IV. Bailments

Question 1

Bailment

Answer 1

The delivery of goods or personal property, whether tangible or intangible, to the rightful possession of another (the bailee) without loss of title by the true owner (the bailor) and usually for a specific purpose.

Question 2

Voluntary Bailment

Answer 2

Exists where the parties agree to the bailment. They can be either for mutual benefit (money) or gratuitous.

Question 3

Involuntary Bailment

Answer 3

A bailment that is implied by law. Ex: finding something lost or mislaid.

Question 4

Elements of Voluntary Bailments

Answer 4

1. Requires that property be delivered and held for a specific purpose.
2. Creation requires delivery of custody and control of the item. Merely having custody without control is insufficient to create a bailment relationship.
3. The bailee must accept the obligation to act as a bailee. A bailee is not deemed to have accepted bailment over property of which she is unaware , such as items inside a box or car trunk, unless having actual/implied notice of contents
4. The parties enter a K, either express or implied, that instructs the bailee on the disposition of the property.

Question 5

Elements of Involuntary Bailment

Answer 5

1. Exists where personal property has been left by the true owner, without negligence, in the possession of another.
2. The law imposes an involuntary bailment, obliging the bailee to hold the property for return to the true owner.

Question 6

Duty of Bailor

Answer 6

A bailor has a general duty to notify the bailee of the condition of the bailed goods to ensure the bailee has the option to decline the bailment if the goods would be harmful to himself or his property.

Question 7

Duty of Gratuitous Bailor

Answer 7

1. Need only warn the bailee of latent defects within the bailor’s knowledge that are not obvious or readily discernible.
2. Has no duty to inspect the property to ensure its safe condition, unless it is inherently dangerous.
3. Bailors of vehicles loaned as convenience to the purchaser of a vehicle who has not yet had delivery of the purchased vehicle may have to perform an inspection

Question 8

Duty of Bailor for Mutual Benefit

Answer 8

1. Deemed to have warranted the fitness of the bailed property for the intended use.
2. Such bailors must reasonably inspect the property and inform the bailee of the defects within the bailor’s knowledge or defects of which he should have known.

Question 9

Duty of Bailee- Return of Property

Answer 9

Has to return property to bailor. Bailees of an actual (voluntary) bailment are strictly liable for failure to return the property. Involuntary bailees are liable only for negligence.

Question 10

Incidental Expenses

Answer 10

Unless a bailment K provides to the contrary, any ordinary, incidental expenses that arise from the use of bailed property must be paid by the bailee.

Question 11

Limitation of Bailee’s Liability

Answer 11

1. A bailee can limit the bailee’s negligence liability in the bailment K with the agreement of the bailor.
2. Courts are reluctant to allow limitation of a bailee’s gross negligence or willful misconduct.