Question 1

The majority of chattel leases are merely forms of bailment.Discuss.

Accepted Answer

Bailment is the transfer of possession o

Question 2

A bailee (a hotel)is liable for damage to goods of guests only if the damage was caused by the negligence of the hotel's employees.

Accepted Answer

A) True 
 B)False

Question 3

Define Bailment.

Accepted Answer

Bailment is a transfer or deposit of per

Question 4

Temporary custody of a car belonging to a friend who has no garage and is going away on a business trip is an example of

Accepted Answer

A) a bailment service. 
B) bailment borrowing. 
C) bailment for value. 
D) bailment benefiting bailor. 
E) gratuitous bailment-bailee benefit. 
A) a bailment service. 
B) bailment borrowing. 
C) bailment for value. 
D) bailment benefiting bailor. 
E) gratuitous bailment-bailee benefit.

Question 5

Explain the difference between an operating lease and a purchase lease.

Accepted Answer

An operating lease tends to be short-ter

Question 6

Use the fact situation above to answer the question. In the fact situation above,the lease is best described as

Accepted Answer

A) a hire-purchase agreement. 
B) an operating lease. 
C) a sale and purchase agreement. 
D) a security lease. 
E) none of the above 
A) a hire-purchase agreement. 
B) an operating lease. 
C) a sale and purchase agreement. 
D) a security lease. 
E) none of the above

Question 7

Explain why the duty of care and hence resulting liability is greater in bailments for reward or payment than in gratuitous bailments.

Accepted Answer

Gratuitous bailments are generally volun

Question 8

A hire-purchase agreement gives only possession of the chattel,not ownership.

Accepted Answer

A) True 
 B)False

Question 9

Which of the standards of care listed below describe the standard of care required by a business that hires out equipment?

Accepted Answer

A) care equivalent to what a prudent and diligent person would take in the use of his or her own property 
B) care equivalent to a gratuitous bailment for the benefit of the bailor 
C) care equivalent to a gratuitous bailment for the benefit of both parties 
D) bailment standards set by the Universal Commercial Code 
E) care equivalent to bailment of a common carrier 
A) care equivalent to what a prudent and diligent person would take in the use of his or her own property 
B) care equivalent to a gratuitous bailment for the benefit of the bailor 
C) care equivalent to a gratuitous bailment for the benefit of both parties 
D) bailment standards set by the Universal Commercial Code 
E) care equivalent to bailment of a common carrier

Question 10

Long term leases in which payments add up to the value of the property are more likely to be purchase leases.

Accepted Answer

A) True 
 B)False

Question 11

Briefly describe the implied term of quiet possession as it relates to chattel leases.

Accepted Answer

The law implies a warranty of quiet poss

Question 12

Yale took a $900 three-piece suit into ABC Drycleaning Inc.When he returned to pick it up,he was advised that it had been stolen,along with the clothing of a number of other customers.The dry cleaning building had metal bars covering the windows,and the clothes of Yale and the other customers were in a locked room.The thief had,with a lot of effort,removed the bars to one of the windows and smashed off the lock to the room containing the clothes.Should Yale be able to succeed in an action against ABC Drycleaning? Give reasons for your opinion.

Accepted Answer

Yale would probably not succeed.A bailme

Question 13

The operating lease tends to be a long-term lease,and the purchase lease tends to be a short-term lease.

Accepted Answer

A) True 
 B)False

Question 14

Provide one example of a gratuitous bailment and one example of a bailment for value.

Accepted Answer

Any example that demonstrates that no pa

Question 15

Bailment is the transfer or deposit of personal property such that the party to whom the property is transferred becomes the owner.

Accepted Answer

A) True 
 B)False

Question 16

Lucy brought her badly stained Persian rug in to be cleaned.The cleaners gave her a receipt in which a clause disclaimed all liability for damage arising from normal handling.When Lucy returned for the rug,it was in an advanced state of deterioration.The cleaners claimed it was exempted from damages by its written disclaimer.The courts would

Accepted Answer

A) exempt the cleaners from liability based on the exemption clause. 
B) interpret the clause most strongly against the plaintiff. 
C) side with Lucy's claim for damages. 
D) explain why the exemption clause would not apply. 
E) require a reasonable explanation as to why the damage was not the result of negligence. 
A) exempt the cleaners from liability based on the exemption clause. 
B) interpret the clause most strongly against the plaintiff. 
C) side with Lucy's claim for damages. 
D) explain why the exemption clause would not apply. 
E) require a reasonable explanation as to why the damage was not the result of negligence.

Question 17

Bailment

Accepted Answer

A) requires transfer of possession of personal property. 
B) arises only from a contract between bailor and bailee. 
C) is a consignment with transfer of title. 
D) alters ownership of a specific item. 
E) cannot include a chattel. 
A) requires transfer of possession of personal property. 
B) arises only from a contract between bailor and bailee. 
C) is a consignment with transfer of title. 
D) alters ownership of a specific item. 
E) cannot include a chattel.

Question 18

Why is a bailor better off on the insolvency of its bailee than a creditor on the insolvency of its debtor?

Accepted Answer

A bailor is better off because the artic

Question 19

A and B agree that A will lease a truck owned by B.The truck is valued at $30 000 and the term,which cannot be cancelled,is three years,by which time A will have paid slightly more than $22 500.00 in lease payments.In this situation,the lease is best described as

Accepted Answer

A) a hire-purchase agreement. 
B) a security lease. 
C) a financing lease. 
D) an operating lease. 
E) a purchase or capital lease. 
A) a hire-purchase agreement. 
B) a security lease. 
C) a financing lease. 
D) an operating lease. 
E) a purchase or capital lease.

Question 20

Identify which three of the following statements are FALSE.
a.A finder generally acquires a good title against everyone except the owner,but this rule has been disqualified by the courts so that it applies only to things found in what the courts have chosen to call non-public places.
b.When goods are damaged in the hands of a business acting as a bailee,the burden of proving it was not negligent is placed upon the bailee because it is difficult for the bailor to ascertain exactly how the loss occurred.
c.At common law a warehousing firm obtains a lien upon goods.
d.An act of God is a natural catastrophe,and it will not include fire unless it has been started by lightning.
e.A hotel may refuse to accept the goods of a guest for safe deposit and retain the benefit of reduced liability under the applicable provincial legislation.

Accepted Answer

Statements

Exam 15: Bailment and Leasing

The majority of chattel leases are merely forms of bailment.Discuss.

A bailee (a hotel)is liable for damage to goods of guests only if the damage was caused by the negligence of the hotel's employees.

Define Bailment.

Temporary custody of a car belonging to a friend who has no garage and is going away on a business trip is an example of

Explain the difference between an operating lease and a purchase lease.

Use the fact situation above to answer the question. In the fact situation above,the lease is best described as

Explain why the duty of care and hence resulting liability is greater in bailments for reward or payment than in gratuitous bailments.

A hire-purchase agreement gives only possession of the chattel,not ownership.

Which of the standards of care listed below describe the standard of care required by a business that hires out equipment?

Long term leases in which payments add up to the value of the property are more likely to be purchase leases.

Briefly describe the implied term of quiet possession as it relates to chattel leases.

The operating lease tends to be a long-term lease,and the purchase lease tends to be a short-term lease.

Provide one example of a gratuitous bailment and one example of a bailment for value.

Bailment is the transfer or deposit of personal property such that the party to whom the property is transferred becomes the owner.

Bailment

Why is a bailor better off on the insolvency of its bailee than a creditor on the insolvency of its debtor?

A and B agree that A will lease a truck owned by B.The truck is valued at $30 000 and the term,which cannot be cancelled,is three years,by which time A will have paid slightly more than $22 500.00 in lease payments.In this situation,the lease is best described as

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