Which term describes the temporary transfer of possession of property under an agreement to return or dispose of the property?

• A. Bailment
• B. Warehouse receipt
• C. Real defense
• D. UCC

Answer: (A)

Bailment involves the temporary transfer of possession of property to another person under an agreement that the property will be returned or disposed of according to the terms. In this relationship, the owner (bailor) parts with possession while retaining ownership, and the person who receives possession (bailee) has a duty to take reasonable care and to return or dispose of the property as specified. Examples include giving a car to a mechanic for repair, leaving clothes with a dry cleaner, or storing goods with a warehouse for safekeeping. This concept specifically describes possession passed for a defined purpose with an obligation to return or properly dispose of the item, which is why it’s the correct term. It’s not a warehouse receipt, which is merely a document proving storage and may accompany a storage relationship. It isn’t about defenses to contract enforcement (real defenses) or about the broader legal framework governing transactions (the UCC).