Question 1

Which of the following was the result in the case referenced in the "Case Nugget," Ziva Jewelry Inc., v. Car Wash Headquarters Inc., in which the plaintiff left his car and keys with a car wash employee and a thief drove off with the car abandoning it unharmed after stealing jewelry valued at over $800,000 from the car's trunk? A) That the car wash was liable to the plaintiff because the car wash accepted responsibility as a bailee. B) That the car wash was not liable to the plaintiff because the car wash employees had no notice they were taking responsibility for so much jewelry. C) That the car wash and the plaintiff would be required to split the loss. D) That the car wash was liable to the plaintiff for the loss because the car wash had not issued a valid disclaimer. E) That it would be unconscionable to hold the car wash liable for the loss.

Accepted Answer

The Supreme Court of Alabama affirmed the dismissal of the case on grounds that a bailee is not liable for the loss of the contents of a bailed vehicle when the bailee did not have actual or implied knowledge of the contents of the vehicle.

Question 2

Which of the following is true if it is determined that harm befell bailed property due to an "act of God"?
A) The bailee is liable for harm to the bailed property arising out of the bailee's ordinary or gross negligence.
B) The bailee is liable for harm to the bailed property arising only out of the bailee's gross negligence.
C) The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
D) The bailee is strictly liable for harm to the bailed property.
E) The bailee is not liable for harm to the bailed property.

Accepted Answer

If the property is harmed by an unpreventable "act of God," there is no liability on the part of the bailee under any circumstances.

Question 3

"Disputed Ring." While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teenager and neighbor, came over to visit and liked the ring. Tina said, "You can have this old thing if you would like." Becca replied, "I really like it - Maybe it's a real diamond!" Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina's house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because neither party knew its true value and that because Tina did not sign any document turning over title, it was impossible for legal ownership to pass. Becca sues. -Which of the following describes the type of gift, if any, at issue? A) A gift causa mortis B) A gift inter vivos C) A gift inter mortis D) A gift causa vivos E) There was no gift because Tina did not realize the ring's value.

Accepted Answer

Inter vivos gifts are gifts that are made by a person during his or her lifetime.

Question 4

Which of the following is true regarding the nature of bailments?
A) Bailments may be express but not implied.
B) Bailments may be implied but not express.
C) Bailments may be implied or express.
D) Bailments that are not express may be enforced as implied bailments only if a gratuitous bailment is involved.
E) Bailments that are not express may be enforced as implied bailments only if a mutual benefit bailment is involved.

Accepted Answer

Bailments may be either express or implied.

Question 5

Which of the following is true if a bailment is for the mutual benefit of both the bailee and the bailor?
A) The bailee is liable for harm to the bailed property arising out of the bailee's ordinary or gross negligence.
B) The bailee is liable for harm to the bailed property arising only out of the bailee's gross negligence.
C) The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
D) The bailee is strictly liable for harm to the bailed property.
E) The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

Accepted Answer

If the bailment is for the mutual benefit of bailee and bailor, the bailee is liable for harm to the bailed property arising out of the bailee's ordinary or gross negligence.

Question 6

"Stolen Bicycle." Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility.
-Which of the following is true regarding Donnie's obligation to Karen?
A) He is liable for the theft of the bicycle arising out of his ordinary or gross negligence.
B) He is liable for the theft of the bicycle arising out of his gross negligence.
C) He is liable for the theft of the bailed property caused by even the slightest lack of due care on his part.
D) He is strictly liable for the theft of the bicycle.
E) He is not liable for the theft of the bicycle because of the doctrine of assumption of the risk.

Accepted Answer

If the bailment is solely for the bailee's benefit, the bailee is responsible for harm to the property caused by even the slightest lack of due care on the part of the bailee.

Question 7

Which of the following was the result on appeal in the case of Stephen Labatt Porter v. Black Warrior Farms L.L.C., the case in the text involving whether a gift was made when prior to going on a cruise, a mother sent money to her son for investment, said in a letter to him that he should keep the money if anything happened to her, returned from the cruise, and died at a later date? A) The court ruled that a gift causa mortis was made because she died before requesting the return of the money and that the money therefore belonged to the son. B) The court ruled that a gift causa mortis was made because the mother intended that the son keep the money if anything happened to her before or after the trip and that the money therefore belonged to the son. C) The court ruled that a valid inter vivos gift was made because the mother never requested the return of the money and that the money therefore belonged to the son. D) The court ruled than a valid inter vivos gift was made because the mother meant for the son to invest the money for her, retaining it if she died, and that the money therefore belonged to the son. E) The court ruled that neither a valid causa mortis nor a valid inter vivos gift was made and that the funds were properly deducted from any distribution to the son or his heirs.

Accepted Answer

The court ruled that the letter "did not constitute a gift or a bequest" to the son and that the funds were properly withheld from distribution to the son and his children from the mother's estate.

Question 8

"Lottery Winnings." Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists of the numbers of his lottery tickets with him in his billfold. Frank's girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, "Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don't make it, I hope you win and live it up; but please don't get another boyfriend." Bubbles replied, "I could never be happy without you." A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank's ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his.
-Which of the following is true regarding Frank's statement at the hospital regarding Bubbles taking the ticket?
A) At that point he made a valid gift that could not be revoked.
B) He did not make a valid inter vivos or causa mortis gift because there was no certainty that he would die.
C) He made an irrevocable gift at that time only if Bubbles never had another boyfriend; otherwise, she had to give the ticket and any resulting cash to Frank.
D) He made an irrevocable gift at that time if Bubbles refrained from having another boyfriend until she cashed the ticket; and, after the ticket was converted, the condition no longer applied.
E) None of these.

Accepted Answer

A gift causa mortis is a gift that is made in contemplation of one's immediate death. It can be revoked any time before the death of the donor, and it is automatically revoked if the donor recovers.

Question 9

"Stolen Bicycle." Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility.
-Which of the following is true regarding Donnie's statements that he owes Karen nothing and that only Karen has the right to take legal action against the thief?
A) He is correct.
B) He is correct that he has no liability to Karen, but incorrect that only Karen may take legal action against the thief.
C) He is incorrect that he has no liability to Karen, but correct that only Karen may take legal action against the thief.
D) Only if he can identify the thief beyond a reasonable doubt is he correct that he has no further duties to Karen because only Karen has the right to take legal action against the thief at that point.
E) He is incorrect because he has the right to take legal action against the thief, and Donnie's conduct indicates that he has legal liability to Karen.

Accepted Answer

If anyone steals the bailed property from the bailee, the bailee may take legal action to recover the bailed property and may even seek compensation for the loss of the property or damage to it.

Question 10

"Disputed Ring." While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teenager and neighbor, came over to visit and liked the ring. Tina said, "You can have this old thing if you would like." Becca replied, "I really like it - Maybe it's a real diamond!" Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina's house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because neither party knew its true value and that because Tina did not sign any document turning over title, it was impossible for legal ownership to pass. Becca sues.
-Which of the following is true regarding Tina's statement that Becca could not have validly accepted the ring?
A) If the ring is valued at $500 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing transferring title would have been needed to validate acceptance.
B) If the ring is valued at $1,000 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing transferring title would have been needed to validate acceptance.
C) Tina is correct that Becca could not have validly accepted the ring because a writing transferring title would have been needed to validate acceptance.
D) Tina is correct that Becca could not have validly accepted the ring when she did not understand its true value.
E) Tina is incorrect, and Becca validly accepted the ring as a gift.

Accepted Answer

Becca expressed a willingness to take the gift establishing a valid acceptance.

Question 11

In order to enforce a right to sell property that is subject to a bailment when the bailor does not pay an agreed upon price, a bailee is given a[n] _____.
A) Bailee's lien
B) Bailor's lien
C) Bailment document
D) Lien document
E) Enforcement lien

Accepted Answer

In most states, when the bailor refuses to provide the agreed-on compensation to the bailee, the bailee may ultimately sell the property after proper notice and a hearing. To enforce this right to sell the property, the bailee is given a bailee's lien, or a possessory lien on the property.

Question 12

Which of the following is a type of document of title issued by a person engaged in the business of transporting goods that verifies receipt of goods for shipment?
A) Warehouse receipt
B) Delivery order
C) Receipt order
D) Negotiable receipt
E) Bill of lading

Accepted Answer

A bill of lading is a document issued by a person engaged in the business of transporting goods that verifies receipt of the goods for shipment.

Question 13

When a bailment is for the purpose of transportation or storage of goods, certain _____, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.
A) Proofs of title
B) Agreements of title
C) Illustrations of title
D) Documents of title
E) Evidence of title

Accepted Answer

When a bailment is for the purpose of transportation or storage of goods, certain documents of title, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.

Question 14

Which of the following is the applicable standard used in determining the liability of a common carrier when harm befalls property that is the subject of a bailment placed in the care of the carrier?
A) The carrier is liable only if ordinary or gross negligence can be proven.
B) The carrier is liable only if gross negligence can be proven.
C) The carrier is liable only if it can be proven that the carrier acted in a reckless manner.
D) The carrier is generally strictly liable for harm to the bailed property.
E) Because of the doctrine of assumption of risk, the carrier is not liable for harm to the bailed property.

Accepted Answer

Because the bailee is a common carrier, he or she is held to a higher standard of care: the standard of strict liability in protecting the bailed property. The only situations in which the common carrier will not be liable for harm to the bailed property are those in which the injury was caused by an act of God, an act of a public enemy, an act of the shipper, or the inherent nature of the good.

Question 15

Which of the following is false regarding bailments? A) A bailment may be gratuitous. B) A bailment may be for consideration. C) A bailment agreement must be contained in a written agreement. D) The parties to a bailment contract can limit or expand the liability of the bailee by contract. E) The standard of care varies depending on who benefits from the bailment.

Accepted Answer

The statute of frauds requires a writing for any contract that cannot be performed within a year, so any bailment relationship that will last more than a year requires a writing to be enforceable.

Question 16

"Lottery Winnings." Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists of the numbers of his lottery tickets with him in his billfold. Frank's girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, "Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don't make it, I hope you win and live it up; but please don't get another boyfriend." Bubbles replied, "I could never be happy without you." A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank's ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. -Which of the following describes the statement Frank made to Bubbles prior to surgery regarding the lottery ticket? A) A gift causa mortis. B) A gift inter vivos. C) A gift inter mortis. D) A gift causa vivos. E) It was meaningless because of the condition of death placed on the gift.

Accepted Answer

A gift causa mortis is a gift that is made in contemplation of one's immediate death.

Question 17

Which of the following is true if a bailment is intended to benefit only the bailor?
A) The bailee is liable for harm to the bailed property arising out of either the bailee's ordinary or gross negligence.
B) The bailee is liable for harm to the bailed property arising only out of the bailee's gross negligence only.
C) The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
D) The bailee is strictly liable for harm to the bailed property.
E) The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

Accepted Answer

If the bailment is intended to benefit only the bailor, the bailee is liable for damage to the property caused by the bailee's gross negligence.

Question 18

"Disputed Ring." While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teenager and neighbor, came over to visit and liked the ring. Tina said, "You can have this old thing if you would like." Becca replied, "I really like it - Maybe it's a real diamond!" Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina's house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because neither party knew its true value and that because Tina did not sign any document turning over title, it was impossible for legal ownership to pass. Becca sues.
-Which of the following is true regarding Tina's statement that she was entitled to the ring because she would not have given it to Becca if she had known the true value?
A) Tina is entitled to ownership of the ring if she can prove that she did not realize its true value.
B) Tina is entitled to ownership of the ring only if she can prove that she did not realize its true value, and also that there was a difference of at least $1,000 between what she believed the value to be and its true value.
C) Tina is entitled to ownership of the ring only if a jury determines that she was not negligent in failing to recognize its value.
D) Tina is not entitled to ownership of the ring because she admitted that there was at least some chance (one in a billion) that it was a genuine diamond.
E) Being ignorant of the value of the ring does not entitle Tina to ownership of it.

Accepted Answer

The three elements necessary for a valid gift were satisfied. First, there was a delivery of the gift. Second, the delivery was made with donative intent to make an immediate gift. Third, there was acceptance, a willingness of the donee to take the gift from the donor.

Question 19

"Stolen Bicycle." Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility.
-Which of the following is true regarding the bailment situation, or lack thereof, existing between Donnie and Karen?
A) It was a gratuitous bailment.
B) It was a bailment for consideration.
C) It was a temporary bailment.
D) It was a constructive bailment.
E) There was no bailment because no consideration was provided.

Accepted Answer

A bailment may be gratuitous or for consideration; and in this instance, because Donnie paid nothing, the bailment was gratuitous.

Question 20

"Lottery Winnings." Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists of the numbers of his lottery tickets with him in his billfold. Frank's girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, "Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don't make it, I hope you win and live it up; but please don't get another boyfriend." Bubbles replied, "I could never be happy without you." A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank's ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his.
-Which of the following is true regarding rightful ownership of the lottery money?
A) Frank's gift was automatically revoked when he recovered, and the lottery ticket and any proceeds are validly his.
B) Although the gift was not automatically revoked on his recovery, Frank has the right to revoke the gift and recover the lottery proceeds.
C) The gift was not automatically revoked on his recovery; and since Frank did not revoke the gift prior to Bubbles cashing the ticket, he has no rights to any funds.
D) Frank has the right to all funds only because Bubbles has a new boyfriend.
E) Frank has no rights because once he gave the tickets to Bubbles, he gave up all his rights to them.

Accepted Answer

A gift causa mortis is a gift that is made in contemplation of one's immediate death. It can be revoked any time before the death of the donor, and it is automatically revoked if the donor recovers.

Quiz 48: The Nature of Property, Personal Property, and Bailments

Which of the following is true if it is determined that harm befell bailed property due to an "act of God"?

Which of the following is true regarding the nature of bailments?

Which of the following is true if a bailment is for the mutual benefit of both the bailee and the bailor?

In order to enforce a right to sell property that is subject to a bailment when the bailor does not pay an agreed upon price, a bailee is given a[n] _____.

Which of the following is a type of document of title issued by a person engaged in the business of transporting goods that verifies receipt of goods for shipment?

When a bailment is for the purpose of transportation or storage of goods, certain _____, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.

Which of the following is the applicable standard used in determining the liability of a common carrier when harm befalls property that is the subject of a bailment placed in the care of the carrier?

Which of the following is false regarding bailments?

Which of the following is true if a bailment is intended to benefit only the bailor?