LAW 603 Chapter Notes - Chapter 17: Consignor, Standard Form Contract, Liability Insurance
Chapter 17: Personal Property: Bailment and Insurance
Real property: immoveable
Personal property: moveable
You can’t carry a piece of land around with you, but you can take a cat or a car from one
place to the next
Real property is usually permanent, whereas personal property tends to be transitionary
– Different owners will come and go, but a particular piece of land will always exist
(unless it falls into the ocean following earthquake). Cats and cars come into the world
though birth and manufacture and eventually pass away through death and destruction
Third distinction is beginning to disappear – historically wealth was concentrates in real
property. Position and power in society depended upon the ownership of land,
increasingly, wealth is held in other forms of property – Bill Gates proof
Personal property can be broken into several categories: intangible and intangible
Tangible property: a thing that can be touched; sometimes called goods or chattels
Intangible property: a thing that cannot be touched
While you can physically hold a cheque, your real concern is with the rights that piece of
paper represents – you can put your hands around those rights – require debtor to fulfill
an obligation
Much of our new economy consists of a special type of tangible property known as
intellectual property which includes copyrights, patents, and trademarks
Acquiring Personal Property Rights
Personal property rights are usually acquired through the intention of one or more
people – you bought this book, the bookseller intended to transfer ownership in
exchange for a payment of money – when you rent something such as a moving van
your rights once again arise from a contractual arrangement
Major differences between purchasing and renting is that you receive a smaller package
of rights when you rent – you cannot keep the whole vehicle indefinitely, you must
return it at the end of the agreed period
Property rights are not always acquired through contracts – sometimes you can get
something for nothing
Assuming that the other person intends to give and that you intend to receive, you can
become the owner of a gift once it is delivered to you –Able to acquire property rights
even if you act alone
Truth in the old saying that “possession is nine-tenths of the law” – sometimes things
have no owner at all – You can acquire ownership of the thing by taking possession of it
with the intention of controlling it for yourself
Truth to the old saying “finders keepers,” but not “losers weepers” – you find property
that someone else has lost – by intentionally taking control of that thing, you will
acquire rights that are effective against everyone expect the true owner. Therefore, if I
take that property from you, you can see me in tort even if it is clear that you are not
the true owner
find more resources at oneclass.com
find more resources at oneclass.com
In business world, a finder’s rights may depend upon the circumstances
Although the law is rather unclear, it appears that occupier is entitled to things that are
found in the private, but not public, parts of its premises
Some rights can be acquired thorough an act of creation – an author enjoys copyright as
a result of writing a new book - owner of a cow acquires rights to any calves that are
born – property rights sometimes arise when none previously existed
Losing Personal Property Rights
Personal property rights don’t last forever
You will lose all your rights to the book if you sell it to someone else
If you rent it to a classmate for a term, you will no longer enjoy the right to immediate
possession (but you will gain a right to a payment)
Since you cannot own something that does not exist, your rights will be lost of this book
is destroyed in a fire
Your rights will continue to exist even if this book is lost or stolen, the situation will be
different if you abandon the text with an intention of giving up control
Rights can also disappear if your personal property becomes attached to, or mixed with,
land or other chattels
Fixtures: a chattel that has been sufficiently affixed, or attached, to land or a building
oOnce a chattel becomes a fixture, it belongs to the owner of the land
Factors in determining whether a chattel becomes a fixture:
oDegree of attachment: a chattel is more likely to be considered if it is attached
to a building rather than merely sitting under its own weight – if you wheeled a
dishwasher into the corner of the kitchen, it would presumably remain yours.
However, if you installed it under the kitchen counter with screws and plumbing,
it might be a fixture and therefore belong to your landlord
oPurpose of attachment: court would be more concerned with the objective
intention served by placing the chattel in the apartment. Key is whether a
reasonable person would believe it became a part of the building. IF it was
installed to enhance value of the apartment, then it is probably a fixture.
However, if it was done to make better use of the dishwasher itself, then it was
less likely a fixture
oTenants’ fixture: special rules that would apply because your apartment was
rented. Courts concerned that tenants might unfairly lose ownership over things
they add to their premises – even if the dishwasher did become the landlord’s
fixture, you could turn it back into a chattel if your removed it, within a
reasonable time after the end of the lease, and without irreparable damages to
the apartment. Same rule applies to trade fixtures – you could remove shelves
and signs that you installed in a warehouse that you rented for storage
find more resources at oneclass.com
find more resources at oneclass.com
Bailment
Bailment: occurs when one person temporarily gives up possession of property with the
expectation of getting it back
Bailor: person who delivers the property
Bailee: person who receives it
Bailment can arise in a variety of ways. one way through consignment
Consignment: occurs when an owner gives property to another person for the purpose
of selling it
Consigner: the owner
Consignee: the person making the sale
When the consignee sells the property on behalf of the consignor to a purchaser,
ownership passes directly from the consignor to the purchaser
The consignee only had control and possession of the property for the purpose of
making the sale – they were never the owner
Other examples of bailment include:
orenting a circular saw from a hardware store
oshipping furniture with a moving company
odelivering a machine to a shop for repairs
oplacing equipment in a storage unit
oleasing a vehicle from a dealership
oborrowing a book from a library
osending a package by courier
olending a lawnmower to a neighbour
Some arise in business contexts, other more informally. Some involve payments of
money; others don’t
They are all considered bailments because they all satisfy the same requirements:
oOne person voluntarily delivers the property to another
oFor a particular purpose
oWith the intention that the property will be retuned or disposed of as directed
The first element usually causes problems
General rule: Bailment exists only if one person intends to deliver control and
possession of property to another person
Sometimes difficult to distinguish between bailment and license
Licence: simply permission to do something that would otherwise be wrongful
Example: you parked your car in my parking lot if you have merely created a licence,
then you are entitled to park on my land, but you have not given control and possession
of your car – I therefore am not obliged to protect your vehicle (not bailment)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
You can"t carry a piece of land around with you, but you can take a cat or a car from one place to the next. Real property is usually permanent, whereas personal property tends to be transitionary. Different owners will come and go, but a particular piece of land will always exist (unless it falls into the ocean following earthquake). Cats and cars come into the world though birth and manufacture and eventually pass away through death and destruction. Third distinction is beginning to disappear historically wealth was concentrates in real property. Position and power in society depended upon the ownership of land, increasingly, wealth is held in other forms of property bill gates proof. Personal property can be broken into several categories: intangible and intangible. Tangible property: a thing that can be touched; sometimes called goods or chattels. Intangible property: a thing that cannot be touched.
