BAILMENT
Meaning of Bailment
• The word bailment has been derived from French word bailor which
means to deliver. Bailment means delivery of property or goods in
trust to another for special purpose and for a limited period.
• According to Section 148 of the Contract Act, 1872; “The
definition of bailment is, “A bailment is a delivery of
goods/products by one person to another for some purpose, upon a
contract that they shall, when the purpose is accomplished, be
returned or otherwise disposed of according to the directions of the
person delivering them.”
Parties in Contract of Bailment: There are two parties in the
contract of bailment:
1. Bailor: Bailor is a person who delivers the property/goods to
another.
2. Bailee: Bailee is a person to whom the property/goods are
delivered by bailor.
For example –
• Mr. A hand over a piece of cloth to tailor for making a shirt. Here
Mr. A is the bailor and tailor is the bailee.
• A leaves his suit-case with a Railway Cloak Room for safe custody.
Essential Features of Bailment
1. Contract: The bailment is always based upon the
contract. there must be a contract between Bailor and
Bailee. Though, the contract can be “Express” or
“implied.” Example: A gives his Car to B for repair, A is
the Bailor and the B is the Bailee
2. Movable goods – in bailment the goods must be movable
and tangible in nature. Hence bailment of immovable
property like building and land cannot be made.
3. Delivery of goods by one person to another: In bailment,
there must be delivery of goods by one person to another.
However, the word, ‘delivery’ is very wide. It may be actual or
constructive. It should be noted that in bailment, only
possession of the goods passes from one person to another.
4. Purpose: There should be the purpose of the bailment or
giving personal property to another person. The goods should
be transferred by the Bailor to the Bailee for some purpose.
Example: A gives his car to X to repair that car. Here the
repairing of the car is the purpose of bailment.
5. Return of goods: The goods transferred by the Bailor to the
Bailee are transferred on the condition that it will be returned
back to the Bailor after the fulfillment of the purpose of the
bailment. However, the goods can be returned back to the Bailor
in its original form or in altered form as the contract may be.
6. Essentials of a Valid Contract: It must have all the essentials
of a valid contract such as offer and acceptance, intention to
create a legal relationship, capacity to contract, free consent,
lawful object, lawful consideration, certainty and legal
formalities.
Types of Bailment
• Gratuitous Bailment: Gratuitous bailment is bailment in which
neither the bailor nor the bailee is entitled to any remuneration
e.g. lending of a book to a friend. Here the goods are delivered to
be carried or something to be done about these without reward.
• Non-Gratuitous Bailment: The non-gratuitous bailment is a
bailment where the bailor or the bailee s entitled to remuneration.
In this case, the goods are delivered to be carried or something to
be done about these for the reward to be payable to the bailee.
Duties of the bailor
• Duty to disclose faults: In bailment, the bailor is expected to disclose
to the bailee all the defects known to him and which would get in the
way with the use of goods bailed. Example: A lends his horse, which
he knows to be frisky, to B. He does not disclose the fact that the horse
is frisky. When B tries to ride it, the horse throws him off its back,
and B is injured.
• Duty to repay Bailee's expenses: A bailor is duty bound to repay to the
bailee expenses incurred by him for work done on the goods received
under conditions of bailment, and for which he is not receiving any
remuneration or deriving any benefit. In this regard,
• Duty to indemnify the bailee: The bailor is bound to make good the
loss suffered by the bailee that is in excess of the benefit actually
derived, where he had delivered the goods gratuitously and
compelled the bailee to return them before the expiry of the period of
bailment.
• Duty to claim back the goods: The bailor is bound to accept the
goods upon being returned by the bailee in accordance with the terms
of bailment. If he refuses or fails to accept back the goods, if offered
at a proper time and at a proper place, without any reasonable
ground, he shall be responsible for any loss or damage to the goods
and not the bailee.
Rights of the Bailor: A bailor has the following rights.
• Right to enforce Bailee's performance: Since the bailor delivers goods
to the bailee for some specific purpose, the former, especially in case
of non-gratuitous bailment, has an elemental right to achieve that purpose
or obtain the benefit (i.e., performance) through the latter. For example,
if X delivers a suit length to Y, his tailor, to stitch a suit for him, X (bailor)
will see that the tailor does the needful in the desired manner.
• Right to claim damages: In all cases of bailment, the bailor has the right
to claim for damages against the loss, if any, caused to the goods bailed
due to the bailee’s negligence or misconduct.
• Right to claim compensation against unauthorized use of goods: A good
example for this is this situation, A lets B use his car but with a condition that
only B shall drive. B allows C, a member of his family, to drive the
car. C rides with care, but the car meets with some accident. Now B is liable
to compensate for the damages caused.
• Right to demand return of goods along with accretion to, if any: The
bailor enjoys the exclusive right to have the goods bailed delivered back to
him in safe and sound condition after the time of bailment has expired or the
purpose behind the bailment has been achieved. Example, A leaves his
brooding hen in the custody of B to be taken care of for a week. The hen has
hatched the chicks. A is entitled not only to the hen but also to the chicks.
Duties of a bailee:
• Take proper care of goods: According to section 151, it is the duty of a
bailee to take care of goods bailed to him. Bailee should take care of these
goods as an ordinary man will take care of his goods of the same value,
quality, and quantity. Thus, if the bailee takes due care of goods then he
will not be liable for any loss, decline of such goods.
• Not to make unauthorized use: As per section 153, the Bailee shall not
make any unauthorized use of goods bailed. In case he makes any
unauthorized use, then bailor can terminate the bailment. Bailor can also
claim for damages caused to goods bailed due to unauthorized use as per
Section 154.
• Not to mix with his own goods: The bailee needs to keep the goods separately
from his own goods. He should not mix the goods under bailment with his own
goods. If it is not possible to separate the goods, the bailee shall compensate the
bailor for the loss of goods.
• Return Goods: The duty of the bailee is to return the goods without demand on
the accomplishment of the purpose or the expiration of the time period. In case of
his failure to do so, he shall be liable for the loss, damages or destruction of
goods.
• Return increase or profits: A bailee shall return the goods along with any
increase or profit accruing to the goods to the bailor, in the absence of any
contract to the contrary. For example, A leaves a hen in the custody of B. The hen
gets a chick. B shall deliver the hen along with the chick to A.
Rights of Bailee: The bailee of the goods has the following rights;
• Right to recover necessary expenses incurred on bailment. (section 158)
Section 158– Some numeration has to be paid to the bailee for services he
renders in respect of them, he has a right to recover the same, or to exercise the
right of lien in respect of such goods until he receives the necessary payment.
For instance, A leaves his horse with his neighbor, B, for safe custody foe one
week. B is entitled to recover the expenses incurred by him in feeding the horse.
• Right to recover compensation from the bailor. (section 164) “The bailor is
responsible to the bailee for any loss which the bailee may sustain by reason that
the bailor was not entitled to make the bailment, or to receive back the goods, or
to give directions respecting them.”
• Right of lien on the goods bailed. (section 170-171)
Lien is the right of the bailee under which the bailee can
retain the goods of the bailor, and refuse to deliver them
back, until the due remuneration or amount due is paid.
The Act recognizes two kinds of lien;
• Particular lien; and
• General lien.
