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Dynamic Business Law 2nd Edition Kubasek Browne Herron Test Bank

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Dynamic Business Law 2nd Edition Kubasek Browne Herron Test Bank

ISBN-13: 978-0077630430

ISBN-10: 0077630432

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Dynamic Business Law 2nd Edition Kubasek Browne Herron Test Bank

ISBN-13: 978-0077630430

ISBN-10: 0077630432

 

 

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Free Nursing Test Questions:

Chapter 48

The Nature of Property, Personal Property, and Bailments

 

True / False Questions

  1. Ownership of property is referred to as “title.”
    True    False

 

  1. A promise to make a gift is generally enforceable.
    True    False

 

  1. A person who finds abandoned property becomes its owner.
    True    False

 

  1. Lost property legally has the same status as mislaid property.
    True    False

 

  1. Parties to a bailment contract can limit or expand the liability of the bailee by contract.
    True    False

 

  1. Unless a bailment is gratuitous, the bailee has the right to be compensated in accordance with the terms of the bailment.
    True    False

 

  1. When property is sold pursuant to a bailee’s lien, the proceeds are first used to pay the bailee and to cover the costs of the sale, and then remaining proceeds go to the bailor.
    True    False

 

 

  1. The statute of frauds requires a writing for a bailment that will not be completed within 6 months.
    True    False

 

  1. By law, a document of title may not be negotiable.
    True    False

 

  1. Some states allow innkeepers to avoid strict liability for their guests’ personal property by providing them with a safe in which they may keep their valuables.
    True    False

 

 

Multiple Choice Questions

  1. What was the result in the Case Opener in which the prisoner was required to move to a new cell and the guard did not lock the old cell as agreed resulting in the theft of some items that had not yet been moved?
    A. The court ruled that a prisoner has no rights in respect to a guard.
    B. The court ruled that while a prisoner has some rights, a prisoner does not have the right to expect a guard to safeguard belongings.
    C. The court ruled that although no bailment existed, the guard had a duty to lock the cell.
    D. The court ruled that a bailment existed and that the guard had a duty to lock the cell and to act with reasonable care as a bailee.
    E. The court ruled that the guard had no duty to lock the cell because no witnesses confirmed that the plaintiff prisoner informed the guard that his personal belongings were in the cell.

 

  1. Which of the following is a set of rights and interests in relation to others with reference to a tangible or intangible object?
    A. Interests
    B. Property
    C. Transfers
    D. Business
    E. Commerce

 

 

  1. Which of the following is a way in which property is generally categorized?
    A. Real
    B. Personal
    C. Valued
    D. All the above
    E. Real and personal, but not valued

 

  1. Which of the following types of property is land and anything attached to it?
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

 

  1. Which of the following is movable property that is not attached to land?
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

 

  1. Which of the following is property that is initially movable but then becomes attached to land?
    A. Appliances
    B. Appurtenances
    C. Equipment
    D. Easements
    E. Fixtures

 

 

  1. Fixtures are treated like ______ property.
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

 

  1. Which of the following is a type of personal property?
    A. Tangible
    B. Unsubstantive
    C. Substantive
    D. All the above
    E. Tangible and unsubstantive, but not substantive

 

  1. Which of the following is a type of property that can be touched?
    A. Tangible
    B. Intangible
    C. Substantive
    D. Unsubstantive
    E. All the above

 

  1. Bank accounts, stocks, and insurance policies are examples of which of the following types of property?
    A. Tangible
    B. Intangible
    C. Substantive
    D. Unsubstantive
    E. All the above

 

 

  1. Which of the following is true under Italian Property Law?
    A. There is a difference between physical possession and a mental intention to possess.
    B. For immovable property the potential owner must possess the property for no less than 20 years before full ownership can occur.
    C. For movable property the potential owner must possess the property for no less than 10 years before full ownership can occur.
    D. All the above.
    E. There is a difference between physical possession and a mental intention to possess, and for both immovable and movable property the potential owner must possess the property for no less than 10 years before full ownership can occur.

 

  1. Which of the following is true regarding the delivery of a gift?
    A. Delivery may be actual.
    B. Delivery may be constructive.
    C. Delivery may be offered.
    D. All the above.
    E. Delivery may be actual or constructive, but offering to deliver is insufficient.

 

  1. Which of the following is a term for gifts made during someone’s lifetime, not in contemplation of death?
    A. Inter vivos gifts
    B. Sustainable gifts
    C. In rem gifts
    D. Probatable gifts
    E. Causa mortis gifts

 

  1. Which of the following is a term for gifts made in contemplation of death?
    A. Inter vivos gifts
    B. Sustainable gifts
    C. In rem gifts
    D. Probatable gifts
    E. Causa mortis gifts

 

 

  1. When does title to property pass?
    A. When the parties intend.
    B. When a contract is made.
    C. When physical possession is obtained.
    D. Twenty-four hours after possession is obtained.
    E. Three days after a contract is signed.

 

  1. Which of the following is a way in which a gift differs from a purchase as a way of transferring ownership?
    A. Once delivered a gift may be taken back by the person who gave the gift whereas that is not true when an item is purchased.
    B. No consideration is needed for a gift.
    C. No written contract is needed for a gift whereas it is needed for a purchase.
    D. No certificate of title is needed for a gift whereas it is needed for a purchase.
    E. All the above.

 

  1. Which of the following is true regarding gifts and the imposition of conditions?
    A. Gifts may be conditional.
    B. Gifts may not be conditional.
    C. Gifts may be conditional only if a condition precedent is involved.
    D. Gifts may be conditional only if consideration is present.
    E. Gifts may be conditional only if one of the parties is related by blood or marriage.

 

  1. Which of the following must occur in order for an inter vivos gift to be effective?
    A. Delivery
    B. Donative intent
    C. Acceptance
    D. All the above
    E. Delivery and donative intent, but not acceptance

 

 

  1. Contracts that are drafted so that one person’s obligations under the contract do not arise until the happening of a certain event are called ______ contracts.
    A. Invalid
    B. Conditional
    C. Preventable
    D. Temporary
    E. Convertible

 

  1. Which of the following must occur in order for a gift causa mortis to be effective?
    A. Delivery
    B. Donative intent
    C. Acceptance
    D. All the above
    E. Delivery and donative intent, but not acceptance

 

  1. Which of the following is a situation in which an involuntary transfer of ownership occurs?
    A. When property is abandoned
    B. When property is lost
    C. When property is mislaid
    D. When property is abandoned, lost, or mislaid
    E. When property is abandoned or lost, but not when property is mislaid

 

  1. Property that the original owner has discarded is ______ property.
    A. Mislaid
    B. Tossed
    C. Discarded
    D. Abandoned
    E. Terminated

 

 

  1. Which of the following is true if a bailment is solely for the bailee’s benefit?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence only.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence only.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

 

  1. Which of the following is property that the true owner has unknowingly or accidentally dropped or left somewhere?
    A. Lost
    B. Mislaid
    C. Discarded
    D. Abandoned
    E. Terminated

 

  1. Which of the following is property that the true owner has intentionally placed somewhere but has forgotten its location?
    A. Lost
    B. Mislaid
    C. Discarded
    D. Abandoned
    E. Terminated

 

 

  1. Which of the following is true regarding lost property?
    A. In most states the finder of lost property has title to the lost good against all including the person who lost the property.
    B. In most states the finder of lost property has title to the lost good against all except the person who lost the property.
    C. In most states the finder of lost property has no title to the lost good because the good is to be turned over to the police department for later sale if the true owner cannot be located.
    D. In all states the finder of property has an obligation to put a notice in the local paper looking for the true owner before the finder of the property can claim ownership.
    E. In most states the finder of lost property has title to the lost good against all except the person who lost the property, but that right only arises after the finder of the property can establish that the finder spent at least one-third of the fair market value of the property in locating the owner.

 

  1. A _____ of personal property is a relationship that arises when one party transfers possession of personalty to another to be used in an agreed-on manner for an agreed-on time period.
    A. Bailment
    B. Transfer
    C. Loan
    D. Release
    E. Lease

 

  1. The ______ is the person who transfers possession of personalty in a bailment situation.
    A. Transferor
    B. Transferee
    C. Novator
    D. Bailor
    E. Bailee

 

 

  1. The ______ is the person who receives transfer of possession of property in a bailment situation.
    A. Transferor
    B. Transferee
    C. Novator
    D. Bailor
    E. Bailee

 

  1. Which of the following is true regarding the person to benefit from a bailment?
    A. A bailment may benefit a bailor.
    B. A bailment may benefit a bailee.
    C. A bailment may benefit either a bailor or a bailee, or both.
    D. A bailment may benefit a bailee only if an employer-employee relationship is involved.
    E. A bailment may benefit a bailee only if the bailee owed a preexisting debt to the bailor.

 

  1. Which of the following is true regarding bailments?
    A. A bailment may be gratuitous.
    B. A bailment may be for consideration.
    C. A bailment agreement must be contained in a written agreement.
    D. All the above.
    E. A bailment may be gratuitous and a bailment may be for consideration, but not all bailment agreements must be in writing.

 

  1. Which of the following is true if a bailment is intended to benefit only the bailor?
    A. The bailee is liable for harm to the bailed property arising out of either the bailee’s ordinary or gross negligence only.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence only.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

 

 

  1. Which of the following is true if a bailment is for the mutual benefit of both the bailee and the bailor?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence.
    B. The bailee is only liable for harm to the bailed property arising out of the bailee’s gross negligence.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

 

  1. Which of the following is true if it is determined that harm befell bailed property due to an “act of God”?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property.

 

  1. Which of the following was true on appeal in the case of Barry Meyer v. Robyn Mitnick, the case in the text involving whether an engagement ring had to be returned in the case of a broken engagement?
    A. That an engagement ring is a conditional gift made in contemplation of marriage which must be returned if the marriage is called off for whatever reason.
    B. That an engagement ring is a conditional gift made in contemplation of marriage but that it must be returned only if the bride to be breaks the engagement.
    C. That an engagement ring is a conditional gift made in contemplation of marriage but that it must be returned only if the husband to be breaks the engagement.
    D. That an engagement ring is a completed gift when it is made and that it does not have to be returned regardless of who breaks the engagement.
    E. That an engagement ring must be returned in the case of a broken engagement only if it is a family heirloom of the husband and that in such a case, the monetary value of the ring must be provided instead.

 

 

  1. In order to enforce a right to sell property that is subject to a bailment when the bailor does not pay an agreed upon price, a bailee is given a[n] _____.
    A. Bailee’s lien
    B. Bailor’s lien
    C. Bailment document
    D. Lien document
    E. Enforcement lien

 

  1. Which of the following was the result on appeal in the case of Stephen Labatt Porter, et al., v. Black Warrior Farms, L.L.C., et al., the case in the text involving whether a gift was made when prior to going on a cruise, a mother sent money to her son for investment and said that he should keep the money if anything happened to her? Recall that the facts showed that she returned from the cruise but died at a later date.
    A. The court ruled that a gift causa mortis was made because she died before requesting the return of the money.
    B. The court ruled that a gift causa mortis was made because the mother intended that the son keep the money if anything happened to her before or after the trip.
    C. The court ruled that a valid inter vivos gift was made because the mother never requested the return of the money.
    D. The court ruled than a valid inter vivos gift was made because the mother meant for the son to invest the money for her.
    E. The court ruled that neither a valid causa mortis nor a valid inter vivos gift was made.

 

  1. Which of the following is true regarding the nature of bailments?
    A. Bailments may be express but not implied.
    B. Bailments may be implied but not express.
    C. Bailments may be implied or express.
    D. Bailments that are not express may be enforced as implied bailments only if a gratuitous bailment is involved.
    E. Bailments that are not express may be enforced as implied bailments only if a mutual benefit bailment is involved.

 

 

  1. When a bailment is for the purpose of transportation or storage of goods, certain _____, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.
    A. Proofs of title
    B. Agreements of title
    C. Illustrations of title
    D. Documents of title
    E. Evidence of title

 

  1. Which of the following is the applicable standard used in determining the liability of a common carrier when harm befalls property that is the subject of a bailment placed in the care of the carrier?
    A. The carrier is only liable if ordinary or gross negligence can be proven.
    B. The carrier is only liable if gross negligence can be proven.
    C. The carrier is only liable if it can be proven that the carrier acted in a reckless manner.
    D. The carrier is generally strictly liable for harm to the bailed property.
    E. Because of the doctrine of assumption of risk, the carrier is not liable for harm to the bailed property.

 

  1. Which of the following was the result in the case referenced in the “Case Nugget,” Ziva Jewelry, Inc. v. Car Wash Headquarters, Inc., in which the plaintiff left his car and keys with a car wash employee and someone drove off with the car and stole jewelry valued at over $800,000 from the car’s trunk?
    A. That the car wash was liable to the plaintiff because the car wash accepted responsibility as a bailee.
    B. That the car wash was not liable to the plaintiff because the car wash employees had no notice they were taking responsibility for so much jewelry.
    C. That the car wash and the plaintiff would be required to split the loss.
    D. That the car wash was liable to the plaintiff for the loss because the car wash had not issued a valid disclaimer.
    E. That it would be unconscionable to hold the car wash liable for the loss.

 

 

  1. Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following describes the type of gift at issue?
    A. A gift causa mortis
    B. A gift inter vivos
    C. A gift inter mortis
    D. A gift causa vivos
    E. There was no gift because Tina did not realize the ring’s value.

 

  1. Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following is true regarding Tina’s statement that she was entitled to the ring because she would not have given it to Becca if she had known the true value?
    A. Tina is entitled to ownership of the ring if she can prove that she did not realize its true value.
    B. Tina is entitled to ownership of the ring only if she can prove that she did not realize its true value, and also that there was a difference of at least $1,000 between what she believed the value to be and its true value.
    C. Tina is entitled to ownership of the ring only if she can prove that she did not realize its true value, and also that there was a difference of at least $10,000 between what she believed the value to be and its true value.
    D. Tina is entitled to ownership of the ring but only because neither she nor Becca realized its true value.
    E. Being ignorant of the value of the ring does not entitle Tina to ownership of it.

 

 

  1. Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following is true regarding Tina’s statement that Becca could not have validly accepted the ring?
    A. If the ring is valued at $500 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    B. If the ring is valued at $1,000 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    C. If the ring is valued at $10,000 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    D. Tina is correct that Becca could not have validly accepted the ring when she did not understand its true value.
    E. Tina is incorrect, and Becca validly accepted the ring as a gift.

 

 

  1. Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following describes a gift made in contemplation of death?
    A. A gift causa mortis
    B. A gift inter vivos
    C. A gift inter mortis
    D. A gift causa vivos
    E. A donative gift

 

 

  1. Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following is true regarding Frank’s statement at the hospital regarding Bubbles taking the ticket?
    A. At that point he made a valid gift that could not be revoked.
    B. He did not make a valid inter vivos or causa mortis gift because there was no certainty that he would die.
    C. He made an irrevocable gift at that time only if Bubbles never had another boyfriend; otherwise, she had to give the ticket and any resulting cash to Frank.
    D. He made an irrevocable gift at that time if Bubbles refrained from having another boyfriend until she cashed the ticket; and, after the ticket was converted, the condition no longer applied.
    E. None of the above.

 

 

  1. Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following is true regarding rightful ownership of the lottery money?
    A. Frank’s gift was automatically revoked when he recovered, and the lottery ticket and any proceeds are validly his.
    B. Although the gift was not automatically revoked on his recovery, Frank has the right to revoke the gift and recover the lottery proceeds.
    C. The gift was not automatically revoked on his recovery; and since Frank did not revoke the gift prior to Bubbles cashing the ticket, he has no rights to any funds.
    D. Frank has the right to all funds only because Bubbles has a new boyfriend.
    E. Frank has no rights because once he gave the ticket to Bubbles, he gave up all his rights to it.

 

  1. Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding the bailment situation, or lack thereof, existing between Donnie and Karen?
    A. It was a gratuitous bailment.
    B. It was a bailment for consideration.
    C. It was a temporary bailment.
    D. It was a constructive bailment.
    E. There was no bailment because no consideration was provided.

 

 

  1. Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding Donnie’s obligation to Karen?
    A. He is liable for the theft of the bicycle arising out of his ordinary or gross negligence.
    B. He is liable for the theft of the bicycle arising out of his gross negligence.
    C. He is liable for the theft of the bailed property caused by even the slightest lack of due care on his part.
    D. He is strictly liable for the theft of the bicycle.
    E. He is not liable for the theft of the bicycle because of the doctrine of assumption of the risk.

 

  1. Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding Donnie’s statements that he owes Karen nothing and that only Karen has the right to take legal action against the thief?
    A. He is correct.
    B. He is correct that he has no liability to Karen but incorrect that only Karen may take legal action against the thief.
    C. He is incorrect that he has no liability to Karen but correct that only Karen may take legal action against the thief.
    D. Only if he can identify the thief beyond a reasonable doubt is he correct that he has no further duties to Karen because only Karen has the right to take legal action against the thief at that point.
    E. He is incorrect because he has the right to take legal action against the thief, and Donnie’s conduct indicates that he has legal liability to Karen.

 

 

 

 

Essay Questions

  1. Cindy sold her old used automobile to Bruce for $1,000. Cindy told Bruce to come and take the car and that the transfer would be complete. Is Cindy correct, and why or why not?

 

 

 

 

  1. Describe how e-commerce has inspired improvements in Internet postal technology.

 

 

 

 

  1. What is meant by the concept of confusion in terms of acquiring ownership, and when and how is it applied?

 

 

 

 

 

 

  1. Bernice enjoys snooping, particularly through her neighbor’s trash. She sneaks out and grabs the neighbor’s trash after they have gone to work but before the trash collector comes. She goes through it to find out confidential information regarding the neighbors but never tells anyone else or uses the information for any purpose. Can Bernice become the legal owner of this property; and, why or why not? Discuss whether you believe it is ethical for Bernice to go through the neighbor’s trash, and why or why not?

 

 

 

 

  1. List and describe the three types of documents of title governing bailments.

 

 

 

 

 

Chapter 48 The Nature of Property, Personal Property, and Bailments Answer Key
 

True / False Questions

  1. (p. 1061)Ownership of property is referred to as “title.”
    TRUE

Ownership of property is referred to as title.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: Personal Property

  1. (p. 1062)A promise to make a gift is generally enforceable.
    FALSE

Gifts differ from purchases in that there is no consideration given for a gift. A promise to make a gift is therefore unenforceable.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: Personal Property

 

  1. (p. 1067)A person who finds abandoned property becomes its owner.
    TRUE

Anyone finding abandoned property becomes its owner by possessing it.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1068)Lost property legally has the same status as mislaid property.
    FALSE

Mislaid property differs from lost property in that the owner has intentionally placed the property somewhere but has forgotten its location. The person who owns the realty on which the mislaid property was placed has the right to hold the mislaid property. The reason is that it is likely that the true owner will return to the realty looking for the mislaid property.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1070)Parties to a bailment contract can limit or expand the liability of the bailee by contract.
    TRUE

The parties to a bailment contract can limit or expand the liability of the bailee by contract.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1071)Unless a bailment is gratuitous, the bailee has the right to be compensated in accordance with the terms of the bailment.
    TRUE

The bailee, unless the bailment is gratuitous, has the right to be compensated in accordance with the terms of the bailment.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Personal Property

  1. (p. 1071)When property is sold pursuant to a bailee’s lien, the proceeds are first used to pay the bailee and to cover the costs of the sale, and then remaining proceeds go to the bailor.
    TRUE

To enforce the right to sell the property, the bailee is given a bailee’s lien, or a possessory lien on the property. Then, when it is sold, the proceeds are first used to pay the bailee and to cover the costs of the sale. The remaining proceeds go to the bailor.

 

AACSB: Analytic
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Personal Property

  1. (p. 1072)The statute of frauds requires a writing for a bailment that will not be completed within 6 months.
    FALSE

The statute of frauds requires a writing for any contract that cannot be performed within a yearRemember, any bailment relationship that will last more than a year requires a writing to be enforceable.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Personal Property

 

  1. (p. 1072)By law, a document of title may not be negotiable.
    FALSE

If an instrument contains the word bearer or the phrase to the order of, it is negotiable. Thus, if a document of title specifies that the goods are to be delivered to the bearer or to the order of a named person, the person who possesses that document of title is entitled to receive, hold, and dispose of the goods it covers.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Personal Property

  1. (p. 1073)Some states allow innkeepers to avoid strict liability for their guests’ personal property by providing them with a safe in which they may keep their valuables.
    TRUE

Some states further allow that innkeepers can avoid strict liability for their guests’ personal property by providing them with a safe in which they may keep their valuables.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Personal Property

 

 

 

Multiple Choice Questions

  1. (p. 1074)What was the result in the Case Opener in which the prisoner was required to move to a new cell and the guard did not lock the old cell as agreed resulting in the theft of some items that had not yet been moved?
    A. The court ruled that a prisoner has no rights in respect to a guard.
    B. The court ruled that while a prisoner has some rights, a prisoner does not have the right to expect a guard to safeguard belongings.
    C. The court ruled that although no bailment existed, the guard had a duty to lock the cell.
    D. The court ruled that a bailment existed and that the guard had a duty to lock the cell and to act with reasonable care as a bailee.
    E. The court ruled that the guard had no duty to lock the cell because no witnesses confirmed that the plaintiff prisoner informed the guard that his personal belongings were in the cell.

The court ruled that once the guard agreed to lock the cell, he had the duty, as a bailee, to act with reasonable care. The court took the majority position in holding that the personal property of inmates is protected.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature of Property, Personal Property, and Bailments

  1. (p. 1060)Which of the following is a set of rights and interests in relation to others with reference to a tangible or intangible object?
    A. Interests
    B. Property
    C. Transfers
    D. Business
    E. Commerce

Property is a set of rights and interests in relation to others with reference to a tangible or intangible object.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

 

  1. (p. 1060)Which of the following is a way in which property is generally categorized?
    A. Real
    B. Personal
    C. Valued
    D. All the above
    E. Real and personal, but not valued

Property is generally divided into two basic categories, real property and personal property.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

  1. (p. 1060)Which of the following types of property is land and anything attached to it?
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

Real property is land and anything permanently attached to the land.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

 

  1. (p. 1060)Which of the following is movable property that is not attached to land?
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

Personal property is generally defined as property that is not attached to the land, or movable property.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

  1. (p. 1060)Which of the following is property that is initially movable but then becomes attached to land?
    A. Appliances
    B. Appurtenances
    C. Equipment
    D. Easements
    E. Fixtures

Sometimes property is initially movable but then becomes attached to the land. In such a situation, the property is called a fixture.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

 

  1. (p. 1060)Fixtures are treated like ______ property.
    A. Real
    B. Personal
    C. Valued
    D. Appraised
    E. Substantive

Fixtures are treated like real property.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

  1. (p. 1060)Which of the following is a type of personal property?
    A. Tangible
    B. Unsubstantive
    C. Substantive
    D. All the above
    E. Tangible and unsubstantive, but not substantive

Tangible property is property that can be identified by the senses.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

 

  1. (p. 1060)Which of the following is a type of property that can be touched?
    A. Tangible
    B. Intangible
    C. Substantive
    D. Unsubstantive
    E. All the above

Tangible property is property that can be identified by the senses. It is property that you can see or touch.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

  1. (p. 1061)Bank accounts, stocks, and insurance policies are examples of which of the following types of property?
    A. Tangible
    B. Intangible
    C. Substantive
    D. Unsubstantive
    E. All the above

Intangible property includes such items as bank accounts, stocks, and insurance policies.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-01 What are the classifications of property?
Topic: The Nature and Classifications of Property

 

  1. (p. 1062)Which of the following is true under Italian Property Law?
    A. There is a difference between physical possession and a mental intention to possess.
    B. For immovable property the potential owner must possess the property for no less than 20 years before full ownership can occur.
    C. For movable property the potential owner must possess the property for no less than 10 years before full ownership can occur.
    D. All the above.
    E. There is a difference between physical possession and a mental intention to possess, and for both immovable and movable property the potential owner must possess the property for no less than 10 years before full ownership can occur.

In Italian law, there is a significant distinction between physical possession and a mental intention to possess. Before a transition from legal possession to full ownership can occur, several requirements must be satisfied. These requirements differ depending on whether the property is classified as immovable or movable. For immovable property, the potential owner must possess the property for no less than 20 years. Movables require a 10-year period of possession.

 

AACSB: Diversity
Bloom’s: Analyze
Difficulty: Hard
Learning Objective: 48-01 What are the classifications of property?
Topic: Personal Property

  1. (p. 1062)Which of the following is true regarding the delivery of a gift?
    A. Delivery may be actual.
    B. Delivery may be constructive.
    C. Delivery may be offered.
    D. All the above.
    E. Delivery may be actual or constructive, but offering to deliver is insufficient.

Delivery may be actual, which is the physical presentation of the gift itself or constructive, which entails the delivery of an item that gives access to the gift or represents it.

 

AACSB: Diversity
Bloom’s: Analyze
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1063)Which of the following is a term for gifts made during someone’s lifetime, not in contemplation of death?
    A. Inter vivos gifts
    B. Sustainable gifts
    C. In rem gifts
    D. Probatable gifts
    E. Causa mortis gifts

Inter vivos gifts are gifts that are made by a person during his or her lifetime.

 

AACSB: Diversity
Bloom’s: Analyze
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1063)Which of the following is a term for gifts made in contemplation of death?
    A. Inter vivos gifts
    B. Sustainable gifts
    C. In rem gifts
    D. Probatable gifts
    E. Causa mortis gifts

A causa mortis gift is made in contemplation of one’s immediate death.

 

AACSB: Diversity
Bloom’s: Analyze
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1061)When does title to property pass?
    A. When the parties intend.
    B. When a contract is made.
    C. When physical possession is obtained.
    D. Twenty-four hours after possession is obtained.
    E. Three days after a contract is signed.

Ownership of property is referred to as title, and title to property passes when the parties so intend.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1062)Which of the following is a way in which a gift differs from a purchase as a way of transferring ownership?
    A. Once delivered a gift may be taken back by the person who gave the gift whereas that is not true when an item is purchased.
    B. No consideration is needed for a gift.
    C. No written contract is needed for a gift whereas it is needed for a purchase.
    D. No certificate of title is needed for a gift whereas it is needed for a purchase.
    E. All the above.

Gifts are another voluntary means of transferring ownership. They differ from purchases in that there is no consideration given for a gift.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1065)Which of the following is true regarding gifts and the imposition of conditions?
    A. Gifts may be conditional.
    B. Gifts may not be conditional.
    C. Gifts may be conditional only if a condition precedent is involved.
    D. Gifts may be conditional only if consideration is present.
    E. Gifts may be conditional only if one of the parties is related by blood or marriage.

Gifts may be conditional.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1063)Which of the following must occur in order for an inter vivos gift to be effective?
    A. Delivery
    B. Donative intent
    C. Acceptance
    D. All the above
    E. Delivery and donative intent, but not acceptance

A gift made by a person during her or his lifetime requires delivery, donative intent, and acceptance.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1065)Contracts that are drafted so that one person’s obligations under the contract do not arise until the happening of a certain event are called ______ contracts.
    A. Invalid
    B. Conditional
    C. Preventable
    D. Temporary
    E. Convertible

Sometimes a contract is drafted so that one person’s obligations under a contract do not arise until the happening of a certain event. These contracts are called conditional contracts.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1065)Which of the following must occur in order for a gift causa mortis to be effective?
    A. Delivery
    B. Donative intent
    C. Acceptance
    D. All the above
    E. Delivery and donative intent, but not acceptance

For a gift causa mortis, you must have the three elements of a gift: delivery, donative intent, and acceptance before the death of the donor.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1067)Which of the following is a situation in which an involuntary transfer of ownership occurs?
    A. When property is abandoned
    B. When property is lost
    C. When property is mislaid
    D. When property is abandoned, lost, or mislaid
    E. When property is abandoned or lost, but not when property is mislaid

Involuntary transfers of ownership occur when property has been abandoned, lost, or mislaid.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1067)Property that the original owner has discarded is ______ property.
    A. Mislaid
    B. Tossed
    C. Discarded
    D. Abandoned
    E. Terminated

Property that the original owner has discarded is abandoned property.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1069)Which of the following is true if a bailment is solely for the bailee’s benefit?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence only.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence only.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

If the bailment is solely for the bailee’s benefit, the bailee is responsible for harm to the property caused by even the slightest lack of due care on the part of the bailee.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1068)Which of the following is property that the true owner has unknowingly or accidentally dropped or left somewhere?
    A. Lost
    B. Mislaid
    C. Discarded
    D. Abandoned
    E. Terminated

Lost property is property that the true owner has unknowingly or accidentally dropped or left somewhere.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1068)Which of the following is property that the true owner has intentionally placed somewhere but has forgotten its location?
    A. Lost
    B. Mislaid
    C. Discarded
    D. Abandoned
    E. Terminated

Mislaid property differs from lost property in that the owner has intentionally placed the property somewhere but has forgotten its location.

 

AACSB: Analytic
Bloom’s: Remember
Difficulty: Easy
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1068)Which of the following is true regarding lost property?
    A. In most states the finder of lost property has title to the lost good against all including the person who lost the property.
    B. In most states the finder of lost property has title to the lost good against all except the person who lost the property.
    C. In most states the finder of lost property has no title to the lost good because the good is to be turned over to the police department for later sale if the true owner cannot be located.
    D. In all states the finder of property has an obligation to put a notice in the local paper looking for the true owner before the finder of the property can claim ownership.
    E. In most states the finder of lost property has title to the lost good against all except the person who lost the property, but that right only arises after the finder of the property can establish that the finder spent at least one-third of the fair market value of the property in locating the owner.

The finder of lost or mislaid property acquires title to the property against all except the true owner.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1069)A _____ of personal property is a relationship that arises when one party transfers possession of personalty to another to be used in an agreed-on manner for an agreed-on time period.
    A. Bailment
    B. Transfer
    C. Loan
    D. Release
    E. Lease

A bailment of personal property is a relationship that arises when one party transfers possession of personalty to another to be used in an agreed-on manner for an agreed-on time period.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1069)The ______ is the person who transfers possession of personalty in a bailment situation.
    A. Transferor
    B. Transferee
    C. Novator
    D. Bailor
    E. Bailee

The “bailor” transfers personal property in a bailment situation.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1069)The ______ is the person who receives transfer of possession of property in a bailment situation.
    A. Transferor
    B. Transferee
    C. Novator
    D. Bailor
    E. Bailee

The “bailee” receives a transfer of personal property in a bailment situation.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1069)Which of the following is true regarding the person to benefit from a bailment?
    A. A bailment may benefit a bailor.
    B. A bailment may benefit a bailee.
    C. A bailment may benefit either a bailor or a bailee, or both.
    D. A bailment may benefit a bailee only if an employer-employee relationship is involved.
    E. A bailment may benefit a bailee only if the bailee owed a preexisting debt to the bailor.

The bailment may be to benefit the bailor, the bailee, or both.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1069)Which of the following is true regarding bailments?
    A. A bailment may be gratuitous.
    B. A bailment may be for consideration.
    C. A bailment agreement must be contained in a written agreement.
    D. All the above.
    E. A bailment may be gratuitous and a bailment may be for consideration, but not all bailment agreements must be in writing.

The bailment may be gratuitous or for consideration.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1069)Which of the following is true if a bailment is intended to benefit only the bailor?
    A. The bailee is liable for harm to the bailed property arising out of either the bailee’s ordinary or gross negligence only.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence only.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

If the bailment is intended to benefit only the bailor, the bailee is liable for damage to the property caused by the bailee’s gross negligence.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1070)Which of the following is true if a bailment is for the mutual benefit of both the bailee and the bailor?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence.
    B. The bailee is only liable for harm to the bailed property arising out of the bailee’s gross negligence.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property because of the doctrine of assumption of the risk.

If the bailment is for the mutual benefit of bailee and bailor, the bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1070)Which of the following is true if it is determined that harm befell bailed property due to an “act of God”?
    A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary or gross negligence.
    B. The bailee is liable for harm to the bailed property arising only out of the bailee’s gross negligence.
    C. The bailee is liable for harm to the bailed property caused by even the slightest lack of due care on the part of the bailee.
    D. The bailee is strictly liable for harm to the bailed property.
    E. The bailee is not liable for harm to the bailed property.

If the property is harmed by an unpreventable “act of God,” there is no liability on the part of the bailee under any circumstances.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1066)Which of the following was true on appeal in the case of Barry Meyer v. Robyn Mitnick, the case in the text involving whether an engagement ring had to be returned in the case of a broken engagement?
    A. That an engagement ring is a conditional gift made in contemplation of marriage which must be returned if the marriage is called off for whatever reason.
    B. That an engagement ring is a conditional gift made in contemplation of marriage but that it must be returned only if the bride to be breaks the engagement.
    C. That an engagement ring is a conditional gift made in contemplation of marriage but that it must be returned only if the husband to be breaks the engagement.
    D. That an engagement ring is a completed gift when it is made and that it does not have to be returned regardless of who breaks the engagement.
    E. That an engagement ring must be returned in the case of a broken engagement only if it is a family heirloom of the husband and that in such a case, the monetary value of the ring must be provided instead.

The court stated that: “We hold that an engagement ring given in contemplation of marriage is an impliedly conditional gift that is a completed gift only upon marriage. If the engagement is called off, for whatever reason, the gift is not capable of becoming a completed gift and must be returned to the donor.”

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1071)In order to enforce a right to sell property that is subject to a bailment when the bailor does not pay an agreed upon price, a bailee is given a[n] _____.
    A. Bailee’s lien
    B. Bailor’s lien
    C. Bailment document
    D. Lien document
    E. Enforcement lien

In most states, when the bailor refuses to provide the agreed-on compensation to the bailee, the bailee may ultimately sell the property after proper notice and a hearing. To enforce this right to sell the property, the bailee is given a bailee’s lien, or a possessory lien on the property.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1064-1065)Which of the following was the result on appeal in the case of Stephen Labatt Porter, et al., v. Black Warrior Farms, L.L.C., et al., the case in the text involving whether a gift was made when prior to going on a cruise, a mother sent money to her son for investment and said that he should keep the money if anything happened to her? Recall that the facts showed that she returned from the cruise but died at a later date.
    A. The court ruled that a gift causa mortis was made because she died before requesting the return of the money.
    B. The court ruled that a gift causa mortis was made because the mother intended that the son keep the money if anything happened to her before or after the trip.
    C. The court ruled that a valid inter vivos gift was made because the mother never requested the return of the money.
    D. The court ruled than a valid inter vivos gift was made because the mother meant for the son to invest the money for her.
    E. The court ruled that neither a valid causa mortis nor a valid inter vivos gift was made.

The court ruled that the letter “did not constitute a gift or a bequest” to the son.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1071)Which of the following is true regarding the nature of bailments?
    A. Bailments may be express but not implied.
    B. Bailments may be implied but not express.
    C. Bailments may be implied or express.
    D. Bailments that are not express may be enforced as implied bailments only if a gratuitous bailment is involved.
    E. Bailments that are not express may be enforced as implied bailments only if a mutual benefit bailment is involved.

Bailments may be either express or implied.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

  1. (p. 1072)When a bailment is for the purpose of transportation or storage of goods, certain _____, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.
    A. Proofs of title
    B. Agreements of title
    C. Illustrations of title
    D. Documents of title
    E. Evidence of title

When a bailment is for the purpose of transportation or storage of goods, certain documents of title, governed by Article VII of the Uniform Commercial Code, may be issued in conjunction with the bailment.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Bailment

 

  1. (p. 1073)Which of the following is the applicable standard used in determining the liability of a common carrier when harm befalls property that is the subject of a bailment placed in the care of the carrier?
    A. The carrier is only liable if ordinary or gross negligence can be proven.
    B. The carrier is only liable if gross negligence can be proven.
    C. The carrier is only liable if it can be proven that the carrier acted in a reckless manner.
    D. The carrier is generally strictly liable for harm to the bailed property.
    E. Because of the doctrine of assumption of risk, the carrier is not liable for harm to the bailed property.

Because the bailee is a common carrier, he or she is held to a higher standard of care: the standard of strict liability in protecting the bailed property.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Bailment

  1. (p. 1072)Which of the following was the result in the case referenced in the “Case Nugget,” Ziva Jewelry, Inc. v. Car Wash Headquarters, Inc., in which the plaintiff left his car and keys with a car wash employee and someone drove off with the car and stole jewelry valued at over $800,000 from the car’s trunk?
    A. That the car wash was liable to the plaintiff because the car wash accepted responsibility as a bailee.
    B. That the car wash was not liable to the plaintiff because the car wash employees had no notice they were taking responsibility for so much jewelry.
    C. That the car wash and the plaintiff would be required to split the loss.
    D. That the car wash was liable to the plaintiff for the loss because the car wash had not issued a valid disclaimer.
    E. That it would be unconscionable to hold the car wash liable for the loss.

The Supreme Court of Alabama affirmed the dismissal of the case on grounds that a bailee is not liable for the loss of the contents of a bailed vehicle when the bailee did not have actual or implied knowledge of the contents of the vehicle.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Bailment

 

  1. (p. 1063)Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following describes the type of gift at issue?
    A. A gift causa mortis
    B. A gift inter vivos
    C. A gift inter mortis
    D. A gift causa vivos
    E. There was no gift because Tina did not realize the ring’s value.

Inter vivos gift are gifts that are made by a person during his or her lifetime.

 

AACSB: Reflective Thinking
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1062)Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following is true regarding Tina’s statement that she was entitled to the ring because she would not have given it to Becca if she had known the true value?
    A. Tina is entitled to ownership of the ring if she can prove that she did not realize its true value.
    B. Tina is entitled to ownership of the ring only if she can prove that she did not realize its true value, and also that there was a difference of at least $1,000 between what she believed the value to be and its true value.
    C. Tina is entitled to ownership of the ring only if she can prove that she did not realize its true value, and also that there was a difference of at least $10,000 between what she believed the value to be and its true value.
    D. Tina is entitled to ownership of the ring but only because neither she nor Becca realized its true value.
    E. Being ignorant of the value of the ring does not entitle Tina to ownership of it.

The three elements necessary for a valid gift were satisfied. First, there was a delivery of the gift. Second, the delivery was made with donative intent to make an immediate gift. Third, there was acceptance, a willingness of the donee to take the gift from the donor.

 

AACSB: Reflective Thinking
Bloom’s: Evaluate
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1062)Reference: “Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an eighteen-year-old teen-ager and neighbor, came over to visit and liked the ring. Tina said, “You can have this old thing if you would like.” Becca replied, “I really like it – Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion chance of that and that Tina was more likely to win the lottery. A few months later Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told Becca that she would never have given it to her if she had realized its value and that possession was back where it had always belonged. Tina also told Becca that Becca failed legally to accept the gift because she did not know its true value and because Tina did not sign any document turning over title. Becca sues. Which of the following is true regarding Tina’s statement that Becca could not have validly accepted the ring?
    A. If the ring is valued at $500 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    B. If the ring is valued at $1,000 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    C. If the ring is valued at $10,000 or over, then Tina is correct that Becca could not have validly accepted the ring because a writing would have been needed to validate acceptance.
    D. Tina is correct that Becca could not have validly accepted the ring when she did not understand its true value.
    E. Tina is incorrect, and Becca validly accepted the ring as a gift.

Becca expressed a willingness to take the gift establishing a valid acceptance.

 

AACSB: Reflective Thinking
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1063)Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following describes a gift made in contemplation of death?
    A. A gift causa mortis
    B. A gift inter vivos
    C. A gift inter mortis
    D. A gift causa vivos
    E. A donative gift

A gift causa mortis is a gift that is made in contemplation of one’s immediate death.

 

AACSB: Reflective Thinking
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1063)Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following is true regarding Frank’s statement at the hospital regarding Bubbles taking the ticket?
    A. At that point he made a valid gift that could not be revoked.
    B. He did not make a valid inter vivos or causa mortis gift because there was no certainty that he would die.
    C. He made an irrevocable gift at that time only if Bubbles never had another boyfriend; otherwise, she had to give the ticket and any resulting cash to Frank.
    D. He made an irrevocable gift at that time if Bubbles refrained from having another boyfriend until she cashed the ticket; and, after the ticket was converted, the condition no longer applied.
    E. None of the above.

A gift causa mortis is a gift that is made in contemplation of one’s immediate death. It can be revoked any time before the death of the donor, and it is automatically revoked if the donor recovers.

 

AACSB: Reflective Thinking
Bloom’s: Evaluate
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1063)Reference: “Lottery Winnings.” Frank, a hypochondriac who was also very compulsive, was having minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket for a chance at the grand prize of $30,000,000. He always kept lists at home of the numbers of his lottery tickets. Frank’s girlfriend, Bubbles, went with him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope you win and live it up; but please don’t get another boyfriend.” Bubbles replied, “I could never be happy without you.” A nurse saw and heard the whole exchange. Frank came out of the surgery just fine but with a sore foot. While he was recuperating that evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was indeed the winning ticket. She immediately moved out and collected the winnings. Frank saw her on television with her new boyfriend, George. She appeared to be very happy. He checked the numbers and discovered that she won off of his ticket. Frank says that the lottery money is his. Which of the following is true regarding rightful ownership of the lottery money?
    A. Frank’s gift was automatically revoked when he recovered, and the lottery ticket and any proceeds are validly his.
    B. Although the gift was not automatically revoked on his recovery, Frank has the right to revoke the gift and recover the lottery proceeds.
    C. The gift was not automatically revoked on his recovery; and since Frank did not revoke the gift prior to Bubbles cashing the ticket, he has no rights to any funds.
    D. Frank has the right to all funds only because Bubbles has a new boyfriend.
    E. Frank has no rights because once he gave the ticket to Bubbles, he gave up all his rights to it.

A gift causa mortis is a gift that is made in contemplation of one’s immediate death. It can be revoked any time before the death of the donor, and it is automatically revoked if the donor recovers.

 

AACSB: Reflective Thinking
Bloom’s: Evaluate
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1069)Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding the bailment situation, or lack thereof, existing between Donnie and Karen?
    A. It was a gratuitous bailment.
    B. It was a bailment for consideration.
    C. It was a temporary bailment.
    D. It was a constructive bailment.
    E. There was no bailment because no consideration was provided.

A bailment may be gratuitous or for consideration.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1069)Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding Donnie’s obligation to Karen?
    A. He is liable for the theft of the bicycle arising out of his ordinary or gross negligence.
    B. He is liable for the theft of the bicycle arising out of his gross negligence.
    C. He is liable for the theft of the bailed property caused by even the slightest lack of due care on his part.
    D. He is strictly liable for the theft of the bicycle.
    E. He is not liable for the theft of the bicycle because of the doctrine of assumption of the risk.

If the bailment is solely for the bailee’s benefit, the bailee is responsible for harm to the property caused by even the slightest lack of due care on the part of the bailee.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Bailment

 

  1. (p. 1071)Reference: “Stolen Bicycle.” Donnie borrowed the bicycle of his friend Karen. She told him that she was happy for him to use it for free, but she would appreciate him taking good care of it. Donnie said nothing in reply. Although Donnie lived in a high crime neighborhood, he left the bicycle unlocked on his deck. The next morning, he discovered that the bicycle had been stolen. Donnie told Karen that he was very sorry about the bicycle. Karen told him that she expected him to pay for it. Donnie refused on the basis that a thief took the bicycle. Donnie told Karen that he believes he knows the identity of the thief and that since only Karen has the right to sue to recover the property, he has no further responsibility. Which of the following is true regarding Donnie’s statements that he owes Karen nothing and that only Karen has the right to take legal action against the thief?
    A. He is correct.
    B. He is correct that he has no liability to Karen but incorrect that only Karen may take legal action against the thief.
    C. He is incorrect that he has no liability to Karen but correct that only Karen may take legal action against the thief.
    D. Only if he can identify the thief beyond a reasonable doubt is he correct that he has no further duties to Karen because only Karen has the right to take legal action against the thief at that point.
    E. He is incorrect because he has the right to take legal action against the thief, and Donnie’s conduct indicates that he has legal liability to Karen.

If anyone steals the bailed property from the bailee, the bailee may take legal action to recover the bailed property and may even seek compensation for the loss of the property or damage to it.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Bailment

 

 

 

Essay Questions

  1. (p. 1062)Cindy sold her old used automobile to Bruce for $1,000. Cindy told Bruce to come and take the car and that the transfer would be complete. Is Cindy correct, and why or why not?

Cindy is incorrect because in order to transfer a vehicle, a certificate of title must be signed by the seller, taken to the appropriate government agency, and then reissued in the name of the new owner.

 

AACSB: Reflective Thinking
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1063)Describe how e-commerce has inspired improvements in Internet postal technology.

E-businesses can use Internet postal technology to print labels and pay for shipping postage using accounts such as PayPal accounts. Prior to improvements in Internet postal technology, it was likely that a small business would print mailing labels by hand and make multiple trips to the post office. Now, it is possible for small business to print out labels and arrange for pickups from carriers. Another benefit is that buyers and sellers can track packages.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1069)What is meant by the concept of confusion in terms of acquiring ownership, and when and how is it applied?

Acquiring ownership through confusion involves only fungible goods. Fungible goods are goods for which one unit of the good is essentially the same as every other unit, such as grains of wheat or gallons of oil. If two people accidentally comingle their fungible goods, or if the goods are comingled because of the actions of a third party, each party is entitled to the percentage of the fungible goods that he contributed. However, if one of the parties was responsible for the comingling, and that person cannot prove what percentage of the comingled goods she contributed, then the innocent party acquires title to all the goods. For example, if a farmer had stored grain in a rented storage elevator, and another farmer wrongfully added his grain to the elevator, the innocent farmer would be entitled to the entire amount in the silo.

 

AACSB: Analytic
Bloom’s: Apply
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

  1. (p. 1067)Bernice enjoys snooping, particularly through her neighbor’s trash. She sneaks out and grabs the neighbor’s trash after they have gone to work but before the trash collector comes. She goes through it to find out confidential information regarding the neighbors but never tells anyone else or uses the information for any purpose. Can Bernice become the legal owner of this property; and, why or why not? Discuss whether you believe it is ethical for Bernice to go through the neighbor’s trash, and why or why not?

Bernice can become the owner because the property has been discarded and abandoned. Anyone finding such property becomes its owner by possessing it. Student answers may vary on the ethical issue. Most students will likely believe that it is unethical to go through the trash of a neighbor even if the information is not used for any improper purpose.

 

AACSB: Reflective Thinking
Bloom’s: Create
Difficulty: Hard
Learning Objective: 48-02 How is personal property transferred?
Topic: Personal Property

 

  1. (p. 1072)List and describe the three types of documents of title governing bailments.

The three types of documents of title governing bailments are bills of lading, warehouse receipts, and delivery orders. A bill of lading is a document issued by a person engaged in the business of transporting goods that verifies receipt of the goods for shipment. A warehouse receipt is a receipt issued by one who is engaged in the business of storing goods for compensation. A delivery order is a written order to deliver goods directed to a party who, in the ordinary course of business, issues warehouse receipts or bills of lading.

 

AACSB: Analytic
Bloom’s: Understand
Difficulty: Medium
Learning Objective: 48-03 What are the rights and responsibilities of parties to a bailment?
Topic: Bailment

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