A special type of formal contract – contract of record – is not a contract in the true sense of the word because it is court created, and it does not have all the elements of a valid contract. Often, such a contract is one that has been confirmed by the court with an accompanying recorded judgment giving the successful litigant the right to demand satisfaction of the judgment.
An oral or written contract that is not under a seal or is not a contract of record is considered an informal contract (also known as a simple contract). An informal contract generally has no requirements as to language, form, or construction. It comprises obligations entered into by parties whose promises are expressed in the simplest and, usually, most ordinary nonlegal language.
After a contract has been negotiated, all obligations must then be satisfactorily performed in order for the contract to be executed. A contract that has not yet been fully performed by the parties is called an executory contract. When a contract's terms have been completely and satisfactorily carried out by both parties, the contract becomes an executed contract. Such a contract is no longer an active agreement and is valuable only if a dispute about the agreement occurs.
Exercise 1. Comprehension questions:
1. How are the two contracting parties called?
2. What are the requirements of an offer?
3. Can it be called an acceptance when the offeree changes the terms?
4. What does the mutual assent suppose?
5. In what cases do people have the right to abandon their contracts?
6. What is a consideration and why is it an important element of a contract?
7. What makes the contract illegal?
8. Can quasi-contract be called a contract in the true sense of the word?
9. What is the contract of record?
Exercise 2. Find in the text English equivalents to the following:
Явно выраженный договор; подразумеваемый договор; лицо, по отношению к которому принято обязательство; кредитор по обязательству; лицо, принявшее на себя обязательство; должник по обязательству, дебитор; кредитор по договору; должник по договору; договор, не могущий быть принудительно осуществленным в исковом порядке; оспоримая сделка; ничтожная сделка.
Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions: