Exam 17: Leasing and Bailment

Common carriers are practically insurers for the goods they carry. Consolidated Shipping is a common carrier and is transporting two new ferry guidance systems to Singapore. During the shipping, both were damaged by corrosion. It was determined that the cause was "inadequate packaging". Is the carrier liable for these damages?

Identify the statement that correctly sets out the common carriers' liability for fire.

Lila gives her watch to Josh for repair. Josh has Lila sign a work order that says that Josh's maximum liability in case the watch is lost or damages will be $100. Josh is unable to repair the watch himself, and so takes it to Fritz who specializes in repair of watches of this type. Unfortunately Fritz dropped the watch down a heating duct, and it cannot be found. The value of the watch was $2000. Fritz has offered to pay Lila $100, but she claims he is responsible for the value of the watch. Is she correct?

Identify which three of the following statements are FALSE.

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

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 check out the machine before using. Assuming the lease contract did not speak to this type of situation, how would the court rule?

If an unpaid bailee loses his lien on bailed goods, which would he be wisest to sue for?

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

According to your text, leasing has become a common alternative to purchasing on credit; in business probably more than 25% of capital equipment is being leased. How do you explain this phenomenon?

A gratuitous bailment is one where one party pays a nominal fee or gratuity, as consideration for the other keeping personal property.

Fruitland Packing Co. has a lien on 2,000 boxes of apples. The bailor has become insolvent and can't pay the charges. What rights does Fruitland have regarding the apples?

Bailment is the transfer or deposit of personal property such that the party to whom the property is transferred becomes the owner.

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

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 Transport Commission that has jurisdiction over the common carrier. Discuss the benefit to both the shipper and the common carrier with this arrangement.

What defences are available to a common carrier to avoid liability against a bailor whose goods were damaged when in the possession of the common carrier?

An example of a gratuitous bailment for the benefit of the bailee would be

Provide one example of a gratuitous bailment and one example of a bailment for value.

His responsibilities are to take reasonable care of the goods, to do the required work in the time promised, not to charge for any unauthorised work (like installing new parts when not needed), and to possess the skills he claims to have:

Bailment

Temporary custody of a car belonging to a friend who has no garage and is going away on a business trip, is an example of