Bailment Storage Agreement

On the other hand, the applicants argue that the Single Code of Trade is not applicable to this transaction…. It is now clear that the scope of Article 2 goes far beyond the limits of this type and concentration, which the code itself defines as a „sale“; the transfer of ownership from a party called the seller to a buyer for a price. The main possibility of this extension is in section 2-102, which states that the section applies to „goods transactions.“ „Article 2 sections find their way into more and more decisions that are not transactions, but that are used as a substitute for a sale or that seem to be attributed to a court attributes that appear to be principles of sale or at least some of them are appropriate for application…. The most important is the application of the provisions guarantee of the article to leases, bonds or construction contracts. Increasingly important is the tendency of the courts to find the section on indissionability, sections 2-302, for non-sale transactions. In addition, unlike a lease agreement in which the property remains in the hands of the landlord, but the tenant has the use of the property, the baileee is generally not entitled to the use of the property as long as it is in its possession. However, a personal property lease is the same as a lease that gives the leaseee the right to use the property. [3] Fungible products (identical products, such as cereals in a silo) are a particularly troublesome problem. In many cases, the goods of several owners are mixed and the identical items are not intended for return. For example, the operator of a grain elevator agrees to return an equal amount of grain of the same value, but not the actual kernels deposited there. According to the rule in carpenter`s cow case, this could be a sale, but it is not. According to the UCC, Section 2-207, depositors of fungible goods are „carrying together“ the goods; In other words, the goods are in everyone`s possession. This distinction between a sale and a lease is important. If there is a loss due to natural causes – for example, if the elevator is on fire – depositors must share the loss pro-rata (meaning that no individual depositor has the right to withdraw all of their cereal; if 20 per cent of the cereals have been destroyed, each depositor cannot withdraw more than 80% of what he has deposited).

In the event of a sale, the buyer acquires the property and must pay for the goods. In the event of a derailment, the Bailee acquires the property and must return the identical object. In most cases, the distinction is clear, but difficult borderline cases can arise.