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Chapter 15

Chapter 15 BU231.docx

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Department
Business
Course
BU231
Professor
Valerie Irie
Semester
Winter

Description
BU231 Chapter 15 - Bailment Bailment Definition -Bailment – a transfer of possession of personal property without a transfer of ownership -Bailor – owner or transferor of the goods -Bailee – party accepting possession of goods from a bailor Nature of Bailment -Most bailments are contractual and involve payment, but a bailment can also occur without there being any contract between a bailor and bailee -The essential elements of bailment are delivery of possession without the intention to transfer title and with the intention that the property shall be returned to the bailor -A bailment may also be involuntary; if a customer leaves a coat behind in a restaurant, the restaurateur becomes a bailee of the coat and cannot refuse to return it at the customer’s request -Gratuitous bailment – a bailment where one party provides no consideration, or where there is no intention to create a contractual relationship Sub-bailment -Sub-bailee – a person who receives a bailment of property from a bailee Rights and Duties of a Bailee Liability Under Contract and Tort -Sometimes bailed goods are lost, damaged, or destroyed while in the possession of a bailee -All bailees are under a duty to take care of property bailed to them -Sometimes a contract of bailment includes a term that the bailee shall not be liable for damage to the goods while in her custody, even when the damage is caused by negligence in the course f performing the contract -Although the law of bailment has elements of both tort and contract law, bailment is a distinct relationship governed by its own rules The Standard of Care -The standard of care is highest on a bailee when the bailment is gratuitous and for the benefit of the bailee, as when one borrows a friend’s car for personal use -Bailments for value – contractual bailment -The standard varies according to the type of goods bailed and the extent of the promise to look after the goods -Two special classes of bailee are subject to higher standards of care because they deal with the public generally: common carriers, and innkeepers Rights and Remedies -Quantum meruit – an amount a supplier deserves to be paid for goods or services provided to the person requesting them (also described as the fair market value of the benefit conferred BU231 Chapter 15 - Bailment Lien -Lien gives the bailee a right to retain possession of the goods until the bailor pays what is due for the services -The bailor cannot repossess the goods until he has paid the sum due -Generally, a right of lien arises only when the services have been performed and payment is already due The Right of Sale -If the bailor is unable to pay off the charges, as when he becomes insolvent, the bailee is left with goods she cannot use because she has no title to them, and yet she has the burden of storing them -The bailmen
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