The creation of bailor/bailee relationship arises where a person called the bailee is given control of the property of another person called bailor for a specific...

      

The creation of bailor/bailee relationship arises where a person called the bailee is given
control of the property of another person called bailor for a specific purpose e.g., where a
customer of a bank deposits valuables in safe custody with the intention that on request
they will be returned to him/her. However, whether a banker is a bailee for reward or for free he/she must take the highest standard of care expected from person undertaking business of banking. Briefly explain the Liability attaching to bailee.

  

Answers


Ruth
a) For conversion i.e., for carrying out “an unauthorized act which deprives another
person of his/her property either permanently or temporarily. Bankers may be
liable if custody items are delivered to the wrong depositor
b) For detinue, i.e. wrongful detention of goods belonging to another person. A
banker would only refuse to return custody items where the identity of the person
demanding delivery is doubted, or where the depositor's signature requesting
delivery to a third party does not appear to be in order. In these circumstances
delay in delivery would be justified to be in the interests of the depositor.
c) For theft. If there is no negligence then no liability attaches. However, the bank
must prove beyond reasonable doubt that the theft was beyond their highest
standards of care.
d) For fraud by employee. If caused by negligence, then damages may result, e.g
where a bank allows one employee to hold all the keys to the safe custody thereby
facilitating fraud.
NatalieR answered the question on February 15, 2022 at 00:50


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