Jane Young, a 16 year old, had a conversation with Jim Cheatum for the sale of a 2020 Toyota Camry. Jane told Jim that she would purchase the car for $20,000. She agreed to give him a down payment of $1000 and then pay him $500 per month until she paid off the entire balance. Jim said he would sell her the car for $25,000 under her same terms. Jane said nothing.

The next day, Jane gave Jim $1000 and took possession of the car. A month later Jim called Jane to find out where her $500 monthly payment was. Jane said that she no longer wanted the car. In fact, Jane was in an accident the week before and couldn't afford to pay for the repairs. Jim now wants the car back and Jane wants the return of her $1000.

1. What problems exist in this scenario?
2. Is Jane obligated to return the car?
3. Does Jim have to return her $1000 deposit?

Please explain the basis for your responses.