Chapter 17: Bailments
1. If you lend a pen to a fellow student you have created a bailment.
2. The subject of the bailment must be real property.
3. Actual bailments and constructive bailments are two ways to transfer possession and control of goods.
4. It is possible for a person to have temporary control of another’s personal property yet not have a bailment.
5. The bailee must return the goods to the bailor and no one else.
6. A mutual-benefit bailment requires ordinary care of the bailed property by the bailee.
7. A gratuitous bailment for the sole benefit of the bailee requires a duty of care that is extraordinary.
8. Minimal care means that the bailee will be liable if negligent in some way.
9. The level of care due in a bailment cannot be modified by a disclaimer unless the bailor is aware of the
limitation before the purchase.
10. A bailee entitled to payment may exercise the bailee’s lien in mutual-benefit bailments.
11. A bailment ends when
A. the parties mutually agree to end it.
B. the agreed time has elapsed.
12. When goods are bailed with common carriers and hotels, the duty of care is
C. ordinary.
D. any of these.
13. A mutual-benefit bailment, in which consideration is given and received by both bailor and bailee, invokes
the duty of
A. extraordinary care.
B. minimal care.
14. Involuntary bailments, which arise without the consent of the bailee, call for
C. ordinary care.
D. any of these.
15. Agreeing to take care of a neighbor’s plants for free during their vacation would require you to exercise
C. ordinary care.
D. gratuitous care.
16. The nature of the bailee’s duty of care may be modified by
A. contract.
B. disclaimer.
17. Which of the following bailments do not arise from contracts?
C. mutual-benefit bailment
D. All of these arise from contracts.
18. Who may charge demurrage?
C. recipient of the shipped goods
D. All of the above can charge demurrage.
19. When a prospective buyer uses the goods to decide whether or not to buy them, it is
A. a bailee’s lien.
B. a carrier’s lien.
20. In a mutual-benefit bailment the bailor’s main duty is
A. to pay the bailee.
B. to return the goods.
C. A bailment may end when the agreed-upon purpose has been achieved.
D. All the above are true.
22. If Antonio rents a car for one week from Ugly Duckling Rent-A-Car at a price of $109.25, what type of
bailment was created?
A. extraordinary
B. ordinary bailment
23. Brian represents Midwest Candy & Fund Raising. In his capacity he contacts Christine who agrees to take
40 boxes of Midwest’s “Chocolate Turtles” for her organization to sell at a price of $8 per box. At the end of a
two-week time period, Christine will return any unsold and unopened boxes of candy and pay Midwest $4 for
each box sold. In this situation, which of the following is true?
C. Christine is the bailor and Midwest is the bailee.
D. Christine is the bailor and Brian is the bailee.
24. When Yu-lan borrows Ned’s van without paying Ned any money for the use of the van, what type of
bailment exists?
A. mutual-benefit bailment
25. Which of the following is a common means in which to amend the bailee’s duty of care?
C. legislation
D. both a and c
26. While on vacation, Rick places his vehicle in your garage for safekeeping until he returns. Which of the
following is true?
C. An extraordinary bailment exists for the sole benefit of the bailee.
D. A mutual-benefit bailment exists for the benefit of both parties.
27. Which of the following is true regarding minimal care?
A. Minimal care means the bailee will be strictly liable for any damage, loss, or injury to the goods.
B. Minimal care is voluntary.
28. After you leave for vacation, your dog digs a hole under the fence and escapes. Your neighbor finds your
dog and takes care of it until you return. What type of bailment exists in this situation?
C. constructive bailment
D. none of these
29. Which of the following statements represents an inaccurate understanding of bailment relations?
A. A transfer of temporary possession takes place.
B. A transfer of temporary control takes place.
30. Maurice is hired to work as a security guard at Coastline Computers where he guards the manufacturing and
storage facility for Coastline’s computers. Which of the following statements accurately reflects Maurice’s legal
status in relation to the computers?
A. Maurice is a bailor.
B. Maurice is a bailee.
31. Deon contracts with WorldWide Shipping to transport crated furniture from San Diego to his furniture store
in Topeka, Kansas. Deon neglects to pay for these transportation charges. WorldWide Shipping may enforce
a(n) ____________________ for the unpaid charges.
32. In a ____________________, ownership remains with the manufacturer or wholesaler until the goods are
sold.
33. Julia wants to borrow Chelsae’s $2,000 diamond necklace and matching earrings to wear to the junior-senior
prom. Chelsae agrees. Julia’s duty of care in this bailment arrangement would be ____________________
34. As a seamstress you agree to take Silvia’s clothes and make the alterations upon which the two of you agree
within the next five days. Silvia agrees to pay you $45 for the alterations. In this type of bailment, you must
exercise ____________________ care.
35. Home & Garden rents 24 white lawn tables and chairs to Miguel for a fee of $329.95. Because a fee is
involved, this is an example of ____________________.
36. Consolidated Freightway agrees to transport Jona’s grand piano from Pittsburgh to Phoenix for a fee of
$1,000. Consolidated Freightway is legally known as a(n) ____________________.
37. Tanner, a jewelry salesman, checks into his hotel and then leaves his sample case in the hotel safe. The hotel
is required by law to exercise ___________________ care of the case.
38. Rudy operates a Western wear store specializing in Western-style jeans, hats, belts, shirts, and boots.
Although Rudy does not pay for them, Drake sends Rudy 36 pairs of boots thereby permitting Rudy to use the
boots to decide whether to buy them. This type of bailment arrangement is known as a(n)
____________________.
39. Marsha places her furniture and other household belongings in Sam’s Storage agreeing to pay $80 per
month. Marsha pays two-month’s rent in advance, but fails to pay both the third and fourth month’s rent. As
Sam has not received the payment for which he is entitled, he changes the lock on Marsha’s storage unit and
retains possession of her belongings. Sam is exercising his right known as a(n) ____________________.
40. Chocoholics manufactures unique, exquisite chocolates. Leslie, a sales agent with Chocoholics, arranges
with Confection Shipment Inc. for shipment of 40 boxes of chocolate from Chocoholics to Bailey’s Department
store in Albuquerque, New Mexico. When Confection Shipment’s truck arrives at Chocoholics warehouse,
however, its driver waits more than four hours for the chocolate product to be placed onto her truck. Confection
Shipment can charge Chocoholics a fee for this delay known as ____________________.
41. Carla borrowed Ann’s food processor to make pizza sauce for canning. Carla got a wooden spoon stuck in
the blades and burned up the motor. What type of bailment was created? What level of care was violated?
Explain your answer.
42. Nick borrowed Calvin’s truck to haul cement blocks and lumber for a garage he was building. Calvin forgot
to tell Nick that he had noticed some brake fluid on the ground and suspected a hole in the brake line. If the
brake line fails, who will be liable for injuries, Nick or Calvin? Why? Explain your answer.