Deck 20: The Law of Bailment

Question 1

When a bailor's goods are not returned or are returned in a damaged condition

A) the bailor must satisfy the court that the standard of care fixed for the bailment was not maintained.
B) the bailor must prove that a bailment existed and show his loss.
C) the bailee's liability will be limited by the existence of an exemption clause which is brought to the bailor's attention before the bailment is completed.
D) a bailee will not be liable if it was a gratuitous bailment as there was no consideration in the arrangement.
E) All of the responses are correct.

Answer 1

B

Question 2

Perishable goods were carried by a common carrier. The goods arrived in an unsaleable condition because a bridge was washed out by flooding during transport. The occurrence was in no way foreseeable or avoidable by the bailer. The bailee will be required to

A) pay nothing because the event was unforeseeable.
B) compensate for the value of the goods because it was a bailee for reward.
C) compensate for the value of the goods because he is, in fact, an insurer.
D) None of the responses are correct.

Answer 2

C

Question 3

The following are types of bailments for which a bailee is required to protect the goods from foreseeable harm:

A) gratuitous bailment.
B) bailment for reward.
C) bailment for the benefit of the bailee and the bailor.
D) bailment for reward and bailment for the benefit of the bailee and the bailor.
E) All of the responses are correct.

Answer 3

E

Question 4

The transfer of securities by a debtor to a creditor as security for the payment of a debt is known as

A) carriage of goods.
B) a pledge.
C) a pawn.
D) bailment.

Question 5

Magda was on a ski trip and staying at the Alpine Lodge, a bed and breakfast. To prevent damage to the rooms, the Alpine Lodge did not allow skis in the guest rooms. It provided a ski rack outside the front doors where the guests were required to store them. No extra fee was charged. Guests were provided with complimentary locks. What type of bailment is this?

A) Gratuitous bailment
B) Bailment for reward
C) Storage of goods
D) Warehouse storage

Question 6

The parking garage in Hana's office building offers a valet parking service at no extra charge for customers in a hurry. The customer leaves the car with the keys in it just outside the attendant's booth. The attendant then parks the car somewhere in the garage and retains the keys until the customer returns. If a car is damaged after it is parked by the valet attendant,

A) there is no liability because the valet service is a mere adjunct of the garage's principal business of renting parking spaces to patrons, and most park their own cars.
B) there is no liability because the free valet service is a gratuitous bailment and the garage operator would only be liable for gross negligence.
C) the garage operator is liable because a true bailment exists.
D) the garage operator's liability would be limited to the cost of the parking if a large red sign explaining the limitation is posted at the payment booth.
E) the car owner is liable.

Question 7

A bailee for reward

A) has a duty to protect the goods from theft.
B) has a duty to use all reasonable care in respect of the goods while in its possession.
C) will not be found liable where the goods are damaged or lost without evidence of fault on behalf of the bailee.
D) has a duty to protect the goods from theft and has a duty to use all reasonable care in respect of the goods while in its possession.
E) All of the responses are correct.

Question 8

Don loans his jet ski to his friend Sasha for the weekend. While driving to the lake the jet ski fell off the trailer and was badly damaged. Don loaded the jet ski on the trailer. Who is liable for the damage?

A) Don, as bailor.
B) Don, as he was negligent in loading the jet ski.
C) Sasha, as the bailee.
D) None of the responses are correct.

Question 9

Barton boarded a large commercial aircraft at Kingston for a flight to Toronto. He placed his coat on the seat beside him but was told by the flight attendant to place his coat on the shelf above his seat. He did so, but at the end of the flight, left the plane without taking his coat with him. He later realized that he did not have his coat and went back to the aircraft to retrieve it. His coat was missing. Barton has no rights against anyone because he failed to take his coat with him when he left the aircraft.

Question 10

Mary takes her engagement ring to Sparkles Jewellers for cleaning and appraisal. She is to pay for the work when she picks up the ring. While the jeweller's back is turned, someone slips behind the counter and steals a number of the boxes containing repaired jewellery, including Mary's ring.

A) Since this is a bailment for reward and the jeweller was negligent, Mary can sue the jeweller successfully.
B) Since Mary has not yet paid the jeweller, this is a gratuitous bailment and he would only be liable if he were grossly negligent.
C) Since the bailment was for Mary's benefit, she cannot sue the jeweller.
D) Since the bailment is not complete until the possession of the ring is returned to Mary, bailment law is not applicable here.
E) If Mary's ring were insured, the insurer would be the only party with any liability to compensate for the loss of the ring.

Question 11

Barton boarded a large commercial aircraft at Kingston for a flight to Toronto. He placed his coat on the seat beside him but was told by the flight attendant to place his coat on the shelf above his seat. He did so, but at the end of the flight, left the plane without taking his coat with him. He later realized that he did not have his coat and went back to the aircraft to retrieve it. His coat was missing. The airline is not liable for Barton's loss, as it never received possession of the coat.

Question 12

Magda was on a ski trip and staying at the Alpine Lodge, a bed and breakfast. The Alpine Lodge did not allow skis in the guest rooms and provided a ski rack outside the front doors where the guests were allowed to store them. Guests were provided with complimentary locks. Who has possession of the skies when they are in the rack?

A) Magda, as the owner still maintains possession as the lodge has no actual knowledge of whose skis are on the rack at a given time.
B) Magda, as she has the ability to unlock the skis.
C) Magda, as the bailor.
D) Alpine Lodge as the bailee.

Question 13

Magda was on a ski trip and staying at the Alpine Lodge, a bed and breakfast. The Alpine Lodge did not allow skis in the guest rooms and provided a ski rack outside the front doors where the guests were allowed to store them. Guests were provided with complimentary locks. Geoff, an employee operates a ski rental business renting out skis from the rack. Can he do this?

A) No, a bailees cannot grant title (via rental) to something he does not own.
B) No, a bailee cannot interfere with a bailor's right of possession.
C) No, a bailee is liable for failing to meet the standard of care for ski storage.
D) No, there is no exculpatory clause on a sign by the ski rack.

Question 14

Once the goods are delivered by the ________ into the charge of the ________, the bailment is ________.

A) bailee; bailor; in existence
B) bailor; bailee; in existence
C) bailee; bailor; completed
D) bailor; bailee; completed
E) None of the responses are correct.

Question 15

The Mobile Garage advertised automobile repairs by "Licensed Mechanics." Lars, a car owner, took his automobile to the Mobile Garage for repairs. The garage owner Fred examined the car and indicated that extensive repairs were required. Lars left his car with Fred who sent the car to ABC Engines Ltd. for specific work. There the repairs were carried out by another licensed mechanic, Rodney, an employee of ABC. Lars paid $1,500 for the repairs, but on his way home discovered that the repairs had been done negligently, and they had ruined the engine.

A) Lars may only sue Rodney, the mechanic that negligently performed the service.
B) The Mobile Garage is liable to Lars under the vicarious performance rule for Rodney's negligence.
C) Money damages awarded by the court would attempt to put Lars in the same position that he would have been in had the contract been properly performed.
D) Lars was entitled to expect that the car would be repaired by Mobile.
E) Lars was entitled to expect that the car would be repaired by Mobile and money damages awarded by the court would attempt to put Lars in the same position that he would have been in had the contract been properly performed.

Question 16

Nelson agreed to store Zarah's canoe for the winter months in a garage that was attached to his house. The next June, Nelson moved the canoe from the garage to a shed at the back of the house, "where it would be safer." The house and shed were later struck by lightning and burned to the ground. Zarah's canoe was destroyed in the fire.

A) The storage of the canoe was a bailment for reward.
B) Nelson's duty was to take special care of the canoe as he is liable for any damage while it is in his possession.
C) Nelson is liable for the loss of the canoe because he moved it from the garage.
D) Nelson is not liable for the loss of the canoe, because it was destroyed by an act of God.
E) Zahrah is liable.

Question 17

An important distinction is that between a bailment and a licence. While a bailment requires the transfer of possession and a common law duty of safekeeping and return, the licence

A) lacks the exclusivity of possession.
B) lacks the responsibility for protection.
C) lacks either or both of the exclusivity of possession and the responsibility for protection.
D) lacks the transfer of possession only.

Question 18

Gord was on a ski trip and staying at the Caker Creek Chalets, a large hotel and cabin complex. To prevent damage to the rooms no skis were allowed in the guest rooms. It provided a ski rack outside the front doors where the guests were required to store them. No extra fee was charged. Guests were provided with complimentary locks. Gord's skis were stolen. Is Caker Creek Chalets liable?

A) Yes, they were the bailee.
B) Yes, they were the bailee and the Innkeepers Act applied.
C) Yes, pursuant to the Innkeepers Act.
D) All of the answers are correct.

Question 19

Barton boarded a large commercial aircraft at Kingston for a flight to Toronto. He placed his coat on the seat beside him but was told by the flight attendant to place his coat on the shelf above his seat. He did so, but at the end of the flight, left the plane without taking his coat with him. He later realized that he did not have his coat and went back to the aircraft to retrieve it. His coat was missing. The airline is liable for the loss of Barton's coat, as it was in possession of the coat at the time it was taken.

Question 20

The transfer of possessions (but not ownership) of chattels by a debtor to a creditor who is licensed to take and hold goods as security for payment of debts is known as

A) bailment.
B) a pledge.
C) a pawn.
D) carriage of goods.

Question 21

Once a plaintiff shows that bailed goods have not been returned to him, he may rely on the principle of res ipsa loquitur.

Question 22

Henry parked his automobile in Allison's Car Park and was requested by the attendant to leave the keys in the car and the car unlocked. Henry received a receipt for the parking which contained the following note on the reverse side of the ticket. "Proprietor of lot will not be responsible for damage to car or contents." A similar sign was located at the entrance to the car parking area. When Henry returned to the lot, he discovered that his car had a damaged front fender. Because Henry did not give the keys to the attendant, there was no transfer of possession, and therefore, no bailment created.

Question 23

Henry parked his automobile in Allison's Car Park and was requested by the attendant to leave the keys in the car and the car unlocked. Henry received a receipt for the parking which contained the following note on the reverse side of the ticket. "Proprietor of lot will not be responsible for damage to car or contents." A similar sign was located at the entrance to the car parking area. When Henry returned to the lot, he discovered that his car had a damaged front fender. The disclaimer of liability on the back of the receipt would not by itself allow the proprietor to avoid liability, unless the notice was brought to Henry's attention before he parked his car.

Question 24

Sandra leaves her car in a commercial parking lot and pockets the keys. She sees a sign that reads "Use of space only-not responsible for loss or damage however caused." Her car is damaged by persons unknown and she sues the operator. The operator relies on his warning. He will likely succeed.

Question 25

Sharif agreed to store Bartle's canoe for the winter months in a garage that was attached to his house. The next June, Sharif moved the canoe from the garage to a shed at the back of the house, "where it would be safer." The house and shed were later struck by lightning and burned to the ground. Bartle's canoe was destroyed in the fire. Sharif 's only duty was to care for the canoe as if it were his own.

Question 26

Under no circumstance may a valid sub-bailment be made without the consent of the original bailor.

Question 27

A bailment without monetary reward, even if a benefit exists for both parties, is gratuitous.

Question 28

Carl requested Simple Delivery Service to pick up a refrigerator at his home and deliver it to his cottage, some 160 kilometres away. Simple Delivery picked up the refrigerator, but through a mix up in delivery bills, lost the refrigerator. In this case, the pickup of the refrigerator by Simple Delivery Service created a bailment.

Question 29

Sharif agreed to store Bartle's canoe for the winter months in a garage that was attached to his house. The next June, Sharif moved the canoe from the garage to a shed at the back of the house, "where it would be safer." The house and shed were later struck by lightning and burned to the ground. Bartle's canoe was destroyed in the fire. Sharif is not liable for the loss of the canoe, because it was destroyed by an act of God.

Question 30

Henry parked his automobile in Allison's Car Park and was requested by the attendant to leave the keys in the car and the car unlocked. Henry received a receipt for the parking which contained the following note on the reverse side of the ticket. "Proprietor of lot will not be responsible for damage to car or contents." A similar sign was located at the entrance to the car parking area. When Henry returned to the lot, he discovered that his car had a damaged front fender. Even if Henry was fully aware of the disclaimer of liability, Allison's Car Park would be liable for the damage to his car.

Question 31

Barton boarded a large commercial aircraft at Kingston for a flight to Toronto. He placed his coat on the seat beside him but was told by the flight attendant to place his coat on the shelf above his seat. He did so, but at the end of the flight, left the plane without taking his coat with him. He later realized that he did not have his coat and went back to the aircraft to retrieve it. His coat was missing. Only the flight attendant is liable for the loss, as he instructed Barton to place his coat on the shelf above his seat.

Question 32

Henry parked his automobile in Allison's Car Park and was requested by the attendant to leave the keys in the car and the car unlocked. Henry received a receipt for the parking which contained the following note on the reverse side of the ticket. "Proprietor of lot will not be responsible for damage to car or contents." A similar sign was located at the entrance to the car parking area. When Henry returned to the lot, he discovered that his car had a damaged front fender. The parking of the unlocked automobile in the car park with the keys left in the car was a bailment for reward.

Question 33

A bailee for storage faces the same standard of care of a skilled shopkeeper, that is to say, absolute liability for all foreseeable risks.

Question 34

Carl requested Simple Delivery Service to pick up a refrigerator at his home and deliver it to his cottage, some 160 kilometres away. Simple Delivery picked up the refrigerator, but through a mix up in delivery bills, lost the refrigerator. Simple Delivery Service would not be liable for the loss if it could prove that the refrigerator was destroyed as a result of an act of God.

Question 35

To be a common carrier is to be a virtual insurer of the goods carried.

Question 36

Chris stops at a motel and leaves his bags in the room. As the nearest restaurant is some distance away, he is occupied for some time. Upon his return he finds his valuables gone and sues the owner. The liability of the owner is absolute by statute law.

Question 37

Sharif agreed to store Bartle's canoe for the winter months in a garage that was attached to his house. The next June, Sharif moved the canoe from the garage to a shed at the back of the house, "where it would be safer." The house and shed were later struck by lightning and burned to the ground. Bartle's canoe was destroyed in the fire. Sharif is liable for the loss of the canoe because he moved it from the garage.

Question 38

Carl requested Simple Delivery Service to pick up a refrigerator at his home and deliver it to his cottage, some 160 kilometres away. Simple Delivery picked up the refrigerator, but through a mix up in delivery bills, lost the refrigerator. A common carrier, such as Simple Delivery Service, is virtually an insurer in the event of a loss of goods placed in its possession.

Question 39

Sharif agreed to store Bartle's canoe for the winter months in a garage that was attached to his house. The next June, Sharif moved the canoe from the garage to a shed at the back of the house, "where it would be safer." The house and shed were later struck by lightning and burned to the ground. Bartle's canoe was destroyed in the fire. The storage of the canoe was a bailment for reward.

Question 40

Carl requested Simple Delivery Service to pick up a refrigerator at his home and deliver it to his cottage, some 160 kilometres away. Simple Delivery picked up the refrigerator, but through a mix up in delivery bills, lost the refrigerator. Common carriers, such as Simple Delivery Service, are bailees for reward.

Question 41

Douglas, a businessman, rented a car from Lemon's Auto Rental. He intended to use the car to distribute products from his business to those of his customers. In the course of his commuting around the city, Douglas encountered many streets laden with "potholes." Just before returning the car to the rental lot the car suffered a breakdown resulting from problems with the suspension system. Three weeks later Douglas received a bill for the repair of the car he had rented. Douglas appealed his bill to the company stating that they should be responsible for the repair. The company replied that the rental agreement stated that the lessee is responsible for problems created by normal "wear and tear."
Discuss the relevant issues of bailment in light of this situation.

Question 42

A way to avoid liability is for all bailees to say, "I will treat these goods as prudently as I would treat my own in similar circumstances."

Question 43

Mrs. Rich took her mink coat and fox jacket to Fun Fur Ltd. for summer storage. She also requested that Fun Fur clean the furs and make some minor repairs. Fun Furs, not having proper facilities, sent the items out to Kleen-All for the cleaning and repair work. In September, Mrs. Rich returned to Fun Furs to pick up her coats and pay for storage and repair costs. Fun Furs discovered that the items had never been returned by Kleen-All. On telephoning Kleen-All they were informed that the furs had been stolen although no one knew exactly when or how. Discuss the rights and liabilities, if any, of the parties involved if legal action was taken, and determine the outcome.

Question 44

Bailments can arise in a wide variety of situations and may provide vastly different benefits for the contracting parties. Discuss the differing standards of care associated with bailments and explain the rationale for each.

Question 45

Where goods have been bailed for repair, and a dispute arises, the bailee will likely claim a right of lien while the bailor will claim conversion.

Question 46

Henry and Juan left their car at a parking lot and deposited their keys with the attendant. They then left the lot and carried on with their day's business. On return to the lot the pair realized that their car was not there. They approached the attendant and brought the situation to his attention. Fearing reprisal for the theft from his lot, the attendant flipped Henry's pay stub over and showed him the limitation of liability printed on the back. This warning is sufficient to protect the parking lot from any liability under the law of bailment.

Question 47

Kamala shipped a parcel with a passenger bus company acting as a private carrier. The parcel contained semi-breakable gifts for her parents in another city. When the parcel arrived Kamala's parents notified her of damage to the parcel's contents. Kamala visited the bus station to complain. An employee of the bus company who dealt with her complaint told her she should have used a courier and, as a private carrier, the company had no obligation to exhibit reasonable care of shipped goods.

Question 48

The Empire Theatre Co. operated a movie theatre and a free parking lot which was adjacent to the theatre building. The lot had posted a prominent "FREE PARKING" sign as well as another much smaller sign which disclaimed the lot's liability for loss or damage. Scarlett parked her car in the theatre's lot while she attended the theatre to see her favourite classic film, "Gone With The Wind." While in the theatre, Scarlett's car was stolen. It was subsequently recovered, although some damage had resulted, and the car needed repairs. Scarlett brought an action against the Empire Theatre for recovery of damages with respect to the car. What arguments might the parties raise in this case?

Question 49

Compare and contrast the nature of bailments between private carriers and common carriers.

Question 50

Johnson was injured in an automobile accident and was taken by ambulance to the nearest hospital. At the time, he had in the pocket of his jacket a sum of money, some credit cards and a sapphire ring he intended to give to his girlfriend. While Johnson was being treated at the hospital, the money, credit cards and ring disappeared from his jacket. Once he was feeling better, Johnson brought an action against the hospital to recover his loss. What principles of law might Johnson advance in his claim, and what defences might be raised by the hospital? Render a decision.

Question 51

Private carriers face a higher standard of care as bailees than do common carriers.

Question 52

Since there is no common law right for a warehouse operator to hold goods until storage charges are paid, the operator must rely on either express provisions in the storage contract, or statutory provisions for lien.

Question 53

A lease of goods is not a bailment of goods.

Question 54

Compare and contrast the nature of bailments for warehouse storage and common carriage of goods.

Question 55

The liability of innkeepers has a long history evolving out of necessity. Briefly explain the development of this form of liability and discuss its context in modern society.

Question 56

One of the principal functions of a bill of lading is to act as evidence of title to the goods being carried. This allows for considerable ease in transferring ownership of the goods during transit.