Business Law II Bailments Chapter 20 Mr. Kretschmer

Bailment Relations Did you ever lend your friend something? If so, you participated in a bailment. A bailment is the transfer of possession without the transfer of ownership. Who is the party who gives up possession of the property? Bailor Who is the party who accepts possession and control? Bailee

Bailment Relations Four characteristics of a bailment: 1. Subject is personal property 2. Transfer is temporary possession 3. Transfer is temporary control 4. Both parties intend to return the goods A bailment must be personal property. Real property such as land and buildings, cannot be bailed.

Bailment Relations Can property be bailed by the person who has title to the goods? Give examples of persons who may have possession. Agent, Employee, Finder, Thief There are two ways to transfer possession and control of goods. Examples of each one are below: Actual Bailments Constructive Bailments

Bailment Relations In order for a bailment to arise, both possession and control of the goods must shift from the bailor to the bailee. Give an example of someone who would have custody of an item or items. A guard hired to protect the paintings at a museum A guard hired to protect the paintings at a museum Can goods be modified when returned to the bailor? If so, explain. What are fungible goods?

Bailment Relations When does a bailment end? If there is a bailment for a fixed period and someone dies, does the bailment end? Who does it go to? Explain. It does not end It does not end

Duties in Bailments What are the cause of most of the legal problems that are associated with bailments? When something happens to the goods while they are in possession of the bailee. When something happens to the goods while they are in possession of the bailee. There are three levels of care when it comes to the care of bailed goods: Give examples of each type of care. 1. Extraordinary Care 2. Ordinary Care 3. Minimal Care

Duties in Bailments When one party benefits from a bailment, what type of bailment occurs? Gratuitous Bailment Gratuitous Bailment Give an example of a gratuitous bailment. Lending a calculator to another student in class. Lending a calculator to another student in class. Give an example of a involuntary bailment. Your neighbors trash can blows into your yard. Your neighbors trash can blows into your yard.

Duties in Bailments There are three ways in which you can modify the nature of the bailee’s duty of care. They are the following: Give examples of each. 1. Legislation – Example = Airlines 2. Contract – Example = GM transportation company 3. Disclaimer – Example = Restaurant

Duties in Bailments What are mutual-benefit bailments? Bailor’s duty to provide goods fit for the intended purpose. Bailor’s duty to provide goods fit for the intended purpose. What are bailments for the sole-benefit of a bailor? Your friend goes on vacation and leaves their pets and house in your care. Your friend goes on vacation and leaves their pets and house in your care. What are bailments for sole-benefit of a bailee? Borrowing equipment from a friend without charge. Borrowing equipment from a friend without charge.

Common Bailments Common carrier agrees, for a fee, to transport goods for anyone who applies, provided the goods are lawful and fit for shipment.

Common Bailments There are four rights of a common carrier. They are the following: 1. Enforce reasonable rules/regulations for the conduct of the business. 2. Charge an amount negotiated with the bailor. 3. Charge demurrage, a fee for the use of the transportation vehicle. 4. Enforce a carrier’s lien – retain the goods until charges for transportation and incidental services are paid.

Common Bailments What are some items that a bailment for hire may be negotiated for a fee? Cars, Trucks, Machines, Other Equipment Cars, Trucks, Machines, Other Equipment List some examples of bailment’s for services below: Fix a bike, repair a baseball glove Fix a bike, repair a baseball glove What does consignment mean? -Ownership remains with the manufacturer or wholesaler until they are sold = Car dealership, Lumber yard, Books, Clothing

Any Questions?