Unformatted text preview: Week Seven Chapter 8 (to page 303)
Innkeeper Liability for Guest Property.
*An innkeeper’s guests bring a lot of stuff in the
form of personal property to the innkeeper’s
*Loss of guest property can occur:
* due to theft by other guests, trespassers or
*Due to innkeeper negligence.
*Due to guest negligence.
*Due to unknown or unproveable reasons.
*An innkeeper owes a duty to protect guest
*There is also a duty to provide reasonable safety
and security for any guest, invitee or licensee who
enters the premises.
*Some innkeeper conduct might not meet that duty
and would be negligent.
*Ways to avoid negligence resulting in property loss
*Sufficient security personnel.
*Warnings to guests to lock rooms and put
valuables in a hotel safe.
*Installing closed-circuit televisions to monitor
*Replacing traditional keys with swipe cards to
avoid the possibility that outsiders would have
access to rented rooms or the premises, as a
*If guest property is lost or stolen while on
premises, the guest may sue the innkeeper.
*If they have insurance for the loss of their property,
the innkeeper remains liable, but it will be their
insurance company that may now sue.
*The insurance company gets whatever rights to
sue that the guest had after it pays the guest’s
(their insured) claim – the claim is subrogated to
the insurance company.
*Any defenses that the innkeeper had against the
guest, would still be available against the insurance
*Innkeeper’s liability for loss of Guest property.
*According to common law, innkeepers were fully
liable for any loss of guests’ property occurring on
hotel *This is a form of strict liability.
*Three exceptions will result in no liability:
*Loss caused by an “act of God” – severe weather
or natural disaster.
*Loss caused by a “act of war” – terrorist attack or
*Negligence by the guest – The guest left their door
open or left their luggage unattended in the lobby.
*Under current law, the three possibilities as to
liability for loss of guest property are that the
innkeeper will have:
*Limited liability (a maximum limit for the amount
they can be liable for a particular loss); or
*Liability Limiting Statute - By state statutory law,
an innkeeper’s liability is now limited to a maximum
amount for each loss so long as the innkeeper
complies with the requirements of the statute.
*The limited amount may be as low as a few
hundred dollars depending upon the situation, even
if the loss ranged into the thousands.
*With regard to the loss of Guest “valuables that
belong in a safe,” the innkeeper liability will be
limited to the statutory amount if:
*Provide a safe for use by guests
*Must be available 24/7 – whenever guests may
*Safe must be reasonably secure.
*Post notices announcing availability of safes in all
required places under the statute.
*Post notices announcing that liability will be limited
if the guest uses the safe.
*If the innkeeper does not comply with the statute,
in any way, its liability will be full liability – meaning
the common law rule will be applied.
*What Property Belongs in the Safe?
*Not all property is appropriate
*Most state statutes require the following property
to be deposited in safes:
*Money. May include gambling chips.
*Bank notes, bonds, negotiable securities
*Other articles of similar value
*Hotel liability, and any limitation thereof, may apply
during guest check-in or check-out.
*When the person becomes a guest, the duty to
protect their property begins.
*That duty would not end until a reasonable time after the relationship ends – when they cease to be
a guest, as discussed earlier.
*The innkeeper’s coverage under the liability
limiting statute - the right to limited liability - would
also be effective from check-in to check-out.
*The same duties and limitation would generally
apply when guest property is in transit to the
innkeeper’s premises, though already accepted by
*Even in the innkeeper’s own restaurant, the guest
status would apply to a guest, though not to other
patrons of the restaurant who are not guests of the
*Some states’ statutes may require a hotel to
maintain suitable locks and bolts on doors and
fastening on windows to benefit from limited
*This is especially true for a liability limiting statute
that covers the loss of guest property that does not
belong in the safe.
*Such a statute might apply to articles of clothing,
inexpensive watches, sporting equipment, camera,
*The limitation may, or may not, apply to items
stored in the innkeeper’s baggage storage, as
opposed to kept in the guest’s own room.
*Under any of the liability limiting statutes, if the
guest can prove that the innkeeper’s own
negligence caused the loss, the innkeeper’s liability
would go back to full liability, losing protection
under the statute.
*When innkeeper negligence is proven, the
innkeeper would also have the available defense of
comparative negligence due to the guest’s
unreasonable conduct contributing to their loss.
*In any event, the absolute liability rule and the
applicable liability limiting statutes generally do not
apply to guests’ cars, the property of nonguests, or
the property of restaurant or gift shop patrons of the
*The issue of liability in these situations would be
governed by law of bailments.
*Guest property lost due to fire.
*Most states now limit or eliminate and innkeeper’s
liability due to fire, if fire is not a result of hotel’s
*As with other losses, the hotel will generally be
fully liable if the fire is caused by the hotel’s
Bailment. Chapter 8 (page 303 to end) •A bailment is a transfer of possession of tangible personal property from one person to another with
understanding that property will be returned.
•There are two parties involved in the transaction. •Bailor—person transferring possession of property
•Bailee—person receiving possession
The essential elements of a bailment: •Personal property;
Land cannot be bailed.
Intangible personal property, such as intellectual
property or shares in a corporation would not be the
subject of a bailment. •Delivery of possession;
•Acceptance of possession;
•Although the text states that bailment agreement is
necessary, there won’t be an actual agreement in a
constructive bailment. Also, an agreement requires
consideration and a bailment can exist where the
bailor, or bailee, gets all of the benefit and the other
•The main legal issues in bailment are: •Did a bailment exist?
•What property was the subject of the bailment?
•If property was bailed, what was the duty owed by
the bailee to protect the bailor’s property? •Is there a duty of the Bailor?
•Did a bailment exist? •Did the bailor deliver possession?
•If bailor’s tangible personal property was not
actually given to the bailee, then the bailment never
•If an owner of a car pays a garage for the right to
park the car in the garage, but the owner parks and
locks the car and leaves with the keys, the owner
never delivered possession of the car to the
•A coat hung, by a patron, on an unattended coatrack in a restaurant, was never delivered to the
restaurant. •Did the bailee accept possession?
Did the bailee intend, expressly or impliedly, to
accept possession of the bailor’s property?
•A coat checked in a restaurant’s attended
• checkroom is bailed.
•Jewelry in the pocket of the coat was not known of
by the restaurant, so it was not bailed and the
restaurant would not be liable for the jewelry.
•If the restaurant’s employee, the coat-check
person, knew or should have known of the jewelry’s
presence in the pocket, they would have to refuse
possession of the jewelry, or it is probably bailed.
•Objects in the locked trunk of a bailed car may be
bailed along with the car, as the bailee knew or
should have known that the trunk would contain
•Objects hidden inside the interior of the car were
not bailed, as the bailee had no knowledge of their
presence. •A Bailee has a duty to protect the bailor’s property
while it is in the bailee’s possession. •The bailee would be liable only if it fails to exercise
the amount of care required in tending to bailed
goods •The care required of the bailee depends upon
type of bailment •There are three types of bailment: •For the sole benefit of the bailor;
•For the sole benefit of the bailee; or
•Bailment for the sole benefit of the bailor •When the bailee receives no benefit from the
bailment. •For example, as a favor, a neighbor fixes another
neighbor’s lawnmower without being compensated
for the work. The one doing the repair is the bailee. •In this case, the bailee is obligated to exercise only
a slight degree of care. •That slight degree of care owed translates into the
bailee being liable only for gross negligence. •Anything less than gross negligence would not
give rise to liability.
•Bailment for the sole benefit of the bailee •As when a Bailor lends property to a bailee and
receives nothing in return. •For example, a caterer has a job lined up, but not
enough equipment to work it. If that caterer borrows the equipment from a friend who owns a restaurant
and does not have to pay the restaurant in return,
the bailee-caterer gets all of the benefit. •In this case, the bailee is obligated to exercise
great care to protect the bailor’s property. •The bailee could be liable for damages, even if
they acted reasonably. They would have to work
harder than “acting reasonably” to protect the
•Mutual benefit bailment •The most common form of bailment
•Bailment for hire is this form.
•For example, An owner takes a vehicle to a repair
shop for brake work. The owner gets the repair and
the shop gets paid - both parties receive some
benefit. •Bailee’s duty to exercise ordinary, or reasonable,
care. •A bailee would be liable for regular negligence. •Proof of negligence in bailment cases •It would be very complicated for a bailor to prove
why or how a bailee breached their duty to protect
the bailed property. •The law, therefore, creates a presumption of a
breach of the duty where the bailee fails to return
property to the bailor or the property is returned in
damaged condition. •This presumption shifts the burden of proof to the
bailee, who must now prove they did not breach
their duty of care. (In effect, a shifting of the burden
makes the defendant guilty until they can prove
they are innocent.) •The bailor need only prove:
•delivery of the property to the bailee;
•acceptance by the bailee; and
•Bailee’s failure to return property or return of property in damaged condition.
•Then the burden of proof is on the baileedefendant.
•Duties owed by the bailor •In mutual-benefit bailment, the bailor may owe a
duty to pay the bailee for services provided.
•Not always the case, as when a person rents a car
from a car-rental company, it is the bailee who
pays. •The bailor generally is obligated to warn bailee of any defects in bailed property that might result in
injury to bailee or interfere with bailee’s use of the
bailed property, such as bad brakes in a car that is
given to the valet parking attendant. •Constructive Bailment
•A bailment created by law as a result of special
circumstances rather than by express statements
made by the parties. •If a person loses some item of tangible personal
property and did not intend to give up ownership,
the finder may be considered a bailee of that item. •A finder of abandoned property can become the
owner of that property, but.. •A finder of lost property often becomes a
constructive bailee who owes some duty of care to
protect and return the property, depending upon
•Rules as to coat checkrooms. •A bailment is created between customer who
leaves property with checkroom attendant and the
facility that employs that attendant. •Attendant accepts garments and issues a receipt.
•Limiting liability laws may cover attended
checkrooms and baggage rooms. •If checkroom is unattended, limiting liability
statutes do not apply and there generally won’t
even be a bailment. •If the checkroom is operated by an independent
contractor, liability limiting statutes, which were
created to limit the liability of a restaurant or
innkeeper, will generally not protect the contractor. ...
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