CAIB 2 - Chapter 5 Study Guide with Questions and Correct Answers

Identify three reasons why a bailee may have temporary custody of the personal property of another for repair For safekeeping or storage For delivery to others Identify three examples of businesses who may be bailees for hire small engine repair shops Dry cleaners Tailors Briefly explain the level of 'ordinary care' to be exercised by a bailee there is a legal duty on the bailee to take the same care of goods of others as would be taken by a prudent and diligent owner of such goods Briefly explain how the level of 'ordinary care' may vary by the type of bailee may vary with the class of property over which bailment is being exercised (ex. Jewelry vs. Wheat) Identify two ways a bailee may be responsible for the goods of others -liable for loss to customers property when the required level OF ORDINARY CARE HAS BEEN BREACHED because of negligence -purchase additional liability for customers property under contract (ex. If stolen by thieves) Identify three ways bailees can insure their legal and contractual responsibility for damages to customer goods *** (3 ways a bailee can look after a customers property) -include the value of customers property in the amount of stock insurance -purchase separate policy insuring the legal liability of the bailee for loss -purchase a specialized bailees customers policy (coverage can be purchased which totally ignores the issue of the legal liability for the loss) Identify three examples of clients who may need inland transportation insurance incoming and outgoing shipments Moving or storage companies Trucking or delivery firms Identify the two parties who may have an insurable interest in property while in the course of transit the owner The carrier (bailee for hire)