Business law 17 ( study )

The bailee must return the goods to the bailor and no one else.

False

The subject of the bailment must be real property.

False

A bailee entitled to payment may exercise the bailee's lien in mutual-benefit bailments.

True

If you lend a pen to a fellow student you have created a bailment.

True

It is possible for a person to have temporary control of another's personal property yet not have a bailment.

True

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.

True

In a ________ , ownership remains with the manufacturer or wholesaler until the goods are sold.

consignment

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

demurrage

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 ______ care.

extraordinary

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.

extraordinary

Minimal care means that the bailee will be liable if negligent in some way.

False

A gratuitous bailment for the sole benefit of the bailee requires a duty of care that is extraordinary.

True

A mutual-benefit bailment requires ordinary care of the bailed property by the bailee.

True

Actual bailments and constructive bailments are two ways to transfer possession and control of goods.

True

Which of the following is a common means in which to amend the bailee's duty of care? a. contract b. lawsuit c. legislation d. both a and c

a. contract

When goods are bailed with common carriers and hotels, the duty of care is a. extraordinary. b. any of these. c. minimal. d. ordinary.

a. extraordinary.

When Yu-lan borrows Ned's van without paying Ned any money for the use of the van, what type of bailment exists? a. gratuitous bailment b. none of these c. extraordinary bailment d. mutual-benefit bailment

a. gratuitous bailment

While on vacation, Rick places his vehicle in your garage for safekeeping until he returns. Which of the following is true? a. A gratuitous bailment exists for the sole benefit of the bailee. b. A gratuitous bailment exists for the sole benefit of the bailor. c. An extraordinary bailment exists for the sole benefit of the bailee. d. A mutual-benefit bailment exists for the benefit of both parties.

b. A gratuitous bailment exists for the sole benefit of the bailor.

Which of the following is untrue? a. A bailment may end when the time agreed upon by the parties has expired. b. Death, insanity, or bankruptcy will end the bailment even when the bailee's duties can be performed by another. c. A bailment may end when the agreed-upon purpose has been achieved. d. All the above are true.

b. Death, insanity, or bankruptcy will end the bailment even when the bailee's duties can be performed by another.

The nature of the bailee's duty of care may be modified by a. legislation. b. any of these. c. disclaimer. d. contract.

b. any of these.

Who may charge demurrage? a. manufacturer shipping its goods b. common carrier c. recipient of the shipped goods d. All of the above can charge demurrage.

b. common carrier

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? a. constructive bailment b. involuntary bailment c. none of these d. voluntary bailment

b. involuntary bailment

Involuntary bailments, which arise without the consent of the bailee, call for a. any of these. b. minimal care. c. extraordinary care. d. ordinary care.

b. minimal care.

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. ordinary bailment b. mutual-benefit c. extraordinary d. involuntary

b. mutual-benefit

A mutual-benefit bailment, in which consideration is given and received by both bailor and bailee, invokes the duty of a. minimal care. b. none of these. c. nominal care. d. extraordinary care.

b. none of these.

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)

bailee's lien

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

bailment for hire

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. c. Maurice only has custody of the computers. d. Both b and c are accurate.

c. Maurice only has custody of the computers.

Which of the following is true regarding minimal care? a. Minimal care is voluntary. b. The bailee must make every effort to identify the owner of the goods. c. Minimal care means the bailee must not ignore, waste, or destroy the bailed property. d. Minimal care means the bailee will be strictly liable for any damage, loss, or injury to the goods.

c. Minimal care means the bailee must not ignore, waste, or destroy the bailed property.

Which of the following statements represents an inaccurate understanding of bailment relations? a. A transfer of temporary control takes place. b. A transfer of temporary possession takes place. c. The subject of bailment can be both personal and real property. d. Both parties intend to have the goods returned.

c. The subject of bailment can be both personal and real property.

A bailment ends when a. the agreed purpose has been achieved. b. the parties mutually agree to end it. c. any of these. d. the agreed time has elapsed.

c. any of these.

Which of the following bailments do not arise from contracts? a. mutual-benefit bailment b. extraordinary bailment c. gratuitous bailment d. All of these arise from contracts.

c. gratuitous bailment

In a mutual-benefit bailment the bailor's main duty is a. to pay the bailee. b. to return the goods. c. to provide goods fit for the intended purpose. d. none of the above.

c. to provide goods fit for the intended purpose.

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.

carrier's lien

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)

common carrier

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? a. Brian is the bailor and Christine is the bailee. b. Christine is the bailor and Brian is the bailee. c. Christine is the bailor and Midwest is the bailee. d. Midwest is the bailor and Christine is the bailee.

d. Midwest is the bailor and Christine is the bailee.

When a prospective buyer uses the goods to decide whether or not to buy them, it is a. a carrier's lien. b. a consignment. c. a bailee's lien. d. a sale on approval

d. a sale on approval

Agreeing to take care of a neighbor's plants for free during their vacation would require you to exercise a. ordinary care. b. extraordinary care. c. gratuitous care. d. minimal care.

d. minimal care.

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.

ordinary

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)

sale on approval