Articles of agreement

Contractor's License No. _

THIS AGREEMENT, made this 25th day of October, one thousand nine hundred and ninety-seven, between ROBERT SMITH, hereinafter called the Owner, and ELVIS PRESLEY, hereinafter called the Con­tractor (it being understood that the terms "Owner" and "Contractor" used herein in the single number shall include the plural, and the use of the masculine gender shall include the feminine and neuter)

WITNESSETH:

FIRST: The Contractor, within the space of 180 working days from and after recording of a loan agrees to furnish the necessary labour and materials, including tools, implements and appliances required, and to perform and complete in a workmanlike manner, free from all liens and claims of artisans, material men and subcontractors thereon, all the work on attached plan and specifications, incorporated herein and made a part hereof; the Contractor to be responsible for carpet, drapes, and furniture placement: this is a "turn key" operation; carpet, furniture, and drapery cost shall be borne by the Owner; and all other works shown and described in and by and in conformity with, the plans and specifications for the same signed by the parties hereto; said plans and specifications to be furnished by the Contractor.

SECOND: Said construction work to be erected on a lot of land situated in the County of Sacramento, State of California, and described as follows: 1415 Baxter Street.

THIRD: The Owner agrees, in consideration of the performance of this agreement by the Contractor, to pay or cause to be paid to the Contractor, his legal representative or assigns One hundred fifty thou­sand dollars ($150,000) in United States legal tender, at the times and in the manner following, to wit: in the normal manner.

NOW, THEREFORE, the Owner hereby accepts the above pro­posal, and the Contractor agrees to perform the work comprehended there under, and by and between them as part and parcel of this contract the stipulations set forth in original writing on the reverse side hereof are understood and agreed upon.

The Owner to pay the Contractor 7% ($10,500 maximum) fee outside of a construction loan and as a monthly billed basis.

Any cost exceeding a construction loan to be Robert Smith's, but not to exceed $6,000.

IN WITNESS WHEREOF, both parties have duly executed this agree­ment the day and year first above written.

___________ ____________

Witness Owner

_____________ _________

Witness Contractor

XV. Translate into Russian. Comment on the use of Incoterms.

DELIVERY TERMS

Every international trade transaction is required to define certain spe­cific responsibilities:

• arrangements and payment for the carriage (freight costs)

• where the risk lies if delivery is not effected

• where the risk lies if loss or damage occurs

In order to overcome problems arising from variations and different interpretations of transport costs and risks, the International Chamber of Commerce (ICC) has developed uniform codifications or rules for ap­plication to the most widely used terms of delivery, known as "Incoterms". These were first published in 1936, and revised since to keep abreast of commercial and transport practices - the previous 1980 edition has been superseded by Incoterms 1990.

There are 13 Incoterms in the 1990 edition, designated by three-letter UN-approved symbols.

It is stressed that the use of Incoterms is and always has been volun­tary, and the benefits which their codifications and clear definitions of seller and importer responsibilities offer to traders do not apply auto­matically. The fact that Incoterms rules are being applied to a transaction must be stated specifically in the sales contract or clearly evidenced in the accompanying commercial documentation.

The listing of Incoterms 1990 by seller's decreasing costs, and thus in increasing order of responsibility for the importer, is as follows:

Delivered duty paid (DDP) - Costs of delivery, including duty, paid up to a named place in the country of importation. All modes of transport.

Delivered duty unpaid (DDU) - As for DDP, except that the importer pays the import duty.

Delivered Ex Quay - duty paid (DEQ) - Costs of delivery, duty paid, to the named port of destination. Sea or inland waterway transport only.

Delivered Ex Ship (DES) - Costs of delivery on board the vessel, duty unpaid, at the named port of destination. Sea or inland waterway transport only.

Delivered at frontier (DAF) - Costs of delivery, duty unpaid, at the named point and place at the frontier. All modes of transport.

Carriage and insurance paid (CIP) - Costs of carriage and insurance of the goods, duty unpaid, to the named destination. All modes of transport.

Carriage paid to (CPT) - As for CIP, except that the cost of insurance is carried by the importer.

Cost, insurance and freight (CIF) - Costs of goods, freight and insur­ance, duty unpaid, to a named port of destination. Sea or inland waterway transport only.

Cost and freight (CFR) - As for CIF except that the cost of insurance is covered by the importer.

Free on board (FOB) - Costs to delivery over the ship's rail at the named port of shipment. Sea or inland waterway transport only.

Free alongside ship (FAS) - Costs to delivery on quay or in lighters at the named port of shipment. Sea or inland waterway transport only.

Free carrier (FCA) - Costs of delivery, cleared for export, into the charge of the carrier named by the importer at the named place or point. ЛИ modes of transport.

Ex Works (EXW) - Costs of goods to the importer at the exporter's premises, packed (unless otherwise arranged) suitably for a known means of transport. The importer thus has maximum responsibility.

XVI. Precis the following text in about one-third of its size.

FOREIGN CURRENCY EXCHANGE

In order to buy foreign products or services, or to invest in other countries, companies and individuals may first have to buy the currency of the country with which they are doing business. Generally, exporters prefer to be paid for their goods and services either in their own cur­rency (Japanese in yen and Germans in marks, for example) or in U.S. dollars, which are accepted all over the world.

The foreign exchange market, or "FX" market, is where the buying and selling of different currencies takes place. The price of one currency in terms of another country's currency is called an exchange rate.

The market itself is actually a worldwide network of traders, connected by telephone lines and computer screens - there is no central headquar­ters. The three major centres of trading, which handle more than half of all FX transactions, arc Great Britain, the United States and Japan.

Trading goes on 24 hours a day; at 8 a.m. in London, the trading day is ending in Tokyo, Singapore and Hong Kong.

The FX market is fast paced, volatile and enormous - in fact, it is the largest market in the world.

MARKET PARTICIPANTS

Of course, not everyone in the world participates in the foreign ex­change market. There are four types of market participants - banks, brokers, customers and central banks.

• Banks and other financial institutions are the biggest participants. They earn profits by buying currencies from, and selling currencies to, customers and to each other.

• Brokers act as intermediaries between banks. Dealers sometimes call them to find out where they can get the best prices for their curren­cies. Dealing through brokers has the added advantage of anonymity; sometimes banks wish to keep their FX transactions confidential, and by dealing through a broker, this can be easily done. Brokers earn profits by charging commissions on the transactions they arrange.

• Customers are market participants, mostly large companies, who require foreign currency in the course of doing business or making in­vestments.

• Central banks, which act on behalf of their governments, some­times participate in the FX market to influence the value of their curren­cies.

Many people's contact with the world of foreign exchange is limited to changing money for use when travelling in, or buying things from, other countries.

However, exchange rates can change at any time, so whenever we engage in FX transactions, we take a risk. There's always a chance that our purchases could actually be less expensive - or, unhappily, more expen­sive - if we wait to buy them.

Changes in foreign exchange rates affect prices of imported goods and the overall level of price and wage inflation in an economy.

Exchange rates respond quickly to all sorts of events, both tangible and psychological: business cycles, balance of payments statistics, politi­cal developments, new tax laws, stock market news, expectations for inflation, international investment patterns, government and central bank policies, and many other things.

At the heart of all this complexity, though, are the same forces of supply and demand that determine the prices of goods and services in any free market.

XVII. Translate into Russian taking note of the words and phrases in bold type.

SPOT EXCHANGE MARKET

An importer can meet foreign currency payment obligations by purchas­ing currency for delivery two working days hence; this is known as pur­chasing currency spot value. However, most transactions have a greater time span than two working days from start to finish, hence the develop­ment of the forward exchange market.

FORWARD EXCHANGE MARKET

An importer can protect against reduced profitability caused by fluctuat­ing currency exchange rates during a purchase contract period, by taking out a forward exchange contract (FEC) with a bank. An FEC is a con­tractual agreement which locks in a fixed exchange rate for a fixed maturity date for a specific amount of currency.

CURRENCY OPTIONS

Whilst an FEC locks in a guaranteed exchange rate, a currency option gives the importer the right, but not the obligation, to buy foreign currency at a specific exchange rate (the strike rate), on, or before, a specified date.

Consequently, if there is an adverse movement in exchange rates be­tween the date of purchasing the option and the date the option can be exercised (the exercise date), the importer can exercise the option and secure the currency at the strike rate. In the event that the exchange rate improves over the strike rate before the exercise date, the importer would allow the option to lapse and would take advantage of buying the currency spot, i.e. cheaper than the strike rate.

CURRENCY SWAPS

If an importer has longer term currency exposures, these can be hedged by using currency swaps. A swap enables the importer to convert a currency obligation into a sterling obligation; there is an exchange of the principal amounts at the outset of the swap and a re-exchange of principal at fixed future dates.

XVIII. Do the two-way translation of the texts.