Who is liable if they are damaged?
Following the devastating fires in the ACT and south east NSW, we have received an enquiry from someone helping family and friends. They have asked the following:
“I am storing furniture and items for a friend in my shed and they are paying me $50.00 a week. What happens if my house and shed are destroyed by fire? Who is liable for the costs of their goods? They are not insured by me or by the friend.”
This is a really good question and involves the law of bailment.
Here are several tips to those who want to help family of friends with storage:
- When taking goods, expressly tell the bailor that it is their responsibility to obtain insurance. Better yet, put this in any written agreement you have to take possession of the goods.
- Take out insurance and factor this into the cost of any charge to the bailor you require.
- Care for the goods as if they are your own.
- If there is an impending risk of damage to the goods, tell the bailor and offer them the opportunity to collect the goods. There is a proposition at law that says that a person must mitigate (minimise) their losses. The law will not aid someone who has ‘sat on their hands’ and not taken reasonable steps to prevent the damage. In the bushfire example, if the bailee told the bailor of the fire risk and offered for them to collect the goods, if the bailor fails to do so, they may have not mitigated their losses.