Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Zelig owns a widget worth $25 000.He purchased property insurance from Superior Insurance Co.The widget was irreparably damaged as a result of an accident that was caused by Zoe.Zoe has a liability insurance policy from Erie Insurance Co.Which of the following statements is TRUE?

Accepted Answer

A) Zelig cannot claim a benefit from Superior Insurance Co unless Zoe caused the accident in a way that exposed her to liability in tort. 
B) If it is required to pay a benefit of $25 000 to Zelig,Superior Insurance Co can claim the same amount of money from Erie Insurance Co even if Zoe could not be held liable to Zelig for damaging the widget. 
C) If Superior Insurance Co sues Zoe,it will do so on the basis of the concept of contribution. 
D) The concept of subrogation means that if Zelig successfully sues Zoe in tort,she will be able to claim a benefit from Superior Insurance Co. 
E) If Superior Insurance Co pays a benefit to Zelig,it will be entitled to exercise subrogated rights against Zoe. 
A) Zelig cannot claim a benefit from Superior Insurance Co unless Zoe caused the accident in a way that exposed her to liability in tort. 
B) If it is required to pay a benefit of $25 000 to Zelig,Superior Insurance Co can claim the same amount of money from Erie Insurance Co even if Zoe could not be held liable to Zelig for damaging the widget. 
C) If Superior Insurance Co sues Zoe,it will do so on the basis of the concept of contribution. 
D) The concept of subrogation means that if Zelig successfully sues Zoe in tort,she will be able to claim a benefit from Superior Insurance Co. 
E) If Superior Insurance Co pays a benefit to Zelig,it will be entitled to exercise subrogated rights against Zoe.

Question 3

Eleni owns and operates a restaurant.During the winter months,it is inappropriate for diners to bring their coats with them to their table.Eleni therefore provides a place for coats to be placed or hung.Does that arrangement necessarily involve a bailment? Is some other arrangement possible? What is the significance of classifying the arrangement as a bailment,rather than something else? Explain your answer,and identify any additional facts that are required before the question can be conclusively answered.

Accepted Answer

This question requires students to disti

Question 4

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?

Accepted Answer

A common carrier is a business that offe

Question 5

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

Accepted Answer

A) If Acme Corp intentionally abandons the widget,you will be entitled to keep it for yourself only if you take possession of it without actual knowledge that it had been abandoned. 
B) If a thief steals the widget and sells it to you,Acme Corp can sue you for the tort of conversion,unless you acted honestly. 
C) If Acme Corp loses the widget,and you find it but are unable to determine its true owner,you will be able to sue me for the tort of conversion if I forcibly take it from you. 
D) If you take the widget in the reasonable belief that it belongs to you,Acme Corp will not be able to sue you for the tort of conversion. 
E) If Acme Corp created the widget,then the widget will not have an owner unless and until someone buys it from the company. 
A) If Acme Corp intentionally abandons the widget,you will be entitled to keep it for yourself only if you take possession of it without actual knowledge that it had been abandoned. 
B) If a thief steals the widget and sells it to you,Acme Corp can sue you for the tort of conversion,unless you acted honestly. 
C) If Acme Corp loses the widget,and you find it but are unable to determine its true owner,you will be able to sue me for the tort of conversion if I forcibly take it from you. 
D) If you take the widget in the reasonable belief that it belongs to you,Acme Corp will not be able to sue you for the tort of conversion. 
E) If Acme Corp created the widget,then the widget will not have an owner unless and until someone buys it from the company.

Question 6

A person may have an insurable interest in a piece of property even if they do not own that property.

Accepted Answer

A) True 
 B)False

Question 7

A cat continually comes to Xavier's back door,so he decides to keep it.Which of the following is true?

Accepted Answer

A) If the cat belongs to someone else,Xavier has no property rights. 
B) Xavier has property rights as long as the cat doesn't have any tags. 
C) If the cat belongs to someone else,Xavier has rights over the cat effective against everyone but the original owner. 
D) Xavier has rights over the cat under the rule of finders keepers,losers weepers. 
E) Xavier cannot have property rights over a living thing. 
A) If the cat belongs to someone else,Xavier has no property rights. 
B) Xavier has property rights as long as the cat doesn't have any tags. 
C) If the cat belongs to someone else,Xavier has rights over the cat effective against everyone but the original owner. 
D) Xavier has rights over the cat under the rule of finders keepers,losers weepers. 
E) Xavier cannot have property rights over a living thing.

Question 8

Pavel found a ring that Jacinta had lost.Does a true bailment exist while the ring is in Pavel's possession? Explain your answer.

Accepted Answer

A True bailment is premised upon three c

Question 9

Kieran owns a factory that burns down because Jefferson is negligent.Kieran is fully insured and is limited to indemnification.Which of the following is true?

Accepted Answer

A) Kieran can sue Jefferson for negligence. 
B) Kieran is not covered because his factory burned down because of a negligent act. 
C) Jefferson will not be liable to anyone because the insurance company covers the loss. 
D) The insurance company may bring an action against Jefferson. 
E) Kieran may be subject to a co-insurance clause. 
A) Kieran can sue Jefferson for negligence. 
B) Kieran is not covered because his factory burned down because of a negligent act. 
C) Jefferson will not be liable to anyone because the insurance company covers the loss. 
D) The insurance company may bring an action against Jefferson. 
E) Kieran may be subject to a co-insurance clause.

Question 10

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.

Accepted Answer

A) True 
 B)False

Question 11

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?

Accepted Answer

A) The bailor is treated as an insurer. 
B) HTC may be held liable only if there is proof that it was at fault. 
C) Given the nature of the parties' relationship,HTC cannot be protected by an exclusion clause. 
D) HTC cannot be considered a common carrier if it occasionally turns away business because it lacks space. 
E) If Rohan's goods are covered by first party insurance,his insurer may eventually be entitled to receive money from HTC. 
A) The bailor is treated as an insurer. 
B) HTC may be held liable only if there is proof that it was at fault. 
C) Given the nature of the parties' relationship,HTC cannot be protected by an exclusion clause. 
D) HTC cannot be considered a common carrier if it occasionally turns away business because it lacks space. 
E) If Rohan's goods are covered by first party insurance,his insurer may eventually be entitled to receive money from HTC.

Question 12

Trans-Man Shipping,which is based in Winnipeg,offered to deliver "anything,anywhere anytime." Rosie entered into a contract with Trans-Man 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,Trans-Man 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?

Accepted Answer

A) Trans-Man Shipping can be held liable only if it deliberately or carelessly damages the phonograph. 
B) If one insurance company is compelled to pay a benefit,the other could not possibly be compelled to pay a benefit. 
C) Rosie purchased a third party insurance policy. 
D) Trans-Man Shipping acted as a bailor. 
E) The Pas Insurance Company sold a first part insurance policy. 
A) Trans-Man Shipping can be held liable only if it deliberately or carelessly damages the phonograph. 
B) If one insurance company is compelled to pay a benefit,the other could not possibly be compelled to pay a benefit. 
C) Rosie purchased a third party insurance policy. 
D) Trans-Man Shipping acted as a bailor. 
E) The Pas Insurance Company sold a first part insurance policy.

Question 13

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 bailor will be entitled to receive

Accepted Answer

A) $1000. 
B) $3000. 
C) $7000. 
D) $10 000. 
E) $12 000. 
A) $1000. 
B) $3000. 
C) $7000. 
D) $10 000. 
E) $12 000.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Anna wanted goods moved from Vancouver to Halifax.For that purpose,she gave them to Boris,who operates an independent trucking business.When Boris reached Winnipeg,his truck broke down.To fulfill his contract with Anna,he gave possession of the goods to Carl,with instructions to deliver them to Halifax.The goods were destroyed while they were in Carl's possession.Which of the following statements is TRUE?

Accepted Answer

A) If Anna did not consent to Carl's possession of the goods,Boris can successfully sue Carl and retain the damages for himself. 
B) If Anna consented to Carl's possession of the goods,she can successfully sue him even if he had no way of knowing that the goods belonged to someone other than Boris. 
C) If Boris and Carl are both common carriers,Boris will be treated as an insurer,but Carl will not,because only Boris dealt directly with Anna. 
D) If the contract between Boris and Carl contained an exclusion clause,there is no way that Anna can be bound by it. 
E) Even though he did not own the property,Boris may sue Carl,but if the court awards damages,then Boris must receive that money on behalf of Anna. 
A) If Anna did not consent to Carl's possession of the goods,Boris can successfully sue Carl and retain the damages for himself. 
B) If Anna consented to Carl's possession of the goods,she can successfully sue him even if he had no way of knowing that the goods belonged to someone other than Boris. 
C) If Boris and Carl are both common carriers,Boris will be treated as an insurer,but Carl will not,because only Boris dealt directly with Anna. 
D) If the contract between Boris and Carl contained an exclusion clause,there is no way that Anna can be bound by it. 
E) Even though he did not own the property,Boris may sue Carl,but if the court awards damages,then Boris must receive that money on behalf of Anna.

Question 16

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

Accepted Answer

A) SHD accepted the clothes as payment of a debt that Melanie owed to it. 
B) SHD has become a bailor. 
C) Melanie will own the clothes until they are sold by SHD to a customer. 
D) Melanie must be an employee of SHd. 
E) SHD became an owner with a defeasible title. 
A) SHD accepted the clothes as payment of a debt that Melanie owed to it. 
B) SHD has become a bailor. 
C) Melanie will own the clothes until they are sold by SHD to a customer. 
D) Melanie must be an employee of SHd. 
E) SHD became an owner with a defeasible title.

Question 17

Taj borrowed a widget from Dhanna.Even though the relationship was a bailment,rather than a sale,both Taj and Dhanna may be required to exercise "reasonable care" in some sense.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) he bought it from a thief in the honest belief that the thief was the true owner. 
B) he found the ring while trespassing on private property. 
C) he stole it. 
D) he found it on public property and the true owner cannot be located. 
E) he received it as a gift,but only if the person who gave it to him had previously acquired it by purchase. 
A) he bought it from a thief in the honest belief that the thief was the true owner. 
B) he found the ring while trespassing on private property. 
C) he stole it. 
D) he found it on public property and the true owner cannot be located. 
E) he received it as a gift,but only if the person who gave it to him had previously acquired it by purchase.

Question 19

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

Accepted Answer

A) subrogation. 
B) co-insurance. 
C) contribution. 
D) deductible. 
E) fidelity. 
A) subrogation. 
B) co-insurance. 
C) contribution. 
D) deductible. 
E) fidelity.

Question 20

Which of the following statements is TRUE with respect to sub-bailments?

Accepted Answer

A) Because of the doctrine of privity,it is possible to have a sub-bailment,but not a sub-sub-bailment. 
B) A sub-bailment must be contractual in origin. 
C) A sub-bailment can occur with the bailor's implied or express consent. 
D) A sub-bailee is always considered an insurer for the purposes of the standard of care. 
E) Every person who is a bailor must also be a bailee. 
A) Because of the doctrine of privity,it is possible to have a sub-bailment,but not a sub-sub-bailment. 
B) A sub-bailment must be contractual in origin. 
C) A sub-bailment can occur with the bailor's implied or express consent. 
D) A sub-bailee is always considered an insurer for the purposes of the standard of care. 
E) Every person who is a bailor must also be a bailee.

Exam 17: Personal Property: Bailment and Insurance

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

Zelig owns a widget worth $25 000.He purchased property insurance from Superior Insurance Co.The widget was irreparably damaged as a result of an accident that was caused by Zoe.Zoe has a liability insurance policy from Erie Insurance Co.Which of the following statements is TRUE?

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

A person may have an insurable interest in a piece of property even if they do not own that property.

A cat continually comes to Xavier's back door,so he decides to keep it.Which of the following is true?

Pavel found a ring that Jacinta had lost.Does a true bailment exist while the ring is in Pavel's possession? Explain your answer.

Kieran owns a factory that burns down because Jefferson is negligent.Kieran is fully insured and is limited to indemnification.Which of the following is true?

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.

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?

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

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

Taj borrowed a widget from Dhanna.Even though the relationship was a bailment,rather than a sale,both Taj and Dhanna may be required to exercise "reasonable care" in some sense.

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

Which of the following statements is TRUE with respect to sub-bailments?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Special Contracts: Negotiable Instruments

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

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