5. Read and translate the text. Contract Law

There are many commercial relationships which are established by people in the world of business. These relationships will typically be regulated by a body of Law. Brought together, these branches of Law represent the Law of commercial transactions.

Contract law is the product of a business civilization. It will not be found, in any significant degree, in precommercial societies. Most primitive societies have other ways of enforcing the commitments of individuals; for example, through ties of kinship or by the authority of religion. In an economy based on barter, most transactions are self-enforcing because the transaction is complete on both sides at the same moment. Problems may arise if the goods exchanged are later found to be defective, but these problems will be handled through property law — with its penalties for taking or spoiling the property of another — rather than through contract law.

A true law of contracts — that is, of enforceable promises - imp­lies the development of a market economy. Where a commitment's value does not vary with time, ideas of property and damages are adequate and there will be no enforcement of an agreement if neither party has performed, since in property terms no wrong has been done. In a mar­ket economy, on the other hand, a person may seek a commitment tod­ay to guard against a change in value tomorrow; the person obtaining such a commitment feels harmed by the fact that the market value dif­fers from the agreed price.

Traditional contract law developed rules and principles controlling the voluntary assumption of obligations, regulating the performance of obligations so assumed, and providing sanctions for failure to perform.

The sales contract is universally recognized as the legal mechanism for conducting trade in goods. It is essential to trade because an international agreement to buy and sell goods, like many domestic agreements, takes time to perform.

In association with contractual relations in international busi­ness contacts it is desirable to clarify at the outset some issues con­nected with the position of foreign persons and entities on the terri­tory of a country other than the country of their citizenship or the country where they have permanent resident status or are usually found, often designated as their domicile. These issues are closely associated with "personal status", i.e. the range of rights and respon­sibilities that a legal system acknowledges not only to its own but also to foreign citizens and corporations (individuals and legal en­tities).

Modern commercial practice relies to a growing extent on arbit­ration to handle disputes, especially those that arise in international transactions.

Most contracts are agreements. It should now be noted that it is by no means true to say that all agreements are contracts. Many agreements fall outside the scope of the law of contract, either because they concern matters of moral, rather than of legal, obligation or because the parties agree that they are not to be treated as enforceable contracts, or because they are not intended to be such.

Contract law may cover agreements relating to transfers of merchandise, land, building, services, and other things tangible. Today we have added, the law is never static; it is always in change, growing or retreating, which also effects notions of justice, and the need for some absolutes.

Comprehension check

6. Work in pairs. Answer the following questions to the text.

1. What does the law of contract consider?

2. How do primitive societies enforce the commitment of individuals?

1. Did contract law exist in early societies? How were problems solved?

3. What does a true law of contract imply?

7. Use all the information you have learnt in this Unit so far to describe the Contract law.

Start like this:

“The Contract Law is ……”

8. Work in pairs. Take turns to describe some of the facts, give your reasons of Contract law in Ukraine.