CHAPTER 46

1. Click your mouse anywhere on the screen to advance the text in each slide. After the starburst appears, click a blue triangle to move to the next slide or previous slide. CHAPTER 46 Personal Property

2. Quote of the Day “The manner of giving is worth more than the gift.” Pierre Corneille, French playwright

3. Gifts • A gift is a voluntary transfer of property from one person to another without any consideration. • A gift involves three elements: • The donor intends to transfer ownership of the property to the donee immediately. • The donor delivers the property to the donee. • The donee accepts the property.

4. Delivery • Physical Delivery – method usually used to deliver the gift. • Constructive Delivery -- made by transferring ownership without a physical delivery. • Delivery to the donee’s agent is a valid gift; delivery to the donor’s agent is not. • Property Already in Donee’s Possession – no delivery is required, if ownership is clearly transferred.

5. Inter Vivos & Causa Mortis • An inter vivos gift – is a gift given during life and with no expectation of death. • The gift is valid, if it meets the basic conditions of a gift. • A gift causa mortis – is a gift given in expectation of dying soon. • The gift is valid, if it meets the conditions of a gift, and the giver dies as expected. • The giver may rescind the gift at any time, and it is automatically rescinded if the giver does not die as expected.

6. Found Property • The primary goal is to get property back to its proper owner, if possible. • A second policy has been to reward the finder if no owner can be located. • Abandoned property – owner knowingly discarded, finder may usually keep • Lost property – owner accidentally lost; finder may keep, only if owner is not found. • Mislaid property – owner set down and forgot; usually owner of premises keeps, if true owner cannot be found. • Treasure trove – money so old that the owner is probably dead; finder usually can keep.

7. Accession • Accession occurs when one person uses labor and/or materials to add value to personal property belonging to another. • Wrongful Accessions – if the improver does so without permission, the owner does not have to pay for the increased value of his property. • Mistaken Accessions – if the improver thinks he has permission, the owner may have to pay for the increased value of his property.

8. Bailment • A bailment is the rightful possession of goods by one who is not the owner. • The parties generally-but not always-create a bailment by agreement. • A bailment without agreement is called a constructive, or involuntary, bailment. • To create a bailment, the bailee must assume physical control with intent to possess.

9. Rights of the Bailee • Anyone who interferes with the bailee’s rightful possession is liable to her. • The bailee is typically, though not always, permitted to use the property.

10. Duties of the Bailee • The bailee is strictly liable to redeliver the goods on time to the bailor or to whomever the bailor designates. • The bailee must exercise due care.

11. Due Care • The level of care required depends upon who receives the benefits of the bailment. • Extraordinary care of the property is required when the bailment is for the sole benefit of the bailee (as when a neighbor borrows your tractor.) • Ordinary care is required in the case of mutual benefit (renting a car at a cost.) • Slight care is all that is required when only the bailor benefits. The bailee is liable for loss only in gross negligence.

12. Burden of Proof • Once the bailor has proven the existence of a bailment and loss or harm to the goods, a presumptive of negligence arises, and the burden shifts to the bailee to prove adequate care. • An exculpatory clause is any part of a contract that attempts to relieve one of the parties of future liability. • Exculpatory clauses are generally valid when the parties have equal bargaining power.

13. Rights and Duties of Bailor • Liability for Defects • If the bailment is for the sole benefit of the bailee, the bailor must notify the bailee of any known defects. • In a mutual-benefit bailment, the bailor is liable not only for known defects but also for unknown defects that the bailor could have discovered with reasonable diligence. • If the bailor is in the business of renting property, the bailment is probably subject to implied warranties.

14. Common Carriers and Contract Carriers • Generally, a common carrier is strictly liable for harm to the bailor’s goods. • A contract carrier (which does not serve the general public) does not incur strict liability. • Innkeepers may act as bailees of their guests’ property; special statutes regulate liability.

15. “A generous gift, a found parcel, a complex bailment: personal property is always with us… unless we misplace it.”

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