Post by Henry Smith
Chris Newman has a new draft paper on SSRN on bailments (“Bailment and the Property/Contract Interface”). The paper is provocative (yes, that is possible in a paper on bailments!) and deeply insightful. Newman argues that much of the confusion about bailment contracts, and especially strict liability for deviation from such contracts, stems from a lack of understanding of which baseline is operative in various cases. The article provides compelling reasons to think that the property baseline governs more than people usually think – and should do so. Like a license (a subject of Newman’s previous work), a bailment is a legal relation that can be created or shaped by contract, but it should not be identified with the contract. Indeed, in involuntary bailments (most prominently with finders), there is no contract at all. But even where there is one, the bailment itself is just a giving of possession without a transfer of ownership. The bailee has a license to do certain things with the thing, and if the bailee exceeds the scope of that license, then the bailee violates the in rem rights of the owner, just as other converters and trespassers might.