1. Special Bailments CHAPTER THIRTY-THREE

2. Copyright © Houghton Mifflin Company. All rights reserved.33 | 2 Special Bailments Special bailments require that the bailee use extraordinary care. Special bailees include the following: –Hotelkeepers –Common carriers Under common law these bailees may be held absolutely liable for loss or damage to property. –This liability may be limited by law. –The absolute liability rule is the subject of many exceptions. –Under the exceptions mentioned hotelkeepers and common carriers are not liable for losses unless they are negligent.

3. Copyright © Houghton Mifflin Company. All rights reserved.33 | 3 Exceptions to the Rule of Strict Liability Special bailees can limit their liability –By agreement with bailors that Limits the amount of their liability, and Limits the activity for which they can be held liable –The limitations will be effective as long as The agreement limiting liability is fair, and The bailor is fully aware of the limitation.

4. Copyright © Houghton Mifflin Company. All rights reserved.33 | 4 Exceptions to the Rule of Strict Liability (continued) Act of God: a natural disaster that is infrequent, such as a flash flood, hurricane, or earthquake. –If an act of God occurs, a special bailee will not be responsible for damage to property. –If the bailee could prevent or limit loss by taking reasonable care a bailee will be held liable even when a natural disaster is involved.

5. Copyright © Houghton Mifflin Company. All rights reserved.33 | 5 Exceptions to the Rule of Strict Liability (continued) Act of public enemy: an act by a military force of another country, pirates, or terrorists from a foreign country. –A mob, rioters, strikers, and robbers are not considered public enemies. –A special bailee will not be liable for damage caused by a public enemy.

6. Copyright © Houghton Mifflin Company. All rights reserved.33 | 6 Act of public authorities: a special bailee will not be liable if the property is seized by a government authority. Fault of the bailor: a special bailee will not be responsible for actions of the bailor that caused damage to the bailed property. Nature of the bailed goods: a special bailee will not be responsible because of loses due to the basic nature of the property. –Some property is perishable, and if the property becomes unusable, although the bailee used the special care required, the bailee will not be liable. Exceptions to the Rule of Strict Liability (continued)

7. Copyright © Houghton Mifflin Company. All rights reserved.33 | 7 Hotelkeepers A hotelkeeper is a person who rents rooms as a continuous activity: –As a regular main business activity –To the public –As living accommodations –In a guest relationship Hotelkeepers must accept any person who arrives in proper condition and has the means to pay for lodging. –Proper condition, for example, means not intoxicated.

8. Copyright © Houghton Mifflin Company. All rights reserved.33 | 8 Hotelkeepers (continued) Hotelkeepers provide lodging for transients. –Transients are those who can stay as long as they wish and who may leave at anytime. –Providing lodging to transients makes the hotelkeeper a special bailee for the property of the transient. People who use hotel facilities such as restaurants and meeting rooms, but are not staying in the hotel as lodgers, are business guests. –A hotelkeeper is only an ordinary bailee of the property of business guests.

9. Copyright © Houghton Mifflin Company. All rights reserved.33 | 9 Hotelkeepers (continued) A hotelkeeper must accept all who wish to stay. –A hotelkeeper cannot discriminate on the basis of race, color, religion, or national origin. A hotelkeeper has a responsibility to take reasonable precautions for the safety of guests and their belongings. –Precautions include: Providing protection from fires Providing safe elevators, rooms, hallways, and stairs

10. Copyright © Houghton Mifflin Company. All rights reserved.33 | 10 Hotelkeepers (continued) A hotelkeeper is absolutely liable for the safety of his or her guests and their property. Hotelkeepers can and do limit their liability in various ways. –Rules vary from state to state: Some states say hotelkeepers are liable only if negligent. Some states allow the hotelkeeper to limit liability by providing a safe for guests to store valuables. If the guest fails to use the safe, the hotelkeeper is no longer a special bailee.

11. Copyright © Houghton Mifflin Company. All rights reserved.33 | 11 Hotelkeepers (continued) Rights of hotelkeepers: –To be paid for the lodging they provide –If not paid for the lodging, to keep belongings of the guest until paid –If not paid after a reasonable time, to sell the belongings and apply the proceeds of the sale to the unpaid bill –Hotelkeepers have the right to ask for payment in advance or evidence of ability to pay such as a credit card.

12. Copyright © Houghton Mifflin Company. All rights reserved.33 | 12 Common Carriers Carrier: one who transports goods or people for pay Private carrier: a carrier owned and operated by a company to transport its own goods Contract carrier: a carrier that limits its customers and transports goods under individual contracts –For example, it may deliver goods only for appliance stores. –Contract carriers can accept or reject customers as they choose. –A contract carrier is an ordinary bailee.

13. Copyright © Houghton Mifflin Company. All rights reserved.33 | 13 Common Carriers (continued) Common carrier: a carrier that transports goods and people for anyone who wishes to hire it. Examples include: –Railroads –Shipping lines –Bus lines –Airlines –Taxis –Trucking companies

14. Copyright © Houghton Mifflin Company. All rights reserved.33 | 14 Common Carriers (continued) Responsibilities of a common carrier of people: –To accept anyone seeking passenger transportation –To provide reasonable passenger accommodation –To provide reasonable protection for passengers

15. Copyright © Houghton Mifflin Company. All rights reserved.33 | 15 Common Carriers (continued) A common carrier of goods: –To follow consignor’s shipping instructions Consignor: the person who delivers goods to a common carrier for transport Consignee: the person to whom the goods have been shipped –To deliver goods to consignee at the time and place agreed upon

16. Copyright © Houghton Mifflin Company. All rights reserved.33 | 16 Common Carriers (continued) A common carrier must exercise a high degree of care to protect passengers. –A common carrier can be held liable for negligence of its employees. –If the passenger causes his or her own injury through carelessness, the carrier is relieved of liability. –If the situation causing injury is beyond the control of the carrier or caused by the passenger, it is not liable for injury.

17. Copyright © Houghton Mifflin Company. All rights reserved.33 | 17 Common Carriers (continued) A common carrier is a special bailee and is absolutely liable: –For goods after the goods are delivered to the carrier –During shipment of the goods A common carrier may limit its liability; however, a common carrier cannot completely absolve itself of its liability for damages caused by its own negligence. –Some states allow carriers to limit liability from situations such as riots, mobs, and thieves. –A common carrier is liable for losses or damages caused by its failure to deliver the goods within a reasonable time.

18. Copyright © Houghton Mifflin Company. All rights reserved.33 | 18 Common Carriers (continued) Common carriers must provide service to those who ask and can pay. A common carrier can refuse passenger service: –When space is unavailable –To those who may endanger other passengers, such as a drunk or a passenger with an infectious disease.

19. Copyright © Houghton Mifflin Company. All rights reserved.33 | 19 Common Carriers (continued) A common carrier can refuse to transport goods when not equipped to transport that particular type of goods. A common carrier has the right to be paid for services. –The carrier can charge for services in advance.