What is a Bailment?

Subject is personal property ! Involves a temporary transfer of possession ! Involves a temporary transfer of control ! Parties intend the goods to be returned
! bailor bailee

Transfer of Possession & Control

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Actual Bailment Bailee accepts and receives goods themselves. Constructive Bailment Bailee accepts a symbol of the personal property in lieu of property itself.

Which of these transfer both Possession and Control?

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Parties Must Intend Goods be Returned

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Your car parked in a parking garage, the keys are in your pocket. Your car left with a valet. House sitting for a friend. A car you rented on Spring Break. A pen you borrow from a friend. A security guard on night duty at an art gallery.
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In same condition (with reasonable aging, usage, etc.)

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Example: Rental car is expected to have additional mileage. Example: repairs or cleaning Goods may be returned to another party designated by bailor. Fungible goods (one unit of goods is the same as the next): only need to return same quantity not exact same goods. Example: Rental truck returned to another city, with a full tank of gas.

In improved or modified condition

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Exceptions:
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Custody temporary control under owners direction

A necklace your friend loans you to wear at prom.

Termination of Bailment
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Common Examples of Bailments

Bailments for Transport
1. 2. 3. 4. (shipping) Enforce reasonable rules for conduct of business Charge a reasonable rate Charge demurrage (fee for vehicle when not in use) Enforce a carriers lien (keep goods until paid)

Agreed upon time is up Purpose has been achieved Parties mutually agree to end

Also ! Death, insanity or bankruptcy of one party ! Except in case of contracted time period, duties are transferred to estate.

Bailments for Hire (rentals) Bailments for Services (repairs)

Whos responsible for damaged good?

Bailments for Sale

(consignment)

4 Characteristics of Bailments
Personal Property Temporary Transfer of Possession Temporary Transfer of Control Intend goods be returned

Why do we care?
Many legal disputes arise when something happens to property before it is returned.

Levels of Expected Care

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Levels of Expected Care

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Extraordinary Care
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Ordinary Care
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Bailee is strictly liable for any damage or loss

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Expected of common carriers

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Only exceptions are acts of God, war or police Examples: hotels, truck lines, UPS, air freight, and gratuitous bailments (bailee is sole beneficiary) Borrowing a friends calculator for no charge

Liable only if neglect or carelessness Mutual benefit to bailor and bailee: both receive consideration Example: Leave tennis racquet to be restrung for $20.

Levels of Expected Care

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What Care Would Be Expected?

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Minimal Care
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Bailee must not waste, ignore or destroy property When bailor is sole beneficiary
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Example: Care for neighbors house plants for free

Involuntary Bailments
Example: row boat washes ashore ! However, if valuable, must make effort to identify owner
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Library Book Find a wallet with $2 Find a wallet with $200 Leave bike at repair shop Furniture on a moving van Rental car

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Borrow your neighbors car Leave your coat at a friends house Rent a video Dog sit for a friend Blood left at a blood bank for future personal use

Levels of Expected Care

Extraordinary care: Common Carriers (if no waivers/disclaimers) Gratuitous Bailments: When Bailee benefits for example: Borrowing something Ordinary care: Mutual Benefit Bailments Both parties Benefit, example: Rentals Minimal care: Involuntary Bailments; Bailor Benefits Found items, taking care of something for free

Modifications to Level of Care

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By Legislation
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Limited liability laws for airlines responsibility for luggage. Parties can determine what kind of care is required Sign, label or warning reducing the duty of care. Bailor must be aware of disclaimer prior to bailment.

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By Contract
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By Disclaimer
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Duty to Return Goods

Bailee must return goods according to the agreement ! If bailee is entitled to payment and not paid may exercise a bailees lien (keep goods until payment) ! If payment is unreasonably delayed, bailee may sell property to recover fee.
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Liability Issues
Mutual Benefit Bailments
Bailor must provide goods fit for intended purpose Bailor must inform bailee of any defects Bailee cannot collect damages if they were aware of the defect Bailor must inform bailee of any defects or dangers Bailee may not use bailed items unless necessary to preserve them Bailor must inform bailee of any defects Bailee may use goods only as agreed.

Bailments for sole benefit of bailor

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Bailments for sole benefit of bailee

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