Question 1

Buck,fearing death from severe injuries suffered in a machinery accident,assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl,a friend,who gladly accepts.Buck ends up recovering from the injuries.Why must Pearl give the certificate of deposit back to Buck?
A)This type of gift is known as a gift causa mortis.It is a conditional gift which is conditioned on Buck's actually dying.Because Buck recovered, the gift is automatically revoked.
B)This is an inter vivos gift because Buck was still alive when the gift was made. Any inter vivos gift is revocable because there is no consideration to make Buck's delivery of the certificate binding under contract law.
C)This is an inter vivos gift and due to state laws, gifts in contemplation of death must be written into a valid will or otherwise the deceased's assets will be distributed according to state statute.
D)This gift is an ordinary gift, but it is revocable because we don't know if the certificate of deposit has matured or not.

Accepted Answer

The type of gift described in the scenario is a gift causa mortis, which is a conditional gift conditioned on the donor's death. Since Buck recovered, the condition was not met and the gift is automatically revoked.

Question 2

Jerry enters a restaurant and hangs his coat in an unattended cloakroom near the entrance of the restaurant.Even though no employee of the restaurant is present,the provision of the cloakroom makes Jerry think it will be safe.In this situation,the restaurant is the bailor of Jerry's coat.

Accepted Answer

Jerry, by leaving his coat in the cloakroom, is entrusting his property to the care of the restaurant, making him the bailor and the restaurant the bailee.

Question 3

Percival takes his computer to a repair shop to have the disk drive repaired.This is most likely a
A)bailor benefit bailment.
B)bailee benefit bailment.
C)mutual benefit bailment.
D)leasehold arrangement.

Accepted Answer

A mutual benefit bailment occurs when both parties benefit from the bailment. In this case, Percival benefits from having his computer repaired, while the repair shop benefits from being paid for their services. Therefore, it is a mutual benefit bailment. The other options do not fit as well, since a bailor benefit bailment would only benefit Percival, a bailee benefit bailment would only benefit the repair shop, and a leasehold arrangement involves the transfer of possession, which is not relevant in this situation.

Question 4

Charles agrees to store Tuan's car in Charles's garage for the winter months while Tuan visits his grandmother in California.As a bailee,Charles is automatically entitled to use Tuan's car while Tuan is away.

Accepted Answer

As a bailee, Charles is not automatically entitled to use Tuan's car while Tuan is away unless Tuan has given him permission to do so.

Question 5

Mega Corporation,the bailor,negotiates a bailment agreement with Huge Corporation,the bailee.Huge Corporation insists that an exculpatory clause be included in the terms and conditions of the bailment agreement.Later,Huge Corporation negligently (ordinary negligence,not gross negligence)damages the property which is the subject of the bailment.Most courts will allow Huge Corp.to stand behind its exculpatory clause and deny liability.

Accepted Answer

Many courts will enforce exculpatory clauses in bailment agreements, even if the bailee is negligent, as long as the clause is clear and unambiguous, and there was no fraud or duress involved in the negotiation of the agreement.

Question 6

Stephen wants to give his niece,Dawn,a piece of jewelry as a gift.Stephen gives Tracy,his agent,the bracelet to take to Dawn.The delivery element of making a gift has been completed.

Accepted Answer

The answer of Stephen wants to give his niece,Dawn,a piece...

Question 7

Jody loaned her neighbor,Phil,her snow blower.Phil set it near his driveway,and later accidentally ran over and destroyed it.In a suit to recover damages,Jody as plaintiff has the burden of proving that Phil was negligent and caused the destruction of her snow blower.

Accepted Answer

The answer of Jody loaned her neighbor,Phil,her snow blower.Phil set...

Question 8

If one party makes accessions without agreement and the improvements can be "undone" without damaging the property,the improver must undo them.

Accepted Answer

This is a principle of property law known as the "doctrine of accession." If an improver makes improvements or additions to someone else's property without prior agreement, they must do so at their own risk. If the improvements can be undone without causing permanent damage to the property, the improver must remove them and restore the property to its original condition. However, if the improvements cannot be undone without damaging the property or rendering it less valuable, the owner of the property may be required to compensate the improver for the added value.

Question 9

Ed wants to give Howard his old car,but Howard says he doesn't want it.Howard later reconsiders and tells Ed he does want the car.His previous repudiation means there is no gift,and Howard has no rights in the car.

Accepted Answer

The answer of Ed wants to give Howard his old...

Question 10

After a meeting with his advisor to register for a class at State University,Ron forgot his calculator in the dean's outer office.Theresa,another student,found the calculator.The calculator is treasure trove and Theresa may keep it.

Accepted Answer

Theresa should turn in the calculator to the lost and found, as it is not her property and she has a duty to make a reasonable effort to return it to its owner.

Question 11

In order to constitute as a gift,
A)the donor must intend to transfer ownership of property within his or her lifetime.
B)the donee need not actually accept the gift.
C)the donor must deliver the gift property to the donee.
D)the donor may revoke the gift at any time.

Accepted Answer

The answer of In order to constitute as a gift,
A)the...

Question 12

A bailment was created for the parties' mutual benefit.This means that the bailee must use ordinary care with the property.

Accepted Answer

When a bailment is created for the parties' mutual benefit, the bailee is required to use ordinary care with the property. This means that the bailee must take reasonable steps to keep the property safe and secure while it is in their possession.

Question 13

Dersett Trucking hauls granite for the major granite companies in Minnesota.Dersett Trucking does not make its trucking services available to the general public.Dersett Trucking is a contract carrier and does not incur strict liability.

Accepted Answer

The statement is true as it mentions that Dersett Trucking hauls granite for major granite companies in Minnesota and does not make its trucking services available to the general public. Additionally, it is stated that Dersett Trucking is a contract carrier, which means it operates under a contract with one or a limited number of shippers and does not provide services to the general public. Finally, it is mentioned that Dersett Trucking does not incur strict liability, which means they are not held responsible for all damages or losses regardless of fault.

Question 14

All bailments have to be by agreement between the bailor and bailee.

Accepted Answer

Some bailments can occur by operation of law without an explicit agreement between the bailor and bailee, such as when property is lost and someone finds it.

Question 15

While shopping at the mall,Everett's wallet fell out of his pocket.Jon found the wallet.The wallet is abandoned property and Jon may keep it.

Accepted Answer

According to the law, the finder of lost property has a duty to try and return the property to its owner. If the owner cannot be found, the property must be turned in to the police. If the property goes unclaimed for a certain period of time, the finder may then be able to claim it as their own. However, in most cases, simply keeping the lost property without attempting to return it is not legal.

Question 16

If property is mislaid,the finder of the property will have a superior claim to possession of the property against everyone except the true owner.

Accepted Answer

The answer of If property is mislaid,the finder of the...

Question 17

In January,Erwin told David,his nephew,that he would give him a car when he graduates from college.David graduated in May.If Erwin refuses to give David a car,David can sue him for breach of an inter vivos gift.

Accepted Answer

An inter vivos gift requires delivery, acceptance, and intent to give at the time of the gift, not a promise to give something in the future. Erwin's statement is a promise, not an immediate gift, so it does not constitute an inter vivos gift.

Question 18

Rhonda is a server in a restaurant.One day she finds a purse while clearing a table.The purse is most likely
A)lost property.
B)mislaid property.
C)treasure trove.
D)abandoned property.

Accepted Answer

Mislaid property refers to an item that has been intentionally set down and forgotten by the owner, but not permanently abandoned. In this case, the purse was likely left by the owner accidentally and not intended to be abandoned. As such, it is considered mislaid and should be turned in to lost and found rather than kept by the finder.

Question 19

The difference between an inter vivos gift and a gift causa mortis is that the inter vivos gift is made during the donor's lifetime and a gift causa mortis is a gift is made after the donor's lifetime by the donor's estate.

Accepted Answer

The difference between an inter vivos gift and a gift causa mortis is actually the opposite of the statement in the question. An inter vivos gift is made during the donor's lifetime, while a gift causa mortis is made by the donor while they are still alive but in anticipation of their imminent death, and it takes effect only upon their death.

Question 20

Jimmy stole Dave's motorcycle and completely revamped the engine and changed the body.These accessions were very expensive,but Jimmy was completely satisfied with the results,intending to sell the motorcycle for a huge profit.If the motorcycle is recovered from Jimmy,Dave must pay Jimmy for the improvements.

Accepted Answer

Jimmy committed theft by stealing Dave's motorcycle, and therefore, he has no right to demand payment for the improvements he made on the stolen property. If the motorcycle is recovered from Jimmy, it should be returned to Dave in its original condition, without any compensation for the changes made by Jimmy.

Quiz 43: Personal Property and Bailment

Buck,fearing death from severe injuries suffered in a machinery accident,assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl,a friend,who gladly accepts.Buck ends up recovering from the injuries.Why must Pearl give the certificate of deposit back to Buck?