Question 1

The notion of an "inherent vice" is a defence.

Accepted Answer

A) True 
 B)False  True

Question 2

A sends a package valued at $400.00 to B by means of the courier company X Co.In the contract between A and X Co.,there is a limitation of liability clause that limits X Co.'s liability for damage or loss caused to the goods by any reason whatsoever,including the negligence of X Co.and/or its employees,to $20.00.When the goods reach B,they are damaged.If A sues X Co.for the full $400.00

Accepted Answer

A) A will not succeed because the limitation of liability clause is effective to reduce A's damages to $20.00. 
B) A will not succeed because A cannot prove that X Co.or its employees were negligent. 
C) A will succeed because X Co.is a private carrier. 
D) A will succeed because X Co.has a very high standard of care. 
E) A will succeed because the court will strike out the limitation of liability clause. 
A) A will not succeed because the limitation of liability clause is effective to reduce A's damages to $20.00. 
B) A will not succeed because A cannot prove that X Co.or its employees were negligent. 
C) A will succeed because X Co.is a private carrier. 
D) A will succeed because X Co.has a very high standard of care. 
E) A will succeed because the court will strike out the limitation of liability clause. A

Question 3

Marie drove her car to a parkade.The attendant took her keys,saying that he would park the vehicle and that he needed the keys because the vehicle might be required to be moved.In the parkade,vehicles were parked in two tiers.To remove a vehicle from the second tier,it was necessary to move the vehicle immediately in front of it in the first tier.Marie paid for the parking and was given a ticket with her vehicle licence number written on it.At the entrance to the parkade,two signs were prominently displayed,one requesting that the conditions on the ticket be read and the other stating that the car with its contents were left at the owner's risk.The conditions on the ticket repeated that the car was parked at the owner's risk and that charges were only for parking space use and that the parkade assumed no responsibility for loss through fire,theft,collision,or otherwise to the car or its contents,whether due to the parkade's negligence or otherwise.During the day Marie's vehicle was temporarily parked on the street immediately in front of the parkade to accommodate the removal of several vehicles.The attendant threw the keys under the front seat and left the car unlocked.The vehicle was stolen and never recovered.Marie said she did not see the signs nor read the conditions on the ticket.Identify the issues raised by these facts.Should Marie succeed in an action against the parkade?

Accepted Answer

Marie should succeed in the action.The issues are whether a bailment was created and what the is effect of the disclaimers in the signs and ticket.A bailment for value was created,for the storage of the vehicle.A bailee for value is expected to take the same care of the goods as a prudent and diligent person should of goods belonging to those with whom it transacts business-a standard of care that is at least as high and probably higher than it might choose to apply to its own goods.The loss of the vehicle resulted from the parkade's failure to meet the required standard of care.Due to the prominence of the signs,an alert person should have seen them.However,these disclaimers would not be sufficient to relieve the parkade of its vicarious responsibility arising from the negligence of its employee.

Question 4

If goods are damaged while in the possession of a bailee,the bailee is strictly liable.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is TRUE regarding bailments?

Accepted Answer

A) A change of ownership does not occur; the bailee is only putting his or her property in the bailor's custody. 
B) The courts want to keep contracts alive,so they will often rescind a bailment. 
C) Under a bailment arrangement,there can arise a time when the possessor can sell the goods against the owner's wishes. 
D) If Sally were suing her dry cleaners for the loss of her coat,Sally must prove that the dry cleaners were negligent. 
E) John put his house under the care of a neighbour until he returns from vacation.For John to take custody of it again is an example of a bailment. 
A) A change of ownership does not occur; the bailee is only putting his or her property in the bailor's custody. 
B) The courts want to keep contracts alive,so they will often rescind a bailment. 
C) Under a bailment arrangement,there can arise a time when the possessor can sell the goods against the owner's wishes. 
D) If Sally were suing her dry cleaners for the loss of her coat,Sally must prove that the dry cleaners were negligent. 
E) John put his house under the care of a neighbour until he returns from vacation.For John to take custody of it again is an example of a bailment.

Question 6

Under the rules of what general area of law is there a duty imposed on all bailees to take care of property bailed to them?

Accepted Answer

All bailees are under a duty b

Question 7

A reason to sue for breach of a contract of bailment rather than for negligence is that in a contract of bailment

Accepted Answer

A) the bailee must disprove negligence. 
B) no limitation clause will protect the bailee against liability for damage to the goods. 
C) the bailee is strictly liable for any damage to the goods. 
D) the bailee owes the bailor a higher standard of care. 
E) all of the above 
A) the bailee must disprove negligence. 
B) no limitation clause will protect the bailee against liability for damage to the goods. 
C) the bailee is strictly liable for any damage to the goods. 
D) the bailee owes the bailor a higher standard of care. 
E) all of the above

Question 8

A work associate leaves his bike each day in your garage while both of you commute to work in your car.(This associate pays $5 per day for riding in your car.)One day the bike is stolen out of your locked garage.Are you responsible for the loss of this bike?

Accepted Answer

A) No,you are not,because you met the standard of care required. 
B) No,you are not,because your work associate automatically assumed this risk. 
C) No,you are not,since it was gratuitous bailment with a low standard of care. 
D) Yes,you are,because your home owner's insurance will pay for it. 
E) Yes,you are,since it was stolen from your property. 
A) No,you are not,because you met the standard of care required. 
B) No,you are not,because your work associate automatically assumed this risk. 
C) No,you are not,since it was gratuitous bailment with a low standard of care. 
D) Yes,you are,because your home owner's insurance will pay for it. 
E) Yes,you are,since it was stolen from your property.

Question 9

Use the fact situation above to answer the question. Using the fact situation above,assume that just after B,the dealer,enters into the lease agreement with A,he assigns the lease to a financing company,which gives notice to A to make all payments to the company until the price has been paid in full,at which time the company will transfer the car to A.In this case,the lease is best described as

Accepted Answer

A) a security lease. 
B) a finance lease. 
C) an operating lease. 
D) a hire-purchase agreement. 
E) an agreement of purchase and sale. 
A) a security lease. 
B) a finance lease. 
C) an operating lease. 
D) a hire-purchase agreement. 
E) an agreement of purchase and sale.

Question 10

What are the bailment rights of the lessee?

Accepted Answer

In the leasing of goods,the lessee is go

Question 11

Common carriers may limit the amount of their liability when the shipper does not declare the value of goods.Usually these terms must be approved by the Canadian Transportation Agency,which has jurisdiction over the common carrier.Discuss the benefit to both the shipper and the common carrier with this arrangement.

Accepted Answer

The common carrier bases its freight cha

Question 12

Regarding bailments,which of the following is TRUE?

Accepted Answer

A) Articles held under bailment form assets available to creditors in bankruptcy. 
B) Bailments are not confined to personal property. 
C) Trusts are bailments because there is a transfer of property. 
D) Chequing accounts at the bank are a form of bailment. 
E) Contents in a safety deposit box are a form of bailment. 
A) Articles held under bailment form assets available to creditors in bankruptcy. 
B) Bailments are not confined to personal property. 
C) Trusts are bailments because there is a transfer of property. 
D) Chequing accounts at the bank are a form of bailment. 
E) Contents in a safety deposit box are a form of bailment.

Question 13

Quincy owns a metal fabricating company.He is desperately in need of working capital in order to carry out several large orders.Therefore he sells his heavy stamping equipment to Beneficial Leasing Inc.in a five-year purchase lease plan.This arrangement amounts to

Accepted Answer

A) a sale and leaseback. 
B) an operating lease. 
C) the mortgaging of assets. 
D) the ducktail plan. 
E) one of the highest costs in asset financing. 
A) a sale and leaseback. 
B) an operating lease. 
C) the mortgaging of assets. 
D) the ducktail plan. 
E) one of the highest costs in asset financing.

Question 14

In both chattel leases and bailment,ownership remains with the property owner who gives possession of the property to another for a period of time on the understanding that it will be returned.

Accepted Answer

A) True 
 B)False

Question 15

When can a warehousing firm that has issued a warehouse receipt for goods avoid liability in not returning the exact goods stored?

Accepted Answer

It can avoid liability when th

Question 16

A leases a harvesting machine from B to be used during the harvesting season in Ontario,which is from the beginning of August to the end of September.In this case,the lease is best described as

Accepted Answer

A) a financing lease. 
B) an operating lease. 
C) a purchase or capital lease. 
D) a hire-purchase agreement. 
E) none of the above 
A) a financing lease. 
B) an operating lease. 
C) a purchase or capital lease. 
D) a hire-purchase agreement. 
E) none of the above

Question 17

A bailor is better off on the insolvency of its bailee than a creditor is on the insolvency of its debtor.

Accepted Answer

A) True 
 B)False

Question 18

Rex,a licensed contractor,rented a heavy duty brush cutter from YouRentAll Inc.Within the first few minutes of use,the blade came off and extensively damaged the shroud and housing of the machine.It was determined that the bolts that held the blade on were left loose by some previous user.YouRentAll sued Rex for the repair costs,claiming Rex should have checked out the machine before using.Assuming the lease contract did not speak to this type of situation,how would the court rule?

Accepted Answer

A) The plaintiff would win,since there is an implied condition here. 
B) The defendant would win,since there is an implied warranty of fitness. 
C) The plaintiff would win,since they are in the business of renting chattels. 
D) The defendant would win,because lessor needs to take care of all repairs. 
E) The plaintiff would win,because proper standard of care was not shown. 
A) The plaintiff would win,since there is an implied condition here. 
B) The defendant would win,since there is an implied warranty of fitness. 
C) The plaintiff would win,since they are in the business of renting chattels. 
D) The defendant would win,because lessor needs to take care of all repairs. 
E) The plaintiff would win,because proper standard of care was not shown.

Question 19

Marcus rented some scaffolding to aid in replacing the siding of his house.This type of lease would be referred to as

Accepted Answer

A) an operating lease. 
B) a security lease. 
C) a capital lease. 
D) a performing lease. 
E) a functioning lease. 
A) an operating lease. 
B) a security lease. 
C) a capital lease. 
D) a performing lease. 
E) a functioning lease.

Question 20

The transfer of possession of personal property without a transfer of ownership is referred to legally as bailment.Which of the following is NOT considered a type of bailment?

Accepted Answer

A) gratuitous bailment for the benefit of bailee 
B) bailment for value (contractual bailment) 
C) bailment for negligence (tort bailment) 
D) gratuitous bailment for the benefit of the bailor 
E) sub-bailment 
A) gratuitous bailment for the benefit of bailee 
B) bailment for value (contractual bailment) 
C) bailment for negligence (tort bailment) 
D) gratuitous bailment for the benefit of the bailor 
E) sub-bailment

Exam 15: Bailment and Leasing

The notion of an "inherent vice" is a defence.

If goods are damaged while in the possession of a bailee,the bailee is strictly liable.

Which of the following is TRUE regarding bailments?

Under the rules of what general area of law is there a duty imposed on all bailees to take care of property bailed to them?

A reason to sue for breach of a contract of bailment rather than for negligence is that in a contract of bailment

A work associate leaves his bike each day in your garage while both of you commute to work in your car.(This associate pays $5 per day for riding in your car.)One day the bike is stolen out of your locked garage.Are you responsible for the loss of this bike?

What are the bailment rights of the lessee?

Regarding bailments,which of the following is TRUE?

Quincy owns a metal fabricating company.He is desperately in need of working capital in order to carry out several large orders.Therefore he sells his heavy stamping equipment to Beneficial Leasing Inc.in a five-year purchase lease plan.This arrangement amounts to

In both chattel leases and bailment,ownership remains with the property owner who gives possession of the property to another for a period of time on the understanding that it will be returned.

When can a warehousing firm that has issued a warehouse receipt for goods avoid liability in not returning the exact goods stored?

A leases a harvesting machine from B to be used during the harvesting season in Ontario,which is from the beginning of August to the end of September.In this case,the lease is best described as

A bailor is better off on the insolvency of its bailee than a creditor is on the insolvency of its debtor.

Marcus rented some scaffolding to aid in replacing the siding of his house.This type of lease would be referred to as

The transfer of possession of personal property without a transfer of ownership is referred to legally as bailment.Which of the following is NOT considered a type of bailment?

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

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Creditors Rights

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