Ivana Hay has been thinking about purchasing a business for a while.

One day she is talking with her friend, Joe Smith, who advises that he knows Bob Baker, the owner of a local bakery, "Bob's Buns" who has expressed some interest to him that he wants to sell his business.

Ivana Hay asks her friend Joe Smith to contact Bob and make some further inquiries regarding the possibility of her purchasing the Bakery.Ivana specifically tells Joe that she is not 100% committed to the idea of buying a Bakery and made it clear to him that she does not want him to make a formal offer. She advises that she only has $250,000.00 to spend to buy a business. She also mentions that if he manages to ultimately broker a deal she will pay him $5,000.00 for his help.

Joe contacts Bob and advises that he has a friend who may be interested in buying the Bakery. Bob is thrilled he has wanted to sell the business and retire for years.

Bob tells Joe that he would sell the Business for $200,000.00 and not a penny less as long as the deal closes on December 31, 2011. Joe, knowing that this is below what Ivana is willing to pay responds "I think we may just be able to make a deal".

Bob responds, "Great, I will have my lawyer draw up the paperwork".

Joe says "Sounds Good", shakes Bob's hand and leaves.

A week later Ivana gets a stack of paperwork in the mail regarding the sale and wonders what Joe has gotten her into.

1)Discuss whether or not there is a valid agreement and who are the parties to the Agreement.

After some reflection and reviewing the paperwork, Ivana decides that she wants to go ahead with purchasing the Bakery. She does; however, have some questions. Please answer the following questions for Ivana.

2)The paperwork listed "Principal" as the purchaser.

i)What does this mean?

ii)Does this have anything to do with the fact that Joe was involved in negotiating the deal?

iii)What legal step would Ivana have to take in order to become the purchaser in the Agreement, in other words, what would she have to do as "Principal"?

3)The paperwork also lists a number of "Assets" that are to be included as part of the sale. Please thoroughly explain to Ivana:

What each of these different types of property are?

What rights she will get in the different types of property? and,

What legislation, if any, applies to each type of property?

i)An Estate in Fee Simple (the building and land for the Bakery);

ii)A Leasehold Estate ( a space for a satellite store that is rented at the local mall);

iii)Intellectual Property

a.Trademark and Tradename (the name "Bob's Buns");

b.Copyright (a detailed list of the recipes for the Bakery);

c.Patent for a machine that Bob created for mixing dough;

d.Industrial Design ( a specially designed paper bag with the emblem "Bob's Buns" embossed on it)

4)Ivana is unsure as to what type of Business Organization she should use to purchase and run the Bakery.

Please explain to Ivana the three main types of Business Organizations that we have learned in this course and give her some advice as to the best method for her to carry on business and why?

5)Ivana has decided to set up a Corporation to purchase the Bakery.

Please explain to her the different roles that Shareholders; Directors; and Officers have in regard to the Management of a Corporation?