Deck 17: Personal Property

Question 1

What most often drives the decision to create a temporary split of ownership and possession with respect to personal property?

A) Both parties have a right to be compensated in any event.
B) The arrangement meets the business needs of both parties.
C) Both parties will have to bear a proportionate risk of a loss.
D) The owner of the property bears ultimate responsibility.

Answer 1

B

Question 2

What should be included in the standard form contract in order for a lessor to maximize its ability to minimize its exposure for damage caused to a leased vehicle in the lessee's possession?

A) a benefit of relationship clause to ensure reciprocal benefit to the lessor
B) the bailee identified as the party to be paid in the event of loss for insurance
C) an ordinary diligence exclusion clause to limit liability for ordinary neglect
D) the bailor named as the party to be paid in the event of loss for insurance

Answer 2

B

Question 3

What is the most common cause for a bailor to incur liability with respect to goods provided under a contractual bailment?

A) the breach of bailor's warranty to provide a bailed chattel fit for its intended use
B) the injury of a bailor while using or operating a bailed chattel
C) the breach of the bailor's duty of care regarding the provision of adequate instruction for use
D) the injury of a bailee's employee while using or operating a bailed chattel

Answer 3

A

Question 4

A court is hearing an argument from plaintiff's counsel regarding a matter involving serious injury to a downhill skier. Counsel contends the cause of his client's injuries was that the rental skis were outfitted with either defective or improperly secured bindings. Which of the following will cause the onus of proof to shift to the bailor, with respect to the responsibility for preventing this mishap and damages for ensuing harms?

A) The bailor's fit or intended purpose warranty is extremely burdensome.
B) The standard of care in a bailment for value focuses on a bailor's misconduct.
C) The bailor's warranty for responsible manner of use has been established.
D) The bailee's reasonable manner of use of the skis has been established.

Question 5

Geoffrey made arrangements for storing his houseboat for the winter at BoatsRStored4U Inc. What is the most immediate legal question that Geoffrey should be clear on before he allows the storage company to take physical possession of his boat?

A) When should he provide proof of ownership and valuation?
B) What will happen if BoatsRStored4U goes out of business?
C) Who will bear the risk of loss or damage and have the obligation to purchase insurance?
D) How will BoatsRStored4U bill him for its services?

Question 6

Why is a short-term lease or rental of property an attractive way for a business to acquire the use of equipment for a particular task or period of time?

A) A lease protects creditors whether the arrangement is contractual or not.
B) A lease is a form of sale and is covered by the large number of terms implied through legislation governing the sale of goods
C) It makes little sense to purchase something that is not needed for a long period, unless, of course, the rental charges approach the cost of buying.
D) The lessee must take reasonable care of the property while that property is in its possession and return it in the state that would be expected

Question 7

What is the most relevant factor when a business entrusts bailed goods to an employee who then pilfers those goods?

A) The employer is subject to vicarious liability.
B) The employer is expected to take greater care than an ordinary person.
C) The employer's standard of care is higher for more valuable property.
D) The employer is subject to personal liability.

Question 8

ImaBigBank has extended an operating line of credit to Vandenbergers Bulbs Ltd. In exchange, Vandenbergers had to provide an assignment of the corporation's accounts receivable from its seasonal city garden contracts. What is the bank's position?

A) It acquired ownership of the right to collect the assigned accounts.
B) It alone possesses the right to collect Vandenbergers' accounts.
C) It is using a very uneconomical method of protecting creditor rights to pledged property.
D) It acquired possession of an assignment without obtaining right of ownership.

Question 9

Which of the following hampers the utility of a registration system for personal property?

A) the failure to guarantee rights to personal property
B) the transportability and mobility of personal property
C) the entitlement to possession of personal property
D) the courts' need to balance value of tangible and intangible property

Question 10

What aspect would normally be described in a contract for services in circumstances involving a bailment of value?

A) the parties' remedies for failure to perform
B) the price to be paid by the bailee for bailment
C) the bailor's remedies for collecting storage charges
D) the services to be provided for the bailor

Question 11

Which of the following is a distinguishing characteristic of the requirement to take reasonable care with respect to the obligations arising from ownership and possession of property?

A) It is non-applicable in arrangements that lack a formal contract.
B) It is applicable regardless of the absence of a contractual arrangement.
C) The damages are always payable to the owner by way of compensation.
D) It is the sole method for meeting the business needs of both parties.

Question 12

What is the term "choses in action" synonymous with in law?

A) tangible property
B) pledged property
C) intangible property
D) non-portable items

Question 13

Which of the following is reflected by the requirement that a business offering bailment for value appropriately stores perishable items placed in its possession?

A) special terms that limit liability set out in the parties' contract
B) a standard of care based on who benefits from the bailment
C) special regulations that set out the standard of care
D) a standard of care based on the nature of the property

Question 14

What is most likely to result if a bailment is without reward and for the benefit of the person possessing the property?

A) The bailor's standard of care will be low.
B) The bailee's standard of care will be low.
C) The bailor's standard of care will be very high.
D) The bailee's standard of care will be very high.

Question 15

What is the focus of the standard of care required of a gratuitous bailor?

A) A bailor must take utmost care to protect the bailed goods.
B) Proof of ownership must be provided.
C) It must be determined whether the bailor or bailee is receiving the benefit of the bailment.
D) It will depend on the common law strict liability rules.

Question 16

What is the legal term for a defect that no one in a distribution chain could reasonably have foreseen?

A) a languishing defect
B) a passive defect
C) a latent defect
D) a patent defect

Question 17

Which of the following exemplifies possession without ownership?

A) granting a trademark registration to an applicant
B) granting a licence for use of a bio-waste technology
C) registering a transfer of a freehold interest in land
D) registering a company's truck under its business name

Question 18

Remmie owns the associated rights to property, the buildings, and everything affixed to them located on that property, and the property itself. How is this particular asset likely to be classified?

A) as chattel property
B) as intangible property
C) as real property
D) as tangible property

Question 19

What feature distinguishes bailment from a contract of purchase and sale?

A) Most commercial contracts are bailments, requiring payment for use of property.
B) Most bailments are gratuitous, requiring no payment for use of property.
C) A bailor retains ownership upon transfer of possession to the bailee.
D) A bailment is typically short-term, while contracts cover a longer term.

Question 20

Which of the following is typically reflected by a higher expectation placed on a business offering a specific type of bailment?

A) special circumstances in the transaction
B) the expertise of the business offering bailment for reward
C) the limits on liability placed by the business offering bailment
D) the specific nature and value of the property

Question 21

What is the most significant effect of the responsibility of the standard of care placed on common carriers with respect to the property they carry?

A) Defences relate mainly to events within a carrier's control.
B) A bailor is required to prove fault.
C) Defences mainly relate to the circumstances of the carrier.
D) Carrier liability for mishaps is severely limited.

Question 22

Which of the following would be the result of a commercial customer's limited means of monitoring a storage facility's treatment of the property given to it for storage?

A) Liability is excluded completely or limited to a very small amount.
B) The bailee must provide consent for storage at an alternative location.
C) The law imposes a high level of accountability for the treatment of the bailor's property.
D) The law imposes a high level of accountability for the treatment of the bailee's property.

Question 23

What is the name used to describe the individual who has the right to enforce a lien over property until such time as storage fees have been paid?

A) warehouseman
B) financier
C) storagekeeper
D) skilled storagekeeper

Question 24

Which of the following is most prominent in bailment transactions?

A) proof and protection of ownership
B) preservation of economic value
C) transfer of risk
D) retention of risk

Question 25

What is most likely to be the result in circumstances involving an outstanding payment for the repair and subsequent storage of a sailboat?

A) a limited defence, mainly relating to circumstances
B) the severe limitation of the bailee's liability
C) the retained possession and sale by right of lien, if needed
D) the bailor's expectation of the receipt of property in good repair

Question 26

Which of the following is a valid criticism of the use of contractual clauses to limit bailment liability?

A) There is a social cost of courts having to inject businesses with ethical standards.
B) Courts will consider the contract price relative to losses to determine enforceability.
C) Courts apply different standards to commercial and consumer contracts.
D) They are vulnerable to various common law challenges.

Question 27

What is the most significant aspect of a bailment contract?

A) It provides remedies for the failure to perform obligations.
B) It reduces serious defects affecting contractual formation or performance.
C) It limits the liability that common law rules of bailment create.
D) It avoids legal complications for damage or loss of bailed property.

Question 28

How is ownership of intellectual property acquired?

A) through creation, licence, or transfer
B) through purchase, manufacture, or trading
C) through creation, registration, or purchase
D) through licence, manufacture, or transfer

Question 29

What is the primary source of the requirement that a lessor's property be reasonably fit for its intended use?

A) commercial chattel leases
B) implied statutory term
C) implied common law term
D) general law of contract

Question 30

Colleen booked two weeks' lodging with a bed and breakfast beginning on June 30. What is the legal term used to describe the individual who takes the booking?

A) lodgekeeper
B) hostelry
C) innkeeper
D) hotelier

Question 31

Which of the following is a valid criticism of a three-party financing lease arrangement?

A) It shields the financier from normal lessor's obligations relating to the property.
B) It imposes a high level of accountability for the property on the dealer.
C) It imposes a high level of accountability on the financier.
D) The property must be purchased outright at the end of the lease.

Question 32

Under what circumstances is it most likely that the obligation to make payments is tied to the suitability and performance of equipment?

A) in a bailment for value agreement
B) in a financing lease
C) in a chattel lease
D) in a two-party leasing arrangement

Question 33

Which of the following is a distinguishing characteristic of a commercial chattel lease?

A) It is regulated by consumer protection legislation.
B) It is regulated by the general law of contract.
C) Rules are implied through legislation.
D) Rules come mainly from statute law.

Question 34

Shawna received a factory recall notice from her GM dealership. She accepted the dealership's offer to drive her to work when she brings the car in for the service recall. What will be the certain result when Shawna hands the dealership her car keys?

A) An agreement on price for the service will be created in advance.
B) An incidental storage bailment will be created.
C) A very high standard of care will be expected.
D) The dealership will lose the right to retain property for payment.

Question 35

What is an attractive way for a business to acquire the use of equipment for a specified period of time?

A) through a financing lease
B) through a term lease
C) through an operating lease
D) through a chattel lease

Question 36

Which of the following is a distinguishing characteristic of the legislated ability of innkeepers to post liability limits in their establishments?

A) It gives shared control over guests' property through their occupation of their rooms.
B) Standard form contracts are a common feature used by innkeepers to transfer risk of liability.
C) It is lost due to innkeepers' negligent or deliberate acts or the deposit of the property for safekeeping.
D) It gives an innkeeper a common law lien against the guests' property in its possession.

Question 37

Which of the following is a characteristic of a common carrier bailment arrangement where possession of the goods rests with the bailee?

A) the right to sell property on non-payment
B) the owner is required to prove fault
C) a presumption of carrier's liability
D) an agreed value of any ensuring repairs

Question 38

Which of the following is a difference between a warehouseman's lien and a common carrier's lien?

A) Warehousemen represent themselves to the public as storekeepers for reward.
B) Warehousemen have a common law lien right with the right to sell property.
C) Common carrier contracts are typically covered by federal legislation.
D) Common carriers have a common law lien right without the right to sell property.

Question 39

Under what circumstances do the rights and responsibilities relating to a storage bailment apply?

A) when standard charge terms limit liability
B) when the property has been returned in the same condition as delivered
C) when the bailor retains possession of the keys
D) when the arrangement meets the definition of a bailment

Question 40

Which of the following distinguishes a commercial bailment contract from a consumer bailment contract?

A) the limitation of standard forms to consumer contracts
B) the seriousness of a defect affecting the formation of a contract
C) the court's inclination to apply differing standards to each
D) the seriousness of a defect preventing the performance of a contract

Question 41

In law, intellectual types of property are known as choses in action.

Question 42

Ross sold his house and went travelling for two months. While he was away, he placed his furniture and other belongings in storage with Kitt's Storage Inc. In these circumstances, Ross is a bailee and Kitt's is a bailor.

Question 43

WeMove4U Inc. is a transport company that operates in Alberta and Saskatchewan. The company has recently adopted a new standard charge agreement that severely limits its liability in the event of mishap with bailed property. By pointing out this clause to its customers, WeMove4U is shifting the burden for damage or loss to the bailor, who should purchase adequate insurance coverage.

Question 44

Intangible property is composed of personal property, the value of which comes from its physical form.

Question 45

The risks relating to personal property concern proof and protection of ownership, rights to possession, and the preservation of economic value.

Question 46

The burden placed on a common carrier to care for the goods of the bailor is determined by the concept of benefit of the relationship. If the bailment benefits the bailor exclusively, the common carrier is required to exercise slight care and is liable only for gross neglect.

Question 47

A key aspect of a bailment contract is often the limitation of the liability that the common law rules of bailment create.

Question 48

Tangible property is composed of personal property, the value of which comes from legal rights.

Question 49

Remmie has leased scaffolding, to be used in his home stuccoing business, for five months from the local rent-all store. Remmie's possession of the scaffolding during the five-month period will be subject to any limitations contained in the lease agreement for the bailed property.

Question 50

Marcella delivered her suits to the drycleaners and arranged for them to be available for pickup three days later. In this bailment for value, Marcella is a bailor and the drycleaner is a bailee.

Question 51

The function of a clause in a warehouseman's contract containing a description of the extent to which the bailee is liable for damage is to signal which party should buy insurance on the item being stored.

Question 52

While a financing lease will likely provide a lessor with the right to purchase the equipment at the end of the lease, a mechanic's lien covering the same equipment would entitle the mechanic to retain possession of the property until payment for the repair is received. Failure to pay for the repair altogether will entitle the mechanic to sell the equipment at fair value, to satisfy its outstanding account with the proceeds, and to forward any excess balance of funds remaining to the bailor.

Question 53

In contractual bailments, bailors warrant that the goods used by their bailees are fit for the purpose for which they are bailed.

Question 54

Because Remmie's stuccoing business is experiencing an unusual demand for its services, Remmie has decided to lease an additional truck and pressure washer as opposed to having the business purchase them outright at this time. The lease for the pressure washer is for two months and would typically be described as an operating lease.

Question 55

A warehouseman's general responsibility toward its customers' property is to treat it as a skilled storekeeper would deal with its own property, which imposes a standard of reasonableness encompassing responsibility for most foreseeable risks.

Question 56

All property, other than land and what is attached to land, that can be identified by its mobility is known as personal property.

Question 57

Remmie has leased a commercial pressure washer and a truck for use in his stuccoing business. His lawyer has advised Remmie that, because there is no legislation dealing with commercial chattel leases, Remmie's leasing arrangements are governed mainly by rules originating from the general law of contract.

Question 58

A bailee who specializes in a certain type of bailment is expected to exercise ordinary diligence but greater care than an ordinary person.

Question 59

The practical distinction that exists between carriers and innkeepers relates to the carrier's shared control over the property entrusted to it and the innkeeper's total control over the property of its guests, acquired through their occupancy of rooms.

Question 60

Insurance coverage is bought through the payment of premiums and is described in the insurance policy.

Question 61

Identify the risks relating to personal property.

Question 62

Identify the elements that are applied to determine the liability of bailees.

Question 63

With respect to a bailment for value, identify the aspects that a contractual services agreement would normally include a description of.

Question 64

Identify the issues typically addressed in a commercial chattel lease.

Question 65

Remedies for failure to perform obligations arising in a bailment relationship originate in two contexts. Discuss.

Question 66

Explain what a court will be require in order to determine who is responsible for damaged goods and for how much.

Question 67

Joelle owns and possesses unencumbered property. Describe how Joelle is entitled to deal with her property, and identify and briefly describe the options available to her in that regard.

Question 68

Identify the common types of bailments.

Question 69

Describe bailment, and discuss its key issues.

Question 70

A bailee performing repairs has a right to a lien against property for the value of repairs made to it. Identify one example of a legislated legal source of that lien right, and provide a brief discussion of a bailee's legislated lien right in these circumstances.