CAIB 2 Chapter 5 Study Guide Questions with
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)
identify how the decision of who should purchase insurance on property in transit is
determined - ✔✔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
* - ✔✔common carrier
contract carrier
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)
identify how the decision of who should purchase insurance on property in transit is
determined - ✔✔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
* - ✔✔common carrier
contract carrier
