Sam entered a cycling race and his bike broke down. He did not have the money to buy a new one so his friend Dan loaned him his racing bike. While riding the bike in the race Sam got a flat tire and lost the race. Sam was disappointed and returned the bike to Daniel saying " nice bike but the tire went flat." Dan asked Sam to pay for the cost of the new tire which was $300 since this were special racing tires. Which of the following statements best applies to this situation?

Select one:

This is a bailment for value and therefore Sam does not have to pay for the new tire.

This is a gratuitous bailment and therefore Sam has a duty to be reasonably careful that no harm or accident comes to the bike.

Because Sam has borrowed the bike, he is obligated to return it in the condition it was in when he picked it up.

Because Sam and Dan are friends there is no bailment