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Chapter 15

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Department
Business
Course
BU231
Professor
Valerie Irie
Semester
Winter

Description
Chapter 15: Bailment and Leasing Bailment: a transfer of possession of personal property without a transfer of ownership. - personal property – “stuff”, called chattels, or a document containing legal rights - most are contractual and involve payment - intention that property will be returned to bailor Contractual (“Bailments for Value”) – of value (both benefiting), there must be consideration Non-Contractual – can benefit both parties or either party - Gratuitous Bailment: a bailment where one party provides no consideration, or where there is no intention to create a contractual relationship - where there is no consideration or intention to create a legal relationship Involunary – giving someone possession of something unintentionally, must give it back Eg. leaving a coat at a restaurant Bailor: owner or transferor of the goods. Bailee: party accepting possession of goods from a bailor. Sub-bailment - Sub-Bailee: a person who receives a bailment of property from a bailee - after receiving the property from the bailor, the bailee transfers possession to someone else - to avoid liability and create a bailment relationship between the bailor and sub-bailee, the bailee must first obtain permission or consent from the bailor for the sub-bailment (must be privy) - sometimes sub-bailments are expected and in this case permission may be implied Rights and Duties of a Bailee Under Contract and Tort - if a good is damaged, lost, or stolen, the courts determine whether or not the bailee is liable for the loss suffered - Contract – terms (expressed or implied by trade custom) set out the duties and liabilities of the bailee for the goods in their possession - Exemption Clause for contract – sometimes it is written out that the bailee is not liable for damage to the goods while in their custody, even if it is caused by negligence in the course of performing the contract. Very strict – if it is damaged while not performing the contract, they are not protected by this clause - All bailees owe a duty of care for the goods in its possession, even in gratuitous bailments, but this duty of care varies - Bailments have components of tort and contract law but it is a law governed by its own rules; sometimes it is easier to sue in bailment law than under tort - The burden of proof is on the bailee since it is difficult for the bailor to establish how the damage occurred The Standard of Care - depends on the type of bailment - generally, a bailment for value is expected to take the same care of goods as a prudent and diligent person should take of those goods belonging to those whom which they do business with. At least as high or higher than they might choose to apply to own goods - Type of Goods bailed – are they valuable,
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