What You Need to Know About Bailment

Instances arise in our daily lives, when we entrust someone or business hold onto a personal asset for a short duration of time. This transfer of an asset legally referred to as a bailment (The term bailment is derived from the French bailor, "to deliver." 5): The transfer of personal property ("In the common law systems personal property may also be called chattels. In the civil law system personal property is often called movable property or movables". Contrary immovable property implies immovable, such as buildings or land. 9) or goods transferred to temporary custody or control of another (second party). 1 A bailment should not be confused or misinterpreted like a sale of an asset. 5 The person delivering the property is the bailor and the person receiving the personal property is the bailee. The bailee must take care of the property or asset above ordinary care (or minimum care) or secure the asset / property from any harm, damage and theft. If the personal property is stolen or damaged because bailee did not diligently or fail ensure the safety of the property (or asset), legally liable for damages. If asset is not returned to the bailor upon request, the bailee can be held liable. 1 Bailee may be liable if the property is used without the permission of the bailor. 3 Also, the bailor may sue the bailee if the property is not delivered to a third party as specified by the bailment agreement. The possession of the property by the bailee cannot be sold to a third party, unless the bailee also an agent authorized by the bailor to make such a sale. 2

Events occur or service agreement bailments: Taking furniture or personal property for storage in a warehouse, delivery of goods to an airline for shipment, valet parking, person checks a coat at a restaurant, loans a car to friend, leaving garment(s) at dry cleaning store, animals lodged at a kennels and securities or bonds left with a bank. 1, 2

Some business establishments may post signs to the affect that "no bailment' is created. However, local laws may decree that type of sign may be representing an unfair enforcement, such as parking garage business.

A bailment should have clear terms (written on a receipt such as storage or warehouse agreement. Otherwise, oral agreement between both parties) regarding how long the bailee may hold onto the property, days, weeks or months. Afterwards the property would be considered abandoned or bailee given notice that the bailor wishes to give up possession of the goods, then the bailee may dispose of the goods or satisfy an overdue payment or rent: A lawful conversion (When a wrongdoer takes possession or keeps a property from it's true owner. 2) of bailed goods. 3 Also, terms of a bailment may give the right of the bailor revoke the bailment if evidence is presented bailee mismanaged the asset or property. Visa versa the bailee may return the property to the bailor if there is perception the bailor did not hold-up to the terms of the agreement in some manner. 4

Types of Bailment: Gratuitous and Constructive:

Gratuitous bailment someone finds lost property and protects it or places the property under the custody of another, such as the police. The property is protected until the owner is found and claims the asset. Gratuitous bailment no payment is collected.

Constructive bailment occurs when the bailee comes into possession of property or goods of the owner, thus the obligation of the bailee protect the goods implied by law or considered as a bailment. When a tenant abandons property in a home or residence the landlord is responsible to care of the property, depending upon the laws of the jurisdiction, and return it to the abandoning tenant. 1

A bailment may include an indemnity clause agreed by both parties. Indemnity clause limits liability incurred by the bailee or defendant pursuant upon a lawsuit. Example: A bailee entrusted to accept packages delivered to the bailor (bailment). An indemnity clause limits valuation of any damage or mishandling of packages in the possession of the bailee. 8

A Judge may find a defendant of bailment liable (Not only for the value of the property, may include suffering, emotional distress and / or pain) when a bailment is breached. Reference to Ferguson v. Birchmount Boarding Kennels Ltd. (Indexed), Ontario Superior Court of Justice (Divisional Court) Chapnik J.- January 27, 2006: Plaintiffs boarded their dog at a kennel while they went on vacation: A bailment. Unfortunately plaintiff's dog escaped from the kennel's enclosed play area. "Trial judge finding that defendant was negligent in its standard of care boarding of dog - Conclusion supported by evidence." The plaintiffs were awarded $1,417.12 for pain and suffering including emotional distraught, insomnia, nightmares and taking time off from work. 6 The state of South Carolina in The Court of Appeals: Mark Hadfield v. Same Glichrist, d/b/a Gilchrist's Service Center, and d/ba/ Glichrist Towing Company - Heard September 12, 2000, Filed October 2, 200. The judge ruled in favor of the plaintiff regarding a bailment: Plaintiff was awarded $4,035.00 for vandalism caused to his car, while parked inside the defendant's towing facility. Also, awarded included compensation for the fact the defendant was unable to afford to repair the damage and after more then 60 elapsed, Hadfield sold the vehicle. The evidence presented during the trial revealed vehicle was not protected above ordinary care, could have prevented vandalism. 7

References:

1.) Bailment - http://contracts.lawyers.com/Bailment.html

2.) Business Law (Eleventh Edition) Ronald A. Anderson (Contributing Authors - Ivan Fox & David P. Towney) - SOUTH WESTERN PUBLISHING CO. 1980

3.) Bailment - http://en.wikipedia.org/wiki/Bailment

4.) What is Bailment - http://www.wisegeek.com/what-is-bailment.htm

5.) Bailment - Categories, Elements, Rights And Liabilities - Termination - http://law.jrank.org/pages/4626/Bailment.html

6.) Ferguson et al. v. Birchmount Boarding Kennels Limited et
al. - http://www.menufoodsclaim.com/doc/Ferguson%20et%20al.%20v.%20Birchmount%20Boarding%20Kennels%20Limited%20et.htm

7.) South Carolina JUDICIAL DEPARTMENT - http://www.judicial.state.sc.us/opinions/displayOpinion.cfm?caseNo=3246

8.) Accepting Deliveries for Customers - http://www.insideselfstorage.com/articles/2b1legal.html

9.) Search Results - Chattels - http://www.amazines.com/Chattels_related.html