Question 1

Sid asks his neighbour Carl to take care of his lawnmower while Sid is on holidays.While he's gone,Carl uses the lawnmower to mow his brother's lawn across town.In the legal sense,Sid is the ________ and Carl is the ________.

Accepted Answer

In a bailment situation, the person who temporarily hands over possession of an item (but not ownership) is called the bailor, and the person who receives the item is the bailee. Since Sid asks Carl to take care of his lawnmower, Sid is the bailor and Carl is the bailee.

Question 2

A work associate leaves his bike each day in your garage while both of you commute to work in your car.(This associate pays $5 per day for riding in your car.)One day the bike is stolen out of your locked garage.Are you responsible for the loss of this bike?

Accepted Answer

As the owner of the garage, you have a duty to exercise reasonable care in protecting your work associate's bike, but you have met the standard of care required by locking the garage. Therefore, you are not responsible for the loss of the bike. Additionally, your work associate assumed the risk of leaving his bike unattended in someone else's garage.

Question 3

In relation to chattel leases,quiet possession means that the lessor will not interfere with the lessee's possession or use of the chattel so long as the lessee complies with the terms of the lease.

Accepted Answer

Quiet possession is a common covenant in leases of personal property, which guarantees that the lessee will not be disturbed in their possession and use of the subject matter of the lease by the lessor or any third party. As long as the lessee pays rent and complies with other lease requirements, the lessor is not entitled to interfere with their use of the chattel.

Question 4

The operating lease tends to be a long-term lease,and the purchase lease tends to be a short-term lease.

Accepted Answer

The operating lease tends to be a shorter-term lease where the lessee is only using the asset for a portion of its useful life, while the purchase or finance lease tends to be a longer-term lease where the lessee is essentially financing the purchase of the asset and has the option to buy it at the end of the lease term.

Question 5

Regarding bailments,which of the following is true?

Accepted Answer

Contents in a safety deposit box are a form of bailment. Bailment refers to a legal relationship in which the possession of personal property is transferred from one party (the bailor) to another party (the bailee) for a specific purpose. The contents in a safety deposit box are held by the bank as a bailee for the depositor, who remains the owner of the contents.

Question 6

A finder,in the legal sense,is

Accepted Answer

A finder is not initially bound to take possession of what he or she finds, but if he or she does, he or she becomes a bailee and has an obligation to return the property to its rightful owner. Option A is not true because the ownership of the land does not determine the ownership of the goods found on the land. Option C is also not true as the finder does not have an obligation to find the owner of the goods, but rather to return them to their rightful owner if the owner is known. Option D is not true as the value of the goods does not affect the finder's obligations. Option E is not true as the finder is not a gratuitous bailor, but rather a bailee.

Question 7

Bailment is the transfer or deposit of personal property such that the party to whom the property is transferred becomes the owner.

Accepted Answer

Bailment is not a transfer of ownership of personal property, but rather a transfer of possession or custody of the property by one party to another, with the understanding that the property will be returned or dealt with in a particular way.

Question 8

Lucy brought her badly stained Persian rug in to be cleaned.The cleaners gave her a receipt in which a clause disclaimed all liability for damage arising from normal handling.When Lucy returned for the rug,it was in an advanced state of deterioration.The cleaners claimed it was exempted from damages by its written disclaimer.The courts would

Accepted Answer

The answer of Lucy brought her badly stained Persian rug...

Question 9

A bailor is better off on the insolvency of its bailee than a creditor is on the insolvency of its debtor.

Accepted Answer

In case of insolvency, the bailor has the right to reclaim the property held by the bailee as a bailment, whereas a creditor on the insolvency of its debtor has to participate in the distribution of assets along with other creditors and may not get the full amount owed. Thus, the bailor has a better position than a creditor in insolvency situations.

Question 10

A gratuitous bailment can only be for the benefit of the bailee,never for the benefit of the bailor.

Accepted Answer

A gratuitous bailment can be for the benefit of either the bailee or the bailor, or even for mutual benefit.

Question 11

Temporary custody of a car belonging to a friend who has no garage and is going away on a business trip is an example of

Accepted Answer

The answer of Temporary custody of a car belonging to...

Question 12

Where a licence is given,unlike with a bailment,the licensee assumes responsibility for safekeeping.

Accepted Answer

In a licence, the licensee is granted the right to use property or land but does not assume responsibility for its safekeeping, unlike in a bailment where the bailee is responsible for the safekeeping of the bailed property.

Question 13

An example of a gratuitous bailment for the benefit of the bailee would be

Accepted Answer

A gratuitous bailment for the benefit of the bailee occurs when the bailor lends an item to the bailee without expecting any payment, and the bailee receives the primary benefit from the use of the item. In choice A, lending a car for the bailee to take a trip is a clear example of this, as the bailee benefits from using the car without providing any compensation to the bailor.

Question 14

In both chattel leases and bailment,ownership remains with the property owner who gives possession of the property to another for a period of time on the understanding that it will be returned.

Accepted Answer

Both chattel leases and bailment involve temporary possession of property by another party while ownership remains with the original owner.

Question 15

A hire-purchase agreement gives only possession of the chattel,not ownership.

Accepted Answer

The answer of A hire-purchase agreement gives only possession of...

Question 16

Which of the standards of care listed below describe the standard of care required by a business that hires out equipment?

Accepted Answer

The standard of care required by a business that hires out equipment is the same as the standard of care required by a prudent and diligent person in the use of their own property. This is because the business is responsible for the safekeeping and proper use of the equipment while it is in their possession, just as a prudent and diligent person would be responsible for their own property. The other choices do not apply specifically to hiring out equipment.

Question 17

Which of the following is true regarding bailments?

Accepted Answer

The answer of Which of the following is true regarding...

Question 18

Miles acquires a power generator under a two-year lease with the manufacturer.After four months,Miles realizes he no longer needs the generator.He delivers the generator back to the supplier,hoping that his lease payments will stop,but to his dismay,he is informed that he will be expected to pay the remaining twenty payments.Will Miles legally be required to finish all the lease payments?

Accepted Answer

The fact that the contract made no provision for early termination means that Miles is legally bound to make all the lease payments, even if he no longer needs the generator. This is because the lease is enforceable and binding, and Miles agreed to the terms of the lease when he signed it.

Question 19

Bailment

Accepted Answer

Bailment involves the transfer of possession of personal property from the bailor to the bailee, without transfer of ownership. The other options are not correct: B is incorrect because bailment can arise from both contracts and circumstances; C is incorrect because in consignment, there is transfer of both possession and title; D is incorrect because ownership remains with the bailor during bailment; E is incorrect because chattels are included in bailment.

Question 20

For $5600,Jackstone Inc.agreed to repackage and ship nine container loads of toys from China.These containers from China were to be received during the next three months.Two containers arrived and were serviced according to the contract.The other seven containers never arrived and neither did any payment.What is Jackstone legally entitled to?

Accepted Answer

Jackstone is entitled to quantum meruit for the services already provided on the two containers, and additionally, they can claim for loss of profits on the seven containers that were never delivered, as they had a reasonable expectation of income from servicing those containers.

Quiz 15: Bailment and Leasing

Sid asks his neighbour Carl to take care of his lawnmower while Sid is on holidays.While he's gone,Carl uses the lawnmower to mow his brother's lawn across town.In the legal sense,Sid is the and Carl is the .

A work associate leaves his bike each day in your garage while both of you commute to work in your car.(This associate pays $5 per day for riding in your car.) One day the bike is stolen out of your locked garage.Are you responsible for the loss of this bike?