Class 5: Bailments

Question 1

What is a bailment?

Can it be real property?

Can it be a lease of the land?

Answer 1

A transfer of goods or chattels.

It is not real property. It is a transfer from a bailor to a bailee.

It can resemble a lease of land, but remember it is chattels/goods NOT real property

Question 2

Where does the law of bailments stem from? 3 places

Answer 2

The principles of:

1) Contract law,
2) Property law
3) Torts law

come into the law of bailment

Question 3

Can a bailment be contractual? Provide an example

Can a bailment be gratuitous? Provide an example

Is it inherently consensual?

What it the assumption about the form of the goods being returned in a bailment?

Answer 3

It can be contractual
Example: Mechanic is contractual

It can be gratuitous
Example” Giving it to a friend for a while (free, gift)

It is inherently consensual

Under a typical bailment, the bailed goods are to be re-delivered in their original Form. May be altered form depending on the terms of the agreement.

Question 4

Who is the bailor and bailee?

Answer 4

Bailor gives item, bailee receives item.

Question 5

Why is it important to know if you are in a licence or bailment?

Answer 5

Bailments have much more responsibility for the items then just a licence

Question 6

If a licensee allows chattels to be left on their property, do they have obligations towards it?

Answer 6

A licensee who allows a chattel to be left on their property typically has no obligations to that chattel

Example: a licensee cannot steal those goods, but there is no need for that licensee to protect it from damage

Question 7

Why does a bailee have to be vigilant about items given?

What happens if a contract requires chattels to be dealt with in a certain way and there is a deviation?

Answer 7

He is governed by the general law that applies to a licensee BUT ALSO by bailment law.

If a contract requires the chattels to be dealt with in a specific way, a deviation gives rise to vicarious liability at law.

Question 8

What is vicarious liability?

Provide an example

Answer 8

A bailee can be liable for the actions of employment by virtue of general principles of vicarious liability

This means that if I am the owner of a dry cleaning store, and my employer spills coffee on the clothes, I am responsible on their behalf.

Question 9

Provide some examples of bailments

Answer 9

Dry cleaning, car mechanic, jewelry store, car valet, bank account,

Question 10

True or false: There is a presumption of negligence on a bailee

Answer 10

True: A presumption of negligence can arise that the bailee must then rebut to avoid liability

If something goes wrong, there is a presumption in law that the bailee was negligent. Thus, the bailee needs to prove otherwise.

Question 11

What determines the degree of negligence for a bailment claim?

Answer 11

The degree of negligence is by the type of the bailment arrangement

Question 12

How can a person avoid liability in a bailee/bailor relationship?

Does this always work?

When does it work?

Answer 12

The bailment agreement may augment or diminish the responsibilities and rights of either party with a limited liability clause.

Does not always work.

Generally, a liability limiting clause will only apply/be upheld if it is made known on the person signing

Question 13

Will a limited liability clause be upheld if there is a breach of contract?

Answer 13

Will not be held if there is a fundamental breach of the contract

Question 14

Can a bailee assign or sub-bail the bailment?

Answer 14

Yes. A bailee can assignee the bailment or sub-bailment

Question 15

What is the key difference when considering whether something is a gift or a bailment?

Answer 15

Ownership.

You have ownership in a gift, but only possession/custody in a bailment.

Question 16

If someone leaves an item at your place, what are you technically?

Do you have these high levels of responsibilities?

Answer 16

Involuntary bailment—you are holding it for them, but you do not have these heighted levels of responsibilities.

Question 17

Hypo:

X lending his car to Y.

Who is the bailor?

Who is the bailee?

Who has possession?

Answer 17

The bailor is X

The bailee is Y

Y has posession

Question 18

Heffron v Imperial Parking Co: 1979

Facts: Owner of the car parked his car in the lot, left keys with attendant. The parking ticket had an exclusion clause saying the lot was not responsible for any damage to the car. Car got stolen.

Issue:
1) Is the lot owner a bailee or licensee? How did the court determine this?

2) Was the exclusion clause upheld to reduce liability? Why or why not?

3) How would the case change if the car owner took the keys with him?

Answer 18

Holding:

1) Court held the lot owner was a bailee and not a licensee. The lot owner took custody, possession and control of the car because: the parking attendant took the car keys, the owner of the car was instructed to leave keys, the lot owner could move the car however they wanted, there was a system for the retrieval for the car. This indicated the surrendering of the ticket was needed to get the car back. The attendant was responsible for taking care of the car.

2) It was determined the exclusion clause was a limited liability clause, and the failure to deliver the car was a fundamental breach and thus the clause did not apply.

3) If the car owner took the keys with him, it would likely be a license situation and not a bailment.

Question 19

In Bata v City Parking Canada

The court of appeal decided a similar case where the owner left his keys in the car at request of the attendant. The car was stolen, and the plaintiff brought an action but was unsuccessful

Why did the court say it was a licence and not a bailment?

Had to do with the term “charges for the parking space only” was in Batta.

Answer 19

Court said it was a license and not a bailment.

Compared facts of case above (Heffron) and this case (batta) the major distinction was the inclusion of the words “charges for the parking space only” was in Batta.

This indicated a license to the court and not a bailment.

Question 20

In regards to a waiver clause/limited liability clause, what does the party need to know?

What does the company need to do?

Do courts try to enforce these?

Answer 20

The bailor must have actual or constructive knowledge of the clause at the time they enter bailment.

Where a limited liability clause is placed must be OBVIOUSLY placed. On a sign, on the parking ticket stub

For bailments, a exculpatory clause waiving liability is not strong and courts try to ignore/restrict such clause.

Question 21

Minichiello v Devonshire hotel

Facts: In this case the plaintiff left his car and keys with the parking attendant, he paid to park it, told the guy there was valuables in the car, and it was stolen thus he sued and won.

Issue:

1) If you are in a bailment, is there a constructive bailment on other things in the chattel?

Answer 21

Yes. When a bailment exists, there will be a constructive bailment of other items that might be reasonably expected to be in or apart of the principal chattel

Question 22

Can a bailer owe a duty of care to the bailee?

Answer 22

A bailer may owe a duty of care to the bailee. If the chattel is defective, the bailer may be liable to the bailee, much as the vendor of defective goods may be liable to the purchaser.

Question 23

Ertan v Thomas 2014

Facts: Ellen allowed Thomas to drive his convertible and then Thomas allowed his girlfriend to drive it.

The girl destroyed the car. Ethan sued Thomas. Court held there was a bailment

Issue:

1) Did Thomas breach his duty by letting his girlfriend drive the car?

Answer 23

Court concluded that Thomas had exercised the reasonable care expected of a bailee with respect to his decision to permit his girlfriend to drive the car; such a decision is within “reasonable care expectations” and there was no obligation on the bailee to check whether his girlfriend had a valid driver’s licence

This case suggests that people who loan cars to their friends may need to take some precautions