UNIT 4: CONTRACT LAW

Exercise 1: Choose the best answer

1. In law, a contract is a legally binding …………….between two or more
parties which, if it contains the elements of a valid legal agreement, is
enforceable by law or by binding arbitration.
A-agree B- agreement C-agreed D-agreeing
2. A legally enforceable contract is an exchange of promises with specific
legal remedies for…………….
A-issue B- problem C-mistake D- breach
3. An agreement is said to be reached ……………an offer capable of
immediate acceptance is met with a "mirror image" acceptance (i.e., an
unqualified acceptance).
A- when B-where C-what D-which
4. The parties must have the necessary capacity to contract and the contract
must not be either trifling, indeterminate, impossible, or …………….
A- legally B- illegally C- illegal D- legal
5. Contract law is based…………… the principle that agreements are to be
kept. 
A- on B- of C- in D-under
6. Breach of contract is …………… by the law and remedies can be
provided.
A- recognizing B- recognizes C- recognized D- recognize
7. As long as the good or service provided is legal, any oral agreement
……………two parties can constitute a binding legal contract.
A-on B- to C-in D- between
8. Each term gives rise to a ……………obligation, breach of which can
give rise to litigation.
A- contract B- contractual C- contracting D- contracted
9. In daily life, most contracts can be and are made……………, such as
purchasing a book or a sandwich.
A-mouthy B- mouth C-oral D-orally
10.Sometimes written contracts are required by either the parties, or by
statutory law within various jurisdiction …………… certain types of
agreement, for example when buying a house or land.
A- for B- of C- to D- on
11.In most systems of law, parties have …………… to choose whether or
not they wish to enter into a contract, absent superseding duties.
A- freedomly B- free C- freedom D- freely
12.In addition, …………… some contracts formalities must be complied
with under legislation sometimes called a statute of frauds (especially
transactions in real property or for relatively large cash amounts).
A-on B-of C-to D- for
 13.The most important feature of a contract is that one party makes an offer
for an arrangement that another…………… .
A- accept B- accepts C- accepting D- accepted
14.The obvious objection is…………… a court cannot read minds and the
existence or otherwise of agreement is judged objectively, with only
limited room for questioning subjective intention.
A- when B- which C- that D- what
15.There must be evidence that the parties had each from
an objective perspective…………… in conduct manifesting their assent,
and a contract will be formed when the parties have met such a
requirement.
A-attended B- engaged C-enjoyed D-did
16.An objective perspective means that it is only necessary that somebody
gives the…………… of offering or accepting contractual terms in the
eyes of a reasonable person, not that they actually did want to form a
contract.
A- impressed B- impression C- impress D- impressing
17.Offer and acceptance does not always need to be expressed orally or in
writing. An implied contract is one ……………some of the terms are not
expressed in words.
B- in where C- on which D- in that D- in which
18.A contract which is implied in fact is one in which the circumstances
imply that parties have reached an agreement even though they have not
done so…………….
A- expressing B- expressly C- express D- expressed
19.A contract which is …………… in law is also called a quasi-contract,
because it is not in fact a contract; rather, it is a means for the courts to
remedy situations in which one party would be unjustly enriched were he
or she not required to compensate the other.
A-showed B- stated C- implied E- thought
20.Consideration is known as 'the price of a promise' and is a requirement
…………… contracts under common law.
A-of B- for C-on D-to
Exercise 2: Fill in the blank with a suitable word.
disputes on who business
behalf client evaluate how
transact aware transactions which

Lawyers create contracts

To practice contract law, lawyers should know how to draft and (1) …………
contracts. They should know the state law that applies to contracts. They should
be (2) …………of issues like choice of law, jurisdiction for enforcement and
mandatory arbitration clauses. Practicing contract law means knowing (3)
………… to draft a contract that’s enforceable and that also has terms that are
acceptable and valuable to the client.
Lawyers handle contract disputes
When a contract dispute arises, lawyers work to help their (4) ………… resolve
the matter and advocate for the best possible result. Sometimes that means
writing demand letters and contacting the other party in order to work towards a
resolution. In other cases, it means litigating the matter in court. Some contract
disputes rely (5) ………… arbitration and mediation. Lawyers who practice
contract law might do some or all of these tasks on (6) ………… of their
clients.
Why become a contract lawyer?
In a contract, words have meaning. Each word is important and even critical.
For lawyers who like writing and enjoy the details, contract law is a good
choice.
When (7) ………… happen, lawyers who enjoy litigation and conflict
resolution can help deserving clients navigate these disagreements. Contract
lawyers help people and companies conduct (8) …………. It’s important work.
The work is often ongoing or repeat, so whether you work for yourself, a law
firm or as in-house counsel, a focus on contract law is often the cornerstone of a
sound career in the law.
Making a business out of doing business
Contract law allows people to conduct business. Contracts are an important,
daily and common part of business and economic activity. Lawyers (9)
………… draft and negotiate contracts help their clients conduct business on
good terms.
Lawyers help clients understand the meaning of proposed contract language so
that their clients can make the best possible choices. When there are contract
disputes, lawyers help their clients resolve these disputes favorably. At each
stage, contract lawyers help businesses and individuals perform (10) …………
in a sound and beneficial way.

Exercise 3: Word formation

In law, a contract is a legally binding agreement between two or more parties
which, if it (1) ………… (contain) the elements of a valid legal agreement, is
enforceable by law or by binding arbitration. A legally enforceable contract is
an exchange of promises with specific legal remedies for breach. These can
include compensatory remedy, whereby the (2) …………. (default) party is
required to pay monies that would otherwise have been (3) …………
exchange) were the contract honored, or an Equitable remedy such as Specific
Performance, in which the person who entered into the contract is required to
carry out the specific action they have (4) …………. (renege) upon.
An agreement is said to be reached when an offer capable of immediate (5)
…………. (accept) is met with a "mirror image" acceptance (i.e., an
unqualified acceptance). The parties must have the necessary capacity to
contract and the contract must not be either trifling, indeterminate, impossible,
or illegal. Contract law is based on the principle that (6) …………. (agree) are
to be kept. Breach of contract is recognized by the law and remedies can be
provided.
As long as the good or service provided is legal, any oral agreement between
two parties can constitute a (7) …………. (bind) legal contract. The practical
limitation to this, however, is that generally only parties to a (8) ………….
(write) agreement have material evidence (the written contract itself) to prove
the actual terms uttered at the time the agreement was struck. In daily life, most
contracts can be and are made (9) …………. (oral), such as purchasing a book
or a sandwich. Sometimes written contracts are required by either the parties, or
by statutory law within various jurisdiction for certain types of agreement, for
example when (10) ………….. (buy) a house or land.

Exercise 4: Match the words or word phrases with its definitions

A B
1- trifling (adj.) A- (of a law or rule) possible to make
people obey, or possible to make happen
or be accepted.
2- litigation (n) B- an argument or disagreement, especially
an official one
3- default (v) C- to publicly support or suggest an idea,
development, or way of doing
something.
4- cornerstone (n) D- a customer or someone who receives
services.
5- dispute (n) E- the process of taking a case to a court of
law so that a judgment can be made.
6- client (n) F- a stone in a corner of a building,
especially one with the date when the
building was made or other writing on
it.
7- constitute (v) G- to tie something tightly or to fasten
something.
8- jurisdiction (n) K- the process of solving an argument
between people by helping them to
agree to an acceptable solution.
9- advocate (v) L- to fail to do something, such as pay a
debt, that you legally have to do.
10- utter (v) M- to fail to keep a promise or an
agreement.
11- indeterminate (adj.) N- not measured, counted, or clearly
known.
12- enforceable (adj.) O- A trifling matter or amount of money is
small or not important.
13- renege (v) P- to say something or to make a sound
with your voice.
14- bind (v) Q- to be or be considered as something.
15- arbitration (n) R- the authority of a court or official
organization to make decisions and
judgments

Exercise 5: Do these statements agree with the information in the article?

Read the text and mark the statements True or False.
Write: TRUE if the statement is true according the passage.
FALSE if the statement is false according the passage.

How do the courts interpret a contract?

To interpret a contract, a court looks at the clear language of the contract from
the viewpoint of an objective and reasonable person. If the contract isn’t clear,
the court may consider outside evidence including outside statements and the
behavior of the parties. It’s best to put a contract in writing, and the statute of
frauds may even invalidate some contracts.
Choice of law and jurisdiction
When lawyers create contracts and handle contract disputes, they should be
aware of choice of law and jurisdiction issues. Choice of law means the state
law that the court uses to interpret the contract. Because most contract law is
state law, choosing to litigate a contract dispute with the laws of one state over
another can completely change the outcome of the case.
Lawyers should carefully consider whether to incorporate a choice of law
provision into the contract at the time of drafting. They should also be careful
when they choose a jurisdiction to bring a contract dispute. Because the rules
vary in each state, these considerations can have a large impact on the outcome
of a case.
Breach of contract
When there’s a disagreement about the terms of a contract or when there’s a
breach of contract, the parties might involve a court to resolve the dispute. The
party seeking damages must prove that a valid contract exists. They must also
convince the court that there’s an appropriate remedy.
Remedies available for breach of contract
There are several remedies that a party might ask a court to impose for a breach
of contract. The most common is compensatory damages. These are the real,
financial losses that a party has because of the breach of contract. If the parties
agree in advance about damages if a breach occurs, that’s called liquidated
damages. When a breach occurs without any real damages, the aggrieved party
can still get a small amount of damages. That’s called nominal damages.
In some cases, a party acts very poorly and inexcusably to breach a contract.
When that happens, the court may award extra damages called punitive
damages. However, this is rare. It’s also rare for a court to order the parties to
perform the contract. That might happen in a case where compensatory damages
are inadequate like in a contract of sale for a rare item.
Emerging issues in contract law
Contract law grows and changes just like any other body of law. In recent years,
the validity of electronic signatures on a contract has become a relevant and
disputed issue in contract law. The practice of contract law includes identifying
emerging issues and advocating for changes and extensions of law in order to
allow the client to conduct business in a convenient and favorable way.
Who practices contract law?
Lawyers throughout the United States practice contract law. A lawyer might
specialize in contract law in private practice, or they might work for a
corporation as in-house counsel. Contract lawyers work as solo practitioners,
and they work at the largest law firms in the country. They might handle
contract law exclusively, or they might handle contracts as part of a diverse
practice. Even general practice attorneys who primarily handle unrelated
matters are usually called on by a client to look at a contract matter at least a
few times in their career.
(https://legalcareerpath.com/what-is-contract-law/)
The court may consider outside evidence including outside
1- T/F
statements and the behavior of the parties if the contract is clear.

Lawyers should be aware of choice of law and jurisdiction

2- T/F
issues when they create contracts and handle contract disputes.

Lawyers should not carefully consider whether to incorporate a

3- T/F
choice of law provision into the contract at the time of drafting

When there’s an agreement about the terms of a contract or

4- when there’s a breach of contract, the parties might involve a T/F
court to resolve the dispute.

There are some remedies that a party might ask a court to

5- T/F
impose for a breach of contract.

When a breach occurs with any real damages, the aggrieved

6- party can still get a small amount of damages. That’s called T/F
nominal damages.
7- Contract law grows and changes not like any other body of law. T/F

The practice of contract law includes identifying emerging

8- issues and advocating for changes and extensions of law in T/F
order to allow the client to conduct business.
9- A lawyer might not specialize in contract law in private practice, T/F
or they might work for a corporation as in-house counsel
10- Lawyers in the United States practice contract law. T/F

Exercise 6: Read and answer questions

Contract law is the area of law that governs making contracts, carrying them out
and fashioning a fair remedy when there’s a breach. Anyone who conducts
business uses contract law. Both companies and consumers use contracts when
they buy and sell goods, when they license products or activities, for
employment agreements, for insurance agreements and more. Contracts make
these transactions happen smoothly and without any misunderstandings. They
allow parties to conduct their affairs confidently. Contracts help make sure that
the parties to a transaction are clear on its terms.
A valid contract has four parts:
Offer
First, one party must make an offer. They must state the terms that they want
the other party to agree to. If the other side agrees to the terms of the offer, the
other side may accept it, and the contract is complete.
Acceptance
Accepting another party’s offer makes a contract complete. The party that
accepts the offer must accept it on the same terms as the terms of the original
offer. They must make sure that the other side knows they accept it.
If they propose different terms, there’s no contract. Instead, their terms are a
counteroffer. It’s then up to the first party to accept the counteroffer or propose
another counteroffer.
Consideration
A valid contract requires each party to give something up. That’s called
consideration. For example, in the case of an employment contract, one party
agrees to give up money, and the other party agrees to give up labor. A contract
is a two-way street with each party giving up something to get something else
that they want.
Mutual intent to enter into an agreement
To have a valid contract, both parties must intend to be bound by the contract. If
a document says that it’s only a statement of intent, the parties may not have a
mutual agreement to enter into a contract. Informal agreements between friends
often fall into this category.
Typically, a promise or an offer of a reward in exchange for certain behavior
creates an enforceable contract with the person who undertakes the activity. For
example, if someone offers a reward for information that leads to an arrest for a
crime, the person who provides the information can seek enforcement of the
reward. On the other hand, an advertisement is not a contract without an
additional, personalized invitation from the seller for the buyer to buy the good.
A contract can be implied. For example, a person who seeks medical treatment
has an implied contract with the doctor who treats them to pay a reasonable
charge for services. Likewise, a person who orders dinner at a restaurant has an
implied contract to pay for the meal that they order.
(https://legalcareerpath.com/what-is-contract-law/)
1. What is contract law?
……………………………………………………………………………………
……………………………………………………………………………………
2. Why we need contract law?
……………………………………………………………………………………
……………………………………………………………………………………

3. What makes a contract complete?

……………………………………………………………………………………
……………………………………………………………………………………
4. How many parts has a valid contract got? What are they?
……………………………………………………………………………………
……………………………………………………………………………………
5. What is called consideration?
……………………………………………………………………………………
……………………………………………………………………………………
6. What must both parties do to have a valid contract?
……………………………………………………………………………………
……………………………………………………………………………………