1. Law for Business and Personal Use © Thomson South-Western CHAPTER 16 Bailments 16-1 Bailments 16-2 Bailor and Bailee Duties

2. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 2 16-1 16-1 Bailments GOALS Discuss the ways in which bailments are created and ended Identify common real-life bailments

3. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 3 FOCUS What is a bailment and have you been involved in one?

4. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 4 HOW ARE BAILMENTS CREATED AND ENDED? Bailment Transfer of possession and control of personal property subject to an agreement to return the property or deliver it to a 3 rd party Delivery Acceptance Consideration Bailor Bailee

5. Law for Business and Personal Use © Thomson South-Western Examples Business Hold something as security You give someone something of yours to sell Dispose of as you direct Personal Have someone look after for safekeeping Lending something to someone to keep Chapter 16 Slide 5

6. Law for Business and Personal Use © Thomson South-Western HOW ARE BAILMENTS CREATED AND ENDED? Possession 1.Actual bailments Actual or constructive delivery 2.Constructive bailments Person in possession of property holds it while law decides who to deliver it to Control Custody Chapter 16 Slide 6

7. Law for Business and Personal Use © Thomson South-Western Disposition of Goods Typically agreed that goods get returned to bailor Sometimes goes to another party Goods must be returned identical to previous state Wear and tear Modifications Fungible No difference Chapter 16 Slide 7

8. Law for Business and Personal Use © Thomson South-Western Termination of the Bailment Previously agreed upon time, purpose, or mutual decision to end bailment Death, insanity, or bankruptcy Rights can be transferred to deceased’s estate Chapter 16 Slide 8

9. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 9 What are the three ways in which bailments are ended?

10. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 10 COMMON EXAMPLES OF BAILMENTS Bailments for transport Common carrier Bailments for hire Rental of property Bailments for services Repairs Bailments for sale Consignment

11. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 11 Name four common examples of bailments.

12. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 12 16-2 16-2 Bailor and Bailee Duties GOALS Describe the duties owed by the bailee in a bailment State the bailor’s duties in a bailment

13. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 13 Characteristics of bailment The subject is tangible personal property The bailor transfers temporary possession to the bailee The bailor transfers temporary control to the bailee The goods must be returned to the bailor or to someone the bailor specifies FOCUS

14. Law for Business and Personal Use © Thomson South-Western Levels of Care Extraordinary bailment Goods are bailed with common carriers and hotels Extraordinary care Generally means the bailee will be strictly liable for any damage, loss, or injury to the goods Only exception is act of war, unforeseeable acts of nature, or acts of police Chapter 16 Slide 14

15. Law for Business and Personal Use © Thomson South-Western Levels of Care When only one party benefits from the bailment Gratuitous bailment Ordinary care The bailee will be liable only if negligence occurs Mutual benefit bailment Chapter 16 Slide 15

16. Law for Business and Personal Use © Thomson South-Western Levels of Care Involuntary bailments Typically arise accidentally and without consent of the bailee Minimal care Only liable for harm to the bailed property if they ignore, waste, or destroy it Chapter 16 Slide 16

17. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 17 DUTIES OWED BY THE BAILEE IN A BAILMENT Duty to care for the property (previously mentioned) Modification of the level of care Modification by legislation Modification by contract Modification by disclaimer Duty to return the goods

18. Law for Business and Personal Use © Thomson South-Western Modification of the Level of Care By legislation Airline industry limiting liability for luggage By contract By disclaimer A sign, label, or warning reducing the bailee’s duty of care Chapter 16 Slide 18

19. Law for Business and Personal Use © Thomson South-Western Duty to Return the Goods According to terms Bailee’s lien Right of a bailee to retain possession of the bailed property until payment is made Bailee gives property back to bailor without payment, the bailor loses the right to force the sale of the bailed property to pay the amount due Chapter 16 Slide 19

20. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 20 Name the three levels of care owed bailed goods.

21. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 21 WHAT DUTIES ARE OWED BY THE BAILOR IN A BAILMENT? Mutual-benefit bailments Bailments for the sole benefit of bailor Bailments for the sole benefit of bailee

22. Law for Business and Personal Use © Thomson South-Western Chapter 16 Slide 22 Name the types of bailments in which a bailor has duties.