Duties of the Bailee. Wanda Perry, who had an account with Farmers Bank of Green-wood, wanted to rent a safe-deposit box from the bank. The boxes were available only to bank customers, and no rent was charged. When renting the box, Wanda was asked to

Question

sign a signa-ture card that stated the following: "The undersigned customer holds the Farmers Bank harm-less for loss of currency or coin left in the box." A little over four years later, the bank was bur-glarized, and most of the safe-deposit boxes were broken into. Wanda's box was among those burglarized, and she lost all the currency and coins contained in it. At trial, evidence showed that the bank had been negligent in failing to restore a burglar alarm system that had been inoperative for more than a week prior to (and including) the day the bank was burglarized. Wanda sued the bank to recover the currency and coins, alleging negligence on the part of the bank. Discuss fully whether the bank should be held liable for the loss.

Answer 1

Duties of the bailee
The court ruled that the release clause in the rental agreement exempting the bank from liability was invalid on the basis of public policy, and the bank was liable for negligence. The court stated that it had "never upheld an agreement purporting to release a party from liability for his own negligence before it occurred. The rationale behind the numerous decisions invalidating so-called releases given before liability arises is based on the strong public policy of encouraging the exercise of care." The court held that "it is not impossible to avoid liability for negligence through contract; however, to avoid such liability, the contract must at least clearly set out what negligent liability is to be avoided."