Personal Property Chapter 9: Property & Bailments

Personal Property Personal Property Chapter 9: Property & BailmentsChapter 9: Property & Bailments

Understanding Business and Personal Law

Personal Property Personal Property Section 17.1Section 17.1

Personal Property and Bailments

Section 17.1Section 17.1Personal Property Personal Property

Section 17.2Section 17.2Bailments Bailments

1717ChapterChapter Personal Property Personal Property and Bailmentsand Bailments




What You’ll Learn

How to identify tangible and intangible How to identify tangible and intangible personal property (p. 362)personal property (p. 362)

How to decide when a gift of personal How to decide when a gift of personal property is completed (p. 362)property is completed (p. 362)




What You’ll Learn

How to distinguish between lost, How to distinguish between lost, misplaced, and abandoned property misplaced, and abandoned property (pp. 362-363)(pp. 362-363)

How to explain the law that applies to How to explain the law that applies to stolen property (p. 363)stolen property (p. 363)




What You’ll Learn

How to discuss the law of patents, How to discuss the law of patents, copyrights, and trademarks (p. 365)copyrights, and trademarks (p. 365)




Why It’s Important

Knowing the law about personal property will Knowing the law about personal property will help you safeguard your possessions.help you safeguard your possessions.




Legal Terms

personal property (p. 362)personal property (p. 362)tangible/intangible personal property tangible/intangible personal property (p. 362)(p. 362)donor/donee (p. 362)donor/donee (p. 362)abandoned property (p. 363)abandoned property (p. 363)intellectual property (p. 365)intellectual property (p. 365)




Legal Terms

patent (p. 365)patent (p. 365)copyright (p. 365)copyright (p. 365)fair use doctrine (p. 365)fair use doctrine (p. 365)trademark (p. 365)trademark (p. 365)




Types of Personal Property Gifts of Personal PropertyLost PropertyMisplaced PropertyStolen Personal Property

Section OutlineSection Outline




Intellectual Property PatentsCopyrightsTrademarks





Pre-Learning Question Pre-Learning Question

What do you think are types of personal property?




Possessions such as books, toys, and Possessions such as books, toys, and clothing are examples of clothing are examples of personal personal propertyproperty, which is anything that can , which is anything that can be owned other than real estate.be owned other than real estate.

Types of Personal PropertyTypes of Personal Property




Tangible personal propertyTangible personal property is is something that has substance and something that has substance and can be touched, such as CD players, can be touched, such as CD players, vehicles, and even food on the table.vehicles, and even food on the table.

Types of Personal Property Types of Personal Property




In contrast,In contrast, intangible personal intangible personal propertyproperty has no substance and has no substance and cannot be touched. cannot be touched.

If someone owes you money, for If someone owes you money, for example, the right to receive money is example, the right to receive money is intangible personal property.intangible personal property.

Types of Personal Property Types of Personal Property




A gift of personal property has three A gift of personal property has three requirements:requirements:

Gifts of Personal Property Gifts of Personal Property

1.1. The The donordonor (the one making the gift) (the one making the gift) must intend to make the gift.must intend to make the gift.




2.2. The gift must be delivered.The gift must be delivered.3.3. The The doneedonee (the one receiving the (the one receiving the

gift) must accept the gift.gift) must accept the gift.

Gifts of Personal Property Gifts of Personal Property




If you find lost property, such as a If you find lost property, such as a watch on the sidewalk, you have a watch on the sidewalk, you have a legal duty to try to find the owner. legal duty to try to find the owner.

Lost Property Lost Property




If the owner can’t be found, you may If the owner can’t be found, you may be able to keep the property, be able to keep the property, depending on your local laws.depending on your local laws.

Lost Property Lost Property




If property is found in a public or semi-If property is found in a public or semi-public place, it is considered public place, it is considered misplaced rather than lost. misplaced rather than lost.

The owner will probably recall where it The owner will probably recall where it was left and return for it.was left and return for it.

Misplaced Property Misplaced Property




If you find property in such a place, If you find property in such a place, you should leave it with the proprietor you should leave it with the proprietor or manager.or manager.

Misplaced Property Misplaced Property




Abandoned propertyAbandoned property is property that is property that has been discarded by the owner has been discarded by the owner without the intent to reclaim without the intent to reclaim ownership. ownership.

Abandoned Property Abandoned Property




With some exceptions, anyone who With some exceptions, anyone who finds abandoned property has the finds abandoned property has the right to keep it and obtain good title right to keep it and obtain good title to it.to it.

Abandoned Property Abandoned Property




A thief acquires no title to goods that A thief acquires no title to goods that are stolen and cannot give good title are stolen and cannot give good title to anyone else. to anyone else.

Even an innocent purchaser who Even an innocent purchaser who acquired the item in good faith must acquired the item in good faith must return it to the owner.return it to the owner.

Stolen Personal Property Stolen Personal Property





How is intellectual property protected by law?




Intellectual propertyIntellectual property is an original is an original work fixed in a tangible medium of work fixed in a tangible medium of expression. Government protects expression. Government protects intellectual property by issuingintellectual property by issuing

Intellectual Property Intellectual Property

PatentsPatentsCopyrightsCopyrightsTrademarks Trademarks




A A patentpatent gives an inventor the gives an inventor the exclusive right to make, use, or sell an exclusive right to make, use, or sell an invention for 17 years. invention for 17 years.

To be patented, a device must consist To be patented, a device must consist of a new principle or idea.of a new principle or idea.

Patent Patent




A A copyrightcopyright is a right granted to an is a right granted to an author, composer, photographer, or author, composer, photographer, or artist to exclusively publish and sell an artist to exclusively publish and sell an artistic or literary work. artistic or literary work. Copyrighted works are protected for Copyrighted works are protected for the life of the author plus 70 years.the life of the author plus 70 years.

Copyright Copyright




Under the Under the fair use doctrinefair use doctrine, , copyrighted material may be copyrighted material may be reproduced without permission in reproduced without permission in certain cases. certain cases. The amount and use of the material The amount and use of the material must be reasonable and not harmful must be reasonable and not harmful to the copyright owner.to the copyright owner.

Copyright Copyright




A A trademarktrademark is a distinctive mark, is a distinctive mark, symbol, or slogan used by a business symbol, or slogan used by a business to identify and distinguish its goods to identify and distinguish its goods from products sold by others.from products sold by others.

Trademark Trademark




Which type of property is being described?

1.1. Property found in a public or semi-Property found in a public or semi-public place.public place.

2.2. Property that has no substance Property that has no substance and cannot be touched.and cannot be touched.




continued

3.3. Property that has been discarded Property that has been discarded by the owner without the intent to by the owner without the intent to reclaim ownership.reclaim ownership.

4.4. Property that is an original work Property that is an original work fixed in a tangible medium of fixed in a tangible medium of expression.expression.




ANSWERANSWER

1.1. MisplacedMisplaced2.2. IntangibleIntangible3.3. AbandonedAbandoned4.4. IntellectualIntellectual




Reviewing What You Learned

1. Give two examples of tangible personal property and one example of intangible personal property.

Section 17.1 Assessment





Tangible: clothing, books, automobiles, and food. Intangible: someone owes you money.


Answer





2. What are the three requirements of a completed gift?







Answer

1)1) Donor must intend to make the gift.Donor must intend to make the gift.2)2) The gift must be delivered.The gift must be delivered.3)3) The donee must accept the gift.The donee must accept the gift.





3. Explain the differences between lost, misplaced, and abandoned property.






Lost: found in a place that would indicate it was not put there intentionally.

Misplaced: found in a place where the owner is likely to recall having left it.


Answer





Abandoned: discarded by the owner without the intent to reclaim ownership of it.


Answer





4. Why can the owner of stolen personal property always regain possession of the item?






Because the title to the stolen goods never left the true owner.


Answer





5. Describe the difference between a patent, copyright, and trademark.






Patent: a grant by the federal government that gives an inventor the exclusive right to make, use, or sell an invention for seventeen years.


Answer





Copyright: right granted to an author, composer, photographer, or artist to exclusively publish and sell and artistic or literary work.


Answer





Trademark: a distinctive mark, symbol, or slogan used by a business to identify and distinguish its products from products sold by others.


Answer





Critical Thinking ActivityIntellectual PropertySuppose you had an idea for a pen that you could use to access the Internet.





Critical Thinking ActivityIntellectual PropertyYou would be able to download e-mail messages and read them on a small screen on the side of the pen. What would you do to protect your intellectual property?





Critical Thinking Activity AnswerIntellectual PropertyAnswers may vary, but will probably suggest applying for a patent.





Legal Skills in ActionPersonal PropertyMyra found a diamond and ruby necklace on the sidewalk near her home. She was very excited because rubies are her birthstone and she loves diamonds.





Legal Skills in ActionPersonal PropertyIs the necklace considered lost, misplaced, or abandoned property? What should Myra do with the necklace? What laws apply to this situation? Write a letter to Myra offering your advice.





Legal Skills in Action AnswerPersonal PropertyAnswers and letters will vary. The necklace is probably considered lost.

Personal Property Personal Property End of Section 17.1End of Section 17.1





What You’ll Learn

How to define a bailment (p. 368)How to define a bailment (p. 368)

How to describe kinds of bailments How to describe kinds of bailments (p. 369)(p. 369)




What You’ll Learn

How to explain who has the burden of How to explain who has the burden of proof in bailment lawsuits (p. 373)proof in bailment lawsuits (p. 373)

How to explain hotel keepers’ duties How to explain hotel keepers’ duties (p. 373)(p. 373)




What You’ll Learn

How to identify the rights and duties of How to identify the rights and duties of common carriers (p. 376)common carriers (p. 376)

How to discuss the obligations of How to discuss the obligations of common carriers toward passengers common carriers toward passengers (p. 378)(p. 378)




Why It’s Important

Understanding the law of bailments can help Understanding the law of bailments can help you avoid difficulties.you avoid difficulties.




Legal Terms

bailment (p. 368) bailment (p. 368) bailor/bailee (p. 368)bailor/bailee (p. 368)mutuum (p. 368)mutuum (p. 368)gratuitous bailments (p. 369)gratuitous bailments (p. 369)gross negligence (p. 370)gross negligence (p. 370)slight negligence (p. 371)slight negligence (p. 371)




Legal Terms

reasonable care (p. 371)reasonable care (p. 371)ordinary negligence (p. 371)ordinary negligence (p. 371)tortious bailee (p. 372)tortious bailee (p. 372)carrier (p. 376)carrier (p. 376)common carrier (p. 376)common carrier (p. 376)




Bailments of Personal Property Main Types of Bailments

Bailments for Sole Benefit of BailorBailments for Sole Benefit of BaileeMutual-Benefit BailmentsTortious BaileesBurden of Proof





Special Bailments Hotel KeepersCommon Carriers






What is a bailment?




A A bailmentbailment is the transfer of is the transfer of possession and control of personal possession and control of personal property to another with the intent that property to another with the intent that the same property will be returned the same property will be returned later.later.

Bailments of Personal Property Bailments of Personal Property




Examples of bailments include: Examples of bailments include:


Renting a video.Renting a video.Leaving your car at the shop for Leaving your car at the shop for repairs.repairs.Dropping off clothes at the cleaners. Dropping off clothes at the cleaners.




The person who transfers the property The person who transfers the property is the is the bailorbailor..

The person to whom the property is The person to whom the property is transferred is the transferred is the baileebailee..





In a bailment, neither the bailor nor In a bailment, neither the bailor nor the bailee intends that title to the the bailee intends that title to the property should pass. property should pass.

The bailee has an obligation to return The bailee has an obligation to return the same property to the bailor at a the same property to the bailor at a later time.later time.





When you loan goods to someone When you loan goods to someone with the understanding that they will with the understanding that they will be used and later replaced with be used and later replaced with different identical goods, a different identical goods, a mutuummutuum has occurred.has occurred.






What are some types of bailments?




There are three types of bailments:There are three types of bailments:

Main Types of Bailments Main Types of Bailments

1.1. Bailments for the sole benefit of Bailments for the sole benefit of the bailorthe bailor

2.2. Bailments for the sole benefit of Bailments for the sole benefit of the baileethe bailee

3.3. Mutual-benefit bailmentsMutual-benefit bailments




In the first two types, called In the first two types, called gratuitous bailmentsgratuitous bailments, property is , property is transferred to another person without transferred to another person without either party giving or asking for either party giving or asking for payments. payments.

Main Types of Bailments Main Types of Bailments




When a personal possession is When a personal possession is transferred to another person for transferred to another person for purposes that will benefit only the purposes that will benefit only the bailor, a bailment for the sole benefit bailor, a bailment for the sole benefit of the bailor results.of the bailor results.

Bailments for Sole Benefit Bailments for Sole Benefit of Bailor of Bailor




For example, your friend asks you to For example, your friend asks you to look after her car while she is away for look after her car while she is away for a week, and you agree to keep her car a week, and you agree to keep her car in your garage.in your garage.





The bailee owes a duty to use only The bailee owes a duty to use only slight care, because the bailee is slight care, because the bailee is receiving no benefit from the receiving no benefit from the arrangement. The bailee is required arrangement. The bailee is required only to refrain fromonly to refrain from gross negligence gross negligence (very great negligence).(very great negligence).





When personal property is transferred When personal property is transferred for purposes that will benefit only the for purposes that will benefit only the bailee, a bailment for the sole benefit bailee, a bailment for the sole benefit of the bailee occurs.of the bailee occurs.

Bailments for Sole Benefit Bailments for Sole Benefit of Bailee of Bailee




For example, George offered his truck For example, George offered his truck to Trina, who was moving. Trina to Trina, who was moving. Trina accepted the offer and used George’s accepted the offer and used George’s truck to move. George received no truck to move. George received no payment. Only Trina received the payment. Only Trina received the benefit of the bailment.benefit of the bailment.





The bailee is required to use great The bailee is required to use great care because possession of the goods care because possession of the goods is intended solely for the bailee’s is intended solely for the bailee’s benefit. benefit.





The bailee is responsible for even The bailee is responsible for even slight negligenceslight negligence, which is the failure , which is the failure to use the care that persons of to use the care that persons of extraordinary prudence and foresight extraordinary prudence and foresight use. use.





The bailee has the right to use the The bailee has the right to use the property only for the purpose for which property only for the purpose for which the bailment was created.the bailment was created.





Mutual-Benefit Bailments Mutual-Benefit Bailments

A mutual-benefit bailment is one in A mutual-benefit bailment is one in which both the bailor and the bailee which both the bailor and the bailee receive some benefit. receive some benefit.





For example, if you leave your car at a For example, if you leave your car at a garage to be repaired, you, the bailor, garage to be repaired, you, the bailor, receive the benefit of a repaired car. receive the benefit of a repaired car. The garage, the bailee, receives the The garage, the bailee, receives the benefit of your payment.benefit of your payment.





The bailee owes a duty to use The bailee owes a duty to use reasonable carereasonable care, or the degree of , or the degree of care that a reasonably prudent person care that a reasonably prudent person would use in the situation.would use in the situation.





The bailee is responsible for The bailee is responsible for ordinary ordinary negligencenegligence, or failing to use the care , or failing to use the care that a reasonable person would use that a reasonable person would use under the same circumstances.under the same circumstances.




17.217.2

Mutual-Benefit BailmentsMutual-Benefit Bailments Bailment Bailor Bailee Bailee

Service or repair Owns the item to be serviced or repaired

Performs the repair or service work

Performs the repair or service work

Storage or parking Owns the item to be stored or parked

Is responsible for the storing or parking

Is responsible for the storing or parking

Security for a loan Pledgor, debtor—borrows money

Pledgee, creditor—lends money

Pledgee, creditor—lends money

Renting or leasing Rents an item to someone Pay to use an item Pay to use an item

Bailments by necessity

Bailments by necessity

Gives up possession of property

Gives up possession of property

Accepts or protectsthe property

Accepts or protectsthe property




Tortious Bailee Tortious Bailee

A A tortious baileetortious bailee refers to a person refers to a person who wrongfully keeps the lost property who wrongfully keeps the lost property of another or knowingly possesses of another or knowingly possesses stolen property. stolen property.




Tortious Bailee Tortious Bailee

One who uses a bailed article for a One who uses a bailed article for a purpose other than agreed upon or purpose other than agreed upon or who refuses to return property at the who refuses to return property at the termination of the bailment may also termination of the bailment may also be considered a tortious bailee.be considered a tortious bailee.




Burden of Proof Burden of Proof

If a bailor brings suit against a bailee If a bailor brings suit against a bailee because the bailed property was because the bailed property was damaged, lost, or stolen while in the damaged, lost, or stolen while in the possession of the bailee, most courts possession of the bailee, most courts place the burden of proof on the place the burden of proof on the bailee.bailee.




Burden of Proof Burden of Proof

The reason is because the bailee is in The reason is because the bailee is in the best position to know what the best position to know what happened to the bailed property.happened to the bailed property.





What are special bailments?




Certain types of bailees have special Certain types of bailees have special obligations in addition to the duties obligations in addition to the duties imposed on all bailees. Special imposed on all bailees. Special bailees include bailees include

Special Bailments Special Bailments

Hotel keepersHotel keepersCommon carriers Common carriers




Hotel Keepers Hotel Keepers

Hotel keepers are special bailees Hotel keepers are special bailees because of the special nature of the because of the special nature of the their business. their business.

Hotel keepers, or innkeepers, operate Hotel keepers, or innkeepers, operate a hotel, motel, or inn that regularly a hotel, motel, or inn that regularly offers rooms to the public for a price.offers rooms to the public for a price.





Hotel keepers have special duties. Hotel keepers have special duties.

Duty to accept all guestsDuty to accept all guestsDuty of reasonable care--a Duty of reasonable care--a minimum standard of comfort, minimum standard of comfort, safety, and sanitationsafety, and sanitation





Must respect guests’ right of privacyMust respect guests’ right of privacyHave greater duty of care toward Have greater duty of care toward guests’ propertyguests’ propertyBy law are insurers of the guests’ By law are insurers of the guests’ property brought into the hotel property brought into the hotel




1.1. Jordan’s bat was broken, so he Jordan’s bat was broken, so he borrowed Julio’s. Who is the bailor? borrowed Julio’s. Who is the bailor? Who is the bailee?Who is the bailee?




ANSWERANSWER

Bailor —Julio; bailee—Jordan




2.2. Beth left her car with Steve at Beth left her car with Steve at CarCraft for repairs. Who is the CarCraft for repairs. Who is the bailor? Who is the bailee?bailor? Who is the bailee?




ANSWERANSWER

Bailor—Beth; bailee—CarCraft




3.3. Zenobia attended a conference on Zenobia attended a conference on global warming at the Convention global warming at the Convention Center and stayed at a nearby Red Center and stayed at a nearby Red Roof Inn. Who is the bailor? Who is Roof Inn. Who is the bailor? Who is the bailee?the bailee?




ANSWERANSWER

Bailor—Zenobia; bailee—Red Roof Inn




A A carriercarrier is a business that transports is a business that transports persons, goods, or both. persons, goods, or both.

A A common carriercommon carrier is a carrier that is is a carrier that is compensated for providing compensated for providing transportation to the general public.transportation to the general public.

Common Carriers Common Carriers




As with hotels, common carriers As with hotels, common carriers cannot turn away people who ask for cannot turn away people who ask for their services. their services.

Common Carriers Common Carriers




Common carriers of goods are liable Common carriers of goods are liable for damages to all goods they ship, for damages to all goods they ship, regardless of whether they are regardless of whether they are negligent.negligent.

Common Carriers of Goods Common Carriers of Goods




17.217.2

Exceptions to Carrier Liability Exceptions to Carrier Liability

Carriers are not liable when damages occur

because ofA public enemy

An act of God

An act of public

authority

Fault of the

shipper

Inherent nature of

the goods




A passenger is a person who enters A passenger is a person who enters the premises of a carrier with the the premises of a carrier with the intention of buying a ticket for a trip.intention of buying a ticket for a trip.A carrier must use reasonable care A carrier must use reasonable care in protecting passengers.in protecting passengers.

Common Carriers of Passengers Common Carriers of Passengers




A carrier’s duty of care to its A carrier’s duty of care to its passengers ends, in most cases, passengers ends, in most cases, when the passenger leaves the when the passenger leaves the carrier’s premises.carrier’s premises.





A common carrier must accept all A common carrier must accept all persons who seek passage, with two persons who seek passage, with two exceptions.exceptions.


1.1. When all available space is When all available space is occupied or reservedoccupied or reserved




2.2. When passengers are disorderly, When passengers are disorderly, intoxicated, insane, or infected with intoxicated, insane, or infected with a contagious diseasea contagious disease





Airlines are required to establish and Airlines are required to establish and publish priority rules for determining publish priority rules for determining which passengers holding confirmed which passengers holding confirmed reservation space may be denied reservation space may be denied boarding on an oversold flight.boarding on an oversold flight.

Bumped Airline Passengers Bumped Airline Passengers




Carriers are obligated to accept a Carriers are obligated to accept a reasonable amount of passengers’ reasonable amount of passengers’ baggage.baggage.

Passenger Baggage Passenger Baggage




A carrier is an insurer of all luggage A carrier is an insurer of all luggage that is checked through the baggage that is checked through the baggage desk, but is not responsible for items desk, but is not responsible for items that you keep at your seat or in that you keep at your seat or in overhead compartments.overhead compartments.

Passenger Baggage Passenger Baggage





1. What is a bailment? Who is the bailor, and who is the bailee?






A bailment is the transfer of possession and control of personal property to another with the intent that the same property will be returned later.


Answer





The bailor is the person who transfers the property. The bailee is the person to whom the property is transferred.


Answer





2. Name the three main types of bailments.






Bailments for the sole benefit of bailor, bailments for the sole benefit of bailee, and mutual-benefit bailments.


Answer





3. Who has the burden of proof in a bailment lawsuit?






The bailee—the one who is in the best position to know what happened.


Answer





4. What are the hotel keepers’ duties of care to their guests?






They must use reasonable care in protecting their guests from harm. They are responsible for injuries to their guests caused by the hotel’s negligence or the negligence of employees.


Answer





5. Common carriers are liable for damages to goods unless the damage comes within one of five exceptions. Name the exceptions.






(1) Acts of God; (2) acts of public enemy; (3) acts of public authorities; (4) acts of the shipper; and (5) the inherent nature of the goods.


Answer





6. When does a carrier’s duty of care to its passengers end?






When the passenger leaves the carrier’s premises.


Answer





Critical Thinking ActivityLiving Bailments The agricultural class at your school raises small animals such as hamsters, rabbits, and guinea pigs. Every weekend several students take the animals home to feed them.





Critical Thinking ActivityLiving Bailments Is this a bailment? What is the extent of care that applies? Explain your answer.





Critical Thinking Activity AnswerLiving Bailments Yes. Students may assume different types of bailment in this situation and therefore their answers to the extent of care will vary.





Legal Skills in ActionAirline ResponsibilitiesAirlines face a public relations nightmare almost every day. Planes take off late, flights are cancelled, and luggage is lost.





Legal Skills in ActionAirline ResponsibilitiesMost people don’t realize that common carriers have rules they follow regarding the transportation of passengers.





Legal Skills in ActionAirline ResponsibilitiesUsing publishing software, create a brochure that outlines the airline’s responsibilities and exceptions. Include information about bumping and baggage.





Legal Skills in Action AnswerAirline ResponsibilitiesBrochures will vary, but should include the responsibilities and exceptions covered in the text.

Personal Property Personal Property End of Section 17.2End of Section 17.2

Documents

Personal Property Chapter 9: Property & Bailments