Ch. 28: Personal Property and Bailments – No. 1
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
Property: Legally protected rights and interests in anything
with an ascertainable value that is subject to ownership.
Personal Property: Movable property – sometimes
of which does not depend on physical existence
property (other than land) can be detached from the land
TYPES OF PROPERTY
Ch. 28: Personal Property and Bailments – No. 2
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
FIXTURES
Fixture: A building or other improvement, other than a trade
fixture, attached to real property
(1) in accordance with the attaching party’s intent;
improvements to realty) for a tenant’s commercial purpose
(1) that remains the property of the tenant,
(2) entitling the tenant to remove the trade fixture at the end
of the lease (subject to the tenant’s duty to pay for
repairs to the realty or improvement caused by removing
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACQUIRING OWNERSHIP: NON-GIFTS
A person may acquire rights in personal property by
creating or producing the property;
expending labor or materials to add value to someone
else’s property (accession);
the property’s value or changes its identity, the
improver may take ownership, subject to a duty to
compensate the prior owner.
commingling her personal property with another’s so
Ch. 28: Personal Property and Bailments – No. 4
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACQUIRING OWNERSHIP: GIFTS
Gift: Any voluntary transfer of property made without
consideration. A gift requires:
(1) Donative Intent: The donor (the person giving the gift)
Certain types of gifts can be delivered
constructively (i.e., without physical delivery) or
by an agent acting on the donor’s behalf.
(3) Acceptance: The donee must accept the gift.
revoke the gift.
Ch. 28: Personal Property and Bailments – No. 5
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
MISLAID, LOST, OR ABANDONED PROPERTY
Lost Property: Property with which the owner has
involuntarily parted and then cannot find or recover. A finder
can claim title to the property superior to that of anyone
except the true owner.
unknown and no one timely claims the property after the
finder reports discovering it.
Abandoned Property: Property with which the owner has
voluntarily parted with no intention of recovering it. A finder
Ch. 28: Personal Property and Bailments – No. 6
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILMENTS
Bailment: Entrusting one person’s (the bailor’s) personal
property to the another person’s (the bailee’s) care, obliging
the bailee to return the bailed property to the bailor (or to a
possession) or constructively (the bailor transfers the
right to possess) deliver the bailed property to the bailee
(1) giving the bailee exclusive possession and control
over the property (subject to the bailor’s superior
rights), and
Involuntary Bailment: In rare cases, the law will
impose a bailment despite the bailor’s lack of consent
and the bailee’s lack of knowledge.
Ch. 28: Personal Property and Bailments – No. 7
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ORDINARY BAILMENTS
Bailment for the Bailor’s Sole Benefit: A gratuitous
bailment made for the bailor’s convenience and benefit.
Bailment for the Bailee’s Sole Benefit: A gratuitous
bailment made for the bailee’s convenience and benefit.
Bailment for the Bailor’s and Bailee’s Mutual Benefit:
Ch. 28: Personal Property and Bailments – No. 8
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILEES: RIGHTS AND DUTIES
Bailee’s Rights: Absent a contrary agreement, a bailee may
(1) control and possess the bailed property during the term
of the bailment agreement;
(b) it is not contrary to public policy.
Bailee’s Duties: Absent a contrary agreement, a bailee must
(1) take reasonable care of the bailed property, and
(2) surrender the bailed property to the bailor or dispose of
Ch. 28: Personal Property and Bailments – No. 9
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILORS: RIGHTS AND DUTIES
(4) will not convert the goods unless agreed;
(5) will see that any repairs or service to the property are
done in a workmanlike manner; and that
(6) the bailee’s liability will not be limited except as the
bailor agreed and the law permits.
Ch. 28: Personal Property and Bailments – No. 10
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SPECIAL BAILMENTS
strictly liable for any loss of or damage to the bailed
property resulting from (1) an act of God, (2) a public
enemy’s act, (3) the bailor’s act, (4) a governmental
order, or (5) the bailed property’s inherent nature.
Innkeeper: Someone who, for a fee, provides public lodging
as a regular business and is strictly liable for any loss of or
damage to a guest’s property.
An innkeeper (1) is strictly liable, if at all, only to
guests, not lodgers; and (2) may avoid strict liability by
providing a safe for the guests’ use, whether or not the
guest uses the safe.
Ch. 28: Personal Property and Bailments – No. 2
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
FIXTURES
Fixture: A building or other improvement, other than a trade
fixture, attached to real property
(1) in accordance with the attaching party’s intent;
improvements to realty) for a tenant’s commercial purpose
(1) that remains the property of the tenant,
(2) entitling the tenant to remove the trade fixture at the end
of the lease (subject to the tenant’s duty to pay for
repairs to the realty or improvement caused by removing
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACQUIRING OWNERSHIP: NON-GIFTS
A person may acquire rights in personal property by
creating or producing the property;
expending labor or materials to add value to someone
else’s property (accession);
the property’s value or changes its identity, the
improver may take ownership, subject to a duty to
compensate the prior owner.
commingling her personal property with another’s so
Ch. 28: Personal Property and Bailments – No. 4
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACQUIRING OWNERSHIP: GIFTS
Gift: Any voluntary transfer of property made without
consideration. A gift requires:
(1) Donative Intent: The donor (the person giving the gift)
Certain types of gifts can be delivered
constructively (i.e., without physical delivery) or
by an agent acting on the donor’s behalf.
(3) Acceptance: The donee must accept the gift.
revoke the gift.
Ch. 28: Personal Property and Bailments – No. 5
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
MISLAID, LOST, OR ABANDONED PROPERTY
Lost Property: Property with which the owner has
involuntarily parted and then cannot find or recover. A finder
can claim title to the property superior to that of anyone
except the true owner.
unknown and no one timely claims the property after the
finder reports discovering it.
Abandoned Property: Property with which the owner has
voluntarily parted with no intention of recovering it. A finder
Ch. 28: Personal Property and Bailments – No. 6
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILMENTS
Bailment: Entrusting one person’s (the bailor’s) personal
property to the another person’s (the bailee’s) care, obliging
the bailee to return the bailed property to the bailor (or to a
possession) or constructively (the bailor transfers the
right to possess) deliver the bailed property to the bailee
(1) giving the bailee exclusive possession and control
over the property (subject to the bailor’s superior
rights), and
Involuntary Bailment: In rare cases, the law will
impose a bailment despite the bailor’s lack of consent
and the bailee’s lack of knowledge.
Ch. 28: Personal Property and Bailments – No. 7
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ORDINARY BAILMENTS
Bailment for the Bailor’s Sole Benefit: A gratuitous
bailment made for the bailor’s convenience and benefit.
Bailment for the Bailee’s Sole Benefit: A gratuitous
bailment made for the bailee’s convenience and benefit.
Bailment for the Bailor’s and Bailee’s Mutual Benefit:
Ch. 28: Personal Property and Bailments – No. 8
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILEES: RIGHTS AND DUTIES
Bailee’s Rights: Absent a contrary agreement, a bailee may
(1) control and possess the bailed property during the term
of the bailment agreement;
(b) it is not contrary to public policy.
Bailee’s Duties: Absent a contrary agreement, a bailee must
(1) take reasonable care of the bailed property, and
(2) surrender the bailed property to the bailor or dispose of
Ch. 28: Personal Property and Bailments – No. 9
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
BAILORS: RIGHTS AND DUTIES
(4) will not convert the goods unless agreed;
(5) will see that any repairs or service to the property are
done in a workmanlike manner; and that
(6) the bailee’s liability will not be limited except as the
bailor agreed and the law permits.
Ch. 28: Personal Property and Bailments – No. 10
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SPECIAL BAILMENTS
strictly liable for any loss of or damage to the bailed
property resulting from (1) an act of God, (2) a public
enemy’s act, (3) the bailor’s act, (4) a governmental
order, or (5) the bailed property’s inherent nature.
Innkeeper: Someone who, for a fee, provides public lodging
as a regular business and is strictly liable for any loss of or
damage to a guest’s property.
An innkeeper (1) is strictly liable, if at all, only to
guests, not lodgers; and (2) may avoid strict liability by
providing a safe for the guests’ use, whether or not the
guest uses the safe.