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

2. Bailment
Definition?
If John leaves his i-Phone at XYZ repair shop for a week? Who is the Bailee? Who is the Bailor?
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?
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.
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. 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. What is Bailment
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.
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. 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

4. Examples of Bailments Dress shirts that are being cleaned at a ______.
Car being parked by a _________.
___________ transported by UPS.
Truck being ________ at a dealership.
Diamond ring taken to jeweler for a _______.
Leaving your _______ in dressing room.
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

5. Mutual Benefit Bailment
Define mutual? – Both parties
Define benefit? – Both receive something that weren’t previously entitled to receive
Define bailment? 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?
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.
BB30 Business Law 6.02 Summer 2013

6. 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

7. Other Bailments Gratuitous Bailment Extraordinary 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. minimal care is expected. You should not destroy property while it is in your care.
Involuntary example – anytime your find someone else’s property. minimal care is expected. You should not destroy property while it is in your care.
BB30 Business Law 6.02 Summer 2013

8. Rights and Duties of Bailee
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

9. What if? What if you refuse to pay for car repairs that you approved?
Can the mechanic keep your car? Yes
Can you call police and say he stole your car? No
Can the mechanic charge you a storage fee even though he won’t return your car? Yes
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.
Mechanic’s Lien applies
Yes No
You do not have to pay for repairs and he cannot hold your car.
BB30 Business Law 6.02 Summer 2013

10. Rights and Duties of Bailor
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

11. 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?
Discuss with the class what they would do if they found out. Then show the next slide and discuss the legal issues.
BB30 Business Law 6.02 Summer 2013

12. 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.
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
BB30 Business Law 6.02 Summer 2013