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Bailments Lecture For End of Semester

 
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PostPosted: Mon May 22, 2017 6:15 am    Post subject: Bailments Lecture For End of Semester Reply with quote

I WILL COVER THE LAW OF BAILMENTS, DURING THE LECTURE OF 5/23/17. THIS AREA OF LAW WILL BE TESTED ON YOUR FINAL EXAM. BELOW IS MY LECTURE NOTES.

BAILMENTS

Transfer of possession of personal property for a specific use w/o change of title.

BAILEE HAS EXCLUSIVE RIGHTS, WHEN BAILED GOODS IN HIS/HER POSSESSION.

OWNER TRANSFEROR is bailor; TRANSFEREE receiving: the bailee.

A. ESSENTIAL ELEMENTS OF BAILMENT

1. Title retention by the bailor

2. Delivery of possession to the bailee

E.G.: Must have happened, or no bailmen.

3. Acceptance of possession by the bailee

4. Possession and temporary control of property by the bailee for a specific purpose.

5. Ultimate possession of the property to revert to bailor unless bailor orders it transferred to another person

B. BAILMENT DISTINGUISHED FROM OTHER TRANSACTIONS

1. DISTINGUISHED FROM SALE:
a. Sale is a transfer of title;
(a.1) Bailment only transfers possession;

b. Sale requires consideration, but bailment may be either gratuitous or for consideration;

c. Sale intends permanent change of possession but bailment only a temporary change.



BAILEE'S DUTY OF CARE

Owed by bailee to the bailor's property depends on:

TYPE OF BAILMENT:

May be classified according to benefits obtained, and such factors are considered in determining liability of bailee for negligence.

SOLE BENEFIT TO BAILOR (Gratuitous; as a favor):

Hold for the bailor; just as a favor to him/her.

Bailee normally owes ONLY SLIGHT DEGREE OF CARE for the property.

BENEFIT TO BOTH PARTIES:

Mutual benefit of both parties, bailee owes DUTY OF ORDINARY CARE; means: Reasonable care under the circumstances of the case. If item missing/damaged then there is a rebuttable presumption that there has been negligence.

SOLE BENEFIT TO BAILEE (Gratuitous):

Bailee requests the use of bailor's property for personal reason. Duty: GREAT CARE FOR THE PROPERTY

e.g.: borrow a tool

LIABILITY STATUTES LOCAL STATUTES:

Many state and local laws provide for limitations of liability in certain types of bailments. [Cal. Civ. Code § 1840]

BAILMENT CONTRACTS:

Agreement to enlarge or limit liability of the bailee.

A. QUASI-PUBLIC BAILEE LIABILITY LIMITATION:

Such as common carriers, public parking lots, garages, and hotels cannot exclude/limit their liability unless permitted by statute. (1) Liability limitation must be reasonable: [§1099]

b. Private bailee liability limitation:

Can limit liability by agreement if it does not defeat the real purpose of the contract.

NOTIFICATION OF LIABILITY LIMITATION:

Private bailees must notify the bailor of any liability limitation; notice printed on a ticket stub or a posted sign does not meet this requirement unless it is reasonably brought to the attention of the bailor.

BAILEE'S LIEN BY STATUTE

Gives the bailee right to possessory lien on bailed goods for payment for work or services performed on the goods.


BAILEE'S DUTY TO RETURN PROPERTY

1. GENERAL RULE:

Upon termination of bailment, duty to return unless exception applies.

EXCEPTIONS TO BAILEE'S DUTY TO RETURN PROPERTY

1. Goods taken by legal process: Goods taken from bailee's possession by legal process {e.g., an attachment by the sheriff for debts), no duty to return
2. Goods delivered to one with better right to possession: Where bailee delivers goods to another who has a better claim to possession than the bailor, the bailee excused from returning.
3. Goods lost, destroyed, or stolen: If no fault of the bailee, not liable to the bailor.
4. Goods under bailee's lien: May retain possession until bailor pays.

TERMINATION OF BAILMENTS

BY PERFORMANCE:

TERMINATION BY DESTRUCTION OF BAILED PROPERTY:

Destroyed by third party, act of God.

PARKING LOT BAILMENTS

Owner leaves key and physical control of auto with parking lot attendant. However, when owner parks and locks his own car, then takes the keys with him, it usually held to be a rental of parking space and not a bailment. Since the element of acceptance and control necessary for a bailment is lacking.

RESTAURANTS:

Unless actual delivery of personal property (e.g., a coat) to proprietor or employee of a restaurant, with acceptance for such purpose, a bailment is usually not created.

SAFE DEPOSIT BOXES:

Generally located on premises of banks and lending institutions and hired to customers with both the bank and user possessing a key; both keys are usually necessary for access to the box. This is a bailment, with the customer as bailor and the bank as bailee.


CONSTRUCTIVE BAILMENTS

Imposed by operation of law rather than by agreement of the parties and may be either voluntary or involuntary.

CONSTRUCTIVE BAILMENTS: MINIMUM DUTY OF CARE


______________

Read and become familiar with these 7 hypotheticals. We will be discussing all of them on Monday.


Bailment 1

On February 4, 1976, James leased a storage locker from Nationwide and agreed to pay $16/month for the lease. James placed various items in the leased premises but never informed Nationwide as to the nature or quantity of articles stored therein. James was free to store or remove whatever he wished without consultation with, permission from, or notice to. Nationwide. James locked the leased premises with his own lock and key. Nationwide was not furnished with a key. Subsequently, certain personal property belonging to James disappeared from the storage space. James sued Nationwide to recover damages of $5,275. Was a bailment created between James and Nationwide?

Bailment 2.

On May 14, 1980, Clarence brought his wife's fur coat to Debonair Cleaners for cleaning and storage. The clerk told him that Debonair was experienced in such matters and that the charge would be 3% of the stated value of the coat. Clarence stated that the coat was worth $13,000 and the clerk gave Clarence a claim check and informed Clarence that the total fee for storage would be $390, to be paid when the coat was retrieved. That evening, Clarence related the substance of his conversation with the clerk to his wife, Alice, and gave her the claim check. Approximately eight months later, Alice went to Debonair to retrieve her coat. She presented the claim check to the clerk who, after searching the premises for the coat, told her that it could not be located. Clarence was informed that the coat had probably been stolen during a break-in and burglary. Clarence sued Debonair to recover the value of the coat. Who wins?

Bailment 3.

Morrison and Willis were guests at a dinner party attended by approximately 25 people. The party began about 7:00 P.M. and ended at approximately 1:00 A.M. Alcoholic beverages were served throughout the evening. At approximately 11:30 P.M., while working in the kitchen, Morrison removed her watch and placed it on the counter. About midnight, Morrison left the kitchen and went outside. After about 15 minutes, she became ill and fled to the bathroom. Shortly after Morrison left the kitchen, Willis saw the watch on the counter and, fearing for its safety, picked it up and carried it in her hand as she looked for Morrison. When Morrison came out of the bathroom, she and her fiance left the party. Willis was unable to find Morrison and cannot recall precisely what she did with the watch. She testified that she either gave it to Morrison's fiance or put it somewhere in the host's house for safekeeping. Morrison's fiance testified that Willis did not give him the watch. The next day, Morrison discovered that she did not have her watch but, in a search of the host's home, the watch was not recovered. Morrison sued Willis for damages. Who wins?

Bailment 4.

Right, Inc. is a parking lot operator in Houston, Texas. On January 18, 1980, Kirkland drove his 1978 Buick Regal automobile to a Right parking lot, placed it in a row of cars to be parked by the attendant, handed the attendant his keys, and was given a receipt by the attendant. When Kirkland returned two hours later to reclaim his car, it could not be found. Kirkland reported the car stolen. Right could not explain the loss of the car, which was found one and one-half weeks later, wrecked and stripped. Kirkland sued Right for damages. Who wins?

Bailment 5.

Alan and Prem were the owners and managers of the Brotsky Investment Corporation, which was engaged in the business of selling rare coins. In August 1980, Leonard purchased silver coins worth $4,998 from the Corporation. The coins were to be put into the Corporation's vault for safekeeping. It was understood that Leonard could demand the return of the coins at any time. In November 1980, Leonard unsuccessfully demanded that his coins be returned. Evidence showed that the coins never made it into the vault and that the coins had been converted for one of the co-bailee's own use. Leonard sued Alan and Prem for damages. Who wins?

Bailment 6.

Warehouse Company stores goods for a fee. On May 31, 1977, Trudy Roice hired Warehouse to store some of her furniture and household goods. Roice paid Warehouse a monthly fee for such services. When Roice decided to remove a few items from storage on September 9, 1979, she found her furniture and cartons in a state of disarray. Several pieces of furniture were substantially damaged, including broken legs, scratches, and so on. Warehouse did not produce any evidence showing how the furniture was damaged. Roice sued Warehouse to recover damages. Who wins?

Bailment 7.

On January 23, 1982, Joseph Conners, his wife, and a group of friends convened in Manhattan, New York, for a party at a discotheque where patrons dance to recorded music played on sound equipment. The Conners party checked their coats, 14 in all, with the coatroom attendant. After paying a $0.75 charge per coat, they received seven check stubs. A small sign in the coat-room stated, "Liability for lost property in this coat/check room is limited to $100 per loss of misplaced article." Conners testified that he did not notice it when he checked his coat, and that the coat room attendant did not call his attention to the sign. At the end of the evening, Conners and the other guests of the party attempted to reclaim their coats. Conners's one-month-old $1,350 leather coat was missing. Conners sued the discotheque for damages. Is the disclaimer of liability enforceable?
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