BAILMENT

by Mark Tarses

What is bailment? Most people have never heard the word 'bailment', but this is an important legal concept that frequently gets tenants into a lot of trouble!

A bailment is an agreement which is created when someone delivers personal property to someone else to hold for a period of time. An example of a bailment is giving a pawn shop a gold watch as security for a loan. A bailment agreement does not have to be in writing in order to be legally binding.

Here is an example of a bailment agreement: A friend says to you: "Can I leave my motorcycle in your driveway for a few days while I'm on vacation? I'm worried that it might get stolen if I leave it on the street." If you say "OK", you have created a bailment. The owner of the motorcycle is the "bailor", and you are the "bailee." As the bailee, you have a legal obligation to protect this motorcycle from all harm. If this motorcycle is stolen, lost, vandalized, or damaged while on your property; you can be held financially liable for the loss. The fact that you let your friend store his motorcycle in your driveway as a personal favor, that you were not paid, does not eliminate or even reduce your legal liability.

Most renter's and homeowner's insurance policies will not pay for bailment losses unless you can prove that you used "sufficient reasonable care" (whatever that means) to protect your friend's motorcycle. How would you do that?

Tenants are sued all the time for bailment losses, and they usually lose. Judges don't care if you got paid or not. In bailment loss cases, the law presumes that the bailee was negligent.

So before you let anyone store anything of value in your home, garage, driveway, or in your yard; you should carefully think about the financial liability you are taking on.

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