Law for Business and Personal Us © Thomson South-Western CHAPTER 16 Bailments 16-1 Bailments 16-2 Bailor and Bailee Duties
Dec 21, 2015
Law for Business and Personal Use© Thomson South-Western
CHAPTER 16Bailments
16-1 Bailments
16-2 Bailor and Bailee Duties
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 2
16-1 Bailments
GOALS Discuss the ways in which bailments
are created and ended Identify common real-life bailments
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 3
FOCUS
What is a bailment and have you been involved in one?
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 4
HOW ARE BAILMENTS CREATED AND ENDED?
Bailment Transfer of possession and control of
personal property subject to an agreement to return the property or deliver it to a 3rd party
Delivery Acceptance Consideration
Bailor Bailee
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Examples
Business Hold something as security You give someone something of yours to
sell Dispose of as you direct
Personal Have someone look after for safekeeping Lending something to someone to keep
Slide 5
Law for Business and Personal Use© Thomson South-Western
Chapter 16
HOW ARE BAILMENTS CREATED AND ENDED?
Possession1. Actual bailments
Actual or constructive delivery
2. Constructive bailments Person in possession of property holds it while
law decides who to deliver it to
Control Custody
Slide 6
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Disposition of Goods Typically agreed that goods get returned to
bailor Sometimes goes to another party
Goods must be returned identical to previous state Wear and tear Modifications Fungible
No difference
Slide 7
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Termination of the Bailment
Previously agreed upon time, purpose, or mutual decision to end bailment
Death, insanity, or bankruptcy Rights can be transferred to deceased’s
estate
Slide 8
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 9
What are the three ways in which bailments are ended?
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 10
COMMON EXAMPLES OF BAILMENTS
Bailments for transport Common carrier
Bailments for hire Rental of property
Bailments for services Repairs
Bailments for sale Consignment
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 11
Name four common examples of bailments.
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 12
16-2 Bailor and Bailee Duties
GOALS Describe the duties owed by the bailee
in a bailment State the bailor’s duties in a bailment
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 13
Characteristics of bailment
The subject is tangible personal property The bailor transfers temporary possession to the bailee The bailor transfers temporary control to the bailee The goods must be returned to the bailor or to someone
the bailor specifies
FOCUS
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Levels of Care
Extraordinary bailment Goods are bailed with common carriers
and hotels Extraordinary care
Generally means the bailee will be strictly liable for any damage, loss, or injury to the goods Only exception is act of war, unforeseeable
acts of nature, or acts of police
Slide 14
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Levels of Care
When only one party benefits from the bailment Gratuitous bailment
Ordinary care The bailee will be liable only if negligence
occurs Mutual benefit bailment
Slide 15
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Levels of Care
Involuntary bailments Typically arise accidentally and without
consent of the bailee Minimal care
Only liable for harm to the bailed property if they ignore, waste, or destroy it
Slide 16
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 17
DUTIES OWED BY THE BAILEE IN A BAILMENT
Duty to care for the property (previously mentioned)
Modification of the level of care Modification by legislation Modification by contract Modification by disclaimer
Duty to return the goods
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Modification of the Level of Care
By legislation Airline industry limiting liability for luggage
By contract By disclaimer
A sign, label, or warning reducing the bailee’s duty of care
Slide 18
Law for Business and Personal Use© Thomson South-Western
Chapter 16
Duty to Return the Goods
According to terms Bailee’s lien
Right of a bailee to retain possession of the bailed property until payment is made
Bailee gives property back to bailor without payment, the bailor loses the right to force the sale of the bailed property to pay the amount due
Slide 19
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 20
Name the three levels of care owed bailed goods.
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 21
WHAT DUTIES ARE OWED BY THE BAILOR IN A BAILMENT?
Mutual-benefit bailments Bailments for the sole benefit of bailor Bailments for the sole benefit of bailee
Law for Business and Personal Use© Thomson South-Western
Chapter 16Slide 22
Name the types of bailments in which a bailor has duties.