A custodian temporarily possesses property belonging to someone else, with the owner retaining ownership rights. Custodians have responsibilities and cannot use the property. Abandoned property can be disposed of, but some types revert to the government.
A custodian is someone who owns property that belongs to someone else. A simple example would be a wardrobe. The wardrobe has the right of possession, but the coats still belong to their respective owners, and will be collected in the future. Depositary/bailor relationships can occur in many different contexts and can be explicit or implicit, depending on the nature of the situation.
The custodian retains the temporary right to possess someone else’s property, usually as part of a mutual understanding. For example, when someone leaves a car with the mechanic, the mechanic becomes a custodian, with the car owner understanding that in order to make repairs, the mechanic must take possession of the car. Similarly, a retail store that asks people to leave their bags at the counter becomes a depository.
The custodian does not get the right to use the property, only to hold it. This is why it is not legal, for example, for a mechanic to take a customer’s car for a drive. Furthermore, the custodian who owns the property can generally demand its return at any time, although in some arrangements failure to perform on an agreement may allow the custodian to retain the property. For example, a bank may retain assets it holds as a custodian if a customer has defaulted on a loan.
Custodians also have certain responsibilities, which may vary depending on the situation. In some express contracts, these responsibilities are clearly outlined. In the example of leaving the car with a mechanic, for example, the mechanic takes responsibility for the car, but does not accept responsibility for personal ownership in the car. This, if the car is damaged, the mechanic pays for it, but if the customer’s CD collection is missing when the car is returned, this is not the mechanic’s responsibility.
In some cases, property left to a custodian for a specified period of time is considered abandoned, and the custodian can dispose of it as he wishes. This is designed to prevent custodians from being stuck indefinitely with property that belongs to someone else. Certain types of property, such as financial accounts, can revert to the government, which can hold them for an additional period of time before handing them over. In other cases, custodians are free to use or dispose of the property as they see fit, such as when a cloakroom donates uncollected coats to charity after keeping them for several months.
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