Comprehensive Volume, 18th Edition
Chapter 23:
Bailments
Definitions
bail v. to entrust one’s property to another for a special
purpose under an agreement
bailee n. person who accepts possession of property in trust
bailment n. the legal relationship that arises when one
person delivers possession of personal property to another
under an agreement, express or implied, by which the latter
is under a duty to return the identical property to the former
or to deliver it or dispose of it as agreed
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bailor n. owner of the property, or person with physical
possession of the property who turns over possession
under a bailment
Bailment
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A bailment is when tangible personal property is
delivered by the owner (bailor) to another
person (the bailee) under an agreement that the
identical property will be returned or delivered
in accordance with the agreement.
The bailee has possession, but not title.
When a person comes into the possession of the
personal property of another without the owner
actually delivering it, the law classifies the
relationship as a constructive bailment.
Required Elements of Bailment
Agreement
Bailor
Bailee
Delivery
Acceptance
of Delivery
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Classifications
Bailments may be classified in terms of
benefit:
(1) sole benefit of the bailor,
(2) sole benefit of the bailee, or
(3) benefit of both parties (mutual benefit
bailment).
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Standard of Care
In some states, the standard of care required of
a bailee is related to the class of bailment:
sole benefit of the bailor: the bailee is required to exercise
only slight care and is liable for gross negligence only
sole benefit of the bailee: the bailee is liable for the
slightest negligence
for mutual benefit, as in a commercial bailment: the bailee
is liable for ordinary negligence
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In other states, the courts apply a “reasonable
care under the circumstances” standard.
Duties of Bailee
A bailee:
must perform the bailee’s part of the contract;
must exercise reasonable care of bailed property;
unless otherwise agreed, must bear the repair
expenses incidental to the use of property in a
bailment for hire situation; and
must return the identical property.
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If a bailee injures a third person while driving a
rented motor vehicle, the bailee is liable to the
third person as though the bailee were the
owner of the vehicle.
Rights and Duties of Bailor
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Bailor may sue the bailee if the goods are
not redelivered according to the
agreement.
In a mutual benefit bailment, the bailor is
under a duty to furnish goods reasonably
fit for the purposes contemplated by the
parties.
The bailor may be held liable for damages
or injury caused by the defective condition
of the bailed property.