Bailment Defined

A bailment is called a deposit within the Civil Code. It is defined as “[a] voluntary deposit [...] made by one giving to another, with his consent, the possession of personal property to keep for the benefit of the former, or of a third party.” (Civ. Code, § 1814.)

Bailments as Lease Agreements Beyond 20 Days

A bailment as defined by Civil Code section 1955 as follows: “[e]xcept as otherwise agreed by the lessor and the lessee in lease agreements for a term of more than 20 days, one who leases personal property must deliver it to the lessee, secure his or her quiet enjoyment thereof against all lawful claimants, put it into a condition fit for the purpose for which he or she leases it, and repair all deteriorations thereof not occasioned by the fault of the lessee and not the natural result of its use.” (Cal. Civ. Code §1955).

Similarities with Contracts

The elements of a breach of contract claim are:

1. the existence of a contract,
2. breach of the contract’s terms, and
3. resulting damage.

(Tribeca Companies, LLC v. First American Title Insurance Co. (2015) 239 Cal.App.4th 1088, 1109.)

“The elements of breach of bailment are substantially similar. “In a broad sense a bailment is the delivery of a thing to another for some special object or purpose, on a contract, express or implied, to conform to the objects or purposes of the delivery which may be as various as the transactions of men.” (H. S. Crocker Co. v. McFaddin (1957) 148 Cal.App.2d 639, 643.)

Duty of Bailee

Under California law, “a bailment for the benefit of both parties ... is a bailment for hire, and imposes on the bailee the duty to use ordinary care with respect to the bailed property.” (Gerbert v. Yank (1985) 172 Cal.App.3d 544, 551 (emphasis added).)

“A bailment ‘is made by one giving to another, with his consent, the possession of personal property to keep for the benefit of the former, or of a third party.’” (McKell v. Washington (2006) 142 Cal.App.4th 1457, 1491 citing Civ. Code, § 1814; see Gebert v. Yank (1985) 172 Cal.App.3d 544, 551; 13 Witkin, Summary of Cal. Law, supra, Personal Property, § 156, p. 168.) In McKell “Plaintiffs allege in their breach of bailment cause of action that they ‘delivered to Washington Mutual, and Washington Mutual agreed to hold for the benefit of plaintiffs, money to pay the cost of underwriting, tax services and wire transfer services.’” (Id.) “More specifically, they allege that "Washington Mutual entered into a standard form loan contract with plaintiffs..., in which plaintiffs... agreed to pay Washington Mutual for the benefit of third parties money for the cost of tax services, and Washington Mutual agreed to pay over to these third party vendors the actual cost for these services and return the remainder to plaintiffs...’” “In breach of this agreement, Washington Mutual paid only a portion of the money to the third party vendors and kept a portion for itself.”