Vocabulary

Part II

vendor price verbal expensive contract party court responsible threat to enforce to sue interest misunderstanding valid bankrupt

a seller. a sum of money for which something is sold or bought. spoken. high priced. an agreement enforceable by law. either side in a lawsuit. a place where law cases are heard. liable for the carrying out of some duty. a statement of an intention to punish or hurt somebody, especially if he does not do as one wishes. to compel obedience to. to make a legal claim against. a legal right to a share in something. a failure to understand rightly, especially when this has led to ill feelings. effective because the correct formalities have been observed. a person judged by a court to be unable to pay his debts in full.

Explanations

Part III

An offer. For a contract to exist, an offer must be made and accepted. The offer may be made conditional. Goods on display for sale are not to be regarded as being an offer. They have been placed there to induce customers to make offers for them.

Price is the money that must be paid for goods or services.

Consideration. In a contract between two people, the contract is valid only if the gain to one person is balanced by some benefit, known as consideration, to the other.

Compensation. It is a sum of money payable to a person who has suffered injury.

The word essential (adjective) means necessary, indispensable or most important.

Is good fortune essential to success?

It is essential that you have the proper qualifications.

The word essentials refers to fundamental elements.

The essentials of essay writing.

They were taught only the basic essentials of the subject

(the minimum amount of instruction that is necessary).

To enter into a contract. One enters into or makes a contract with somebody for something. Other expressions in use are to sign a contract (e.g. for the sale of a property) and to exchange contracts (e.g. for the purchase of a house).

Exercises

1. Answer the following questions.

1. What is the meaning of “consideration”?

2. When do the buyer and the seller enter into a written contract?

3. If one party of a contract defaults what remedy is open to the second party?

4. Name some classes of people who cannot be parties to a contract.

5. Why must contracts be written?

2. Give the meanings of the following words.

1. Contract. 2. Compensation. 3. Responsible. 4. Vendor. 5. Verbal.

3. Give the word that fits the description.

1. High priced.

2. Either side in a lawsuit.

3. To make a legal claim against.

4. Effective because the correct formalities have been observed.

5. A person judged by a court to be unable to pay debts in full.

4. Fill in the blanks with correct words.

1. For a contract to exist, an ______ must be made and accepted. 2. ______ is the money paid for the goods or services supplied. 3. A contract is valid only if the gain to one person is balanced by some benefit, known as ______, to the other. 4. A sum of money payable to a person who suffers injury is called ______. 5. Goods on display for sale are not to be considered as being an ______.

Discussion about contracts

Part I

Mrs Smith. What is the meaning of the word “contract”?

Mr Smith. It’s just another word for an agreement.

Mrs Smith. Can you quote an example?

Mr Smith. Yes, dear. My life insurance policy is a contract.

Mrs Smith. What does it contain?

Mr Smith. It contains my rights and liabilities and those of the life

Insurance company.

Mrs Smith. Is anyone permitted to enter into a contract?

Mr Smith. No, only certain classes of people are permitted.

Mrs Smith. Who are they?

Mr Smith. People other than minors, lunatics and bankrupts.

Mrs Smith. Why are lunatics not allowed to do so?

Mr Smith. They are considered incapable of understanding the contract

they sign.

Mrs Smith. Why are bankrupts disqualified?

Mr Smith. As they are in debt, it is considered unsafe to society to allow

them to do business.

Mrs Smith. Does a person have to sign a contract to buy a house?

Mr Smith. Yes, I am afraid it is so.

Mrs Smith. What’s the reason?

Mr Smith. As a large sum of money will change hands, the transfer of

ownership has to be properly documented.

Mrs Smith. Can laymen prepare the contract?

Mr Smith. As it is quite involved, the buyer and the seller should act

through their lawyers.

Mrs Smith. Can people enter into illegal contracts?

Mr Smith. No, such contracts are not valid.

Mrs Smith. Are contracts an important subject to businessmen?

Mr Smith. Certainly, dear. Without them there would be much confusion

and dispute.

Vocabulary

Part II

policy liability minor disqualified debt illegal layman dispute

a statement of rights and obligations of a company. money owed or an obligation not met. a person under the age of 18. unfit. payment which has not yet been made to somebody. against the law. a person who is not an expert, e.g. in law or medicine. an argument.

Explanations

Part III

Minor. In law a minor is a person not yet legally of age. In the U.K. a person attains the status of an adult at the age of 18. At that age he can enter into contracts.

The transfer (noun)of ownership. To transfer (verb) is to hand over the possession of property or rights to a person.

Ownership (noun) refers to the state of being an owner.

Layman. This word is derived from lay (adjective) meaning non-professional. Such a person is not an expert, especially with reference to medicine and the law.

Where medicine is concerned I am a layman.

His technical language will not be understood by laymen.

Exercises

1. Answer the following questions.

1. Give an example of a contract.

2. What is stated in a contract?

3. Who may enter into a contract?

4. Why are lunatics not permitted to sign contracts?

5. Should laymen prepare contracts?

2. Give the meanings of the following words.

1. Policy. 2. Liability. 3. Minor.

3. Give the word that fits the description.

1. Against the law.

2. A person who is not an expert.

3. Payment which has not yet been made to somebody.

Lesson 7

Advertising and business

Part I

To advertise is to make known to the public the seller’s goods and services. This may take the form of advertising in newspapers, magazines and trade journals. Other means include television, radio, the cinema, exhibitions, advertising on the interior and exterior of buses and window displays. Hoardings and electric street signs are also used.

Advertising is essential. Without it people will not know the location of a shop or the goods and services marketed by its owner. Advertising increases demand and creates loyal customers. It educates potential customers to make them aware of the benefits of the products and services sold.

Advertising also occurs by word of mouth. Customers satisfied with goods or services will speak well about them. Their recommendation will greatly increase the volume of business. On the other hand, if the quality of the goods or services is poor, customers will complain. This will affect business. Intelligent businessmen know this and will spend much time and effort to keep their customers happy.

Advertising may cost much. It is very expensive to advertise on television. However many thousands of viewers will see the advertisement and the advertiser will benefit from the increased demand. It is cheaper to advertise in newspapers and magazines. An advertisement has to be attractive to catch the eye of the reader. It must also be regular to secure results. Advertising agencies help businessmen to insert advertisements in the media. Some hold the view that advertising interferes with the choice of customers. However, it is clearly of great advantage to the businessman as a means of increasing his sales at the expense of his rivals.