute money or
3 stock ledger D The pa rtners have equal
the general partners for the services to the partnership; they management rights, unless they
4 general partnership agreement D obligations of the business. share profits and losses. agree otherwise.
5 stock certificates D
6 IRS and StateS Corporation election D 5) ...... Unlimited personal liability of General and limited partners The general partner manages
the general partners for the
7 bylaws D obligations of the business;
contribute money or services the business, subject to any
to the limited partnership; they limitations of the Limited
8 organisational board resolutions D limited partners generally have share profits and losses. Partnership Agreement.
3.2 .- :: Listen again and answer these questions. no personal liability.

1 According to the lawyer, what is the advantage of incorporating an entity .in the
state of Delaware?
2 What information is included in the articles of in corporation? Reading 8: A memorandum of association
3 What happens at the first organ isation al meeting of a corporation?
An important document in company formation is the memorandum of association (UK) or
3.3 Company types (USA) Look at this table, which provides inform ation on the
articles / certificate of incorporation (USA) . This document sets forth the objects of the
documents required to form and operate the different company types in the United
company and its capital structure; as such, it represents a legally binding declaration of
States. Based on what you heard in Exercise 3.1, which type of business association
intent t o which the members of the company must adhere.
was the lawyer discussing with her client?
4.1 Below is an extract from the articles of incorporation of a US company. Read through
US entities Documents required for formation and operation the extract quickly and tick the issues it addresses.
sole proprietorship DBA filing 1 appointing members of the board of directors D
general partnership General Partnership Agreement, local filings if partnership holds real estate 2 changing corporation bylaws D
limited partnership Limited Partnership Certificate, Limited Partnership Agreement 3 procedures for holding a vote of the shareho ld ers D
C corporation Articles of Incorporation, Bylaws, Organisational Board Resolutions, 4 stipul ation s for keeping corporation records D
Stock Certificates, Stock Ledger
S corporation Articles of Incorporation, Bylaws, Organisational Board Resolutions,
Stock Certificates, Stock Ledger, IRS and StateS corporation election The power to alter, amend or repeal the bylaws or to adopt new bylaws shall be vested in the Board
of Directors; provided, however, that any bylaw or amendment thereto as adopted by the Board of
3.4 Company types (UK) The table on the next page conta ins information about five Directors may be altered, amended or repealed by a vote of the shareholders entitled to vote for the
types of common UK business assoc iations, covering the aspects of liabi lity of election of directors, or a new bylaw in lieu thereof may be adopted by vote of such shareholders.
5 No bylaw which has been altered, amended or adopted by such a vote of the shareholders may be
owners, capita l contributions and management. (In many jurisdictions in the world , altered, amended or repealed by vote of the directors until two years shall have expired since such
there are entities which share some or a ll of these characteristics.) Look at the table action by vote of such shareholders. [... ]
and decide which entity (a -e) is being described in each row (1 - 5).
The Corporation shall keep as permanent records minutes of all meetings of its shareholders and
a private limited company (Ltd) directors, a record of all action taken by the shareholders or the directors without a meeting, and a
b general partnership I 0 record of all actions taken by a committee of the directors in place of the Board of Directors on
c pub lic limited company (PLC) behalf of the Corporation. The Corporation shall also maintain appropriate accounting records.
The Corporation, or its agent, shall maintain a record of its shareholders in a form that permits
d limited partnership
preparation of a li st of the names and addresses of all shareholders, in alphabetical order, by class
e so le proprietorship of shares, showing the number and class of shares held by each.

Unit 2 Company law: company formation and management ~

4.2 Read t he extract aga in and decide whether t hese statements are true or fa lse.
1 The boa rd of directors only has t he powe r to change t he bylaws if t he shareholders
in t urn have t he power to amend any changes _made by t he boa rd of directo rs.
2 The board of directo rs is prosc ribed at all tim es f rom changing any bylaw whi ch
has bee n altered by a vote of th e sharehold ers.
3 Records mu st only be ke pt of decisions reached by shareholders and
directors in th e course of a meeting.
4 Reco rd s of th e shareholders must list th e number
of shares t hey own .
4.3 For ea ch of th ese words or phra ses, find th e italicised word(s) in th e extract th at
most close ly match es its mea ning.
1 passed 3 instead 5 ca nce ll ed 7 given to
2 who have th e right to 4 on condition 6 revised 8 th ese
Language use: Shall and may
Read through the extract on page 23 aga in, noting how sha ll and may are used , and
answer th ese questions.
1 Which of these words most close ly matches th e meaning of sha ll in each case?
a) wi ll b) must
2 What do you notice about the use of sha ll in lin e 6?
3 Which of these words most close ly matches the meaning of may in the text?
a) can b) could
In legal docum ents, the verb shall is mainly used to indicate obligation , to express
a promise or to make a decla ration to which t he parties involved are legally
bound. This use differs f rom that in everyday speech, where it is most often used
to make offers (Shall I open the window?) or to refer to the future (I shall miss
you) , although this latter use is less f requent in modern Engl ish.
In legal texts, shall usually expresses the mea ning of 'must' (obligation ):
Every notice of the meeting of the shareholders shall state the place, date and hour.
or 'will ' (in the sense of a promise):
The board of directors shall have the power to enact bylaws.
Shall can also be used in legal texts to refer to a future action or state:
.. . until two years shall have expired since such action by vote of such
shareholders.
In everyday speech , this future meaning is commonly expressed using only the
present perfect (... until two years have expired ... ).
Another verb commonly found in legal documents is may, which generally expresses
permission, in the sense of 'can ' (this use is less common in everyday English):
... any bylaw or amendment thereto as adopted by the Board of Directors may be
altered, amended or repealed by a vote of the shareholders.
In everyday English , may is sometimes used as a substitute for might, indicating
probability (He may want to see the document).
Learners of legal English should be aware that the use of shall in legal texts has been
criticised in recent years, particularly with regard to what some consider its inconsistent
and excessive use. Language reformers point out that in many instances, shall does
not express obligation, but rather is used solely to give a text a 'legal feel'. Th is
tendency, which can in part be attributed to the conservative nature of legal writing,
can lead to undesirable consequences, ranging from legal disputes arising from the
ambiguous use of shall in contracts to difficu lties in translating English-language
proscribe
legislation into other languages. Furthermore, the fact that shall is often used in legal
= prohibit, ban
texts in ways which differ from general English usage serves to make these texts harder
prescribe
to understand and less transparent to t he average person. For th is reason, su pporters
=stipulate
of the Plain English Movement even recommend replacing shall with must to express
obligation (see Unit 3). At t he very least, learners of legal English shou ld know about
t he issues surrou nding t he use of shall and exercise care when writing.
listening 8: Forming a business in the UK
You are going to hear a phone conversation in which a lawyer, Mr Larsen, discusses some of
the characteristics of two business entities with Mr Garcia, a client who is interested in
forming a company in the UK.
6.1 ,. ~
Listen to th e phon e conversation and decid e wh eth er th ese st atements are t rue
or false.
1 Th e client has not yet decided what type of company he wants to form.
2 The cli ent has never founded a company before.
3 The lawyer points out that the two types of company differ with regard to the
matter of personal liabi lity.
4 The shares of a USC corporation can be freely traded on a stock exchange.
5 Both company types mentioned by the lawyer can be formed by a person who is a
citizen of another country.
6 The UK company type discussed places a restriction on the number of people
permitted to buy shares in the company.
7 The fastest way to form a company is to subm it the documents directly to
Companies House.
6.2 In the conversation , the lawyer compares and contrasts two company types.
Comp lete the sentences below (1-4) using the phrases in the box (a - d).
a are like each other b are simil ar to c differs d in both
1 C corporations ............ private limited companies in the UK in many ways,
particu larly in respect of li ability.
2 Sharehold ers are not personally liable for the debts of the corporation ............ a
C corporation and a private limited company.
3 In th is respect, a private limited company .. ..... .... ... Its shares are not avai lab le to
the gen eral public.
4 The two types of company .... ........ in that both can be founded by persons of any
nationality, who need not be a resident of the country.
6.3 Co mpare and contrast two types of company from the table on page 23 using these
phrases.
X differs from Yin that ...
X rese mbles Y in that .. .
EXAMPLE: A '?Ole- J?YopYiet'OY4Jp diffe,y.q. fvoV\'1, t>v J?YiVt>vte- JiWiited co~ iV~- t\.~At it i'i> ~ big-tM t?Oie-
J?YopYie-'lm' Y~ ~ big- t>v ~~ diYec.WY OY t>v ~d of div-ec.tOY"'
Unit 2 Company law: company formation and management ~
 Speaking: An informal presentation: a type of company

When speaking briefly about a topic of professional interest, experienced speakers

One of th e most common requests our law firm gets regarding Ru ssia comes fro m a non-Russian compa ny
will organise their thoughts in advance. A simp le but effective structure divi des
seekin g assistance in setting up a Russian joint ve nture or a represe ntative office. When we tell them in response
information into three parts: to their queri es that only rarely does it make sense to go into Russia with a joint ve nture or a represe ntative
3 concluding statement office, th ey commo nl y respo nd either with su rpri se that there are other alternatives or by telling us th at th is is
1 introductory remarks 2 main points
how th eir ve ry well-run competitor ente red the Russian market. When we explain th at Russia now allows
The main points are also best limited to three, as this is easy to remember. Wholly Foreign-Own ed Entities (WFOE), they quickly rea lise the benefits of not getting enmeshed with a Ru ssian
joint-ve ntu re partner. However, th e benefits of a WFOE over a represe ntative offi ce are more difficult to explain .
Notes for a res ponse to the exercise below might look like this:
The purpose of this arti cle and the accompanying table is to bri efly compare the advantages and disadvantages
Introductory remarks of a representative office and of a limited liability co mpany (known as an Obschtschestvo s Ogranitschennoj
Otvetstvennostju, or 000) wholl y owned by a foreign entity in terms of those characteristics th at are re levant for
A publikt aktiebolag is t he closest Swed ish equivalent to a public limited company -
co mpanies interested in establishing and running a bu siness in Russia. At the outset, however, it must be made
most common form for major international businesses in Sweden . clear th at if your intention is to buy or sell goods in Russia, you ca nnot legally go in as a rep resentative office.
A representative offi ce is limited to representing or marketin g for a foreign-owned entity. In th e past, many fo reign
Main points companies would go into Ru ssia by way of a representative office and th en conduct business within Russia, but
1 liability: no personal liabi lity only because they had no other real choice. Companies have th at choice now.
2 management: board of directors (Swedish equivalent, styrelsen) has power to
make decisions; shareholders don't participate in ma nagement Com parison Representative office Limited liability company (000)
3 needed for fo rmation: memorandum of association (stiftelse urkund) and articles Legal status Not an independent legal entity. Can act only through a manager authorised to
All property would be owned by act for and on behalf of the foreign entity
of association (bolagsordning) th e foreign (non-Ru ssian) entity. pursuant to power of attorney. All th e rights of a
Concluding statement Not allowed to conduct comm ercial Ru ssian company. Managing director elected by
activity, so it doesn't technically th e foreign company can act on behalf of 000
An aktiebo/ag is similar to a publi c lim ited company, with t he most sign ifi ca nt .
generate profits. Limited to without a power of attorney withi n the framework
difference being t hat its shares do not need to be listed on an exchange or negotiating contracts, marketin g or provided by Russian legislation , 000 co rporate
authorised marketpl ace. conducting oth er supporting documents and agreements concluded between
activities for th e foreign entity. 000 and the director.
Li ability Foreign entity would be liable for 000 is liable for its own obligations. Th e
Which types of companies are there in your jurisdiction? Choose on e and describe it as acts of its representative office foreign entity's liability gen erally limited to its
done pursu ant to th e power of contribution to charter capital.
you would for a client from another country. In your description, refer to some of th e
attorn ey.
features given in the UK company tab le on page 23 . Tell your client which documents
Charter capital None Approximately $330 minimum charter
must be fi led to complete the formation process. Wherever re levant, compare and capital required
contrast your company type with a UK business entity.
Fees and costs $10,000-$18,000 $3,500-$6,500
Foreign employee Foreign employees must obtain In order to employ foreign employees, a
Reading C: Russian entity formation issue person al work permit. company must obtain an employment permit.
Afterwards, every foreign employee must
Law firms often publish informative articles on their websites which they believe will be of obtain a personal work permit.

interest to their clients. Typically, these articles deal with areas of the law in which the firm Taxation Subject to payroll , retirem ent, road Subject to same taxes at same rates as
has particular expertise. The text on the next page, which appeared on the website of a US and social security taxes. representative office, but also subject to
income tax, VAT (e. g. equipment shipped for
law firm, deals with entity formation in Russia, and contrasts a Wholly Foreign - Owned Entity sale to Russia is subject to VAT) , property
[WFOE) with a representative office. taxes and transportation taxes (if 000 owns
vehicles). The foreign entity dividends
8 .1 Read the first paragraph. Which three types of business enterprise are mentioned? received from 000 may be subject to either
US or Russian taxation according to th e
8.2 Read through the entire article and decide whether these statements are true or false. Treaty signed between USA and Russia
1 The option of forming a WFOE to do business in Russia has existed for many years. regarding double taxation .

2 Establ ishing a representative office is not recommended for merchants unless

they are primarily interested in engaging in marketing activities.
3 Since an 000 has the status of a legal person, it is fully liable for its own
obligations, and the foreign entity is free from all liability.
4 Regarding employee permits, the same requirements apply for both business types.
5 The tax and reporting requirements connected with a WFOE are disadvantages
that shou ld be weighed against the advantage it offers with regard to the freedom
to carry out business in Russia.
8.3 Is there a comparable WFOE in your jurisdiction? Describe its features with regard to
the points listed in the table in the article.
In the course of deciding wh ether to establish a representative office or a WFOE , the investor must balance th e
convenience of a representative office with the ability to conduct business in Ru ssia through a WFOE. A representative
off1ce 1n Russi a can be opened and closed with relatively little formality. Since th e office is not a Russian legal person,
II IS not subject to many of the burdensome regulations that apply to legally established Russian companies, such as
tax and reporting requirements. However, the business activities of a representative office are severely restricted, to
the po1nt that it usually can do little more than act as a company's marketing arm in Russia. On the other hand, a
WFOE entity in Russi a is considered to be a legal person, and as such , it enjoys both the rights and obligations of
any oth er Ru ssian company. Thus the scope of business operations for a WFOE in Russi a is nearly always equivalent
10 that of any other Ru ssian company. But a WFOE in Ru ssia is also subject to the same taxation , reporting and
~ompany regulation requirements of any Russian company. The burden of these obligations for a WFOE must be
alanced aga1nst the freedom to conduct real business in Russia.
Unit 2 Company law: company formation and management ~
 9.2 Read the who le letter and choose the best answer to each of these questions.
Reading D: Corporate governance
1 On wh ich grounds did the shareholders fi le the action?
Lawyers often assist their clients in handling legal disputes involving corporate governance. a on the grounds of the ir rights as shareholders
The letter of advice below addresses one such dispute. b on the grounds of a violation of th e bylaws
c on the grou nds of an ongo ing proxy fight
9.1 Read the first three paragraphs of the letter. What does t he dispute specif ica lly d on t he grou nds of the ir lack of faith in th e board of directors
involve?
2 What does t he writer identify as th e issue in the case?
a wh ether the annual shareholders' meeting determin es th e term of the board of
Re: Special shareholders' meeting of Longfellow Inc.
directors
I have now had an opportunity to research the law on this point and I can provide b whether th e election of th e board of directors requires a quorum
c whether th e annual shareholders' meeting must be held a full year after
you with the following advice.
th e last one
Firstly, to summarise the facts of the case, a group of shareholders of Longfellow d whether th e bylaws define th e term 'full year'

Inc. has filed an action in the district court seeking to set aside the election of 3 Wh at does th e writer say regarding ea rlier cases related to this one?
5 the board of directors on the grounds that the shareholders' meeting at which a Th ey provide for an analysis in favour of th e shareholders.
they were elected was held less than a year after the last such meeting . b They give the board of directors the freedom to run th e company as they see fit.
c Th ey have merely provided an interpretation of the legislative intent.
The bylaws of the company state that the annual shareholders' meeting for d Th ey do not address th e issue involved.
the election of directors be held at such time each year as the board of directors 4 What does th e writer co nclude?
determines, but not later than the fourth Wednesday in July. In 2009, the meeting a It is dubious that the shareholders will prevail.
10 was held on July 17th. At the discretion of the board, in 2010 the meeting was b The facts of the case do not support judicial intervention.
held on March 19th. The issue in this case is whether the bylaws provide that c A court of appea l will only look at the facts of the case.
no election of directors for the ensuing year can be held unless a full year has d The board of directors has a duty to act in good faith.
passed since the previous annual election meeting. 9.3 Choose the best explanation for each of these words or phrases from the letter.
The law in this jurisdiction requires an 'an nual' election of the directors for 1 on the grounds that (line 5)
15 the ensuing 'year'. However, we have not found any cases or interpretation of a in the area of
this law which determine the issue of whether the law precludes the holding of
b on the basis of the fact that
c despite the fact that
an election until a full year has passed. The statutes give wide leeway to
the board of directors in conducting the affairs of the company. I believe that it is 2 at the discretion of (line 9)
unlikely that a court will create such a restriction where the legislature has not a according to the decision of
b through the tact of
20 specifically done so.
c due to the secrecy of
However, this matter is complicated somewhat by the fact that there is currently 3 the ensuing year (line 11)
(
a proxy fight underway in the company. The shareholders who filed suit are also a the past year
alleging that the early meeting was part of a strategy on the part of the directors b the present year
to obstruct the anticipated proxy contest and to keep these shareholders from c the next year
25 gaining representation on the board of directors. It is possible that the court will 4 statutes give wide leeway (line 16)
take this into consideration and hold that the purpose in calling an early meeting a statutes can easily be avoided
was to improperly keep themselves in office. The court might then hold that, b statutes allow considerable freedom
despite the fact that no statute or bylaw was violated, the election is invalid on a c statutes restrict extensively
general legal theory that the directors have an obligation to act in good faith. 5 alleging (line 20)
30 Nevertheless, courts are usually reluctant to second-guess the actions of boards a stating without proof
of directors or to play the role of an appellate body for shareholders unhappy with b making reference to
the business decisions of the board. Only where there is a clear and serious c proposing
breach of the directors' duty to act in good faith will a court step in and overturn 6 to act in good faith (line 26)
the decision . The facts in this case simply do not justify such court action and I a to act from a religious belief
35 therefore conclude that it is unlikely that the shareholders will prevail. b to do something with honest intention
c to plan for the future carefully
Unit 2 Company law: company formation and management ~
9.4 Answer these questions.
1 What do the bylaws of the company stipulate concerning the date of the election
of company directors?
2 What do the shareholders claim was the reason why the annual shareho lders'
meeting was held early?
3 What role might the concept of 'good faith' play in the court's decision?
9.5 What is your opinion of the case? Do you think the shareho lders' claim is justified?
9.6 In the letter, different verbs are used to refer to what the company bylaws and the
re levant legislation say. Complete these phrases using the appropriate verbs from
the letter.
1 The bylaws of the company .. .
2 The law in this jurisd iction .. .
3 The law ...
Text analysis: A letter of advice
10.1 Look at the letter on page 28 aga in and discuss these questions.
1 Wh at is the purpose of the letter?
2 Who do you t hin k might have requested it?
3 Looking at the letter carefully, what wou ld you say is the function of each
paragraph?
The text in Reading D represents a letter of advice, a type of text written by a
lawyer for a client.
The function of a letter of advice is to provide an analysis of a legal problem so
that the client can make an informed decision concerning a course of action.
Another type of text which should be mentioned here because of its similarity to a
letter of advice is a legal opinion. While the language of this type of text is similar,
a legal opinion is generally much longer, as it entai ls thorough research and
covers the issues in greater detail. A legal opinion also carries much more weight
and greater potential liability for the lawyer or firm issuing it.
Regarding the contents, we can say that, in general, a letter of advice:
0 identifies the legal issue at stake in a given situation and explains how the law
applies to the facts presented by the client;
0 indicates the rights, obligations and liabilities of the client;
0 outlines the options the client has, pointing out advantages and disadvantages
of each option;
0 considers factors such as risk, delay, expense, etc., as well as case-specific
factors;
0 makes use of facts, relevant law and reasoning to support the advice.
The structure of the letter can be made clear by using standard signalling phrases.
The tab le on page 31 provi des examples of phrases used to structure the
information in a text. These phrases serve as signals, pointing to information
before it is presented, thus increasing the clarity of a text.
10.2 Read through the letter once aga in and look for 11 phrases with a signa lling
function. Add them where appropriate to this table.
Referring to the subject Thank you for instructing us in relation to the above matter. You have requested
matter advice concerning ...
1) ············································································································································
Summarising facts Our opinions and advice set forth below are based upon your account of the
circumstances giving rise to this dispute, a summary of which is as follows. Based on
information provided to us, we understand that ...
2) ············································ ·········································· ······················································
Identifying legal issue The legal issue seems to be ...
3) ············································································································································
Referring to relevant The section which is relevant for present purposes provides that ...
legislation/regulations The section makes express reference to ...
As the law stands at present, .. .
4) ............................................................................................................................................
5) ............................................................................................................................................
6) ············································································································································
Referring to previous The court has held that ...
court decisions We have (not) found cases or interpretation of this law which argue that ...
Drawing conclusions We therefore believe that .. .
7) ........................................................................................................................................ .
8) ·········································································································································
9) .........................................................................................................................................
10) ·········································································································································
11) .........................................................................................................................................
Indicating options In light of the aforesaid, you have several courses of action 1 alternatives 1 options
open to you.
Closing I await further instructions at your earliest convenience.
Please contact us if you have any questions about the matters here discussed, or any
other issues.
Writing: A letter of advice
A client who is the managing partner of a Mexican energy- drink firm has asked you for
information about establishing a business in Russia, with a view to launching a chocolate-
flavoured energy drink called Xocoatl.
Write a letter of advice in which you should:
0 say what a WFO E is;
0 list ad vantages and disadvantages connected with it;
0 reco mmend the best course of action for his firm.
Before you write, co nsider the purpose, the expected co ntents and the sta ndard stru ctu re
of a letter of advice . Refer ba ck to Reading C for information about WFOEs in Russia and
make use of signalling phrases from the table above to help structure the information in
you r letter.
Unit 2
To improve your web-based research skil ls, visit www.cambridge.org/eltjile2, cl ick on Research
Tasks and choose Task 2.
Unit 2 Company law: company formation and management ~
Language focus 4 Vocabulary: prepositional phrases These prepositional phrases, which are common
in legal texts, can all be found in Reading C. Match the prepositional phrases (1 - 4)
with their definitions (a - d).
1 Vocabulary: distinguishing meaning Which word in each group is the odd one out?
You may need to consult a dictionary to distinguish the differences in meaning. 1 in terms of ~ a 1) for the purpose of; 2) by the route through
2 in the course of b as an answer to; in reply to
1 stipulate
2 succeeding
specify
~
elapsing ensuing
prescribe
subsequent
3 by way of c 1) with respect or relation to; 2) as indicated by
4 in response to d while, during
3 responsibility duty discretion obligation
5 Vocabulary: prepositional phrases Complete these sentences using the prepositional
4 prior previous prerequisite preceding
phrase from Exercise 4 that best fits in each one. For one of the sentences, there is
5 margin leeway latitude interpretation
more than one correct answer.
6 preclude permit forestall prevent

2 Vocabulary: word choice These sentences deal with company formation and 1 \~ .~ .~~~ .. choosing the name of the company, a number of matters must be
considered.
management. In each case, choose the correct word or phrase to comp lete them.
2 Confidential information acquired ............ one's directorship shall not be used for
1 The constitution of a company comprises ~I contains of two documents. personal advantage.
2 The memorandum of association states 1 provides for 1 sets up the objects of the 3 I would advise that members of your project group formalise your relationship
company and details its authorised capital. ............ a partnership agreement, incorporation or limited liability company.
3 The articles of association contain arguments I provisions I directives for the 4 This form of corporation is often considered to be the most flexible body ........... .
internal management of a company. corporate structure.
4 The company is governed by the board of directors, whilst the day-to-day 5 Our company formations expert is unable to provide advice ............ your query, as
management is delegated upon 1 to 1 for the managing director. there are a number of factors which need to be taken into account which do not
5 In some companies, the articles of association make I give I allow provision for relate directly to his area of expertise.
rotation of directors, whereby on ly a certain portion of the board must retire and 6 The relationship between management and boards of directors at US multinational
present itself for re-e lection before t he AGM. companies has been changed dramatically through a series of corporate governance
6 Many sma ll shareholders do not bother to attend shareholders' meetings and will initiatives begun ............ corporate scandals, the Sarbanes-Oxley Act and other
often receive proxy circu lars from t he board, seeking authorisation to vote on the requirements.
basis of 1 in respect of 1 on behalf of the shareholder. 7 Shareholders and other investors in corporations tend to view corporate governance
3 Word formation Complete this tab le by filling in the correct noun or verb form. ............ the corporation's increasing value overtime.
Underline the stressed syllable in each word with more than one syllable. 8 Regular and extraordinary board meetings may be held by telephone, video-
conference and ............ written resolutions.
Verb Abstract noun Personal noun 6 Verb-noun collocations Match each verb (1-5) with the noun it collocates with (a-e)
administrate1 MwUI-ti<?tvAtiOVI- MwUI-ti<?fYAtOY in Reading D. If you have difficulty matching them, look back at the letter.
audit 1 violate - - - - - a affairs
liquidation 2 call b rep resentation
perpetrate 3 overturn c a meeting
appointm ent 4 gain d a decision
assume
5 conduct e a law
authorise 7 Collocations with file Decide which of these words and phrases can go with the verb
formation to file. You may need to consult a dictionary.
issue
omit an acti on an AGM an amendment an appea l a breach a brief charges
a claim a complaint a debt a defence a dispute a document a fee
provide
an injunction a motion provisions a suit
redemption
requ ire
resolution
transm it
1 (US) administer

Unit 2 Company law: company formation and management ~