1. © Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager Frank Cavico and Bahaudin G. Mujtaba Chapter 16 – Personal Property, Gifts, and Bailment

2. © Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager (Frank Cavico & Bahaudin g. Mujtaba, 2008; ILEAD Academy, LLC) Table of Contents – Chapter Titles Chapter 1 – Introduction to Law and the Legal System Chapter 2 – Torts and Business Chapter 3 – Products Liability Chapter 4 – Contract Law Chapter 5 – Sales Law and the Uniform Commercial Code Chapter 6 – Agency and Employment Law Chapter 7 – Business Organizations Chapter 8 – Commercial Paper and Banking Transactions Chapter 9 – Creditors and debtors – Rights and Responsibilities Chapter 10 – Internet Law Chapter 11 – Intellectual Property Law Chapter 12 – Real Property Law Chapter 13 – International Business Law Chapter 14 – Liability of Accountants and Other Professionals Chapter 15 – Wills and Trusts Chapter 16 – Personal Property, Gifts, and Bailment Chapter 17 – Conclusion and Case Problems

3. © Cavico & Mujtaba, 2008 Chapter Topics Personal Property Gifts Bailment –Summary

4. © Cavico & Mujtaba, 2008 Personal Property Ownership rights to personal property can be obtained by a variety of methods. One can acquire ownership of personal property, that is, things or (to use the old English term) chattels, simply by finding them, which of course is rare in the “real-world.” That is, the ownership of certain types of chattels can be acquired merely by taking them into possession. Two examples would be abandoned goods and wild animals. Also, as will be seen, the finder may acquire ownership of lost property through possession as well as certain procedures for publication. Yet most acquisitions of ownership involve some type of conveyance or by dealings with the former owner. The obvious illustration is a purchase and sale of goods, which subject was covered extensively in the Sales chapter; yet there are many non-sale methods, both voluntarily and non-voluntarily, of securing ownership over personal property.

5. © Cavico & Mujtaba, 2008 Bailment A bailment is the delivery of the possession of personal property from one person, called the bailor, to another, called the bailee, pursuant to an agreement by which the bailee is obligated to return the identical property to the bailor or deliver it to a third party. The agreement can be written or oral; it can be gratuitous or for consideration. The most important points are that in a bailment the title to the property remains with the bailor; the bailee is entitled only to possession. Bailment situations arise only regarding personal property and not land, though it is possible to have a bailment of intangible personal property, such as by means of the delivery of a stock certificate.

6. © Cavico & Mujtaba, 2008 Bailment Termination A bailment is terminated under the following circumstances: 1) If a bailment is for a specified period, when the period elapses, so does the bailment. 2) If the bailment is one at will, that is, not for a definite time period, the bailee may terminate at any time. 3) If the bailment has an express purpose, when the purpose is accomplished, the bailment ends. 4) A bailment may automatically end by operation of the law if the bailee acts improperly, for example, violates the terms of the bailment agreement or substantially misuses or abuses the property.

7. © Cavico & Mujtaba, 2008

10. Real Property Law Property can be defined generally as anything that can be owned, possessed, used, or disposed of The two basic types of property are real property, which is not moveable, and personal property, which is moveable the concept of a “fixture,” which is a piece of personal property that has become so firmly attached to real property that it is considered part of the real property

11. © Cavico & Mujtaba, 2008 Real v. Personal Property Real property consists of land, that is, the actual soil, attachments to land, such as fences, trees, crops, minerals, and waters If the personal property is so securely attached that it cannot be removed without damaging the real property to which it is attached, then it likely will be regarded as a fixture Personal property is any property or property right that cannot be classified as real property. There are two types of personal property: 1) tangible, and 2) intangible Real property is divided into two major classifications: 1) the fee simple, and 2) the life estate

12. © Cavico & Mujtaba, 2008 “Accession” is a means of acquiring property by an addition or increase in property already owned “Accretion” occurs when the boundary to property is a river, stream, lake, or ocean, and the land is increased by the shifting flow of the water or the depositing of silt or sand on the bank “Confusion” is the mixing of goods by different owners so that the parts belonging to each owner cannot be identified and separated “Adverse possession” is a method of acquiring title to real property by occupying for a period of time fixed by statute, usually 21 years If property is abandoned, the person who discovers and takes possession of it acquires title thereto Real property also can be owned concurrently; that is, two or more people can own the property at the same time as co-owners

13. © Cavico & Mujtaba, 2008 Chapter Summary This chapter reviewed three important areas of the law which are important subject matters not only for their business applications, but also for their individual and family financial ramifications. The three legal areas were personal property, gifts, and bailment, which were treated separately for academic purposes in three distinct sections to the chapter, but which in the “real-world” are often interrelated, especially because, as was seen, one very common subject matter of a gift is personal property.

14. © Cavico & Mujtaba, 2008 Summary After reading this chapter, one should be able to understand the definition and nature personal property law, gifts, and bailment in the United States

15. © Cavico & Mujtaba, 2008 Reference 1.Cavico, F. & Mujtaba, B. G., (2008). Business Law for the Entrepreneur and Manager. ILEAD Academy Publications; Davie, Florida, USA. ISBN: 978-0-9774-2115-2. 2.Cavico, F. and Mujtaba, B. G. (2008). Legal Challenges for the Global Manager and Entrepreneur. Kendal Hunt Publishing; United States.