BailmentBailment

““the transfer of possession, but not the transfer of possession, but not the title of personal property by one the title of personal property by one party to another, under agreement”party to another, under agreement”

Parties InvolvedParties Involved

Bailor: “the party who gives up Bailor: “the party who gives up possession, but not title, of property in a possession, but not title, of property in a bailment”bailment”

Bailee: “the party who acquires Bailee: “the party who acquires possession but not title of personal possession but not title of personal property in a bailment”property in a bailment”

Conditions of BailmentConditions of Bailment

1) parties must agree that the same 1) parties must agree that the same property is to be returned to bailor, or property is to be returned to bailor, or accounted for as directed, although accounted for as directed, although possibly altered in formpossibly altered in form

2) there must exist both a delivery and 2) there must exist both a delivery and acceptance of propertyacceptance of property

DutiesDuties

Duty of Bailor:Duty of Bailor:

Duty of Bailee:Duty of Bailee:

tort of conversiontort of conversion

Types of BailmentTypes of Bailment

1) Sole Benefit of Bailor: possession of 1) Sole Benefit of Bailor: possession of personal property is transferred to personal property is transferred to another for purposes that will benefit only another for purposes that will benefit only the bailorthe bailor

2) Sole Benefit of Bailee: transactions in 2) Sole Benefit of Bailee: transactions in which the possession of personal which the possession of personal property is transferred for purposes that property is transferred for purposes that will benefit only the baileewill benefit only the bailee

Types of Bailment Types of Bailment (cont’d)(cont’d)

3) Mutual Bailment: when personal 3) Mutual Bailment: when personal property is transferred to a bailee with the property is transferred to a bailee with the intent that both parties will benefitintent that both parties will benefit

Exceptions: a) where property is taken Exceptions: a) where property is taken from bailee under valid legal processfrom bailee under valid legal process

b) when a person to whom property is b) when a person to whom property is delivered has better entitlement to delivered has better entitlement to possession than the bailorpossession than the bailor

Types of Bailment Types of Bailment (cont’d)(cont’d)

4) Involuntary Bailment: property comes 4) Involuntary Bailment: property comes into possession unintentionally or by an into possession unintentionally or by an “act of God”.“act of God”.

Mutuum: loan to another with Mutuum: loan to another with expectation that goods will be used up expectation that goods will be used up and replaced with like goods of equal and replaced with like goods of equal amount (not a bailment)amount (not a bailment)

CarriersCarriers

Private Carriers: “those who transport Private Carriers: “those who transport only in particular instances and only for only in particular instances and only for those they chose to contract withthose they chose to contract with

e.g. FH vehicles and liverye.g. FH vehicles and livery Common Carriers: “any carrier required Common Carriers: “any carrier required

by law to convey passengers or frieng by law to convey passengers or frieng without refusal if the approved fare or without refusal if the approved fare or charge is paid e.g. airline, train etc. charge is paid e.g. airline, train etc.

Common Carrier TermsCommon Carrier Terms

Bill of Lading: “the contract existing Bill of Lading: “the contract existing between the consignor and the carrier”between the consignor and the carrier”

Consignor: “one who ships goods by Consignor: “one who ships goods by common carrier”common carrier”

Consignee: “one to whom goods are Consignee: “one to whom goods are shipped by common carriershipped by common carrier

AgencyAgency

““the relationship that exists between the relationship that exists between a person identified as a principal a person identified as a principal and another by virtue of which the and another by virtue of which the latter may make contracts with third latter may make contracts with third persons on behalf of the principalpersons on behalf of the principal

Parties InvolvedParties Involved

Agent: “party appointed by the principal to Agent: “party appointed by the principal to enter into a contract with a third party on enter into a contract with a third party on behalf of the principal”behalf of the principal”

Principal: “party who appoints a second party Principal: “party who appoints a second party to serve as an agent”to serve as an agent”

Third PartyThird Party

Principal authorizes the agent to deal with a Principal authorizes the agent to deal with a third party.third party.

Agency (cont’d)Agency (cont’d)

Principal must indicate that the agent is to act Principal must indicate that the agent is to act for and under the control of the principal.for and under the control of the principal.

Agent must consent to act on behalf or and Agent must consent to act on behalf or and subject to the control of the principal.subject to the control of the principal.

Principal’s authorization to the agent can be Principal’s authorization to the agent can be express or implied.express or implied.

Fiduciary relationship.Fiduciary relationship. Contract is between the principal and third Contract is between the principal and third

party.party.

Principal-Agent Principal-Agent RelationshipRelationship

AgentAgent has the authority to represent the principal.has the authority to represent the principal. Principal is liable for the agent’s acts.Principal is liable for the agent’s acts. Agent’s duties require judgment, discretion and Agent’s duties require judgment, discretion and

decision-making.decision-making. Key issue is degree of control.Key issue is degree of control. Principal requirements:Principal requirements: Agent requirements:Agent requirements: Agents are responsible for “tortuous” activity.Agents are responsible for “tortuous” activity. Agents generally cannot appoint sub-agents.Agents generally cannot appoint sub-agents.

Types of AgencyTypes of Agency

Agency by Appointment: POAAgency by Appointment: POA

Agency by RatificationAgency by Ratification

Agency by ConductAgency by Conduct

Agency by Operation of LawAgency by Operation of Law

Types of AgentsTypes of Agents

UniversalUniversal General: “one who is authorized to General: “one who is authorized to

execute the principal’s business of a execute the principal’s business of a particular kind, or all the principal’s particular kind, or all the principal’s business at a particular place”business at a particular place”

Special: “one authorized by the principal Special: “one authorized by the principal to execute specific acts”to execute specific acts”

Borrowed ServantBorrowed Servant

Agent’s DutiesAgent’s Duties

Obedience to instructions.Obedience to instructions. Good faith/loyalty.Good faith/loyalty. Skill, judgment, and discretion.Skill, judgment, and discretion. Obligation to account.Obligation to account. Relay information.Relay information.

Principal’s DutiesPrincipal’s Duties

Appropriate compensation.Appropriate compensation. Reimbursement for expenses.Reimbursement for expenses. Indemnification for losses.Indemnification for losses. Right of lien against the agent.Right of lien against the agent. Protection from injury. Protection from injury.

Third Party’s ObligationsThird Party’s Obligations

Contractual liability to the principal.Contractual liability to the principal. Contractual liability to the agent.Contractual liability to the agent. Tort liability.Tort liability.

RelationshipsRelationships

Employee/Employer: employee is the “person Employee/Employer: employee is the “person hired to perform work and who is obligated both hired to perform work and who is obligated both as to the work to be done and as to the manner as to the work to be done and as to the manner in which it is to be done”in which it is to be done”

Employer is the “party who employs employees Employer is the “party who employs employees to do certain work”.to do certain work”.

Partnerships: “voluntary association of two or Partnerships: “voluntary association of two or more people who have combined their resources more people who have combined their resources to carry on as co-owners of a lawful enterprise for to carry on as co-owners of a lawful enterprise for their joint profit”their joint profit”

Relationships (cont’d)Relationships (cont’d)

Independent Contractor: “one who Independent Contractor: “one who contracts to perform certain tasks for a contracts to perform certain tasks for a set fee, but who is independent of the set fee, but who is independent of the control of the contracting party as to control of the contracting party as to means by which the contract is executed, means by which the contract is executed, except for specifications established in except for specifications established in the contract”the contract”

Termination of AgencyTermination of Agency

Agreement and PerformanceAgreement and Performance Mutual AgreementMutual Agreement Discharge by PrincipalDischarge by Principal Operation of Law:Operation of Law:

death/insanity of agent or principaldeath/insanity of agent or principal bankruptcybankruptcy destruction of subject matterdestruction of subject matter