Question 1

Ed wants to give Howard his old car,but Howard says he doesn't want it.Howard later reconsiders and tells Ed he does want the car.His previous repudiation means there is no gift,and Howard has no rights in the car.

Accepted Answer

True

Question 2

Percival takes his computer to a repair shop to have the disk drive repaired.This is most likely a:
A) bailor benefit bailment.
B) bailee benefit bailment.
C) mutual benefit bailment.
D) leasehold arrangement.

Accepted Answer

A mutual benefit bailment is when both the bailor (Percival) and bailee (repair shop) benefit from the transaction. In this case, Percival benefits by having his computer repaired and the repair shop benefits by receiving payment for their services.

Question 3

A bailment was created for the parties' mutual benefit.This means that the bailee must use ordinary care with the property.

Accepted Answer

When a bailment is created for mutual benefit, the bailee has a duty to use ordinary care with the property to protect both the bailor's and the bailee's interests.

Question 4

If one party makes accessions without agreement and the improvements can be "undone" without damaging the property,the improver must undo them.

Accepted Answer

This is known as the principle of accession by mistake. If one party makes improvements or accessions to another's property without their agreement, and the improvements can be undone without damaging the property, then the improver must undo them. This is based on the principle of unjust enrichment, where the improver should not benefit from their mistake at the expense of the property owner.

Question 5

The difference between an inter vivos gift and a gift causa mortis is that the inter vivos gift is made during the donor's lifetime and a gift causa mortis is a gift is made after the donor's lifetime by the donor's estate.

Accepted Answer

The explanation provided in the statement is incorrect. An inter vivos gift is made during the donor's lifetime, while a gift causa mortis is made by the donor during their lifetime in anticipation of their impending death. This gift takes effect only if the donor dies as a result of the anticipated peril. If the donor does not die, the gift is invalid. The gift is not made by the donor's estate after their death.

Question 6

While shopping at the mall,Everett's wallet fell out of his pocket.Jon found the wallet.The wallet is abandoned property and Jon may keep it.

Accepted Answer

The correct course of action would be for Jon to turn in the wallet to mall security or the police in case the owner comes looking for it. Keeping the wallet would be considered theft.

Question 7

In January,Erwin told David,his nephew,that he would give him a car when he graduates from college.David graduated in May.If Erwin refuses to give David a car,David can sue him for breach of an inter vivos gift.

Accepted Answer

An inter vivos gift requires delivery, acceptance, and intent to give at the time of the gift, not a promise to give something in the future. Erwin's statement is a promise, not an immediate gift, so it does not constitute an inter vivos gift.

Question 8

Jody loaned her neighbor,Phil,her snow blower.Phil set it near his driveway,and later accidently ran over and destroyed it.In a suit to recover damages,Jody as plaintiff has the burden of proving that Phil was negligent and caused the destruction of her snow blower.

Accepted Answer

The answer of Jody loaned her neighbor,Phil,her snow blower.Phil set...

Question 9

After a meeting with his advisor to register for a class at State University,Ron forgot his calculator in the dean's outer office.Theresa,another student,found the calculator.The calculator is treasure trove and Theresa may keep it.

Accepted Answer

Theresa should try to return the calculator to Ron, as it is not hers to keep. Theft or keeping lost property without attempting to return it is illegal and unethical.

Question 10

Dersett Trucking hauls granite for the major granite companies in Minnesota.Dersett Trucking does not make its trucking services available to the general public.Dersett Trucking is a contract carrier and does not incur strict liability.

Accepted Answer

The statement accurately describes the business model and legal status of Dersett Trucking.

Question 11

A bailment relationship can be created with respect to either real or personal property.

Accepted Answer

A bailment relationship can only be created with respect to personal property, not real property.

Question 12

Mega Corporation,the bailor,negotiates a bailment agreement with Huge Corporation,the bailee.Huge Corporation insists that an exculpatory clause be included in the terms and conditions of the bailment agreement.Later,Huge Corporation negligently (ordinary negligence,not gross negligence)damages the property which is the subject of the bailment.Most courts will allow Huge Corp.to stand behind its exculpatory clause and deny liability.

Accepted Answer

Many courts will uphold exculpatory clauses in bailment agreements as long as they are clear and unambiguous and do not violate public policy. However, some jurisdictions may invalidate such clauses if they are found to be unconscionable or against public policy.

Question 13

Charles agrees to store Tuan's car in Charles's garage for the winter months while Tuan visits his grandmother in California.As a bailee,Charles is automatically entitled to use Tuan's car while Tuan is away.

Accepted Answer

As a bailee, Charles is not automatically entitled to use Tuan's car while Tuan is away. Charles only has the right to possess and store Tuan's car, but not use it without Tuan's permission.

Question 14

Rhonda is a server in a restaurant.One day she finds a purse while clearing a table.The purse is most likely:
A) lost property.
B) mislaid property.
C) treasure trove.
D) abandoned property.

Accepted Answer

Mislaid property is property that is intentionally placed somewhere but then forgotten. In this case, since the purse was found on a table, it is likely that the owner simply forgot it there, making it mislaid property. It is not considered lost or abandoned property, as those imply that the owner did not intend to leave the item behind. Treasure trove refers to a collection of valuable items that have been intentionally hidden or buried.

Question 15

In order to constitute a valid gift:
A) the donor must intend to transfer ownership of property immediately.
B) the donee must accept the gift.
C) the donor must deliver the gift property to the donee.
D) All of the above are necessary for a valid gift.

Accepted Answer

All three elements are necessary for a valid gift. The donor must intend to transfer ownership, the donee must accept the gift, and the property must be delivered to the donee. Without any one of these elements, the gift may not be valid.

Question 16

Jerry enters a restaurant and hangs his coat in an unattended cloakroom near the entrance of the restaurant.Even though no employee of the restaurant is present,the provision of the cloakroom makes Jerry think it will be safe.In this situation,the restaurant is a bailee of Jerry's coat.

Accepted Answer

A bailee is someone who has taken possession of someone else's property with the intent to return it. Since no employee is present to take possession of Jerry's coat, the restaurant is not considered a bailee.

Question 17

Jimmy stole Dave's motorcycle and completely revamped the engine and changed the body.These accessions were very expensive,but Jimmy was completely satisfied with the results,intending to sell the motorcycle for a huge profit.If the motorcycle is recovered from Jimmy,Dave must pay Jimmy for the improvements.

Accepted Answer

Jimmy committed a crime by stealing Dave's motorcycle and making improvements without Dave's permission. Dave is not responsible for paying for these improvements.

Question 18

If property is mislaid,the finder of the property will have a superior claim to possession of the property against everyone except the true owner.

Accepted Answer

The answer of If property is mislaid,the finder of the...

Question 19

Stephen wants to give his niece,Dawn,a piece of jewelry as a gift.Stephen gives Tracy,his agent,the bracelet to take to Dawn.The delivery element of making a gift has been completed.

Accepted Answer

The answer of Stephen wants to give his niece,Dawn,a piece...

Question 20

Buck,fearing death from severe injuries suffered in a machinery accident,assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl,a friend,who gladly accepts.Buck ends up recovering from the injuries.Why must Pearl give the certificate of deposit back to Buck?
A) This type of gift is known as a gift causa mortis. It is a conditional gift which is conditioned on Buck's actually dying. Because Buck recovered, the gift is automatically revoked.
B) This is an inter vivos gift because Buck was still alive when the gift was made. Any inter vivos gift is revocable because there is no consideration to make Buck's delivery of the certificate binding under contract law.
C) This is an inter vivos gift and due to state laws, gifts in contemplation of death must be written into a valid will or otherwise the deceased's assets will be distributed according to state statute.
D) This gift is an ordinary gift, but it is revocable because we don't know if the certificate of deposit has matured or not.

Accepted Answer

The gift given by Buck to Pearl is known as gift causa mortis, which is conditional upon Buck's death. As Buck recovered from his injuries, the gift is automatically revoked, and therefore Pearl must return the certificate of deposit to Buck.

Quiz 44: Personal Property And Bailment