Bailments

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• Chapter 23
• Bailments

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Definitions
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Bailment

• A bailment is when tangible personal property is
  delivered by the owner (bailor) to another person
  (the bailee) under an agreement that the
  identical property will be returned or delivered
  in accordance with the agreement.
• The bailee has possession, but not title.
• When a person comes into the possession of the
  personal property of another without the owner
  actually delivering it, the law classifies the
  relationship as a constructive bailment.

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Required Elements of Bailment
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Classifications

• Bailments may be classified in terms of benefit
• (1) sole benefit of the bailor,
• (2) sole benefit of the bailee, or
• (3) benefit of both parties (mutual benefit
  bailment).

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Standard of Care

• In some states, the standard of care required of
  a bailee is related to the class of bailment
• sole benefit of the bailor the bailee is
  required to exercise only slight care and is
  liable for gross negligence only
• sole benefit of the bailee the bailee is liable
  for the slightest negligence
• for mutual benefit, as in a commercial bailment
  the bailee is liable for ordinary negligence
• In other states, the courts apply a reasonable
  care under the circumstances standard.

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Duties of Bailee

• A bailee
• must perform the bailees part of the contract
• must exercise reasonable care of bailed property
• unless otherwise agreed, must bear the repair
  expenses incidental to the use of property in a
  bailment for hire situation and
• must return the identical property.
• If a bailee injures a third person while driving
  a rented motor vehicle, the bailee is liable to
  the third person as though the bailee were the
  owner of the vehicle.

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Rights and Duties of Bailor

• Bailor may sue the bailee if the goods are not
  redelivered according to the agreement.
• In a mutual benefit bailment, the bailor is under
  a duty to furnish goods reasonably fit for the
  purposes contemplated by the parties.
• The bailor may be held liable for damages or
  injury caused by the defective condition of the
  bailed property.