Business Law Chapter 48 Homework Max Had Been Paid Fee For The

CHAPTER 48

PERSONAL PROPERTY AND BAILMENTS

ANSWER TO CRITICAL THINKING QUESTION

IN THE FEATURE

DIGITAL UPDATE—CRITICAL THINKING

How might a couple who enjoy purchasing virtual and digital goods together avoid

property division issues in the event of a divorce? Couples can specify in pre-nuptial

agreements who gets what if divorce occurs. As they add new virtual and digital property, they

can create addenda to their existing agreements.

ANSWERS TO QUESTIONS

AT THE ENDS OF THE CASES

Case 48.1—CRITICAL THINKING

LEGAL ENVIRONMENT

Under what circumstances would Corbello not be entitled to an accounting? Why?

Corbello would not be entitled to an accounting if she were not a co-owner of the work’s

copyright. This situation could exist if Woodward’s interest in the copyright had not passed to

her or if she had previously transferred the interest to another party.

If she had granted the right to create a derivative work to the members of the Four

Seasons, or another party, Corbello would not be entitled to an accounting. This might have

CASE 48.2—CRITICAL THINKING

WHAT IF THE FACTS WERE DIFFERENT?

Suppose that Piper had told Kauffman that she was giving the rings to Kauffman but

wished to keep them in her possession for a few more days. Would this have affected the

court’s decision in this case? Explain. Whether a gift would exist would depend on whether

Kauffman had acquired the unconditional right to remove the rings whenever she chose. In

other words, the court would ask whether Piper had given up complete control of the rings

CASE 48.3—LEGAL REASONING QUESTIONS

1. How did cases addressing the issue of a landlord’s duty under Illinois law, with

respect to a tenant’s personal property after an eviction, affect the court’s reasoning in

this case? The court in the Zissu case, after reviewing cases addressing the issue of a

landlord’s duty under Illinois law with respect to a tenant’s personal property after an eviction,

applied the principles of those cases to deny the landlord’s motion to dismiss.

In the Zissu case, Pavel and Aise Zissu lived in an apartment in Chicago, Illinois, owned

2. Besides negligence, are there other tort claims that the Zissus might have

successfully alleged in their complaint? Discuss. Besides negligence, the Zissus might

have successfully alleged in their complaint a cause for trespass to personal property,

conversion, and intentional infliction of emotional distress. (In fact, they did include these claims

in their complaint.)

CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 3

Trespass to personal property involves an injury to or interference with another’s

possession of his or her personal property, with or without physical force. This may be

committed by intentionally taking an item of personal property from the possession of another,

or by using or interfering with personal property in another’s possession. The Zissus asserted

3. Suppose that instead of putting the Zissus’ personal property outside, IH2 had taken it

to a storage facility. Would the result have been different? The conclusion of the court in

the Zissu case would likely have been the same even if, instead of placing the Zissus’ personal

property on the curb outside the apartment, IH2 had taken it to a storage facility. But the facts

might have been sufficiently different to result in no litigation—the goods might not have been

damaged or stolen in a storage facility. If so, there would have been no basis for the ground on

which the Zissus brought this suit.

4 UNIT TEN: PROPERTY AND ITS PROTECTION

ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE

AT THE END OF THE CHAPTER

1A. Type of property

2A. Type of gift

3A. Type of bailment

Finney was the bailor and Denai was the bailee in an ordinary, voluntary, gratuitous bailment for

the sole benefit of the bailor. It is ordinary because it is not special—Denai is not a common

carrier, a warehouse company, or an innkeeper. It is voluntary because the property was

4A. Standard of care

Doty was a common carrier (a publicly licensed transportation service, such as a trucking

company). A common carrier is held to a standard of care based on strict liability, rather than

reasonable care, in relation to bailed personal property. The carrier is thus liable, regardless of

ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE

AT THE END OF THE CHAPTER

Common carriers should not be able to limit their liability. Those who use common

carriers for shipping should not have to worry about what happens if a parcel is lost or

CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 5

ANSWERS TO ISSUE SPOTTERS

AT THE END OF THE CHAPTER

1A. Quintana Corporation sends important documents to Regal Nursery, Inc., via

Speedy Messenger Service. While the documents are in Speedy’s care, a third party

causes an accident to Speedy’s delivery vehicle that results in the loss of the documents.

2A. Rosa de la Mar Corporation ships a load of goods via Southeast Delivery

Company. The load of goods is lost in a hurricane in Florida. Who suffers the loss?

ANSWERS TO BUSINESS SCENARIOS

AT THE END OF THE CHAPTER

48-1A. Duties of the bailee

This bailment was created primarily for the benefit of the bailor. Under these circumstances the

bailee can be expected to use only slight care in the protection of the bailed property from loss

or damage. Because the bailee’s custom was to leave the garage door open on short trips, her

48-4A. Duties of the bailee

One of the duties of the bailor is to provide the bailee with goods that are free from defects that

could cause injury to the bailee. If the bailed goods are defective, the bailor’s duty is to give the

bailee appropriate notice. Failure to do this may cause the bailor to be liable for negligence.

6 UNIT TEN: PROPERTY AND ITS PROTECTION

(b) In a mutual benefit bailment (a rental bailment is one in which both partners re-

ANSWERS TO BUSINESS CASE PROBLEMS

AT THE END OF THE CHAPTER

48–3A. Gifts

A gift is a transfer of property without consideration. To make a valid gift, the donor must part

with the control of the property that is to be the gift with “donative intent” (an intent that title to

the property will pass to the donee). There are three requirements: (1) the donor’s donative

48–4A. BUSINESS CASE PROBLEM WITH SAMPLE ANSWER—Bailment obligation

Moreland should be awarded damages, and Gray should take nothing. The bailee must exercise

reasonable care in preserving the bailed property. What constitutes reasonable care in a

bailment situation normally depends on the nature and specific circumstances of the bailment. If

the bailed property has been lost or is returned damaged, a court will presume that the bailee

was negligent.

48-5A. Gifts

Nielsen can take the Stig with him—Koerner is not the Stig’s rightful owner. A gift is a means of

transferring the ownership of personal property. A gift is a voluntary transfer of property

ownership. There are three requirements for an effective gift—(1) donative intent on the donor’s

part, (2) delivery, and (3) acceptance by the donee.

48-6A. Lost property

Simon’s cell phone was lost. Property that is involuntarily left is lost property. Property that has

voluntarily been placed somewhere by the owner and then inadvertently forgotten is mislaid

property. Property that has been discarded by the true owner, who has no intention of reclaiming

title to it, is abandoned property.

The finder’s responsibility with respect to lost property is to return it. A finder of the

48–7A. Bailments

Most likely, under the facts in the problem, CFASS is fully liable for the damage to Sullivan’s

artworks. The warehouser appears to have been negligent in failing to protect the property from

damage by the storm, and the limitation-to–liability clause in the parties’ agreement is not likely

to apply.

A bailment is created when a party delivers his or her personal property into the

possession of another who is to be responsible for the care and custody of the property. If bailed

property is returned damaged, a court will presume that the bailee was negligent. The bailee

can rebut this presumption by showing that he or she exercised due care. For example, the

bailee’s obligation will be excused if the property was destroyed through no fault of the bailee. In

an ordinary bailment, a bailee has the right to limit liability for damage to the property. But a limit

for a party’s own wrongful acts, such as an exculpatory clause may provide, is often held to be

illegal. In this problem, Sullivan delivered his artworks to CFASS for storage. Based on the terms

48–8A. A QUESTION OF ETHICS—Gifts

(a) The three elements of a gift are the donor’s intent to make it, the donor’s (or

agent’s) delivery of it, and the donee’s acceptance of it. Broadly applying those requirements,

the trial court held that “the passing of the ring was a completed gift on the transfer of the ring

to” Campbell. The court stated that as soon as Campbell received the ring and accepted it, it

became a “final” gift and “nothing else that happens thereafter changes it. I think that

engagement rings are gifts.”

CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 9

(b) In the Crippen case, the appellate pointed out that “there are cases holding that a

donee is entitled to retain an engagement ring when the donor is responsible for the failed

engagement.” Here, however, the court “decline[d] to follow these cases because we believe the

rule adopted by us is more in keeping with the essence of what occurs, and what is

(c) The answer to this question should follow the application of the same principles

that influenced the answer to the previous question. If, as the trial court held, “the passing of the

ring was a completed gift on the transfer of the ring” then the creditor in this problem should not

10 UNIT TEN: PROPERTY AND ITS PROTECTION

ANSWERS TO LEGAL REASONING GROUP ACTIVITY QUESTIONS

AT THE END OF THE CHAPTER

48–9A. Bailments

(a) Rosa is entitled to the return of the cash. There was a bailment between her and

Sébastien. A bailment is formed by the delivery of personal property without the transfer of title

by one person, the bailor, to another, the bailee, usually under an agreement for a particular

(b) The government’s best argument that the arrangement between Rosa and

Sébastien was not a bailment is that whoever possesses cash has title to it. On that ground,