CAIB 2 - Chapter 5 Exam with Complete
Solutions
identify three reasons why a bailee may have temporary custody of the personal
property of another - ANSWER-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - ANSWER-small
engine repair shops
dry cleaners
tailors
briefly explain the level of 'ordinary care' to be exercised by a bailee - ANSWER-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 -
ANSWER-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 - ANSWER--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) -
ANSWER--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 -
ANSWER-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 - ANSWER-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is
determined - ANSWER-if the owner or carrier would be responsible for loss to the
property
and to what extent
identify the three types of carriers which can be used to transport goods of owners or
shippers * - ANSWER-common carrier
contract carrier
private carrier
identify five excluded losses for which a common carrier would NOT be liable to the
owner of the goods * - ANSWER-acts of god
acts of public enemies
acts of public authority
neglect or default of the shipper
inherent vice in the goods transported ( perishable goods, eggs, shelf life)
identify the document used to establish the liabilities of common carrier * - ANSWER-
bills of lading
identify the three types of bills of lading normally used by common carriers - ANSWER-
standard (ordinary) bill of lading
valued bill of lading
released bill of lading
how are the goods valued under a standard (ordinary) bill of lading? - ANSWER-amount
is established at a certain amount per kilogram/pound or parcel
identify two reasons to use a released bill of lading - ANSWER-when the value of goods
is less than stated on standard (ordinary) bill of lading
when the value of goods is more than what is stated on the standard tariff (tax)
Solutions
identify three reasons why a bailee may have temporary custody of the personal
property of another - ANSWER-for repair
for safekeeping or storage
for delivery to others
identify three examples of businesses who may be bailees for hire - ANSWER-small
engine repair shops
dry cleaners
tailors
briefly explain the level of 'ordinary care' to be exercised by a bailee - ANSWER-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 -
ANSWER-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 - ANSWER--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) -
ANSWER--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 -
ANSWER-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 - ANSWER-the owner
the carrier (bailee for hire)
identify how the decision of who should purchase insurance on property in transit is
determined - ANSWER-if the owner or carrier would be responsible for loss to the
property
and to what extent
identify the three types of carriers which can be used to transport goods of owners or
shippers * - ANSWER-common carrier
contract carrier
private carrier
identify five excluded losses for which a common carrier would NOT be liable to the
owner of the goods * - ANSWER-acts of god
acts of public enemies
acts of public authority
neglect or default of the shipper
inherent vice in the goods transported ( perishable goods, eggs, shelf life)
identify the document used to establish the liabilities of common carrier * - ANSWER-
bills of lading
identify the three types of bills of lading normally used by common carriers - ANSWER-
standard (ordinary) bill of lading
valued bill of lading
released bill of lading
how are the goods valued under a standard (ordinary) bill of lading? - ANSWER-amount
is established at a certain amount per kilogram/pound or parcel
identify two reasons to use a released bill of lading - ANSWER-when the value of goods
is less than stated on standard (ordinary) bill of lading
when the value of goods is more than what is stated on the standard tariff (tax)
