Assume you are living in Toronto and have now embarked upon a career (in whatever field you

plan to pursue) and, having now earned 5 or 6 pay cheques, youre feeling pretty good about

yourself. You decide to attend a meeting of the Queens Alumni Association one evening. At

that meeting you listen to a speech by a wealthy Queens alumnus named Dan Grape; his

speech has been about entrepreneurship and the benefits of wealth creation. You are intrigued

by this topic. Despite having sizable debts to pay off after university and earning only an entry

level salary, you aspire to the finer things in life. You sidle over to Dan and strike up a

conversation. He is duly impressed that a young person such as yourself finds him to be

interesting (most people find Mr. Grape to be a pompous windbag), and he begins to tell you

about his many and varied possessions some of which are rare antiquities. In particular, he

mentions three items he owns:

1. 1933 Rolls Royce Phantom II luxury car (assume it is still drivable and apparently in

fully restored mint condition)

2. hockey stick used by Paul Henderson when he scored the winning goal for Team

Canada when they beat the Soviet Union in Game 8 of the 1972 Super Series (sometimes

referred to as The Greatest Goal for Canadian Hockey fans

3. original acetate (vinyl record) recording of the Beatles from 1962, which has never been

publicly released

Grape confides in you that his portfolio has taken a significant hit in light of some ill-advised

mortgage-backed investments and that he is thinking about selling these three items. It could be

the newfound feeling of being a salaried professional in the world, or perhaps the two glasses of LAW 204/704 Individual Assignment #3:

Corporate Law Drafting

Page 3 of 4

wine you have drunk at the alumni event

1

, but you find yourself having the following

conversation with Dan Grape:

You: You know, I would love to own something like the [insert here one of the three items

above your choice].

DG: Well, make me an offer, young [man/woman]!

You (gulping slightly): I have no idea how much it is worth.

DG: Well, market value would be [here assume a number of at least $100,000 feel free to be

creative]. Im sure we could find a number in that vicinity that would make both of us happy.

You (sobering suddenly): Thats really interesting. but I dont have that kind of money right

now. Ive got student loans...Im not sure I could get hold of that kind of money.

DG: Oh come now. If you are truly interested in something, take a risk thats how I got rich!

If you are truly interested in something, you can find a way to finance the purchase. Ill bet I

had less money than you when I graduated from Queens in 1971, and I amassed my first

million in a year and a half.

You (smiling, and nodding): Hmmm. I really would like to own a [insert here one of the three

items above]! That price you mentioned isnt that unreasonable, I suppose. I will have to think

about how I can finance this and other detailsYes, OK, Ill do it! Or rather, lets you and I

do this - Ill send you a contract.

You and Dan Grape then exchange business cards, and you then leave the Queens Alumni

Association meeting, with Dan saying: I look forward to seeing the contract and getting this

done hopefully within the next month.

***

4. Part 2: Questions

4.1. Question 1 (8 marks)

You proceed to draft the agreement an agreement to purchase the asset you have chosen from

Dan Grape in exchange for the purchase price you have determined. Lets assume that you have

chosen to set out your agreement in a formal agreement style as a lawyer would (as discussed in

this module); we can also assume that the agreement will set out clearly the two main

obligations of you and Grape: that you pay the purchase price and that he deliver to you the

asset on a specific closing date.

1 Lets assume that is not enough to render you inebriated.LAW 204/704 Individual Assignment #3:

Corporate Law Drafting

Page 4 of 4

Think about this transaction and the agreement further. You had certain expectations when you

agreed to buy this item from Grape. Use the contract you are drafting to protect your

expectations. That is, draft one clause that you would want to include in this contract for your

protection. This should be one complete clause NOT the entire contract

2

- in however much

detail (or length) as you feel is necessary to protect your expectations contractually (indeed

effective clauses could be as short as one sentence, or it could be longer with various sub

clauses). Include definitions if necessary.

4.2. Question 2 (10 marks)

Discuss the clause you have written for the contract in Question #1. Why have you included it

from both a legal and practical perspective that is, what problem are you trying to solve with

this provision? Now explain what could happen if you signed a contract for the purchase of

this asset from Grape, that did NOT include this clause?

4.3. Question 3 (12 marks)

In order to pay for the asset from Grape, you have arranged to borrow money from Abby Baker.

Abby has provided you with a very short Loan Agreement she wants you to sign, as follows:

In consideration of the mutual covenants herein contained and for other good and valuable consideration,

Abby Baker (Lender) and XX

3

(the Borrower) hereby agree as follows:

1. Abby shall provide Borrower with the sum of $YYYYY

4

.

2. The Loan shall be fully repaid within 12 months in equal monthly instalments.

3. You agree that the interest rate for the Loan is 6% per annum.

4. Lender shall strictly enforce the terms of this agreement, which shall be subject to the laws of the

Province of Manitoba.

As drafted, this Loan Agreement seems problematic for you. Please identify and explain to

Abby Baker two specific (and different) problems with the drafting of the Loan Agreement as

set out above, and then explain how the problems could be fixed. (To be clear, I am not concerned

with the substance of the agreement or the business terms of the loan; please focus on the words used to

draft it.)