Scribd
Upload
11 views6 pages

Bailment

Bailment is defined as the delivery of goods by one person to another for a specific purpose, with the expectation that the goods will be returned once the purpose is fulfilled, as outlined in the Indian Contract Act, 1872. Essential elements include delivery of possession, a specific purpose, return of goods, and a contractual relationship, while ownership remains with the bailor. Bailment can be classified based on benefit and purpose, and both parties have specific rights and duties, including the bailee's duty of care and the bailor's duty to disclose defects.

Uploaded by

aadarsh1022006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
11 views6 pages

Bailment

Bailment is defined as the delivery of goods by one person to another for a specific purpose, with the expectation that the goods will be returned once the purpose is fulfilled, as outlined in the Indian Contract Act, 1872. Essential elements include delivery of possession, a specific purpose, return of goods, and a contractual relationship, while ownership remains with the bailor. Bailment can be classified based on benefit and purpose, and both parties have specific rights and duties, including the bailee's duty of care and the bailor's duty to disclose defects.

Uploaded by

aadarsh1022006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

Bailment — Essentials and Legal

Framework
What is a Contract of Bailment?
According to Section 148 of the Indian Contract Act, 1872, bailment is
defined as the “delivery of goods by one person to another for some
purpose, upon a contract that they shall, when the purpose is
accomplished, be returned or disposed of according to the directions of
the person delivering them.”

Example: If you give your car to a mechanic for repairs, this is a


contract of bailment. You (the bailor) deliver the car to the mechanic (the
bailee) for a specific purpose (repair), with the expectation that the car will
be returned after the work is done.

Essential Elements of a Contract of Bailment


For a contract of bailment to be valid, it must satisfy the following essential
elements:

A. Delivery of Possession

• Bailment involves the delivery of possession of goods from


the bailor to the bailee. This transfer of possession is
temporary and does not transfer ownership.

Example: When you leave your clothes with a dry cleaner,


you give them possession temporarily, but you retain
ownership.
B. Purpose of Bailment

• The bailment must be for a specific purpose, such as


safekeeping, repair, transportation, or use. The bailee is
obligated to return or dispose of the goods after fulfilling this
purpose.

Example: A customer gives their watch to a repair shop with


the purpose of getting it fixed.

C. Return of Goods

• The bailee is required to return the exact goods delivered or


dispose of them as per the bailor’s directions once the
purpose is accomplished. The goods should not be
substituted with anything else unless agreed upon.

Example: A borrows a painting from B for an art exhibition.


A must return the same painting to B after the exhibition ends.

D. Movable Property

• Bailment applies only to movable goods. Immovable


properties like land and buildings are not subject to bailment.

Example: A car, jewelry, or furniture can be bailed, but land


or a house cannot.

E. Contractual Relationship

• A contract, whether express or implied, is essential to


establish a bailment relationship. The contract outlines the
terms, duties, and rights of both the bailor and bailee.
Example: When you leave your bag at a luggage storage
facility, an implied contract of bailment is created.

F. Ownership Remains with Bailor

• In bailment, ownership of the goods remains with the


bailor. Only possession is transferred to the bailee
temporarily.

• Example: If you rent a bicycle to someone, you remain the


owner while the person using it only has possession for a
certain period.

Types of Bailments
Bailment can be classified based on the purpose or nature of benefit:

A. Based on Benefit

• Gratuitous Bailment: Involves no compensation. It is purely


for the benefit of either the bailor or the bailee.

• Non-Gratuitous (Commercial) Bailment: Involves a contract


with compensation, typically benefiting both parties, like a
rental or repair agreement.

B. Based on Purpose

• Bailment for Safe Custody: Goods are entrusted to the bailee for
safekeeping.

• Bailment for Repair or Maintenance: Goods are handed over


for repair or maintenance.
• Bailment for Use: Goods are bailed for temporary use, such as
hiring equipment.

Legal Duties of the Bailee and Bailor

Duties of the Bailee / Finder of Lost Goods

• Duty of Care: The bailee must take reasonable care of the


goods. If any loss or damage occurs due to negligence, the bailee
may be held liable.

• Duty to Return Goods: The bailee must return the goods to the
bailor as per the contract terms.

• Duty Not to Use the Goods Improperly: The bailee should use
the goods only for the agreed purpose. Unauthorized use may
lead to liability for damages.

• Duty Not to Mix Goods: If the bailee mixes their goods with
the bailor’s goods without consent, they are responsible for
separation or compensating for any loss.

Duties of the Bailor

• Duty to Disclose Defects: The bailor must inform the bailee of


any known defects in the goods that may affect safe handling.

• Duty to Bear Necessary Expenses: If the bailment is


gratuitous, the bailor must bear reasonable expenses incurred
by the bailee for the upkeep of the goods.
• Right to Demand Return: The bailor has the right to demand
the return of goods upon fulfilling the purpose of bailment.

Rights of the Bailee and Bailor

Rights of the Bailee

• Right to Retain Goods: In some cases, the bailee may have


the right to retain goods until they receive payment for their
services.

• Right to Claim Compensation: If the bailee incurs a loss due


to defects in the goods or lack of disclosure by the bailor, they
can claim compensation.

Rights of the Bailor

• Right to Take Back Goods: The bailor has the right to get
their goods back once the purpose of bailment is completed.

• Right to Claim Damages: If the bailee fails to exercise


reasonable care, resulting in damage or loss, the bailor can
claim compensation.

6. Termination of Bailment
A contract of bailment can be terminated under various circumstances:

• Completion of Purpose: Bailment automatically terminates


once the purpose for which it was created is fulfilled.
• Expiry of Time Period: If a time period is specified in the
bailment contract, it ends upon expiration.

• Destruction of Goods: Bailment terminates if the goods are


destroyed or lost.

• By Bailor’s Request: The bailor can terminate the bailment


by requesting the return of goods if there’s no fixed time or
purpose.

You might also like