Bailments (Only read pages1061 to 1066. DO NOT Read Documents of Title)

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Bailments (Only read pages1061 to 1066. DO NOT
Read Documents of Title)

• Chapter 49

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Bailments

• A bailment is the legal relationship that results
  whenever one person (the bailor) transfers
  possession (but not title) of his/her personal
  property to another person (bailee) to return it
  or otherwise dispose of it, according to his/her
  instructions.
• only exists with personal property
• To form a bailment, there must be an agreeement.
  Owner must make DELIVERY of property. Bailee must
  have clear intent to CONTROL the property, and
  bailee must ACCEPT it.
• Delivery can be constructive, symbolic rather
  than actual (i.e., keys to car)

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Bailments vs. Sales Gifts

• Bailments are distinguished from a sale or gift
  in that the bailee does not receive title, at
  the end of the bailment term, the bailee must
  return or account for the property.
• Bailee has absolute duty to restore possession of
  the property to the bailor - cant misdeliver or
  bailee will be liable for conversion. Bailee is
  presumed negligent if property is damaged.
• Generally, the bailee is required to return the
  specific property unless property is fungible
  (i.e.,grain), the bailee need only return goods
  of the same quality and quantity.

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Constructive Bailments

• Involuntary bailments. Bailee comes into
  possession without the affirmative consent of its
  true owner.
• Taking or having possession of lost or mislaid
  property.
• Involuntary bailee owes the owner a slight duty
  of care and is only liable for gross negligence

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Classification of Ordinary Bailments Bailees
Duty of Care

• Gratuitous Bailments - for sole benefit of
  bailor. Bailee has a duty of slight care only
  liable for gross negligence.
• Bailment for the Sole Benefit of Bailee - Bailee
  owes a duty of great care, the utmost care.
  Liable for slight negligence.
• Mutual Benefit Bailments - Bailee owes a duty of
  ordinary care. Liable for ordinary negligence
  (Includes commercial bailments)

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Extraordinary (Special) Bailments

• Common carriers
• Innkeepers
• Public warehousers

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Limitation of Liability

• Limitation of liability for negligence or breach
  of contract.
• Limitation must be contained in a separate
  agreement, or within the bailment contract.
• Liability for wrongful misconduct may not be
  limited.
• The ability to modify may be restricted by
  statute.
• Limitation must be brought to the attention of
  bailor, and he must agree, or its
  unenforceable...against public policy.

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Termination

• Expiration of specified term
• Purpose of bailment is accomplished
• Mutual agreement between bailor and bailee.
• Serious misuse of bailed property by bailee.
• Decision by either party if bailment is at will