Scribd
Upload
10 views

Bailment

Uploaded by

Charita Prasad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
10 views

Bailment

Uploaded by

Charita Prasad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

Introduction

There are many cases of bailment in our day to day life. For example, in the
case of laundry, we give our clothes for getting washed. Once they are washed,
they are to be returned back to us. We place the other person in temporary
possession of our clothes for a specific purpose and there is an express or
implied understanding between the two to return the good once the purpose
has been fulfilled.

Meaning
The word ‘bailment’, is derived from ‘bailler’, a french word which means ‘to
deliver’. Bailment has been defined under the Section 148 of the Indian
Contract Act, 1872, according to which Bailment involves the delivery of goods
from one person to another for a specific purpose and upon a contract, when
the purpose is fulfilled, the good has to be returned or dealt with on the
direction of the person who has delivered the goods

Who are the parties to the contract of


Bailment?
There are generally two parties to the contract of Bailment. The person who is
the owner and delivers the good is called ‘bailor’ while the person to whom the
goods are delivered is called ‘bailee’.

General rules relating to Bailment are mentioned in Chapter IX (Section 148-


181) of the Indian Contract Act, 1872. Bailment is a type of a special contract,
so all essential elements of a valid contract like consent, competency, etc are
required for it to be valid. But, a valid bailment can arise even without a valid
contract between the two parties, for example, a lost good finder becomes a
bailee and has the responsibility to return it to its owner, the bailer, even if no
contract exists between them.
How is Bailment different from the sale of the
good?
Sales involve the transfer of the ownership of the good in exchange for
something of value while on the other hand, Bailment involves the transfer of
the possession of the good, not the ownership.

What goods can be bailed?


Only the goods that are of movable nature can be bailed. However, current
money or legal tender cannot be bailed and deposition of money will not be
counted as bailment as money is not a good and the same money will not be
delivered back to the client.

Essential Features

Delivery of Possession
There must be a delivery of goods, which means, delivery of possession of the
goods by the bailer to the bailee to fulfill the purpose of bailment. Possession
refers to exercising control over the good and excluding any other person to do
the same.

Section 149 of the Indian Contract Act, 1872 talks about the same. The delivery
of possession can either be actual or constructive. It means that either the good
can directly be put in the actual physical possession of the bailee or put the
bailee in a position of power over such goods that can be physically possessed
later, if possible. In constructive delivery, the bailor gives the bailee means of
accessing the custody of the good and not its actual delivery.

For example, C has a rare coin locked safe deposit box. As the delivery of a safe
deposit box is impossible, when C, bailor, gives the key of the deposit box for
the bailment of the coin to A, bailee, it would be considered as constructive
delivery.
It is important to note that mere custody of goods is not equivalent to the
possession of goods. In Reaves v. Capper, it was held that a servant can be in
the custody of the goods because of the nature of his job but that does not
mean he is in possession of the goods. For example, a servant holding his
master’s umbrella is not a bailee.

Delivery upon Contract


There must be a contract between the bailor and the bailee for such transfer or
good and its return. If there is no contract, there cannot be bailment. Moreover,
the contract can either be expressed or implied.

Exception: If the good is lost, the finder of good will be seen as the bailee
even if there was no contract of Bailment or delivery of goods under a contract.
A finder of goods is a person who found a lost good belonging to someone else
and keeps it under his possession until the owner of the good is found. This
leads to an involuntary form of Bailment contract between them. The finder has
all rights and duties that of a bailee.

Delivery must be for some purpose


It is essential that there must be a purpose for which the delivery of the goods
takes place. If after the completion of the purpose of bailment the good is not
accounted for, then bailment cannot arise. This is an important feature as it
separates it from other relations like agency, etc..

Return of goods
After the completion of the purpose, the good must be delivered to the bailor or
dealt with as per his instructions. If he/she is not bound to return the good then
there is no bailment. Even if there is an agreement to return an equivalent and
not the same good, it will not amount to bailment.

For example, a tailor receives a saree for stitching as he is the bailee. After the
saree has been stitched, the tailor is supposed to return it to the bailor.

Moreover, it is necessary for the bailee to follow the instruction given by the
bailor for the purpose of the return of the good if any.
In Secy of state v. Sheo Singh Rai, a man, for the purpose of cancelling and
consolidating nine government promissory notes into a single note of Rs.
48000, went to a Treasury Officer. Later, the notes were misappropriated by a
servant at the treasury and the man filed a suit against the State to hold it
responsible as a bailee. He failed as there is no Bailment without delivery of
good and a promise to return the same and the government was not bound to
return the same notes or deal with them in accordance with the wishes of the
man.

Classification of Bailment
Bailment can be broadly categorized into two types:

On the basis of Remuneration

Gratuitous Bailment
When a bailment is made without any consideration of benefit to the bailor or to
the bailee, it is referred to as gratuitous bailment. In simple terms, it is a
bailment without any consideration.

For example, when one lends a book to a friend free of cost.

Non-Gratuitous Bailment
When generally there is a consideration for bailment between the bailor and the
bailee then it is referred to as non-gratuitous bailment.

For example, when someone gets a book issued from a library in exchange for a
fee.

On the basis of benefits to the parties

For the exclusive benefit of the bailor


In this case, the bailor delivers his/her good to the bailee for safe custody.
There is no benefit/benefit for the bailee.
For example, leaving a pet with a neighbour when going out.

For the exclusive benefit of the bailee


In this case, the bailor delivers a good for the benefit of the bailee. For
example, a friend borrowing our car for a week.

For the mutual benefit of them both


In this case, the bailor deliver his good to the bailee for consideration and both
the parties get benefit out of bailment,

For example, giving a bike for repair to a mechanic, for which the mechanic gets
paid.

You might also like