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, you're feeling pretty good about yourself. You decide to attend a meeting of the Queen's Alumni Association one evening. At that meeting you listen to a speech by a wealthy Queen's 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:

1933 Rolls Royce Phantom II luxury car (assume it is still drivable and apparently in "fully restored mint condition")

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

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 wine you have drunk at the alumni event1, 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]. I'm sure we could find a number in that vicinity that would make both of us happy."

You (sobering suddenly): "That's really interesting.... but I don't have that kind of money right now. I've got student loans...I'm 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 - that's how I got rich! If you are truly interested in something, you can find a way to finance the purchase. I'll bet I had less money than you when I graduated from Queen's 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 isn't that unreasonable, I suppose. I will have to think about how I can finance this - and other details......Yes, OK, I'll do it! Or rather, let's both do it - I'll send you a contract."

You and Dan Grape then exchange business cards, and you then leave the Queen's Alumni Association meeting, with Dan saying: "I look forward to seeing the contract and getting this done - hopefully within the next month."

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. Let's 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. 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 contract2 - 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

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?

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 XX3 (the "Borrower") hereby agree as follows:

Abby shall provide Borrower with the sum of $YYYYY4.

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

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

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.)