Hotel, Restaurant, and Travel Law:
A Preventive Approach,
Seventh Edition
Chapter 8
Protecting Patrons’ Property
COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED.
Introduction
 Hotel guests bring a variety of
personal property to hotels
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Money
Jewelry
Computers/electronic devices
Clothing
Sports equipment
Cars
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Risks to Property in the Hotel
 Hotel theft is a problem the
hospitality industry has not fully
solved
 Liability of the innkeeper for losses
has lessened over time
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Hotel Theft
 Hotel thefts are not rare—industrywide problem
 Hotel thieves are professionals
seeking money, jewels, and credit
cards
 They often register as guests in the
hotels they plan to burglarize
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Hotel Theft
(continued)
 Tricks of hotel thieves:
 Offering money in exchange for confidential
information from
 Maids
 Bartenders
 Other hotel personnel
 Generally do not carry weapons
 If caught in the act, they feign drunkenness
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Hotel Theft
(continued)
 Strategies to stem the increase of
hotel thefts:
 Increase number of security personnel
 Hiring trained professionals
 Warning guests to lock rooms and put
valuables in a hotel safe
 Installing closed-circuit televisions to
monitor hallways
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Keycards and Keys
 Most hotels today use electronic keycards,
which have a magnetic strip
 Allows the code that opens the door to be
changed every time a new guest occupies
the room
 Keycard system was inspired by problems
associated with more traditional keys
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Guests’ Insurance
 Many people are not personally
insured against the loss of their
valuables
 If their property is stolen while they
are at the hotel, they are likely to sue
the hotel seeking compensation
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Absolute Liability for Guests’ Goods
 According to common law, hotelkeepers
were liable for any loss of guests’ property
occurring on hotel premises
 Doctrine was called absolute or strict
liability
 Applied to guests’ property that was infra
hospitium—literally “within the inn”
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Exceptions to the Absolute
Liability Rule
 Three exceptions:
 Loss caused by an act of God
 Loss caused by a public enemy
 Negligence by the guest
COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED.
Prima Facie Liability Rule—
Minority View
 Six states have adopted a rule that
modified absolute liability as follows:
 Hotelkeepers are liable for property laws only if
the loss occurs through their negligence
 If the innkeeper can prove the loss resulted from
some other cause
 If the goods are stolen by robbers without aid
or negligence of the innkeeper
COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED.
Limited Liability—Modern Limitations
to the Absolute Liability Rule
 Current law recognizes that absolute
liability rule is burdensome to
modern-day hotels
 All state legislatures have adopted
statutes to significantly limit hotel’s
liability, provided hotels follow specific
procedures
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Limited Liability—Modern Limitations
to the Absolute Liability Rule
(continued)
 Hotel complies with mandated rules
 Faces only liability of a few hundred
dollars, even if items are valued at
much more
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Limited Liability—Modern Limitations
to the Absolute Liability Rule
(continued)
 Common provisions:
 Hotel must:
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Provide a safe for use by guests
Post notices announcing availability of safes
Post notices announcing limited liability
Maximum recovery allowed to a guest is
prescribed by statute
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Limited Liability—Modern Limitations
to the Absolute Liability Rule
(continued)
 If the innkeeper deviates from
requirements of the statute in any
manner, common law rule will apply
and the innkeeper will have unlimited
liability
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Providing a Safe
 In the past, hotels provided a safe or
safe-deposit boxes
 Today’s popular alternative is for
hotels to provide individual safes in
each guest room
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Posting Notice of
Availability of Safe
 Posting means displaying a sign that
calls attention to the availability of a
safe and that states that, by law, the
hotel’s liability for valuables is limited
 Must be posted at the registration
desk, on the check-in form, and in
guest rooms
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Strict Interpretation of
Posting Requirements
 Failure by the hotel to comply strictly
with the posting requirements will
result in loss of limited liability
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Conspicuous Posting
 Notice must be displayed in such a
way that people are likely to see it
 Must be easily readable
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Posting Notice of Hotel’s
Limited Liability
 Not enough to post availability of a safe
 Must also post notice that the hotel’s liability is
limited
 Without such notice, guests are led to believe
they will be protected for the full value of
deposited items
 Absent notice of limited liability, common law
rule applies and the hotel will be fully liable
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Languages Other than English
 If a hotel can anticipate guests who
speak languages other than English,
it is well-advised to post written
notices in other languages as well as
English
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What Property Belongs in the Safe?
 Not all property is appropriate
 Most state statutes require the following
property to be deposited in safes:
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Money
Jewels
Ornaments
Bank notes, bonds, negotiable securities
Precious stones
Other articles of similar value
COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED.
What Property Belongs
in the Safe?
(continued)
 Ambiguities exist
 Are cufflinks ornaments?
 How much money may guests keep in their
rooms outside of the safe
 Must they put a watch in the safe?
 Gambling chips have been determined to be
included on the list of valuables to be stored
in a safe
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Theft during Checkout
 A hotel’s freedom from liability is not
altered by the fact that the loss
occurred as the guest was preparing
to leave the hotel
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Hotel Guest in Hotel Restaurant
 Even in the restaurant, a guest
retains status of a guest of the hotel
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Door Locks and Window Fastenings
 Some states’ statutes require a hotel
to maintain suitable locks and bolts
on doors and fastening on windows to
benefit from limited liability
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Clothes and Other
Personal Property
 Hotel liability is limited for clothing,
inexpensive watches, sporting
equipment, or merchandise samples
 If loss is due to negligence on the
part of the hotel, it will be liable for
the full amount of a guest’s loss
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Checkrooms
 Some states differentiate between
clothing lost or damaged in guest
rooms and property lost in a checkroom
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Baggage Rooms
 Most states restrict a hotel’s liability
for loss or damage to a guest’s
property stored in a baggage or
storage room
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Merchandise Samples
 Refers to goods for sale brought to a
hotel by a salesperson-guest
 Even common law recognized a
distinction between items for personal
use and property brought for
commercial purposes
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Merchandise Samples
(continued)
 Innkeeper must receive written notice
that samples are in the hotel,
acknowledge that the guest has such
property, and its value
 Some states’ statutes require the
guest to declare to the hotel value of
the merchandise before the hotel is
liable for the loss
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Property in Transit
 Most states have statutes that limit a
hotel’s liability for guests’ property
while in transit
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Property Not Covered
 Statutes do not cover all property
that might be stolen
 Applies only to hotel guests, not to
nonguests
 Cars, property of nonguests, and
property of restaurant patrons is
covered by law of bailments
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Fire
 Hotels’ liability is limited or eliminated
if fire is not a result of hotel’s
negligence
 The hotel will be fully liable if a fire is
caused by the hotel’s failure to
exercise reasonable care
COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED.
Estoppel: Loss of Limited Liability
 Equitable estoppel—legal principle
that precludes a person from claiming
a right because that person made a
false representation to another who
relied on the untruthful statement
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Misrepresenting Risk
 Principle of estoppel imposed if
innkeeper (or employee) misleads a guest
and causes a guest to disregard
posted directions for safekeeping
property
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Hotel’s Negligence
 Most limiting statutes do not protect
an innkeeper in situations where the
loss of guests’ property is due to the
hotel’s negligence
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Comparative Negligence
 Hotel and guest are both negligent—
loss is due to combined negligence
 Hotel’s liability will be reduced by the
percentage of responsibility attributed
to the guest
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Nevada’s Limiting Statute
 Limitation of liability (maximum $750) even
if the hotel is grossly negligent
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Liability during Check-In/Out
 Before guests have had a chance to
access hotel safe
 Valuables have been removed from
hotel safe
 Limiting statutes are applicable—hotel
not liable for full loss
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Bailment
 Transfer of possession of personal
property from one person to another
with understanding that property will
be returned
 Bailor—person transferring
possession of property
 Bailee—person receiving possession
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Bailment
(continued)
 Essential elements of a bailment:
 Personal property
 Delivery of possession
 Acceptance of possession
 Bailment agreement
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Bailment
(continued)
 Effect of bailment on liability
 Existence of bailment affects liability
 If no bailment exists, neither does
liability
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Bailment
(continued)
 Bailee is liable only if it fails to
exercise amount of care required in
tending to bailed goods
 Requisite care depends on type of
bailment
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Bailment
(continued)
 Types of bailment:
 For the sole benefit of the bailor
 For the sole benefit of the bailee
 Mutual benefit
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Bailment
(continued)
 For the sole benefit of the bailor
 Bailee receives no benefit from the
bailment
 Bailee obligated to exercise only slight
degree of care
 Liable only for gross negligence
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Bailment
(continued)
 For the sole benefit of the bailee
 Bailor lends property to bailee and
receives nothing in return
 Take great care of the property
 Exercise a great deal of care higher than
a reasonable person exercises with their
own property
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Bailment
(continued)
 Mutual benefit
 Bailment for hire
 Both parties receive some benefit
 Duty to exercise ordinary care
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Bailment
(continued)
 Duty of bailor in mutual-benefit
bailment
 Obligated to warn bailee of any defects
in bailed property that might result in
injury to bailee or interfere with use of
property
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Bailment
(continued)
 Proof of negligence in bailment cases
 Bailor not required to prove that bailee
was negligent
 Bailor need only prove:
 delivery to bailee
 acceptance by bailee
 failure to return property or return of
property in damaged condition
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Bailment
(continued)
 Items inside bailed property
 Bailment of property inside exists if
bailee could reasonably anticipate
property would be inside
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Bailment
(continued)
 Rules particular to cars
 Taking care of cars is a great
responsibility
 Disclaimers of liability on signs or
receipts not effective
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Bailment
(continued)
 Significance of a car key
 If driver keeps possession of key, she
has not delivered possession of
property—no bailment exists
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Liability for a Patron’s Property in a
Restaurant, Bar, or Cloakroom
 Only portion of limiting statutes that
apply covers no-fee checkrooms
where customer is given a receipt for
checked property
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Constructive Bailment
 Bailment created by law as a result of
special circumstances rather than by
agreement between the parties
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Checkrooms
 Bailment is created between customer who
leaves property with checkroom attendant and
the facility
 Attendant accepts garments and issues a receipt
 Limiting liability laws cover attended checkrooms
and baggage rooms
 If checkroom is unattended, limiting liability
statutes do not apply
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Concessionaires
 Independent contractor who operates
a checking facility
 Usually concessionaire pays hotel a
fee
 Concessionaire is not entitled to
benefits of statutes designed to
protect innkeepers and restaurateurs
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