Chapter 27

1. Chapter 27 “Bailments”

2. What is a Bailment? • Transfer of possession of personal property without transfer of ownership. • Bailor- party who gives up possession of property. • Bailee- The party who receives possession and control.

3. Three Characteristics of Bailment • The Subject of Bailment Must Be Personal Property • A Bailor Gives Temporary Possession and Control of Goods To Another • The Parties Must Intend That the Goods Be Returned to the Bailor • Fungible- There’s no difference between one unit of the goods and another.

4. What Are The Types of Bailments? • Extraordinary Bailments- Bailment requiring an unusually high standard of care • Ordinary Bailment- Voluntary bailments with parties other than commercial carriers and hotels. • Involuntary Bailment- arises without the consent of the bailee.

5. Common carrier- one who agrees, for a fee, to transport good for another who applies, provided the goods are lawful and fit for shipment. Gratuitous Bailment- Bailment which benefits only one party. Bailment for the sole benefit of the bailee- a type of gratuitous bailment in which the bailor transfers an item to the bailee without charge and the bailee gains the service. Bailment for the sole benefit of the bailor- a type of gratuitous bailment in which the bailor transfers the item to the bailee and the bailor gains a service without charge. Mutual-benefit bailment- when consideration is given and received by both bailor and bailee. Actual bailment- the bailee receives and accepts the goods themselves.

6. Constructive bailment- when the bailee agrees and accepts a symbol of the actual personal property. Bailees duty of care- care of goods while they are in the possession of the bailee. Three levels of care: 1-Duty of Extraordinary Care-If there is damage, loss, or injury the bailee is liable. 2-Duty of Ordinary Care-The bailee will be liable only if he or she has been negligent in some fashion. 3-Duty of Minimal Care-The bailee must not waste or destroy the property.

7. How Can the Bailee’s Duty of Care Be Modified? • Modification of Legislation • Modification of Negotiated Contract • Modification by Disclaimer • disclaimer- a sign, label, or warning reducing the bailee’s duty of care.

8. What is the Nature of the Bailee’s Duty to Return the Goods? • Bailee’s duty to return the property- compels the bailee to return the bailed property according to the terms of the bailment agreement. • Bailee’s lien- retains possession until paid.

9. What are the Bailee’s Duties? • Bailor’s duty to provide goods fit for the intended purpose- the bailor’s obligation in a mutual-benefit bailment to check for damages and inform the bailee of discoverable defects, or be liable for any resulting injuries.

10. What are the Most Common Bailments? • Bailments for Transport • Demurrage- Fees for use of the transportation vehicle when the bailor fails to load or unload at the agreed time. • Carrier’s Lien- The right to obtain possession of the goods until the charges for transportation and incidental services are paid. • Bailments for Hire • Bailments for Services • Bailments for Sale • Consignment- where ownership remains in the manufacturer or wholesaler until the goods are sold. • Sale on Approval- the prospective buyer is permitted to use the goods to determine whether he or she wants to buy them.

11. How is a Bailment Ended? • When the time agreed upon by the parties has elapsed. • When the agreed purpose has been accomplished. • When the parties mutually agree to end it.