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Quote of the Day “The manner of giving is worth more than the gift. ” Pierre Corneille, French playwright 47 2 p Business Law for a New Century

Gifts p A gift is a voluntary transfer of property from one person to another without any consideration. p A gift involves three elements: • The donor intends to transfer ownership of the property to the donee immediately. • The donor delivers the property to the donee. • The donee accepts the property. 3 47 p Business Law for a New Century

Delivery p Physical Delivery – method usually used to deliver the gift. p Constructive Delivery -- made by transferring ownership without a physical delivery. p Delivery to the donee’s agent is a valid gift; delivery to the donor’s agent is not. p Property Already in Donee’s Possession – no delivery is required, if ownership is clearly transferred. 4 47 p Business Law for a New Century

Inter Vivos & Causa Mortis p An inter vivos gift – is a gift given during life and with no expectation of death. • The gift is valid, if it meets the basic conditions of a gift. p A gift causa mortis – is a gift given in expectation of dying soon. • The gift is valid, if it meets the conditions of a gift, and the giver dies as expected. • The giver may rescind the gift at any time, and it is automatically rescinded if the giver does not die as expected. 5 47 p Business Law for a New Century

Found Property p The primary goal is to get property back to its proper owner, if possible. p A second policy has been to reward the finder if no owner can be located. • Abandoned property – owner knowingly discarded, finder may usually keep • Lost property – owner accidentally lost; finder may keep, only if owner is not found. • Mislaid property – owner set down and forgot; usually owner of premises keeps, if true owner cannot be found. • Treasure trove – money so old that the owner is probably dead; finder usually can keep. 6 47 p Business Law for a New Century

Accession p Accession occurs when one person uses labor and/or materials to add value to personal property belonging to another. • Wrongful Accessions – if the improver does so without permission, the owner does not have to pay for the increased value of his property. • Mistaken Accessions – if the improver thinks he has permission, the owner may have to pay for the increased value of his property. 7 47 p Business Law for a New Century

Bailment p A bailment is the rightful possession of goods by one who is not the owner. p The parties generally-but not always- create a bailment by agreement. p A bailment without agreement is called a constructive, or involuntary, bailment. p To create a bailment, the bailee must assume physical control with intent to possess. 8 47 p Business Law for a New Century

Rights of the Bailee p Anyone who interferes with the bailee’s rightful possession is liable to her. p The bailee is typically, though not always, permitted to use the property. 47 9 p Business Law for a New Century

Duties of the Bailee p The bailee is strictly liable to redeliver the goods on time to the bailor or to whomever the bailor designates. p Due care • The level of care required depends upon who receives the benefits of the bailment. 47 10 p Business Law for a New Century

Burden of Proof p Once the bailor has proven the existence of a bailment and loss or harm to the goods, a presumptive of negligence arises, and the burden shifts to the bailee to prove adequate care. p An exculpatory clause is any part of a contract that attempts to relieve one of the parties of future liability. 11 47 p Business Law for a New Century

Rights and Duties of Bailor p Liability for Defects • If the bailment is for the sole benefit of the bailee, the bailor must notify the bailee of any known defects. • In a mutual-benefit bailment, the bailor is liable not only for known defects but also for unknown defects that the bailor could have discovered with reasonable diligence. • If the bailor is in the business of renting property, the bailment is probably subject to implied warranties. 12 47 p Business Law for a New Century

Common Carriers and Contract Carriers p Generally, a common carrier is strictly liable for harm to the bailor’s goods. p A contract carrier does not incur strict liability. p Innkeepers may act as bailees of their guests’ property; special statutes regulate liability. 13 47 p Business Law for a New Century

“A generous gift, a found parcel, a complex bailment: personal property is always with us… unless we misplace it. ” 47 14 p Business Law for a New Century

Link to the Internet p Clicking on the orange button below will link you to the website for this book. (You must first have an active link to the internet on this computer. ) 15 p Once there, click: p You should then see web links related to that chapter. • • Online Study Guide, then Your choice of a chapter, then Practice, then Internet Applications Click here! Click above to return to the slide show. 47 p Business Law for a New Century