Contracts

TITLE: Prepare a Client Letter Advising About a Beginning Contract Process

DUE: Monday, January 29, 2026, at 5:25 PM

INSTRUCTIONS FOR STUDENT:

You are tasked with preparing a draft letter to a client advising the client regarding a contracting process that is just beginning. You are provided with an email from a senior lawyer tasking you. The senior lawyer has also provided you with the rough term sheet that the client and their counterparty prepared.

The term sheet references terms (e.g. the non-compete or the concept of an escrow) that we will specifically study later in this course. For such terms, you are not expected to understand the limitations or issues related to those terms for purposes of this assignment. Your focus in this Assignment should be on the process of getting a contract done, and not as much on the issues or limits with the proposed terms. Pay attention to what the partner and the client tell you they want to do and try to incorporate your approach and advice to match that.

The learning goals of this assignment are twofold:

1) Develop your ability to initiate a contract process.

2) Gain insights into client-lawyer (and inter-lawyer) communications.

Escrow and Closing

The term sheet lists a 30–day escrow period. What this means is that when the contract is executed the buyer will then have 30 days to inspect the business and its books. If the buyer wants to and is satisfied with what they have seen, they can close the transaction, meaning that they are purchasing the asset. You do not have to understand the concept of closings and phased contracts yet (Class 15). But since they want to close in six weeks what that means is that they need to get the contract executed in two weeks, leaving about 4 weeks for the due diligence period. All of this is not something you are tasked with writing about, but I wanted you to understand this concept now.

Business Industry Knowledge

There are many other business/industry specific concepts about this transaction that you are not expected to know. But, if you think you have some insights, knowledge or ideas that you might bring to bear on this task, feel free to try and advise about them. Over the course of this class,you will gain some experience and knowledge about the nature of various types of business. But, over your career, that experience will accumulate and deepen. This Assignment exposes you to a relatively simple business purchase and sale transaction.

Grading Criteria

You will be graded for how well you:

1) Provide advice and guidance to the client on the contracting process (Module I),

2) Communicate effectively (Module II), and

3) Use the language teaching of Module III (through Class 9).

As noted in the separate document, Completing Assignments and Exercises, you also will be graded on how well you followed the instructions of the assignment which includes the directions from the partner and all the other instructions in that document. Being able to pay attention to detail and focus on the correct task is another important and common characteristic of successful lawyers.

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EMAIL

From: Pat Partner

Sent:Tuesday, Jan 28, 2026 7:11 AM

To:Alex Associate

Subject: FWD: New Contract Opportunity

Hi Alex,

See the email below from a previous client of mine who is attempting to buy a business. Can you look at their term sheet and draft a letter from me to them advising them about their next steps and how we can help them?

I want to end up negotiating the deal with them and then drafting/preparing the contract itself. I will have a contract form we can use from a previous transaction and we can support the two-week deadline to have a contract ready. I will handle the fee quote request so do not worry about that part of the letter.

Just give them an overview of how they can get this across the finish line. Also point out any issues you see in the terms they have agreed on and what other major topics they should tackle.

I will look closely at your letter and add anything needed, including the fee estimate.

Yours,

Patty

Pat Partner

Senior Partner

Dewey Dewey and Dewey, A Law Corporation

From: Carla Client

Sent: Friday, January 28, 2026 7:36 PM

To: Pat Partner

Subject: New Contract Opportunity

Hi Patty,

I hope all is well. I have attached a term sheet I have worked out with a competitor of mine to buy their business in San Jose. Its in a shop in a strip mall with four stalls for servicing hydraulic lifts. I would love to get it. The owner wants to retire and no one in their family wants to take it over, which is why I think they want to sell. It would be a great opportunity for us to expand into the Bay Area. I am confident our reputation and marketing work will allow us to translate that place into a good asset.

Can you look over the term sheet and give me your thoughts on what is next as well as what we missed?

Also, Ill need an estimate of your fees.

This is red hot, I want to close in six weeks. I can get the financing ready for that. Can we get a contract done fast enough to support that? I figure that means we need a contract signed in two weeks.

Carla

Carla Client

President, Central Valley Hydraulics

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Term sheet for purchase of San Jose Lifts

$1.2 Million. Includes all equipment, materials and supplies on site.

30 day transition/escrow where CVH can meet with employees; decide who is staying, who is not and examine the books and facilities and decide whether to go forward with the transaction.

SJL owner to serve as advisor for a one-year period following close.

SJL owner agrees not to compete with CVH for 3 years.

No warranties on equipment, it is all as-is.