Chapter 27

Bailments
 What is a Bailment?
Transfer of possession of personal property
without transfer of ownership.
Bailor- party who gives up possession of
property.
Bailee- The party who receives possession
and control.
Three Characteristics of Bailment
The Subject of Bailment Must Be Personal
Property
A Bailor Gives Temporary Possession and
Control of Goods To Another
The Parties Must Intend That the Goods Be
Returned to the Bailor
Fungible- Theres no difference between
one unit of the goods and another.
 What Are The Types of
Bailments?
Extraordinary Bailments- Bailment
requiring an unusually high standard of care
Ordinary Bailment- Voluntary bailments
with parties other than commercial carriers
and hotels.
Involuntary Bailment- arises without the
consent of the bailee.
Common carrier- one who agrees, for a fee, to transport good for
another who applies, provided the goods are lawful and fit for
shipment.
Gratuitous Bailment- Bailment which benefits only one party.
Bailment for the sole benefit of the bailee- a type of gratuitous
bailment in which the bailor transfers an item to the bailee
without charge and the bailee gains the service.
Bailment for the sole benefit of the bailor- a type of gratuitous
bailment in which the bailor transfers the item to the bailee and
the bailor gains a service without charge.
Mutual-benefit bailment- when consideration is given and
received by both bailor and bailee.
Actual bailment- the bailee receives and accepts the goods
themselves.
Constructive bailment- when the bailee agrees and accepts a symbol of
the actual personal property.

Bailees duty of care- care of goods while they are in the possession of
the bailee.
Three levels of care:
1-Duty of Extraordinary Care-If there is damage, loss, or injury the
bailee is liable.
2-Duty of Ordinary Care-The bailee will be liable only if he or she has
been negligent in some fashion.
3-Duty of Minimal Care-The bailee must not waste or destroy the
property.
 How Can the Bailees Duty of
Care Be Modified?
Modification of Legislation

Modification of Negotiated Contract

Modification by Disclaimer
disclaimer- a sign, label, or warning reducing the bailees
duty of care.
What is the Nature of the Bailees
Duty to Return the Goods?

Bailees duty to return the property-

compels the bailee to return the bailed
property according to the terms of the
bailment agreement.

Bailees lien- retains possession until paid.

 What are the Bailees Duties?
Bailors duty to provide goods fit for the
intended purpose- the bailors obligation in
a mutual-benefit bailment to check for
damages and inform the bailee of
discoverable defects, or be liable for any
resulting injuries.
 What are the Most Common Bailments?

Bailments for Transport

Demurrage- Fees for use of the transportation vehicle when the bailor
fails to load or unload at the agreed time.
Carriers Lien- The right to obtain possession of the goods until the
charges for transportation and incidental services are paid.

Bailments for Hire

Bailments for Services
Bailments for Sale
Consignment- where ownership remains in the manufacturer or
wholesaler until the goods are sold.
Sale on Approval- the prospective buyer is permitted to use the goods
to determine whether he or she wants to buy them.
 How is a Bailment Ended?
When the time agreed upon by the parties
has elapsed.

When the agreed purpose has been

accomplished.

When the parties mutually agree to end it.