1. What is the reason for requiring legal capacity in order to form a valid contract? Who are we, as a society, trying to protect? What are the two most common situations where legal capacity is missing from a contract? What happens to the contract? Can the person who lacks legal capacity enforce the contract anyway? Why or why not?
2. Angie is a student attending college 1500 miles away from home. Angie attends school and works part-time at a restaurant. Using the money she earned, she made the following purchases and agreements. On Angie's 18th birthday (the age of majority in her home state and in the state where she attends school), Angie informed her parents that she wanted to move back home and attend school locally. Angie's parents agreed and she began to make plans to move back home. She decided that she will handle each of her recent purchases and agreements in the manner noted below. All of these transactions occurred in the state where Angie is attending college.
a) A year ago (while still 17) she rented an apartment for $500 per month rent. She signed a two-year lease agreement. She paid a security deposit of $500 and has paid monthly rent in the amount of $500 per month for a full year. Now she wants to move out and get a full refund of all the rent she has paid, plus the security deposit she paid. She also wants to be relieved from any obligation for the remaining year of the lease agreement.
b) A year ago (while still 17) she bought a big screen television for $3,000 (she loves Husker volleyball!) She paid $800 down and made monthly payment on the balance until it was paid in full. Now that she is moving back home, she wants to return the television and get a full refund of her $3,000. The television is in good working order.
c) Two months ago (while still 17), Angie bought a used car to get her to work. She paid $200 down and is making monthly payments of $200 over a period of five months, for a total purchase price of $1,200. Now, she decides she doesn't want the car any longer. The car still runs fine, but it has a big dent in the door where another car crashed into it from the side. She wants to return the car and get a refund of the money she has already paid. She also wants to be relieved from having to make the remaining payments.
d) A year ago (while still 17) Angie joined a health club that is located right across the street from her apartment. She pays a monthly fee of $40. She signed a three-year membership contract. After turning 18 and before moving back to her parents, Angie visited and used the health club facility three times and made a monthly payment for the current month. Angie now wants to cancel her contract and get a full refund of all the money she paid to the health club.
e) A week before she turned 18, Angie stocked up on groceries. She bought $78 worth of food and personal items (toiletries, paper goods, cleaning products, etc.) and she has used or eaten most of it, or shared it with friends. She wants to get a refund of the $78 she paid for the food, but she has nothing left to return.
Instructions: Consider each of the transactions described above and discuss fully Angie's obligations and rights with respect to each transaction. Be sure to consider and discuss all of Angie's options with respect to each transaction. Keep in mind that there may be differences depending on state laws. You should make note of these as you answer the questions.