1. ES 6 UNDERSTAND SALES, CONSUMER, PROPERTY AND CYBER LAWS Objective 6.02 Understand property law BB30 Business Law 6.02 Summer 2013

2. Bailment Definition? –An agreement created by the temporary delivery of personal property by the owner to someone who is not the owner for a specific purpose. –Both parties agree that the property will be returned to the bailor. If John leaves his i-Phone at XYZ repair shop for a week? Who is the Bailee? Who is the Bailor? –Bailee (XYZ Repair Shop) - has in their temporary possession property that belongs to someone else. –Bailor (John) – owner of property who gives up possession to someone else temporarily. –Custody – person may have custody of an item and not become the bailee. There is an art show in the gym this weekend. Peter is hired to spend the night in the gym and protect the artwork. Why would this not be considered a bailment? –A bailment has not been formed. None of the artwork was left with the guard specifically. Peter was hired by the school to protect the artwork not the owners of the artwork. BB30 Business Law 6.02 Summer 2013

3. Examples of Bailments Dress shirts that are being cleaned at a dry cleaner. Car being parked by a valet. Package transported by UPS. Truck being repaired at a dealership. Diamond ring taken to jeweler for a repair. Leaving your clothes in dressing room. BB30 Business Law 6.02 Summer 2013

4. Mutual Benefit Bailment Mutual – Both parties Benefit – Both receive something that weren’t previously entitled to receive (recall benefits in contract law – consideration) Bailment – Recall slide 1 - An agreement created by the temporary delivery of personal property by the owner to someone who is not the owner for a specific purpose. What is a mutual benefit bailment? BB30 Business Law 6.02 Summer 2013

5. Mutual Benefit Bailments Invokes the duty of ordinary care on the bailee Results from a contract (for service, repair, storage, rental) with consideration exchanged Both bailor and bailee receive benefit A pledge as security for a loan is also a mutual benefit bailment Most bailments are mutual benefit BB30 Business Law 6.02 Summer 2013

6. Other Bailments Gratuitous Bailment –Free of charge (lend something to a friend). –Only one party benefits Extraordinary bailment –A common carrier or hotel is strictly liable for damage to bailed goods Involuntary bailment –Arise accidentally. Involuntary example – anytime your find someone else’s property. Discuss that minimal care is expected. You should not destroy property while it is in your care. BB30 Business Law 6.02 Summer 2013

7. Rights and Duties of Bailee Rights: –To hold a Mechanic’s Lien -the right to retain property of another, if not paid for service rendered –To expect payment for services rendered Duties: –Of reasonable care and protection of goods while in custody of bailee –To comply with terms of bailment BB30 Business Law 6.02 Summer 2013

8. What if? 1.What if you refuse to pay for car repairs that you approved? a.Can the mechanic keep your car? YES b.Can you call police and say he stole your car? NO c.Can the mechanic charge you a storage fee even though he won’t return your car? YES 2.What if you refuse to pay for car repairs that you did not approve? You do not have to pay for repairs and he cannot hold your car. BB30 Business Law 6.02 Summer 2013

9. Rights and Duties of Bailor Rights –to have goods protected –to receive service as agreed upon –to have goods returned in timely manner Duties –to pay for service provided –to warn of dangers or special care required –to pick up goods in a reasonable time BB30 Business Law 6.02 Summer 2013

10. What if? Ethics and the Law: What if a student who finds necklace and knows who it belongs to but does not return it to the rightful owner? What if a parking valet who takes your hot car on a joy ride? What if a dry cleaner’s employee who wears your leather jacket out on a date? BB30 Business Law 6.02 Summer 2013

11. Tortious Bailee What is a tortious bailee? –A party who wrongfully retains lost property or stolen property –A party who wrongfully uses a bailed article for a purpose other than that agreed upon by the parties Example: Sallie told Mary that she was upset because she had lost her silver engraved bracelet. Mary found the bracelet and decided to keep it for herself. Example: Luke forgot his ski goggle at the ski resort. His friend, Kyle, found the goggles. Kyle knew they were Luke’s but decided to keep them and use them as his own. BB30 Business Law 6.02 Summer 2013