Instruction: This writing assignment has 3 questions. Please answer all as completely as possible. With the exception of one area, you should not have to do any outside research — but if you do, please cite your source in some way.
Also pay attention to formatting. This counts for a significant chunk of your grade, so please use your best efforts. There is no page requirement, but you should answer each question as completely as possible.
Question 1
This question will require you to draft part of a contract. The contract in question is between you and your friend, John Smith. John needs $500 to pay some bills, and you are happy to loan it to him. However, you are a little worried that John might not pay it back. You want to be clear, in writing, that this is not a gift — that there is consideration. You also want to make sure whatever terms you write up aren’t illusory. In this case, that means you want any terms you write up to clearly obligate John to pay you back; you don’t want him coming back to you in 5 years saying that paying you back was only optional.
Before you write up your contract, think about the following issues:
- Name of offeror
- Name of offeree
- Consideration provided by offeror
- Consideration provided by offeree
- What terms do you want the repayment agreement to include? In other words, are there any time limits, interest payments, fees, etc., that you want to impose to make sure John pays you back, and that will cause him to be in breach if he doesn’t fulfill those terms?
Please note that you should not submit your answers to A through E — these are simply the things I want you to think about before actually drafting the agreement ….
Now that you have thought through the terms of the offer, you need to draft the agreement in a more formal manner. You write the following letter to John. Please fill in the blanks [ ] as appropriate. Make sure that whatever terms you pick are clear to me, and that they are not too vague or arbitrary to be enforce by a court of law.
Also note that you must draft a forum selection clause, so that any dispute is resolved in RI courts.
This answer must be double spaced, times new Roman, 1-inch margins.
- Discussed in A through E above well develop, answer the forum selection clause, and remember formatting.
[your name]
Johnson & Wales University
Providence, RI 02903
April 1, 2021
John Smith
Johnson & Wales University
Providence, RI 02903
Re: Letter of Intent, Loan Agreement
Dear John:
Below is my initial offer for a contract, regarding your request to borrow $500 from me.
I hope to hear from you soon.
Best regards,
[/s/ your name]
Enclosure
Loan Agreement (draft)
This Loan Agreement is between [name or offeror] (Offeror) (hereinafter “Lender”) and [name of offeree] (Offeree) (hereinafter “Lendee”.)
1. Lender agrees to provide $500 in cash (hereinafter “Loan”) to Lendee.
2. The Loan shall be delivered no later than 30 days from the date of this agreement.
3. Lendee shall repay the Loan subject to the following terms:
a. [fill in terms using precise, unambiguous language that the courts could enforce]
b.
c. [etc. however, many terms as you need]
4. In the event of a breach, [write a forum selection clause. If you use language from the internet — which is fine — please drop a footnote to cite your source].
SIGNED, THIS __ DAY OF APRIL, 2021
Sign: __________________ __________________
Print:__________________ __________________
Lender Lendee
Question 2
Does this agreement need to be in writing in order to be enforceable? Please address any statute of frauds issues, as well as any other circumstance relevant to the question about whether this contract would need to be written to be enforced. Answer as completely as possible.
- Please be sure to double space, use times new Roman font, one-inch margins.
Question 3
You have told John that you absolutely need the money back by the date indicated in the contract, because you plan to use the $500 to pay off your own debts. You tell him that if you don’t get the full amount back in time, you will owe an additional $100 in interest payments because you failed to make the $500 payment.
John pays you $300 by the due date. $200 is still outstanding. As a result, you cannot fully pay off your debts and owe $50 additional in interest.
If you seek contract damages from John, how much would the court award you? Explain your reasoning, and think about expectation damages, consequential damages and incidental damages. Answer as completely as possible.
- Please be sure to double space, use times new Roman font, one-inch margins.