Exam 16: Personal Property: Bailment and Insurance

Tara operates a small computer design business.Her primary asset is her computer system, which she bought four years ago for $25 000.She bought property insurance with respect to that machine.Tara's computer was recently stolen.Her insurance policy covers loss by theft and the insurance company admits that it must pay a benefit to Tara.The concept of indemnification necessarily means that Tara will receive either $25 000 or the price of a new computer that is at least as good as her old computer was when it was new.

A bailment relationship was created between Vijay and Amanda.It was intended to last for two weeks.That period has expired.Amanda now claims that she is entitled to exercise a lien.Which of the following statements is most likely to be TRUE?

Rohan created a bailment by providing goods to Hi-way Transport Co (HTC), which is a common carrier.The goods were damaged during the bailment.Which of the following statements is TRUE?

Acme Corp owns an expensive widget.Which of the following statements is TRUE?

Katarina is interested in the possibility of establishing a business that delivers goods.She has heard, however, that as a matter of risk management, she should avoid becoming a "common carrier." What is a common carrier? What special risks are associated with being a common carrier? What is the policy justification for those risks?

Chasya rented a widget from Alec.During the rental period, the widget was involved in an accident.Which of the following statements is TRUE?

A court has determined that Geo-Trans Ltd is a common carrier.Because of that special status, the Canada Transport Commission will prevent Geo-Trans Ltd from inserting any exclusion clauses into the contracts that it uses with its customers.

Gamma Ltd owns a widget.It purchased property insurance from Atlantic Insurance Co.The widget was recently destroyed by a fire.It was worth $75 000, and it will cost that much to replace it.Both parties agree that that loss falls within the terms of the policy.Nevertheless, a dispute has arisen regarding a $5000 deductible.That most likely means that

Which of the following statements is TRUE?

As defined in Chapter 16, a "licence"

Which of the following statements is most likely to be TRUE with respect to insurance?

Theta Ltd owned a widget worth $50 000.It purchased "full coverage" property insurance from Atlantic Insurance Co.It also bought "full coverage" property insurance from Pacific Insurance Co.The widget was destroyed by a fire.Theta Ltd received a $50 000 benefit from Atlantic Insurance Co.Atlantic Insurance Co has now sued Pacific Insurance Co.The best explanation for that action lies in the concept of

Alameda owned a painting.The painting was totally destroyed in a fire.The law will say that he lost his property rights in the painting even if he has first party insurance.

Surinder rented a boat from Aqua Inc.Is the parties' relationship better described as a sale or as a bailment? Explain your answer.

Gig Shipping, which is based in Winnipeg, offered to deliver "anything, anywhere anytime." Rosie entered into a contract with Gig Shipping to send an antique phonograph from Portage La Prairie to Brockville.The phonograph was lost in transit.Rosie claimed the value of the phonograph under a policy that she had purchased from The Pas Insurance Co.Despite the loss, Gig Shipping feels protected from the effects of liability by a policy that it purchased from Brandon Insurance Co.Which of the following statements is most likely TRUE?

Naomi owned an inventory of widgets worth $100 000.She purchased $40 000 worth of property insurance from Huron Insurance Co.That policy contained a co-insurance clause that required at least 80 percent coverage.A flood caused extensive damage to Naomi's widgets.Naomi will be entitled to receive a benefit of $20 000 if the flood caused damage worth

Kalinda parked her car on Dev's land.In deciding whether the parties have created a licence, rather than a bailment, a court would look exclusively at the price (if any) that Dev charged Kalinda.If the price was above market value, a bailment was created.Otherwise, a licence was created.

Before she left for a one-month trip to Europe, Inez asked her brother, Edgar, if she could park her car on his driveway.When he said "yes," she gave him her keys, but told him that no one was allowed to drive the vehicle under any circumstances.She also said that she would collect the car as soon as she returned home.A judge most likely would find that Inez created

Pan-Canada Delivery Inc is a common carrier.It accidentally damaged an expensive shipment of goods.Nevertheless, it cannot possibly be held liable if

Chiko has possession of a ring.He is entitled to keep it if