BAILMENT

Bailment means to deliver or handing over

Bailment implies an sort of relationship in which the
personal property of one person temporarily goes into
the possession of another.
The ownership of the article or goods is in one person
and the possession in another
The circumstances in which this happens are numerous.
Delivering a cycle, a watch or any other article for repair,
or leaving a cycle or car etc. at a stand , depositing
luggage in a cloak room, delivering gold to a goldsmith
for making ornaments, or delivering garment to
drycleaner etc. are all situations which create the
relationship of bailment.

BAILMENT
The contract Act deal with only the general
principles underlying the contract of bailment
and some special types of bailment
e.g.pledges, finder of lost goods etc. There are
separate Acts e.g. the carriers Act, 1865,
Railway Act, 1890 etc. which deal with special
types of bailment

BAILMENT
DEFINITION: (Sec.148)
A bailment is the delivery of goods by one person
to another for some purpose, upon a contract
that they shell, when the purpose is
accomplishment, be returned or otherwise
disposed of according to the directions of the
person delivering them
BAILOR AND BAILEE: The person who delivers the
goods is called the bailor and the person to
whom they are delivered is called the bailee

BAILMENT
CHARACTERISTICS OF BAILMENT
1)Delivery of possession:
Delivery of possession for this purpose
should be distinguished from a mere custody.
One who has custody without possession, like
a servant, or a guest using his hosts giids is
not a bailee

BAILMENT
Delivery may be actual or constructive.
Constructive delivery may be made by dong
something which has the effect of putting the
goods in the possession of the intended bailee
or any person authorized to hold them on his
behalf e.g. when goods are in transit i.e. at sea
or on a train, they can be delivered by handing
over the bill of lading or railway receipt
representing the goods.

BAILMENT
2)Delivery should be upon a contract
A bailment is always based upon a contract between the bailor and the
bailee. However, the finder of goods is an exception to this rule.
3)Return of specific goods
The goods returned should be the same ones which were bailed.
However, in some cases the goods are bailed for the purpose of
making some repairs, alteration in them e.g. delivery of clothes to a
tailor for stitching. This also constitutes bailement
4)Purpose
When goods are delivery by mistake without an purpose, there is no
bailment
5)Goods only
Bailment is possible only of goods i.e. movable property

BAILMENT
Deposit of money is not bailment:
Deposit of money in bank does not constitute
bailment since the bank is not bound to return
the identical coins or currency notes which are
deposited. The relationship between the banker
and the customer is not one of bailor and bailee
but of a debtor and creditor
But if notes and coins are deposited in a box for
safe custody, it is a bailment as they are to be
returned in specie

KINDS OF BAILMENT
1)Bailment for the benefit of the bailor only, as
in the case of delivery of goods to a friend for
safe custody
2)For the benefit of the bailee only, as in the
case of lending of a motorcycle or car to a
friend for his temporary use, without charge

KINDS OF BAILMENT
Gratuitous and Non-gratuitous bailment
A gratuitous bailment is that in which neither
the bailor nor the bailee is entitled to any
renumeration e.g. lending of a book to a
friend
A non-gratuitous bailment is that in which the
bailor or the bailee gets renumeration e.g.
giving a watch or a scooter for repairs

BAILMENT
Consideration in relation to gratuitous bailment
What is the consideration in a contract of
bailment where it is for the exclusive benefit
of the bailor or for the exclusive benefit of
the bailee?
The detriment suffered by the bailor in parting
with the possession of the goods is sufficient
consideration to support the promise on the
part of the bailee to return the goods.

DUTIES OF BAILEE
1)Duty to take reasonable care of the goods
delivered to him(Sec.151 &152)
2)Not to make unauthorized use of goods
bailed(Sec.153 & 154)
3)Not to mix goods bailed with other goods
(Sec.155-157)
4)Duty to return the goods (Sec.160 & 161)
5)Duty to deliver any accretion to the goods

DUTIES OF BAILOR
1)To disclose faults in goods bailed(Sec.150)
2)To repay necessary expenses in case of
gratuitous bailment (Sec.158)
3)To repay any extraordinary expenses in case of
non-gratuitous bailment
4)To receive back the goods
5)Duty to indemnify bailee for lack of
title(Sec.164)

RIGHTS OF BAILEE
1)Enforcement of bailors duties
2)Right to deliver goods to one of several joint
bailors (Sec.165)
3)Right to deliver goods, in good faith, to bailor
without title(Sec.166):The bailee has a right to
deliver the goods, in good faith, to the bailor
without title, without incurring any liability
towards the true owner

RIGHTS OF BAILEE
4)Right of particular lien(Sec.170):
5)Right of general lien(Sec.171)
Line: The right to retain possession of the
property or goods belonging to another, until
some debt or claim is paid is called lien. The
right depends on possession and is lost as
soon as possession of the goods is lost.

PARTICULAR LIEN
Particular lien means the right to retain only that
particular property in respect of which the charge
is due
Where the bailee has, in accordance with the
purpose of the bailment, rendered any service
involving the exercise of labour or skill in respect
of goods bailed, he has, in the absence of a
contract to the contrary, a right to retain such
goods until he receives due remuneration for the
services he has rendered in respect of them

PARTICULAR LIEN
The bailee retaining the article to enforce his
lien cannot charge for keeping them
The bailee cannot exercise his lien for the nonpayment of extra-ordinary expenses. He
should sue for them
Besides the bailee other persons who possess
the right of particular lien are: finder of goods,
Pawnee and unpaid seller

GENERAL LIEN
General lien means right to retain all the goods of the
other party until all the claims of the holder are paid
The following persons have a general lien, in the
absence of a contract to the contrary:
1)Bankers
2)Factors
3)Attorneys of high court
4)Wharfingers
5)Any other person if there is express contract to that
effect

RIGHTS OF BAILOR
1)Enforcement of bailees duties
2)Right to terminate bailment if bailee uses the
goods wrongfully(Sec.153) e.g. A gives on hire
to B a horse for his own riding. B drives the
horse in his carriage. The contract of bailment
is voidable at the option of A
3)Right to demand return of goods at any time
in case of gratuitous bailment(Sec.159)

RIGHTS OF BAILOR
3)When the goods are lent without reward, the
bailor can demand their return whenever he
pleases even though he lent for a specified
purpose or time and the bailee is not guilty of
wrongful use. But if the premature return of
goods causes the bailee loss in excess of
benefit actually derived, the bailor must
indemnify the bailee for the amount in which
the loss occasioned exceeds the benefit
derived

TERMINATION OF BAILMENT
1)By lapse of time
2)Accomplishment of purpose
3)Inconsistent use of goods(Sec.153): if the bailee
does any act inconsistent with the terms of the
bailment, the bailtor may terminate the bailment
even though term has not expired or purpose has
not been accomplished
4)Death(Sec.162):A gratuitous bailment is
terminated by the death either of the bailor or
the bailee

TERMINATION OF BAILMENT
5)Gratuitous bailment (Sec.159):A gratuitous
bailment can be terminated by the bailor at
any time, even before the specified time or
before the purpose is achieved, subject to the
limitation that where such termination causes
loss in excess of benefit actually derived by
the bailee, the bailor must indemnify the
bailee for the amount in which the loss
occasioned exceeds the benefit derived

RIGHTS OF BAILOR AND BAILEE

AGAINST WRONG-DOERS
Sec.180: If a third person deprives the bailee
of the use or possession of the goods bailed,or
does any injury, the bailee is entitled to use
such remedies as the owner might have used
in like case if no bailment had been made, and
either the bailor or the bailee may bring a suit
against the wrong-doer for such deprivation or
injury

RIGHTS OF BAILOR AND BAILEE

AGAINST WRONG-DOERS
Sec.181:Whatever is obtained by way of relief or
compensation in any such suit, is to be
apportioned, as between the bailor and the
bailee, according to their respective interests
For example: if somebody forcefully takes
possession of a coat from a tailors shop, then
either the tailor or the owner of the coat may sue
the wrong-doer. If the tailor files the suit, he shall
had over the recovered amount, after deducting
his tailoring charges, to the owner of the coat

PLEDGE OR PAWN
Sec.172: The bailment of goods as a security for
payment of a debt or performance of a promise is
called pledge
Example: A borrows Rs.500 from B and keeps his
watch as a security for the payment of the debt.
The bailment of watch in this case is called
pledge.
Thus, a pledge is a special kind of bailment
Pawnor and Pawnee: The bailor is called the
pawnor and the bailee the Pawnee

DISCHARGE OF SURETY FROM

LIABILITY
1)By notice of revocation(Sec.130)
2)By death of surety(Sec.131)
3)By variance in terms of contract(Sec.133)
4)By release or discharge of principal debtor(Sec.134)
5)Compounding by creditor with principal
debtor(Sec.135)
6)Creditors act or omission impairing suretys eventual
remedy(Sec.139)
7)Loss of security (Sec.140)
8)Invalidation of contract of guarantee (Sec.142,143,144)

PLEDGE AND BAILMENT

Similarities: Like bailment pledge involves only a transfer of
possession of goods pledged. The ownership rests with the
pledgor. Like bailment, pledge can only ne of movable
property. Both are created by contract between the parties.
Differences:
(a)Purpose
(b)Right of sale: Pledge has a right of sale in case of default
after giving notice to the pledgor but there is no such right
of sale to the bailee
(c)Right to us: Pledge has no right of using the goods pledged
but bailee can use the goods of the nature of transaction so
requires

RIGHTS AND SUTIES OF PAWNEE

1)Right of retainer(Sec.173)
2)Right of retainer for subsequent
advances(Sec.174)
3)Right to extra-ordinary expenses(Sec.175)
4)Right to sue the pawnor or sell the goods on
default of the pawnor(Sec.176)
DUTIES:
Same as the of a bailee

RIGHTS AND DUTIES OF PAWNOR

RIGHTS
Right of redemption(Sec.177):Right to redeem
the debt at subsequent date before actual sale of
goods
Enforcement of pawnees duties
DUTIES
To compensate the pawnee for any extraordinary
expensed incurred by him(Sec.175)
To meet his obligation on stipulated date and
comply with the terms of the contract.