Bailment - A Clarification

If property is repaired or stored, a basic understanding of bailment law is essential. As always, bailment law is complex and involves analysis of facts and issues specific to your case. I strongly recommend you seek advice of a competent attorney regarding specifics of your case/issues. This is not legal advice, but only a general, broad discussion of some bailment issues.

Generally speaking, a “bailment” exists where there is (1) a contract, express or implied, (2) delivery of property to the bailee, and (3) acceptance of the property by the bailee. For example, where a customer delivers a vehicle for repairs to a repair shop and contracts with the shop for repairs to the vehicle, a bailment exits once the repair shop accepts the vehicle in conjunction with the contract for repairs. “Bailor” is the party who delivers personal property to another in a contract of bailment. “Bailee” is the party to whom personal property is delivered under a contract of bailment. There are several different kinds of bailment, and each has its own duties and obligations.

There is a misconception that once a bailment is established, there is an absolute duty on the Bailee to return the property to the Bailor. If, using this example, after repairs are completed and the Bailor is told to retrieve its property and before it can, unknown thieves break into the Bailee's premises and steal the Bailor's property, some would argue that the Bailee is liable to the Bailor for this theft and property loss. Such argument relies upon the notion that the Bailee warranted he/she would return the Bailor's property, and failure to return the property, regardless of cause of loss, is a breach of warranty and contract. This is not necessarily the law in Texas. In the example above, once a bailment is created, it continues until the property is redelivered to the bailor or the bailor is notified to pick up its property. Berlow v. Sheraton Dallas Corp., 629 S.W.2d 818, 821 (Tex.App.—Dallas 1982, writ ref’d n.r.e.). As such, in the foregoing example, there may be an argument that the Bailee acted reasonably in performing under the repair contract, timely notified the Bailor of the completion of repairs and need to retrieve its property, and took reasonable steps to secure the Bailor's property. Thus, there may be no liability at all to Bailee for the loss of property, in the foregoing example.

Bailment issues, like all legal issues/cases, require examination and analysis by a qualified attorney. There are few issues where liability is established as a matter of law, and a qualified attorney should be consulted in all cases.