What is a Bailee?
A bailee is a person who has been entrusted with custody of a piece of property. A bailee does not have ownership of the property.
How Does a Bailee Work?
Let's say John Doe owns a big piece of farmland on the eastern shore of Maryland. His adult son wants to farm the land.
Rather than transferring ownership of the property to his son, John Doe (the bailor) transfers possession or custody of the farmland to his son (the bailee). The son might pay rent or a lease fee in return. The son receives only custody and control of the property, but John still owns it. John is thus responsible for paying the property and is liable for what happens on the land (unless the bailee failed to care for the land properly).
In general, there are three kinds of bailments:
- Service agreement bailments, whereby the bailee agrees to perform a service for the bailor (such as park or store a car).
- Constructive asset (such as with a safe box). , whereby the bailee agrees to protect the bailor's
- Gratuitous bailments, whereby the bailor doesn't receive payment from the bailee for the (such as free coat checks at a restaurant).
almost always involves a written contract. Sometimes, that contract is printed on the back of a coat check stub or a claim ticket for valet parking. can occur without compensation, however.
Why Does a Bailee Matter?
When we entrust our property or assets to others, we are often putting those things in fiduciary duty. In both cases, someone is being entrusted with others' assets and must act to protect those assets while in their custody.. In this sense, the concept is similar to that of