Property Law Chapter 4 Personal Property

Introduction Property law regulates the relationships between people and property. The term ‘property’ refers to the physical things you can own, such as :- -land -furniture -computers -the rights you can exercise over physical and non-physical things Commercially (and personally) property right are valuable assets

Introduction Property is classified as: - 1. Real property - This means land or anything which is fixed or attached to the land ‘so that it has merged and become one’ with the land. For example houses, office buildings. Personal property - This means all other property which is not real property. Personal property may also be referred to as chattels.

Introduction Personal property are divided into: - Tangible personal property– property that is visible, moveable and touchable, such as cars, computers, furniture and any form of goods. Intangible personal property– property that cannot be physically touched but involves a legal right, such as copyright or trademark, ownership or shares or right to payment of debts.

Personal Property Personal property can be divided into property that is tangible and intangible: Property that is physical, tangible and moveable is known as a chose in possession. EXAMPLES – clothes, furniture, office equipment, cars and animals. These physical pieces of property are also sometimes referred to as chattels or simply goods. Property that has no physical dimensions is known as a chose in action. Such intangibles cannot be possessed EXAMPLES - shares in a company, intellectual property such as copyright or trade mark or rights under a contract.

Liens A lien is a right to retain possession of property to secure payment of a debt. It will not usually contain the power to sell the property. Types include: - Particular possessory lien General possessory lien Equitable lien Statutory lien

Liens The right to retain possession of property via a lien is lost: - When possession is lost The debt is pair By abandonment or waiver When substituted security is accepted.

Bailment A bailment involves transfer of possession of goods for a purpose. A bailment occurs when possession of goods is transferred from one person (bailor) to another (bailee). The transfer is made on the understanding the goods will be returned the bailor in the same condition as when bailed unless otherwise agreed. Ownership of the goods remains with the bailor.

Bailment For there to be a bailment:- The bailor retains ownership of the goods. The bailee has temporary possession and control of the goods. Possession of the identical goods must return to the bailor or a third person as directed by the bailor. Bailments can be broadly classified into gratuitous bailments where no consideration or reward is provided fro the bailee’s conduct and non-gratuitous bailments where there is consideration or reward for the bailee’s conduct.

Bailment Duties of a Bailee • The duty to take care of the goods. • The duty to retain possession. • The duty not to use or misuse the goods. • The duty to return the goods. Standard of care required – the court will consider: - • The type of bailment – the relationship between the parties. • The expertise of the bailee. • The nature of the goods bailed.

Bailment Liability of a Bailee If the particular bailment meets the definition of a contract, a bailor can sue the bailee for breach of contract if the goods are lost or damaged on the basis that the condition to re-deliver the goods to the bailor in the same state as they were at the time of delivery has been breached. Liability may also arise in tort. A bailee may be liable in negligence for a failure to take care of the goods. A bailor may also have the right to sue in the torts of conversion and detinue.

Bailment Limitation of Liability Clauses If the bailment is contractual, it is common commercial practice for bailees to seek to limit or exclude their liability by including exclusion clauses within the contract.

Bailment Duties of a Bailor A bailor owes a duty not to interfere with the bailee’s possession of the goods for the duration of the bailment. If the bailment is regulated by statue such as contracts of hire and contracts of consumer credit than duties are imposed on the bailor regarding such matters as fitness for purpose and acceptable quality of the goods. .

Bailment Termination of a Bailment A bailment will be terminated: - • When goods are returned to the bailor as then the bailor will have both ownership and possession. • When goods are destroyed or lost. • By the negligence of the bailee. • If the bailment is a contract: • On breach of a condition. • By a term of the contract. • By performance of the contract. • By agreement between the parties. • By the time stated or if no time is stated for the bailment, by either parity giving reasonable notice to the other party.

Personal Property Securities Personal property securities laws govern how personal property can be used to secure a loan. The new national system of online registration helps to protect consumers and business to manage credit risk, check for security interests over personal property and register security interests in personal property used to secure payment or other obligation. AIM – to increase in the availability of finance and therefore lower costs for businesses because there will be greater certainty about whether an item of personal property is subject to a security interest.

Bills of Sale Legislation – Effect of PPS Reforms The personal properties securities legislation supersedes the state and territory bills of sale legislation. A secured party to a bill of sale who wishes to maintain their priority position must opt in the new PPS Register by May 2013 or risk losing their priority of payment.