CHAPTER 20BAILMENTS

Bailment = transfer of possession without the transfer of ownership

Bailor = party who gives up possession of the property

Bailee = party who accepts possession and control

Examples:

You lend your pen to a friend Not a sale or a gift, because your friend must

return the pen to you. It’s a bailment.

You get a movie from RedBox

4 Characteristics of Bailments:

1. Subject is personal property 2. A transfer of temporary possession 3. A transfer of temporary control 4. Both parties intend return of the goods

1. Personal Property

Subject must be personal property

Real property can’t be bailed

2. Transfer of Temporary Possession

Usually property is bailed by the person who has title to it.

Property may be bailed by any person in possession (owner’s agent or employee, a finder, or even a thief)

2. Transfer of Temporary Possession

2 ways to transfer possession and control of goods:

Actual bailments = bailees receive and accept the goods themselves. Example: when you rent a car, get behind the

steering wheel and drive off, you receive and accept the car in bailment.

Constructive bailments = bailee receives and accepts a symbol of the personal property Example: If ask to borrow your neighbor’s truck

and receive and accept the keys

3. Transfer of Temporary Control Both possession and control of the goods must shift

from bailor to bailee for bailment to arise.

Example: cars left in parking lots

1. Car owner parks the car in a lot but keeps the keys. Owner can later drive the car away without permission of an attendant. Owner gave up possession but not control. No bailment.

2. If attendant takes possession of the car and gives the owner a claim check that must be turned in to get the car back, there is a bailment.

It is possible for a person to have temporary control of another’s personal property yet not have a bailment. This occurs with custody.

Owners do not give complete control, they just authorize someone to watch over the goods, but the owner retains control.

4. Goods to Be Returned

Both bailor and bailee must intend that the goods be returned.

Usually the bailee must return the identical goods, but they can be modified as a result of repairs, processing, or aging.

Some goods fungible. Fungible = no difference between one unit of the goods and another.

Bailments Ending

Bailment ends when the time agreed upon by the parties has elapsed, when the agreed purpose has been achieved, or when the parties mutually agree to end it.

Bailments Activity

Divide into four groups of four people per group.

Create a spider map to identify the four characteristics that must be present for bailments to exist.

Then brainstorm examples of bailments and create a second drawing to depict the bailment attributes of the example.

Most legal problems with bailments arise when something happens to the goods while they are in the possession of the bailee.

Levels Of Care

Extraordinary care – bailee will be strictly liable for any damage, loss, or injury to the goods. Example: goods bailed at common carriers

and hotels Example: You lend your calculator to a

classmate without charge.

Levels Of Care

Ordinary care – bailee will be liable if negligent in some way. Example: left car at a repair shop and paid

$29.99 for an oil change.

Levels Of Care

Minimal Care – bailee must not ignore, waste, or destroy the bailed property. Example: neighbor’s trash can blows onto

your property. For valuable property, the bailee must make a minimal effort to identify the owner.

Example: When mail is delivered to the wrong address.

Example: Your parents agree to care for a neighbor’s house plants without charge while the neighbor is on vacation.

Situation

You borrow your neighbor’s sailboat for the afternoon. While sailing, a strong wind rips the sail.

1. What type of bailment was created?2. How does that affect your liability for the

damage to the boat?