Question

Lisa is 16 years old. She owns a parcel of waterfront land that she inherited from her father who died in 2015. The land overlooks Tracadie Bay in Prince Edward Island and has direct access to a beach. The land is undeveloped. It is comprised of 5.6 acres in area and has 240 feet along the shore of Tracadie Bay. Lisa mows the grass on the property regularly during the summer but has no immediate plans to do anything with the land. Reece is an actress from Los Angeles, California, USA. She is a non-resident of Prince Edward Island but has been vacationing in Prince Edward Island every summer for the past 8 years. She wants to acquire waterfront land in Prince Edward Island and build a summer home. She is very interested in acquiring the land from Lisa. Reece is willing to pay as much as $200,000 Cdn for Lisa's land, however, she decides that she will try to get the best price she can. On July 15, 2020, Reece offers to buy Lisa's land, for $95,000 Cdn. She tells her that she will pay these funds to Lisa in cash on September 30, 2020. Lisa is extremely happy with the offer and accepts it. She shakes Reece's hand. Nothing is put in writing. Reece has not applied for any financing, as she will use her cash to pay Lisa. She also commits nothing to write, assuming that she will get a Deed for the land from Lisa at the end of September when she pays her the purchase price. She has also not considered whether she needs any permits or approvals for acquiring the land. The following day Reece hires a contractor, Chris Smith Construction, to begin building a foundation for what will be her cottage. She enters into a written contract with the contractor to build her house for $350,000 Cdn. Reece does not yet have a Deed for the property. The contractor installs a concrete foundation. The contractor plans to complete building the cottage during the next few months. The contractor issues a progress bill to Christine on August 30, 2020 for $28,000 for the foundation. On September 1, 2020, Lisa advises Reece that she discussed the purchase price with a real estate agent and feels that $95,000 is not enough money. Lisa tells Reece that she wants $180,000 for the land. Otherwise, they have no deal. Reece refuses to pay $180,000 for the land. She also refuses to pay the contractor's progress bill because she does not want to pay for something that is on land she is not able to buy. Discuss the potential legal issues that may arise in this fact pattern. Indicate whether there is any further information that you need to identify the legal issues.

Answer 1

The potential legal issues that may arise in this fact pattern.

• Contract with a minor
• Legal capacity
• Violation of statute of fraud
• Violation of the legal framework 
• Negligency tort
• Termination of contract

Explanation:

The potential legal issues that may arise in this fact pattern.

• Contract with a minor - Reece enter into a contract with a minor, Lisa.The time Lisa and Reece entered into the contract, she was 16 years old and legally she was a minor and not in position to enter into a legally bidding and enforceable contract/agreement.
• Legal capacity - Lisa was a minor and did not have the legal capacity to enter into a contract in the absence of a guardian or parent.
• Violation of statute of fraud - A legal issue of violation of the statute of fraud may arise because the contract between Lisa and Reece was not in writing.Statute of fraud requires contract involving sale of land to be in writing.
• Violation of the legal framework  - The contractor began work on the land without the necessary paper work.This will raise the legal issue of violating the legal framework
• Negligency tort - The contractor breached the duty of care by not properly covering the foundation. When the 10 year old is injured as a result of this negligence, this raises the potential legal issue of negligence lawsuit.
• Termination of contract - This fact pattern will raise the legal issue of if Lisa can terminate and void the contract with Reece. contracts with minors a void and not enforceable.