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Creation of a Bailment Relationship

ADM-477: Business Law

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Getting Started

Bailments are so commonplace that you likely have been involved in a bailment relationship. Let’s examine an everyday example. April drives her car to Monte’s Restaurant and gives the restaurant’s valet her keys to park her car in the restaurant’s secure parking lot. This common occurrence is known as a bailment. The bailor (April) has delivered her personal property (her car) to the bailee (Monte’s Restaurant) under the agreement that the bailee will return the property to the bailor at the end of the bailment, which occurs once April has finished her meal and paid her bill. So, if you ever have used valet parking, you also have participated in a bailment relationship!

Upon successful completion of the course material, you will be able to:

  • Explain the rights and responsibilities of the parties in a bailment relationship.

HTML BackgroundInfo

Background Information

To create a bailment, the following elements are required:

  • The bailor is the owner of the personal property or has the legal right to possess the personal property.
  • The personal property is delivered to the bailee, who has exclusive possession and control over the personal property.
  • The bailee accepts the personal property along with the legal duty to return the property to the bailor at a designated time.

In our scenario, a bailment has been created because April delivered her car to the restaurant’s valet, who in turn gave April a claim check. Once April finishes her meal, she can present the claim check to the valet, who will retrieve her car from the parking lot.

Categories of Bailments
Bailments fall into three distinct categories:

  • Bailments for the sole benefit of the bailor
  • Bailments for the sole benefit of the bailee
  • Bailments for the mutual benefit of the bailor and the bailee

Legal Duties of the Bailee
Bailees owe certain legal duties to the bailor:

  • To take care to protect the bailor’s personal property from loss or damage
  • To return the bailor’s personal property once the bailment has concluded

Level of Care
If the property is damaged or lost due to the bailee’s lack of care, the bailee will be found to be negligent. The level of care required by the bailee depends on the type of bailment.

  • Bailments for the benefit of the bailor: A minimal degree of care is required to protect the property. Therefore, if the bailee is grossly negligent and causes the property to become damaged or lost, the bailee will be liable for the resulting damages.
  • Bailments for the benefit of the bailee: A high degree of care is required to protect the property. If the bailee’s slight negligence causes property damage or loss, the bailee will be liable for the resulting damages.
  • Bailments for the mutual benefit of the bailor and the bailee: Ordinary or reasonable care is required to protect the bailed property. This is also known as the reasonable person standard, meaning that the bailee is expected to act as a similarly situated reasonable person would act to protect owned property from loss or damage. An additional distinction is made where the bailee is holding itself out to the public as a professional bailee. A professional bailee must act according to the industry standard in that profession and must show a lack of negligence in the event of property loss or damage to avoid liability.

Historically, courts have relied on these three distinctions to determine the liability of the bailee in the event of property loss or damage. However, the modern trend shows some courts relying less on these categorical distinctions and imposing a duty of reasonable care on bailees.

HTML Instructions


  1. Review the rubric to make sure you understand the criteria for earning your grade.
  2. Consider the following scenario:

    Jeff is an avid UNC–Chapel Hill basketball fan and drives to the Greensboro Coliseum to watch his beloved Tarheels play in the Atlantic Coast Conference (ACC) basketball tournament against their arch-rivals, the Duke University Blue Devils. When Jeff arrives at the parking lot, he pays $20 to the attendant for parking and takes a ticket. On the ticket is printed “WARNING: Not responsible for damage to personal property while on Greensboro Coliseum premises.” He parks his car, puts his keys in his pocket, and enters the Coliseum.

    Jeff is overjoyed as he watches the Tar Heels beat the Blue Devils by 30 points. Returning to his vehicle, he is shocked to see his windshield bashed in and surmises that the perpetrator must have been a Blue Devil fan—after all, a large, heavy Blue Devil statue now protrudes from Jeff’s Carolina-blue car’s windshield! Jeff also surmises that the vandal is probably long gone by now (since the Tar Heels were leading by 25 points at halftime) and already well within the protective confines of the stone wall surrounding Duke University 60 miles away.

  3. In a one- to two-page letter, advise Jeff of his legal rights against the Greensboro Coliseum for damage to his vehicle.
  4. The one- to two-page letter should contain 250 to 500 words.
    1. Follow APA formatting, including using 12-point font.
    2. Correct use of citations and references is required.
  5. When you have completed your assignment, save a copy for yourself, and submit a copy to your instructor using the Assignment submission page by the end of the workshop.

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