Exam 16: Personal Property: Bailment and Insurance

Dominion Carriage Inc (DCI) is a common carrier.In exchange for payment of a price, it agreed to transport Milo's widgets from Halifax to Vancouver.DCI's ship was to head south along America's east coast, pass through the Panama Canal, and then head north along America's west coast.The goods unfortunately were damaged en route.Because he has suffered a loss of $100 000, Milo has sued.DCI seeks to avoid or limit liability on various grounds.Which of the following statements is most likely to be TRUE?

Tamika rented a warehouse from Lester.During the life of the lease, she attached shelves along the interior walls.The lease has expired.Each party claims to own the shelves, which are still in place.In deciding the case, a judge would be MOST influenced by

A bailment was created between Owen and Padma.The bailment involved the storage of a widget for 12 months.The price for storage was $1000 per month.At the end of the year, only $5000 had been paid in total.The widget was worth $10 000.It was sold for that amount under a lien and right of sale.Ignoring the costs associated with the enforcement of the lien and the right of sale, when the sale proceeds are distributed, the bailee will be entitled to receive

Because he was new to the city, Pierce was looking for a house to buy.After seeing an "Open House" sign on the lawn of a lovely bungalow, he stopped and took a tour through the property.Just as Pierce got to the backyard, Quincy (the owner) pointed at the in-ground pool and said, "We are, of course, taking that with us." Pierce laughed.He laughed alone, but he simply assumed that Quincy has a very dry sense of humour.Impressed with what he saw, Pierce bought the house.When the sale closed and Pierce took possession, however, he was horrified to discover that the backyard consisted of a huge excavation site.The pool was gone.It seems that Quincy wasn't joking after all.Which of the following statements is most likely to be TRUE?

Thomas owns a manufacturing system worth $200 000.He purchased $90 000 worth of property insurance from Prairie Insurance Co.That policy contains a co-insurance clause that requires 90 percent coverage.A fire recently damaged Thomas's manufacturing system.How much is Prairie Insurance Co required to pay to him if the fire damage is assessed at $100 000? What if it is assessed at $200 000?

Solace Insurance Company (SIC) sold an insurance policy to Kelly.As a result of certain events, the concept of subrogation has become relevant.This most likely means that

Identify and briefly explain three reasons why property insurance very often does not provide full indemnification, in the sense that it does not provide the insured with enough money to buy a replacement for a lost or destroyed piece of property.

Melanie brought a box full of old clothes to Second Hand Duds (SHD).SHD agreed to sell the clothes on consignment.This means that

The creation of a bailment requires proof that

Every night for two weeks, a cat hung around Xavier's back door.Since the cat did not seem to have a home, Xavier decided to keep it.Which of the following is most likely to be TRUE?

A bailee is always entitled to exercise a right of sale if a bailor does not pay a price associated with a bailment relationship.

Adrienne wanted to place her jewels, which were valued at $100 000, in safe storage while she was on vacation.For that purpose, she gave them to Saul, a jeweler.Since Saul did not actually have safekeeping facilities, he gave Adrienne's jewels to Jeannie.Since Jeannie did not have safekeeping facilities either, she simply placed the jewels in her desk drawer.The jewels were stolen from that drawer by an unknown thief.The evidence indicates that Saul knew that Jeannie did not have proper safekeeping facilities.Adrienne had the jewels fully insured against loss or theft under a policy that she purchased from Rideau Insurance Co.Saul has liability insurance that he bought from Wellington Insurance Ltd, but Jeannie does not have any insurance.The evidence indicates that both Saul and Jeannie acted carelessly.Which of the following statements is most likely to be TRUE?

Erin owns and operates a computer design business that employs 20 people.She recently purchased business interruption insurance and key person insurance.What was her likely purpose in doing so?

Kiran placed a widget with Laila under the terms of a bailment.The widget was lost while it was in Laila's possession.The burden of proof may shift, so that Laila is required to prove that the loss was not her fault, even if she was not a common carrier.

"The acquisition of personal property always involves the intention of at least two people." Is this statement true? Explain your answer by using examples.

William owned a factory that was burned to the ground as a result of Jefferson's negligence.Happily, William had purchased first-party coverage from Clinton Insurance Corp (CIC).Which of the following statements is most likely to be TRUE?

Raja gave a widget to Northwest Storage.Under the terms of the parties' contract, Northwest Storage was required to safely store the widget from October to April, and to then return it to Raja.The widget was in excellent condition when Raja delivered it to Northwest Storage, but it was badly damaged upon its return.A court has held that, on the facts, the burden of proof will be shifted.What does that mean? Which party will the court's decision favour? What is the policy justification for shifting the burden of proof?

In determining whether or not a chattel has become affixed, a court is usually most influenced by the value of the chattel.

"Property law, like nature, abhors a vacuum.Consequently, property rights that are lost by one party are always acquired by another party." Is this statement true? Explain your answer by using examples.

The word "bailment" is derived from words that mean "to pay for the release" in French.