Unit 14 PROVISIONS ON THE PARTIES 

- Identification  
- Notices  
- Regulation of assignment  

1. Identification  

Notes of identification in a contract  

(1) For companies and LLPs, identify them using their:  
- full legal name;  
- registered office address;  
- company registration number; and  
- country of incorporation.  
(2) For sole traders, identify them using:  
- their trading name;  
- the full name of the individual concerned;  
- the current address of the individual concerned; and some unique identifier (such as a national
ID number or  passport number)  

1.1 The names of the Parties  

The principle:  
- The official, registered names of the parties should appear at the head of the contract. 
- The “hereinafter-called” wording saves space and prevents legal problems caused by
mistyping. 
E.g.:  
- Using the short form for a specific name  
 “The Smith, Jones, Wrangel and Ironside Supply Company Inc. A corporation organized and
existing under  the laws of the State of the Delaware, USA, having offices in_______ San
Francisco, California, hereinafter  called “SMITH”.”  
- Using the short form for Generic description  
 “The Docklands Procurement Company, a corporation organized and existing under the laws
of the republic of  Verbena having offices at ____Port Mary, Southampton, United Kingdom,
hereinafter called “BUYER”  

1.2. Signatures  
- Traditional way:  

“In Witness Whereof  

We have this 16th day of March 2003 made and signed this
Agreement…” 

- Anglo-American contracts-includes mention of a seal  

“In Witness Whereof  

The parties hereto have set their hands and sealed this 16th day of March 2003
…” 

In the Anglo-American world, simple formulas are gaining favor.  

THE PARTIES, INTENDING TO BE LEGALLY BOUND, have executed this agreement as of

the date first set forth above. 

2. Notices  
- A “notice” is any formal notification required by the contract 
- The Notices clause should defines:  
(a) form of notice;  
(b) how notice may be made;  
(c) the address  
(c) when the notice is deemed to have been received.  
 Specimen clause  

Notices   
Notices served by one party to the other under the Contract are valid only if sent by registered
mail (DHL) and signed. Such notices are to be sent to the following addresses:   
Supplier: (address)   
Purchaser: (address) 

3. Assignment of Rights and duties  

- Usually NOT allowed to avoid any potential problems  
- In international contracts, try to exclude both assignment of rights and delegation of duties
without your written consent.  
Specimen clause  
Assignment of Rights, Delegation of Duties (Chuyển quyền và nghĩa vụ)
The rights under this Contract may not be assigned nor the duties delegated by either party
without the prior written consent of the other party.  

Practice 1 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 duty right responsibility obligation  

2 intent objective intention intensity  
3 compose( soạn thảo) draft write enlist  
4 convince propose induce persuade  
5 appeal(kháng cáo) elect select choose 

Practice 2 Word choice  

These sentences are from a tenant's Right of Assignment document. In each case, choose the
correct word or  phrase to complete them.  
1 Notwithstanding anything to the contrast / contrary / opposition contained in the lease,
Tenant can / may /  shall have the following rights with respect to assignment, transfer or sub-
lease (referred to / in / as hereinafter  as a ‘Transfer’) of the demised premises.  
2 Landlord agrees that it will not unreasonably withdraw / rebut / withhold its approval to any
Transfer of the demised premises or any part thereof/ thereafter / thereunder, provided such
Transfer shall be subject to all of the terms and circumstances / conditions / inclusions of the
lease.  
3 Tenant shall waive / have / own the right to perform any of the following acts without the
necessity to request or obtain Landlord’s refusal / withdrawal / approval therefore.  
4 Transfer the demised premises or any portion thereof to / from / at any ‘affiliate company’.
An affiliate company shall mean, for purposes of this Article 49, any corporation, partnership
or other business entirety/ entreaty / entity under common control and ownership with the
Tenant, or with the parent or any subsidiary of the Tenant. 
Practice 3 Prepositions with contract  
1 Complete the phrases below using the correct preposition in the box. You may need to
consult a dictionary.  

against from to (x4) under

upon 

1 the parties to a contract  

2 pursuant to  the contract  
3 to have rights and obligations under a contract  
4 to benefit from the contract.  
5 to assign rights or delegate duties to a third party  
6 to enforce a contract against someone  
7 a third-party beneficiary to a contract  
8 in reliance upon the contract  

Practice 4 Read the text and answer the questions  

Basic concepts associated with assignment and third-party rights.  
Generally, a contract operates to confer rights and impose duties only on the parties to the
contract and no other parties. The principle that follows from this is that third parties have no
rights and, as such, cannot enforce contractual provisions. This contractual relationship is
summed up in the term privity of contract. However, in many jurisdictions, there are two
exceptions to this general rule: the first is when the original contract provides for rights to be
conferred on a third party, and the second is when contractual rights and duties are transferred
to  a third party at a later date.  

When speaking of the first type of situation, lawyers generally refer to third-party beneficiary
contracts. The most common form of this type of contract is where party A enters into a valid
contract with party B which stipulates that party B shall render performance for the benefit of
party C, i.e. the third-party beneficiary. No problems arise if party B performs. But what
happens when party B fails to perform? Have rights been vested in party C such that C can
enforce the contract, or must party A do so? In many jurisdictions, this problem is addressed
through a determination of whether the contract expresses an intent to create a legally
enforceable right in the third party. However, must the intent be from both parties to the
agreement (A and B) or just the recipient of the promise to be enforced, i.e. the promisee (A) as
opposed to the promisor (B)? The courts usually look to the intent of the promisee and ask the
question: According to the contract, who was to receive the benefit of the promise, the
promisee or a third party directly?  

In deciding the promisee’s intent, the courts look at the following factors: (1) is the third party
identified in the contract? (2) is performance to be made directly to the third party? (3) does the
third party have any rights (specific or general) under the contract? and (4) is there any
relationship between the promisee and the third party such that it could be inferred that the
promisee wished to enter into a contract for the benefit of the third party? Of course, the greater
the number of times the court answers ‘yes' to the above questions, the more likely it is that the
court will rule that the third party is an intended beneficiary, and thus entitled to enforce the 
contract, as opposed to an incidental beneficiary.  
In the second case mentioned above, rights and duties are transferred after the original contract
has been signed.  If in the original contract the transferring party (A) is owed a right by the
non-transferring party (B), then A is known as the obligee and B is the obligor. However, if in
the original contract A owes B a duty, then A is known as the obligor and B the obligee. When
it is not specified whether rights or duties are being transferred, the term assignor can be used
for A, who attempts to transfer his rights and/or duties under the contract to a third party (C,
the assignee). If a right is being transferred, C becomes the obligee in place of A. (Although
this does not necessarily release A from any obligations to B under the original contract.) If a
duty is being transferred, A is known as the delegator, while C is referred to as the delegate.
The term assignment of contract can mean several different things. This term is ambiguous, as
it does not indicate whether there is both an assignment of rights and a delegation of duties. In
everyday usage, it generally means that both are applicable.  However, in the interests of
precision, the term ‘to assign' should really be reserved specifically for the transfer of rights,
and the term ‘to delegate' should be used in connection with the transfer of duties (and
therefore with performance). This distinction is crucial because, while an obligee can rid
himself of a right merely by making an effective assignment, an obligor cannot rid himself of a
duty by the same means. Generally, in order for the obligor to discharge his duties under the
contract through assignment, the obligee must first release him from his obligations under the
contract. When this takes place, there is a novation of the original contract, in which the
obligor’s position is taken on by a new party.  

The right to assign is generally governed by an assignment clause in the contract, the
enforceability of which depends on many factors, including the particular wording of the
clause, the nature of the obligations to be  performed and the nature of the contract.  

Questions  
1. Decide the following statements if they are True or False  
1. A third-party beneficiary contract is one which intends for someone who is not a party to
that contract to benefit from the contract.  T
2. The term privity of contract refers to the relationship which exists between the immediate
parties to a contract. T 
3. The transfer of rights under a contract is known as delegation.  F
4. Novation is the renewal of a contract by the contracting parties.  F

2. Complete the text below using the words in the box.  

assignment (x3) benefits novation (x4) parties third party 

1)NOVATION is a means by which one party to a contract totally removes himself from the
contract by transferring not only all of the 2) BENEFITS conferred by that contract, but also all
of the obligations. The 3) THIRD PARTY replaces the original party as a party to the contract.
Following 4) NOVATION the other contracting party is left in the same position as he was in
before it was carried out, except that there is an obligor. A 5) NOVATION requires the
agreement of all three parties. In contrast, an 6) ASSIGNMENT refers to transfer of a right
(and sometimes, in general speak, obligations) of one person to another. 7) ASSIGNMENT
differs from novation in that the 8) PARTIES to the contract do not change. Most rights and
obligations are capable of 9) ASSIGNMENT, but not all are capable of 10) NOVATION 

3. Complete these verb-noun collocations as they appear in the text. Then express the
meaning of each phrase in your own words. The first has been done as an example.  
1 confer (rights) (paragraph 1)  
This means to give rights to someone in a contract.  
2 impose duties (paragraph 1)  
3 enforce contractual provision (paragraph 1)  
____________________________________________________________________
______________  
4 render performance (paragraph 2) 
_____________________________________________________________________
_____________  
5 delegate duties (paragraph 4)  
This means to give duties to So else to do on your behalf
 6 assign rights (paragraph 4)  
 This means to transfer the rights to the third party so that they have them

Practice 5 English- Vietnamese translation  

1. Entire agreement: This Contract sets out the entire agreement between the Parties. Neither
party has entered into this Contract in reliance upon any representation, warranty or
undertaking of the other party that is not expressly set out or referred to in this Contract. This
Article shall not exclude any liability for fraudulent misrepresentation.  
 Điều khoản nhất trí toàn bộ: Hợp đồng này đưa ra điều khoản nhất trí toàn bộ giữa các Bên.
Cả hai bên tham gia vào Hợp đồng này không dựa trên bất kỳ các cam đoan, bảo đảm hoặc cam
kết nào của bên kia mà không được quy định rõ ràng hoặc được đề cập đến trong Hợp đồng này.
Điều khoản này sẽ không loại trừ bất kỳ trách nhiệm pháp lý nào đối với việc trình bày sai sự
thật.

2. Notices: Any notice under this Contract shall be in writing (which may include e-mail) and
may be served by leaving it or sending it to the address of the other party as specified in Article
13.2 below, in a manner that ensures receipt of the notice can be proved.  
- For the purposes of this Article, notification details are the following, unless other details
have been duly notified in accordance with this Article.  
 Thông báo: Bất kỳ thông báo nào theo Hợp đồng này phải ở dạng văn bản (có thể bao gồm
cả e-mail) và có thể được gửi bằng cách để lại hoặc gửi tới địa chỉ của bên kia như quy định tại
Điều 13.2 dưới đây, theo cách đảm baảo là có thể chứng minh khi nhận được thông báo

3. Assignment of rights and duties: Neither party shall have the right to assign or subcontract
any of its obligations or duties under this agreement without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed.  

 Chuyển giao quyền và nghĩa vụ: Cả hai bên không có quyền chuyển giao hoặc ký HĐ phụ
với bất kỳ trách nhiệm hay nghĩa vụ nào theo HĐ này mà không có sự đồng ý trước bằng văn
bản ngay lập tức của bên kia

Practice 6 Vietnamese-English translation 

1. Không bên nào được quyền chuyển giao hay ký kết hợp đồng phụ đối với bất cứ trách nhiệm
hay nghĩa vụ nào của mình theo bản hợp đồng này.  
 Neither party shall have the right to assign or subcontract any of its obligation or duties
under this agreement

2. Hợp đồng này thay thế cho mọi thỏa thuận hay hiểu biết liên quan đến đối tượng của Hợp
đồng. Hợp đồng này sẽ không được sửa chữa hay bổ sung trừ khi có sự thỏa thuận của các bên
bằng văn bản (kể cả văn bản thỏa thuận bằng email)  
 This Contract shall supersede any and all prior agreement or understandings between the
parties respecting the subject matter hereof. All modifications and improvements shalle not be
made without the prior written agreement by both parties (include agreement by e-mail)
3. Không bên nào được quyền chuyển giao hay ký kết hợp đồng phụ đối với bất cứ trách nhiệm
nào của mình theo bản hợp đồng này mà không có sự đồng ý trước bằng văn bản của bên kia,
sự đồng ý này sẽ do bên kia toàn quyền quyết định.  
 neither party shall have the right to assign or subcontract any of its obligations and duties
under this Contract without the prior written consent, which consent shall be made by the other
party in full decision power.

Unit 15 CONTRACT STATUS  

- Breach of contract and Remedies  

- The discharge of a contract (Termination, Rescission, Cancellation, Impossibility
and Frustration) 
- Limitation of Liability  
- Language  

1. Breach of contract and Remedies  

1.1 Types of breach  

- Delay in delivery: compensated by liquidated damages  
- Failure to repair under warranty: lump sum compensation is paid.  
- Delay in payment: compensated by the payment of interest.  
1.2 The aim: to avoid the cost and uncertainty of legal proceedings  
1.3 General Considerations  
(1) For what breaches of contract are liquidated damages payable?  
(2) Must the injured party notify a breach to the party at fault?  
(3) What is the amount of damages payable?  
(4) What, if any, is the ceiling on the damages?  
(5) Are damages payable even if there is no loss?  
(6) Are damages payable even if there is no fault?  
(7) Is payment of damages an alternative to performance?  
(8) Is compensation available beyond liquidated damages?  

1.4 Types of damages  

03 common types:  
- Compensatory damages bồi thường thiệt hại thực tế: compensation for actual loss  
- Liquidated damages bồi thường thiệt hại tính trước: lump-sum compensation for predicted
losses  
- Punitive Damages phạt vi phạm hợp đồng: Penalty => to force or terrorize the other party  

  Compensatory   Liquidated   Punitive  

damages  damages  Damages  
(Penalty) 

When   After breach Before breach Before breach

assessed 

How   On the basis of actual loss As a best guess at As a weapon of terror to

assessed  of harm possible loss ensure performance

Type of   Loss must be proved No proof of loss is No proof of loss is

 proof  penny by penny

How   By all courts By all courts Not allowed by Anglo-

enforced  american court
Lump-sum compensation:  
- Wrong party is required to make ___one payment___for a number of separate items; one
sum must be paid all at once rather than in _several___ smaller amounts.  
03 common types:  
Type 1: Too High A Figure: The Penalty  
- A strong buyer sets a high figure for compensation, hoping to ______________ the seller to
deliver on time or perform some other duty. 
- The motive behind such a clause is said to be in ______________ (to “terrorize”).  
- The figure is ______________to any actual harm the buyer suffers.  
Type 2: Fair Estimate of Probable Harm: Liquidated Damages  
- If a buyer and seller want to be fair, they try to decide a ______________figure for the harm
the buyer will probably suffer.  
- It’s a guess, but a ______________once acceptable to both sides.  
- The motive is to avoid lengthy and expensive arguments about damages if there is a
______________to  perform.  
Type 3: Too Low a Figure: The Quasi-Indemnity  
- A strong seller can fix compensation ______________ ______________what is reasonable.  
- This stipulation, in effect, “indemnifies” the seller against (______________ him from) the
payment of compensation for his own breach of contract.  
Notes  
- To avoid the cost and uncertainty of legal proceedings, many contracts regulate the
__consequences___of breach of contract.  
- The most common breaches are in the areas of payment, delivery and failure to repair under
___warranty____.  
- A loss caused by a failure to pay on time is compensated by the payment of _interests___.  
- A loss caused by late delivery or breach of warranty is not easily ___lump-sum__. So lump-
sum compensation is normal.  
- The lump-sum is maybe set too high (penalty), about right (liquidated damages), or too low
(quasi-indemnity).  The motive behind the penalty is to force (“terrorize’) one party into
__full__ performance.  
- A penalty is ___enforceable___in Common courts though the quasi-indemnity is usually
enforced.  
- Compensatory damages (exact compensation for loss suffered) are assessed after the loss or
damage has occurred; every penny of loss must be __proved___.  

1.5 Liquidated Damages: Some Problems  ( xem thôi)

The principle:  
- National laws differ widely in their ______________of damages; few generalizations are
possible.  - Most questions relating to damages are normally, ______________: the parties can
make whatever  arrangements they wish.  
- Clear contracts will ______________all potential problems.  
Problems  
(1) Are Liquidated Damages payable when there is no loss?  
The principle:  
- If an objective condition occurs (for example, delivery is a week late) the party at fault will
compensate the injured party, usually by paying money.  
- If there is no loss, national law attitudes vary. Under American law, a court usually enforces
the damages clause if the figure is a fair estimate-even with or without loss.  
- To avoid the uncertainty of different judgments, parties should have the following typical
clause:  “Payment of liquidated damages is contingent exclusively upon late delivery of the
goods; in no case shall the  buyer be required to substantiate any claim for payment of
liquidated damages with proof of loss or damage.”  

(2) Are Liquidated Damages payable when there is no fault?  

- If late delivery (or whatever) occurs but is not the fault of the supplier, must the supplier still
pay liquidated  damages? 02 common excusable cases  
+ Grace Period 
+ Force majeure  
Specimen clause  

“Liquidated Damages   
If the Seller fails to supply any or all of the Goods within the time period specified in the
Contract for reasons for which he is at fault, save the case of Force Majeure, then the Buyer
shall deduct from the Contract Price per  week of delay, as liquidated damages, a sum
equivalent to one half percent of the delivered price of the delayed  Goods….” 

2. The discharge of a contract  

Termination, Rescission, Cancellation, Impossibility and Frustration  
2.1 Termination  
- Termination occurs when either party pursuant to a power created by agreement or law puts
an end to the contract otherwise than for its breach.  
(1) Termination for convenience (đơn phương chấm dứt HĐ): occurs when one party (usually
the buyer or the employer) simply decides to drop the contract. No reason is required.  
Specimen clause:  

Termination for Convenience of the Buyer  

The delivery of Goods under this Contract may be terminated by the Buyer in accordance with
this clause in  whole, or in part, whenever the Buyer shall determine that such termination is in
his best interest. Any such termination shall be effected by delivery to the Seller of a Notice of
Termination specifying the extent to which supply of Goods under the Contract is terminated,
and the date upon which such termination becomes effective. 
Việc giao Hàng hóa theo Hợp đồng này có thể bị Người mua chấm dứt toàn bộ hoặc một phần
theo điều khoản này bất cứ khi nào Người mua xác định rằng việc chấm dứt đó là vì lợi ích tốt
nhất của mình. Bất kỳ sự chấm dứt nào như vậy sẽ được thực hiện bằng cách gửi cho Người bán
Thông báo chấm dứt nêu rõ mức độ chấm dứt việc cung cấp Hàng hóa theo Hợp đồng và ngày
mà việc chấm dứt đó có hiệu lực.
- To avoid the uncertainty of different legal system, a terminated party should incorporate the
following clause to get its rights.  
Specimen clause  
In the event of termination for whatever reason, the Seller shall be entitled to receive
full payment for all goods and services delivered by the Seller at the date of
termination.  

(2) Termination for default (chấm dứt HĐ do vi phạm): occurs when the contract names certain
defaults which allow one side (usually the  buyer) to terminate.  
Specimen clause:  

Termination for Default  

The Buyer may by written notice of default to the Seller terminate the whole or any part of this
Contract- in any one of the following circumstances:  
(i) If the Seller fails to make delivery of the Goods within the time specified herein;  
(ii) If the Seller fails to perform any of the other provisions of this Contract, or so fails to make
progress as to endanger performance of this Contract in accordance with its terms, and in
either of these two circumstances does not cure such failure within a period of 10 days. 

2.2. Cancellation  
- When one party breaches a contract, the other has the right to demand __cancellation__of the
contract.  
- In case of cancellation, the case will be put to court => it is messy, expensive and
______time-consuming__
Notes:  
- A contract is terminated ___provision__of the contract;  
- A contract is cancelled when one side has __breached___and the other simply
refuses to proceed.  
- Cancellation on ____trivial grounds (lý do ko xác đáng)___makes no legal sense. 
- A fundamental breach goes "to the ___heart_____ of the contract" and allows the other side
to end his contract.  
2.3. Rescission  
- A contract is __rescinded___when the two parties agree to end a contract in case they are no
longer interest in performing their contract.  
Notes:  
- Termination and cancellation are both ______________procedures  
- Rescission is ______________procedures  
2.4. Impossibility and Frustration  
- It occurred when one party finds it impossible or totally ______________to continue with it.  

3. Limitation of Liability  

The principle  
The four ways to limit parties’ liability:  
(1) Set a financial (or time) limit with a CEILING (mức phạt)
(2) Block a particular path with a ROADBLOCK (sự cố)
(3) Block off all paths with an IRON CURTAIN (gói gọn toàn bộ nghĩa vụ và trách nhiệm)
(4) Make somebody else liable by SIGNPOSTING ( chuyển quyền)

(1) The Ceiling  

- The seller pinpoints his exposure, i.e. his possible loss if the worst comes to the worst by
setting a ceiling on payments for which he is liable:  
E.g.:  
“Delay  
For each week of delay, the Seller shall pay 1% of the contract price up to a maximum of 5%
of the contract price.”  
Or  
- Limit seller’s total liability under the contract:  

“Total Liability  
The total liability of the Seller for all claims for damages made against him by the Buyer under
this Contract or  otherwise shall not exceed 10% of the Contract price.” 

- Ceilings are set for a particular time 

“Liabilities after Expiration of Defects Liability Period  

The Seller shall have no liability to the Buyer for any loss or damage to the Buyer’s physical
property which  occurs after the expiration of the Defects Liability Period unless caused by
Gross Misconduct of the Seller” 

- Time-ceiling clause:  

“Notification of Defects   
If within twenty-one days of receipt of any consignment from the Seller, the Buyer fails to notify
the Seller that the consignment is defective and submit defect, then the consignment shall be
deemed to comply in all respects  with the specifications and the Buyer shall waive/forego all
right to reject the consignment.” 

(2) The Roadblock  

- One common roadblock was Force Majeure 

“Force
Majeure 

If either party is prevented from, or delayed in, performing any duties under this Contract by
reason of a force majeure event, then this party is not considered to be in default and no
remedy, be it under this contract or otherwise, is available to the other party.” 

- Rejection of liability for consequential loss:  

 “Consequential Loss or damage  
Performance of the said duty to repair or replace defective items or to pay liquidated damages
in the agreed  amount shall constitute full and complete satisfaction of any claim of the Buyer
under this warranty. The Seller shall not be liable to the Buyer by way of compensation for any
loss of profit or for any loss or consequential  damage that may be suffered by the Buyer, or
for any other loss, injury, harm or damage whatever arising.” 

 (3) The Iron Curtain: toàn bộ trach nhiệm

- Specimen clause  

“Comprehensiveness  
The rights and duties provided for in this Contract are the only rights and duties in case and in
consequence of a breach of this Contract by either party and all further rights and duties, be
they under this Contract or  otherwise, are hereby expressly excluded.” 

(4) Changing the Road signs  

Taxation  
All income taxes, value added taxes, customs duties, excise charges, stamp duties or other fees
levied by any government, governmental agency or similar authority shall be borne exclusively
by the party against whom they are levied. However, in the event that the government of the
Buyer's country levies income taxes or value added taxes against the Seller, then the Buyer
shall compensate and hold harmless the Seller against such levies. 

Notes:  bỏ
- The distribution of risk between the parties is, in general, ______________. They can agree
(almost) any  limitations of liability that suit them.  
- There are four basic techniques for limiting liability: setting a ______________disallowing a
certain type of  claim, disallowing any claim not expressly accepted, agreeing in
______________.  
- Limitation clauses are not enforced if they try to limit liability for ______________breach of
contract, fraud,  or breach of trust, or (in main systems) if they try to limit liability for personal
injury.  
- Limitations, especially if they are unusual in any way, must be ______________displayed,
not hidden or  disguised.  
- Limitations imposed by General Conditions generally ______________the parties who have
done business on  that basic for some while.  
- In general, the courts look ______________at limitations of liability. If there is any doubt
about the language  or the content, the limitation is not enforced  

4. The Language of a Contract  

The principle  
- In international business practice, __1 language_is commonly used. 
- For the sake of clarity when the contract is translated, the parties usually agree on a
__definitive___contract language.  
- When two languages are ____equally effective____, the arbitrator/judge shall decide which
language shall be used. 
Specimen clause:  
Language  
The language of the Contract, of all Contract Documents, and of all correspondence and other
communication between the parties shall be English.  

Practice 1. Types of Damages (Definitions by US Law)  

Match the types of damages with their definitions  

1. Actual A. a small amount (usually 6 cents or 1 dollar) awarded to a person whose

damages D right has been violated but who has not sustained any actual loss. In other 
words, when no real damage is proven, the court may award nominative 
damages to the successful litigations of English courts 

2. Incidental B. An amount that parties to a contract agree will be paid as damages in case 
damages of breach 
  C

3. Nominal C. Damages claimed on the basis of the hopeful expectations of

damages the complaining party, not on factual proof of loss; they are not permitted
A  in determining the other party’s complaining to the complaining party. 

4. Speculative D. Damages proven to have resulted from the other party’s breach of
damages contract;  this compensates a party for whatever is lost or injured 
 E

5. Liquidated E. In addition to actual damages, other proved expenses incurred by

damages  a wronged party in a breach of contract. It compensates a party for expenses 
B directly related to the loss 

Practice 2 The discharge of a contract. Match the terms and the definitions below: 

1. Termination for  A. The violation of a law; in contracts, the failure to fulfill the
convenience G terms of an  agreement 

2. Termination for B. The discharge of an otherwise enforceable agreement due to the

delay F breach of one of the parties. It is expensive, messy and
unpredictable 

3. Termination for  C. This occurs when the contract names certain breaches which
insolvency D allow one side (usually the buyer) to terminate. 

4. Termination for D. This occurs when one party in a bankrupt situation. The
default C receiver in bankruptcy may elect, for the better protection of
creditors, to carry out a contract that will increase the bankrupt’s
assets. 

5. Breach A E. The amicable discharge of a contract by mutual agreement. 

6. Cancellation B F. This occurs when the seller delivers goods or services later than
a certain period agreed in a contract. 

7. Termination I G. This occurs when one party (usually the buyer) simply decides
to drop the contract. 
 8. Rescission E H. If goods or services simply cannot be delivered because of a
reason beyond the seller’s control, the contract is discharged by the
seller. 

9. Frustration H I If the whole sense of the contract is lost, the duty of payment is
discharged by the buyer. 

10. Impossibility K K. This occurs when two parties find it impossible to continue the
performance of a contract or they may find an interest in dissolving
their contract. 

Practice 3 Word choice  

Choose the correct word or phrase to complete each sentence in this liquidated damages
clause.  

LIQUIDATED DAMAGES FOR DELAYS  

Contractor understands and acknowledges that time shall be 1) on /of/ in the essence of this
contract and agrees that the damages that may 2) cause / result from / bring about any delay in
finishing the work or parts 3) thereby / thereof/ therein will be difficult, if not impossible, to 4)
change / avoid / ascertain. Thus, Contractor  agrees that if the work and all parts thereof are not
completed 5) in / at / on or before the dates stipulated for completion thereof, as extended in
the manner specified 6) herein / hereof / hereafter, Contractor 7) shall / may  / should pay to
owner as stipulated, agreed and liquidated damages and not as a penalty, the amount stated on 
the cover sheet for each calendar day in which the work or any portion thereof remains
uncompleted after such  completion date as so extended.  

Practice 4 Language use  

Complete the sentences below using the verb phrases in the box. In some cases, there is more
than one correct answer.  

are hesitant to dismissed finding that held that rejected ruled that 
1. Courts are hesitant to uphold restraints on trade. (Các tòa án đang do dự trong việc duy trì
các hạn chế đối với thương mại)
2 The Court ruled that punitive damages can be awarded in a contract case.  
3 The Court rejected plaintiffs' claims that the disclosure constituted a breach of the
parties' agreement, as reflected in the privacy policy the company posted on its website, not to
disclose such personal information, finding that the posting of such a policy did not create an
enforceable agreement between the parties.  

Practice 5. Fill in the gaps of the following clauses with the words given in the box.  

1. Termination for the Convenience of the Employer  

delivery effective interest performance

terminated

The performance of work under this Contract may be terminated by the Employer in
accordance with this clause in whole, or from time to time in part, whenever the Employer
shall determine that such termination is in the best interest of the Employer. Any such
termination shall be effected by delivery to the  Contractor of a Notice of Termination
specifying the extent to which performance of work under the Contract is terminated, and the
date upon which such termination becomes effective.  

2. Termination for default  

cure endanger fails part provisions

written

 “The Employer may, by written notice of default to the Contractor, terminate the whole or
any  part of this contract in any one of the following circumstances:  
(i) If the Contractor fails to make delivery of the supplies or to perform the services within the
time specified herein…  
(ii) If the Contractor fails to perform any of the other provisions of this Contract, or so fails to
make progress as to endanger performance of this Contract in accordance with its terms, and
in either of these two circumstances does not cure such failure within a period of 10 days…” 

3. Termination consequences:  

Arbitration full incurred necessary

survive 

“In the event of Termination, the duties of the parties shall be as incurred up to the date
of  Termination. In particular, the Seller shall receive the full Price of any goods delivered and
accepted by the Buyer. The provisions of this Contract dealing with defects liability,
Arbitration, and such other provisions as are necessary in order to resolve any post-
Termination disputes shall survive Termination.”  

Practice 6 Translate the following clauses into Vietnamese  

1. Language: This Contract and the Contract documents are written in English. Any
translation into another language is for information only and has no legal status.
Correspondence between the parties shall be  conducted exclusively in English.  
Ngôn ngữ: Hợp đồng này và các tài liệu Hợp đồng được viết bằng tiếng Anh. Mọi bản dịch
sang ngôn ngữ khác chỉ để tham khảo và không có tư cách pháp lý. Thư từ giữa các bên sẽ
được thực hiện hoàn toàn bằng tiếng Anh.  

- The language of all designs, drawings, plans, specifications, and all other documentation
provided by the Seller under this Contract shall be English; however, the training materials
and the maintenance manuals specified in Article II shall be supplied in both an English-
language version and an Arabic version. In the event of a discrepancy between the two
versions, the English-language version shall prevail. 
 Ngôn ngữ của tất cả các thiết kế, bản vẽ, kế hoạch, thông số kỹ thuật và tất cả các tài liệu khác
do Bên bán cung cấp theo Hợp đồng này sẽ là tiếng Anh; tuy nhiên, các tài liệu đào tạo và sổ
tay hướng dẫn bảo dưỡng quy định tại Điều II sẽ được cung cấp bằng cả phiên bản tiếng Anh
và phiên bản tiếng Ả Rập. Trong trường hợp có sự khác biệt giữa hai phiên bản, phiên bản
tiếng Anh sẽ được ưu tiên áp dụng. 

2. Limitation of Liability: The Buyer’s sole remedies for claims of any kind with respect to the
Products  furnished under this Agreement and with respect to all other performance by the
Seller under or in connection  with this Agreement or with respect to or in any way connected
with the manufacture, sale, handling, use,  repair, maintenance or replacement of the Products
including liability arising out of contract, strict liability,  negligence, or any other tort shall be
limited to those remedies prescribed in the warranty section of this  Agreement.  
Giới hạn trách nhiệm pháp lý: Các biện pháp khắc phục duy nhất của Người mua đối với các
khiếu nại dưới bất kỳ hình thức nào liên quan đến Sản phẩm được cung cấp theo Thỏa thuận
này và đối với tất cả các hoạt động khác của Người bán theo hoặc liên quan đến Thỏa thuận
này hoặc đối với hoặc theo bất kỳ cách nào liên quan đến sản xuất, bán, xử lý, sử dụng, sửa
chữa, bảo trì hoặc thay thế Sản phẩm bao gồm trách nhiệm pháp lý phát sinh ngoài hợp đồng,
trách nhiệm nghiêm ngặt, sơ suất hoặc bất kỳ vi phạm nào khác sẽ được giới hạn trong các biện
pháp khắc phục được quy định trong phần bảo hành của Thỏa thuận này. 

3. Product Liability: The Supplier shall fully indemnify and hold harmless the Purchaser from
and against from any loss, liability or claim in respect of personal injury to, or the death of,
any person or any loss of or damage to any property of any kind whatsoever arising out of or
in connection with the possession, ownership, use and  operation of the Item by the Purchaser
or any third party approved by the Purchaser whether such Item is  installed in an Equipment
or not.”  
Trách nhiệm pháp lý đối với sản phẩm: Nhà cung cấp sẽ hoàn toàn bồi thường và không gây
tổn hại cho Bên mua khỏi bất kỳ tổn thất, trách nhiệm pháp lý hoặc khiếu nại nào liên quan
đến thương tích cá nhân hoặc cái chết của bất kỳ người nào hoặc bất kỳ tổn thất hoặc thiệt hại
nào đối với bất kỳ tài sản nào dưới bất kỳ hình thức nào phát sinh từ hoặc liên quan đến việc
sở hữu, sử dụng và vận hành Vật phẩm bởi Bên mua hoặc bất kỳ bên thứ ba nào được Bên
mua chấp thuận cho dù Vật phẩm đó có được lắp đặt trong Thiết bị hay không. ” 

Unit 16 SETTLEMENT OF DISPUTES  

 Case study:  

Blue King Beer is a brewery in Verbena that exports about 40% of its production. Blue King is
negotiating with a hotel chain in Esperanza to supply a range of "fancy" beers suited to the
taste of tourists. The minimum contract price over a period of three years is agreed as
$400,000—about 5% of Blue King's turnover. During negotiations the subject of a settlement
of disputes clause comes up. 

How would you advise the two sides when they ask you the following questions?  

1. Is it reasonable to omit a settlement of disputes clause completely?  

No, a sizable contract should contain a clause on settlement of disputes

2.. If no, should we specify arbitration or litigation? Why?  
Arbitration. Bc cheaper, quicker, and more businesslike 
3. Should we add an amicable settlement provision? Why? 
Yes. A serious and successful attempt at an amicable settlement can save a such huge
sum of money 
4. If yes, should this provision contain a detailed procedure for amicable settlement? 
Yes. A procedure 
5. If a contract specifies arbitration, where is the best place for the tribunal to meet?  
UNSPECIFIED (ko chọn ra đc, để trọng tài chọn)
BUYER'S COUNTRY (QG ng mua)
NEUTRAL COUNTRY (QG trung lập)
EXPORTER'S COUNTRY  
COUNTRY OF THE DEFENDANT (QG bên bị kiện)
The country of the Defendant. It creates extra costs for the side wishing to begin the dispute and
thus make amicable settlement more likely. Và chế tài dễ hơn nhiều.
 6. Should we state that both sides accept any arbitral award as "final and binding"? 
Yes. It is always worth stating this even though such clauses are not always enforceable.
Ở VN, coi phán quyết của trọng tài là trung thực, và đã cam kết giải quyết bằng trọng tài
thì không được chọn tòa án. Tránh việc các bên kiện nhau tiếp.

1. Approaches to settlement of disputes  

The principle  
- If parties do not specify a clear and detailed procedure for settling their disputes, this will
make such disputes unnecessarily bitter.  
- If a contract says nothing about the settlement of disputes then the courts will decide how
such disputes will be settled.  (Ko có điều khoản giải quyết tranh chấp, tranh chấp sẽ đưa ra tòa
án, và toàn xét xử mang tính chủ quan ko theo thỏa thuận nữa)

Common approaches  
- Amicable settlement  
- Conciliation  
- Arbitration  
- Litigation  

The advantages and disadvantages of each type of settlement. 

  AMICABLE   CONCILI-  ARBITRATION  LITIGATION 

SETTLEMENT   
-ATION 

Third party is  (1) NO (2) YES (3) YES (4) YES
involved 

Decision is  (5) NO (6) NO (7)YES/NO (tùy (8) YES

enforceable  luật pháp quốc gia) 

Decision is (9)  (10)  (11)  (12) 

purely  legal 

Time-saving  (13) YES (14) YES (15) NO (16) NO

Cost- (17) YES (18) YES (19) NO ( ko biết, (20) NO( ko biết,
effectiveness  tùy mức độ vụ án, tùy mức độ vụ
sự việc) án, sự việc)

Confidentiality  (21) YES (22) YES (23) YES ( ko có (24) NO ( công

bên thứ 3 biết được) khai)

2. Stipulations of settlement of disputes  

(1) Amicable settlement  

- Amicable settlement is most preferred by the parties because it is the quickest and cheapest
way.  
The Purchaser and the Supplier shall make every endeavour to resolve amicably by direct,
informal negotiation  any disagreement or dispute arising between them under, or in
connection with the Contract.  

(2) Conciliation  
Procedures of conciliation:  
- Conciliation (or mediation) require a third party, a conciliator (or a mediator), trusted by both
parties to sit down with them and try to reach an agreement.  
- The mediator has no authority to impose a settlement or to make a judgment  
- Proceedings of conciliation are short and informal; if there is goodwill on both sides, the
chance of a fair solution is high.  (quá trình thương lượng của 2 bên có sự tham gia góp ý của
luật sư hai bên; nhược điểm, một bên có thể thay đổi quyết định sau khi thỏa thuận giải quyết
được thành lập)
Specimen clause  

Procedure for amicable settlement shall be as follows:  

a. The parties shall agree a date and place for an amicable settlement meeting;  
b. Attending the meeting shall be one executive representing each party and one lawyer
representing each party;   
c. The lawyers shall not be allowed to speak at the meeting;  
d. The meeting shall take place in three sessions. In the first session, each party shall state its
position on the subject of the disagreement. In the second session the parties shall suggest
ways of resolving the disagreement.  In the third session the parties shall attempt finally to
resolve the disagreement.   
In the event that the parties fail to resolve their disagreement amicably, they shall proceed to
arbitration on the terms specified hereinafter. 

(3) Arbitration  
- When negotiating the arbitration clause of a contract, four practical questions should be
settled by the parties:  number of arbitrators, place of arbitration, the language of the court,
allocation of arbitration fees.  (mỗi bên chịu một nửa số phí, or bên thua chịu, or trọng tài phán
quyết bên nào chịu nếu 2 bên ko quy định)
- To avoid the confusion of different legal provisions, the parties should agree that the arbitral
award is binding and rule out further appeal.  
Specimen clauses 

"All disputes arising out of or in connection with the present Contract shall be finally settled
by VIAC  (Vietnamese International Arbitration Centre) in Hochiminh city, Vietnam. The
Rules of VIAC shall apply, the  number of arbitrators shall be appointed in accordance with
the said Rules." 

Or  

Any dispute, controversy or claim arising out of or relating to this Contract, or the breach,
termination or  invalidity thereof, shall be settled by arbitration in accordance with the
UNCITRAL (United Nations  Commission on International Trade Law) Arbitration Rules at
present in force.  
The number of arbitrators shall be three. The place of settlement of disputes shall be …... The
language used by  the court in the settlement of disputes shall be English. In the event of
arbitration, each party shall bear its own  costs. Both parties agree to accept the award of the
court of arbitration as final and binding on them both, to  the exclusion of all other remedies. 
(4) Litigation  
- Litigation is the most complicated, time-consuming, costly and public disclosed.  
- Its decision is legally binding, it is, therefore, required to be put into a contract as the final
settlement of  disputes in case other ways prove impossible.  
Specimen clause:  

All disputes, conflicts or discrepancies arising out of this Contract, which cannot be settled by
amicable  negotiation, shall be referred to the Economic Court of Hochiminh City, Vietnam for
final settlement. 

Practice 1 Read the text and answer the questions  

Alternative dispute resolution  
Alternative dispute resolution, often abbreviated to ADR, is well-established in a number of
jurisdictions,  including the USA, Canada and Australia. Over recent years, we’ve seen the
emergence of mediation  organisations and dispute resolvers, some on the Internet. In the UK,
ADR is positively promoted for use in a  wide range of civil disputes, including small claims,
family matters, construction or building contracts, and  complex international commercial
disputes. It’s generally proposed as a cost-effective alternative to the  litigation process and
entered into on a voluntary basis by disputants, or because of contractual provisions, that  is,
the conditions of a contract. Many commercial agreements now include dispute resolution
clauses in which  the contracting parties agree the method to be used if a dispute occurs during
the life of the contract. However,  parties may also be referred to ADR by the court during the
course of litigation. A Civil Procedure Rule  requires the UK civil courts, as part of the case
management process, to encourage and facilitate parties to use  ADR procedure if appropriate.
A National Mediation Helpline has also been set up to provide advice by  telephone or online.  

Use one word to complete the extract below  

1. Dispute Resolution Procedure  

1.1 General  
1.1.1 All disputes between the parties arising out of or relating to this Agreement shall be 
referred, by either party , to the project board for (2)resolution.  
1.1.2 If any dispute cannot be resolved the project board within a maximum of 114 days after 
it has been referred under Clause 1.1.1, that dispute shall be referred to the [appropriate
officer] of the [public sector client] and the [e.g. project manager] of the Contractor for 
resolution.  
1.1.3 Work and activity to be carried out under this Agreement/ Contract shall not cease or be
delayed by this  dispute (8)resolution procedure.  
  
Practice 2 Explain why the following clauses are defective.  
1. All disputes arising from or in connection with this Contract, including any disputes of the
formation, validity  or breach of Contract, shall be referred to and settled by Vietnamese
International Arbitration Centre (VIAC) at  the Vietnamese Chamber of Commerce and
Industries in Ho Chi Minh City or the International Arbitration  Centre in Singapore. The Rules
of Conciliation and Arbitration of ICC shall be applied.  
F. The choice of two arbitration centres will make it impossible for the parties to settle any
disputes
The wording: “ The Rules of Conciliation and Arbitration of ICC shall be applied “ is not
relevant, VIAC has their own rules
Missing provisions: the language, place of arbitration, fees allocation, number of arbitrators
2. Any dispute, controversy, or disagreement which proves impossible by amicable settlement
shall be referred  to the Vietnamese Chamber of Commerce and Industries (Vietcochamber).
Award(s) made by Vietcochamber  shall be final and binding the parties. Arbitration fee shall
be for the faulty party’s account.  
F. Vietcom Chamber is not an authorized entity to deal with arbitration
3. Any disputes or discrepancies which cannot be settled to the satisfaction of both parties shall
be arbitrated in  Vietnam under the law of Viet Nam. Arbitration Awards shall be final and
binding upon both parties, all  arbitration fees shall be borne by the losing party.  
Unclear. No authorized entity  for arbitration has been defined
 4. All disputes arising from this Agreement shall be settled by arbitration in Ho Chi Minh city
under the Rules  of Conciliation and Arbitration of ICC.  
Unclear, the name of arbitral tribunal has not been defined
5. If any claims arise out of or in connection with this Contract, both parties agree to settle
amicably. Should it  be impossible to reach an agreement, the claims shall be settled by the
International Chamber of Commerce and  industries of Vietnam whose awards shall be final
and binding to both the Seller and the Buyer.  
Unclear, the so-called “ International Chamber of Commerce and Industries of Vietnam “ has
not been in existence in Vietnam. Vietco chamber is not an authorized entity to deal with
claims 
Practice 3 Use the words in the box to complete the following clauses of dispute
settlement.  

1. Mediation  

authority, collectively, competent, equitable, proceedings, relating, remedies,

resolution, schedule  termination 

Except for equitable actions seeking to enforce the provisions of Sections 8(a), 9, 10, 11 and 12
of this  Agreement which may be brought by a court in any competent jurisdiction, in the event
a dispute, claim  or controversy arises between the parties relating to the validity,
interpretation, performance, termination or breach of this Agreement, collectively referred to as
“a Dispute”), the Parties agree  to hold a meeting regarding the Dispute, attended by
individuals with decision-making authority, to  attempt in good faith to negotiate a resolution
of the Dispute prior to pursuing other available  remedies. If, within thirty (30) days after such
meeting or after good faith attempts to remedies  such a meeting have failed, the Parties have
not succeeded in negotiating a resolution of the Dispute; the  Dispute shall be resolved through
legal proceedings.  

2. Arbitration  

affiliated, agreeable, award, conclusions, confidential, experienced, hearing,

jurisdiction, proceeding,  reasonable 
All claims and disputes arising under or relating to this Agreement are to be settled by binding
arbitration in  [insert name of country] or another location mutually agreeable to the parties.
The arbitration shall be  conducted on a confidential basis pursuant to the Commercial
Arbitration Rules of the American  Arbitration Association. Any decision or award as a result
of any  proceeding such arbitration shall be in writing and shall provide an explanation for all
conclusions of law and fact and shall include the  assessment of costs, expenses, and reasonable
attorneys' fees. Any such arbitration shall be conducted by an arbitrator experienced in [insert
industry or legal experience required for arbitrator] and shall include a  written record of the
arbitration hearing. The parties reserve the right to object to any individual who  shall be
employed by or affiliated with a competing organization or entity. An award of arbitration
may  be confirmed in a court of competent jurisdiction.  

Practice 4 English-Vietnamese translation  

1. Dispute resolution procedure  
Any dispute, controversy or claim arising out of or relating to this Contract, including its
conclusion,  interpretation, performance, breach, termination or invalidity, shall be finally
settled under the rules of [specify  the arbitration institution] by [specify the number of
arbitrators, e.g. sole arbitrator or, if appropriate, three  arbitrators] appointed in accordance
with the said rules. The place of arbitration shall be [specify]. The  language of the arbitration
shall be [specify].  
Bất kỳ tranh chấp, tranh cãi hoặc khiếu nại nào phát sinh từ hoặc liên quan đến Hợp
đồng này, bao gồm cả việc ký kết, giải thích, thực hiện, vi phạm, chấm dứt hoặc vô
hiệu, cuối cùng sẽ được giải quyết theo các quy tắc của [nêu rõ tổ chức trọng tài] bằng
cách [nêu rõ số lượng trọng tài viên , ví dụ trọng tài viên duy nhất hoặc, nếu thích hợp,
ba trọng tài viên] được chỉ định phù hợp với các quy tắc đã nói. Nơi phân xử sẽ là [ghi
rõ]. Ngôn ngữ của trọng tài sẽ được [ghi rõ]. 
2. Ad hoc arbitration  
“Any dispute, controversy or claim arising out of or relating to this Contract, including its
conclusion,  interpretation, performance, breach, termination or invalidity, shall be finally
settled under the rules of  UNCITRAL [specify other rules] by [specify the number of
arbitrators, e.g. sole arbitrator or, if appropriate,  three arbitrators] appointed by [specify
name of appointing institution or person]. The place of arbitration shall  be [specify]. The
language of the arbitration shall be [specify]. ”]  
Mọi tranh chấp, tranh cãi hoặc khiếu nại phát sinh từ hoặc liên quan đến Hợp đồng này, bao
gồm cả việc ký kết, giải thích, thực hiện, vi phạm, chấm dứt hoặc vô hiệu, cuối cùng sẽ được
giải quyết theo các quy tắc của UNCITRAL [nêu rõ các quy tắc khác] bằng cách [nêu rõ số
lượng trọng tài viên , ví dụ trọng tài viên duy nhất hoặc, nếu thích hợp, ba trọng tài viên] được
chỉ định bởi [nêu rõ tên của tổ chức hoặc cá nhân chỉ định]. Nơi phân xử sẽ được [ghi rõ].
Ngôn ngữ của trọng tài sẽ được [ghi rõ].
“Any dispute, controversy or claim arising out of or relating to this Contract, in particular its
conclusion,  interpretation, performance, breach, termination or invalidity, shall be finally
settled by the courts of [specify  place and country] which shall have exclusive jurisdiction.  
Bất kỳ tranh chấp, tranh cãi hoặc khiếu nại nào phát sinh từ hoặc liên quan đến Hợp đồng này,
đặc biệt là việc ký kết, giải thích, thực hiện, vi phạm, chấm dứt hoặc vô hiệu, cuối cùng sẽ được
giải quyết bởi các tòa án của [nêu rõ địa điểm và quốc gia], nơi sẽ có quyền tài phán riêng

1. Mọi tranh chấp phát sinh liên quan đến Hợp đồng này phải được giải quyết chung thẩm theo
Quy tắc Hòa  giải và Trọng tài của Phòng Thương Mại Quốc tế bởi 03 trọng tài viên được chỉ
định cho phù hợp với quy tắc  này.  
Any dispute arising in connection with this Contract must be finally resolved in accordance
with the Rules of Conciliation and Arbitration of the International Chamber of Commerce by
03 arbitrators appointed in accordance with these Rules. 
2. Địa điểm xét xử trọng tài sẽ là thành phố Hồ Chí Minh. Ngôn ngữ trọng tài sẽ là tiếng
Anh.  
The place of arbitration will be Ho Chi Minh City. The language of arbitration will be
English. 
3. Trường hợp đưa ra trọng tài, mỗi bên sẽ tự chịu chi phí phần mình. 
In the case of arbitration, each party shall bear its own costs.
4. Trường hợp đưa ra trọng tài, hội đồng trọng tài sẽ xác định mức phí cho mỗi bên  
In the case of arbitration, the arbitral tribunal shall determine the fee for each party  
5. Trường hợp đưa ra trọng tài, trọng tài phán quyết bên nào thì bên đó phải chịu toàn bộ chi
phí cho cả hai bên.  
In case of arbitration, the arbitrator shall decide which party shall bear all costs for both
parties.