Bailment

1. BAILMENT

2. BAILMENT
‘Bailment’ is derived from a French word
‘bailer’ which means ‘to deliver’.
But in law it refers to the contract which
results from delivery of goods.
In contract of bailment only possession is
passed on not the ownership.
There cannot be bailment of immovable
property.

3. Section 148
“ A bailment is 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 otherwise
disposed of according to the directions of the
person delivering them. The person to whom
they are delivered is called the bailee”

4. Examples:
X delivers a piece of cloth to Y, a tailor, to
be stitched into a suit. It is contract of
bailment.
X delivers a watch to Y, a watch repairer for
repair.
Gold given to goldsmith to make ornament.
Something left with a friend inadvertently.
When a person find lost goods – implied
contract of bailment.

5. ESSENTIALS OF BAILMENT
Contract
Delivery of goods – Delivery of possession of
goods from one person to another. Mere
custody of goods does not amount to change
in possession. Goods must be handed over
to the bailee for some purpose.
The delivery of possession of goods is of the
following kinds:
1. Actual delivery – when goods are physically
handed over to the bailee by the bailor.

6. 2. Constructive delivery or Symbolic Delivery –
Handling over the keys of a warehouse,
Document of title of goods.
( immovable property)
3. Delivery of goods must be for some purpose-
The delivery of goods must be for some
purpose. Eg goldsmith
4. Delivery upon a contract – There is no
bailment where the delivery of goods is
without contract. ( A minor )
5. Return of goods.

7. KINDS OF BAILMENT
On the basis of benefit –
2.Exclusive for the benefit of bailor.
3.Exclusive for the benefit of bailee.
On the basis of Reward –
1. Gratuitous Bailment – Goods are delivered
by the bailor to the bailee without any
reward. Lending a book to a friend for
reading. ( Exclusive benefit of either of the
party)

8. 2. Non – Gratuitous bailment – Where bailor
& bailee is entitled to reward for bailment.
E.g.
A car let out for hire,
Gold given to goldsmith for making jewellery
for charges.

9. DUTIES OF BAILEE
1.To take reasonable care : as a prudent man
would take of his own goods. If any loss or
damage incurs to the goods bailed inspite of
the due care, he will not be liable for any
such loss or damage. The burden of proof is
on the bailee to show that he was not
negligent.
The bailee is not answerable for any loss to
goods bailed, caused by an act of God,
Lightning, flood.

10. E.g.
X bailed the goods to Y. Inspite of Y’s taking
reasonable care, goods were stolen & Y did
not inform the owner or police. Y was held
liable.
X, had hired a wooden shop & it was burst by
mobs during a communal riot. Held X was not
liable.
2. Not to make any unauthorized use of goods
– A lends a horse to B for his own riding only.
B allows C, member of the family, to ride the
horse. The horse accidentally falls & is
injured. B is laible to make compensation

11. 3. Not to mix the goods with his own goods:
Mixing with bailor’s consent .
Mixing without bailor’s consent :
Where goods can be separated – Bailee is
liable to bear all the expenses of separation.
E.g. A bails 100 bales of cotton marked with a
particular mark to B. B, without A’s consent
mixes the 100 bales with other bales of his
own bearing a different mark. A is entitled to
have his 100 bales returned & B is bound to
bear all the expenses for separation of
bales.

12. Where the goods mixed cannot be separated
– The bailor is entitled to be compensated by
the bailee for the loss of goods.
4. Not to set up adverse title – Bailee must hold
the goods on behalf of & for the bailor. ( Even
he comes to know about the true owner of
the goods )
5. To return increase or profit – It happens in
case of animals. A leaves a cow in the
custody of B to be taken care of. The cow
has a calf. B is bound to deliver the calf as
well as cow to A.

13. 5. To return the goods – If he fails to do so, he
becomes liable for any loss. Responsible
also for act of god.
Case: Shaw & co. vs. Symmons & sons – X
delivered books to Y to be bound. Y promised
to return the books within a reasonable time.
X pressed for the return of the book. But Y,
failed to deliver them back even after the
expiry of reasonable time. Subsequently the
books were burnt in an accidental fire at the
premises of Y. Y was held liable for the loss.

14. Where there are several joint owners of
goods bailed – the bailee may return the
goods to any of the bailor.
Where there is a gratuitous bailment, the
bailee is bound to return the goods to the
bailor on demand even before the expiry of
the fixed period or accomplishment of
purpose. The bailor is liable to pay if there is
any loss incurred due to termination of
bailment. ( books for reading )

15. DUTIES OF BAILOR
1.To disclose fault in the goods bailed.
2.To repay necessary expenses in case of
gratuitous bailment – Where the bailee is
required to keep goods for the benefit of the
bailor without any remuneration, it is duty of
bailor to repay all necessary expenses. E.g.
X leaves a horse in the custody of Y to be
taken care of & y is to receive no
remuneration. All the expenses incidental
thereto i.e. feeding horse, medical expenses
should be paid to Y.

16. 3. To repay the ‘extra – ordinary expenses in
case of non – gratuitous bailment:
Y hires X’s horse for his carriage. The horse
becomes ill & Y spends Rs. 50 on medical
expenses over & above Rs. 20 on feeding the
horse. X is liable to pay to Y Rs. 50 the extra-
ordinary expenses only.
4. To indemnify the bailee – the bailor has to
indemnify the loss if incurred on defective title
of the goods.
5.To received back the goods – If the bailor
refuses to receive back the goods, he is liable
to compensate the bailee for the necessary
expenses of custody.

17. RIGHT OF BAILOR
Right to claim for loss caused to the goods by
the bailee for not taking reasonable care.
Right to claim damages for mixing goods
without consent.
Right to claim increase in goods.
Right to demand back the goods.

18. RIGHTS OF BAILEE
Right to recover extra ordinary expenses
incurred on goods.
Right to claim damages incurred because of
non disclosure of faults in goods bailed.
Right to deliver goods to any one of the
several joint owners.
Right to receive compensation for loss
incurred for bailor’s defective title.

19. BAILEE’S LIEN
Lien is a right of a person to retain the
property or goods of another until he pays
( Bailor ) the lawful charges or debt due
thereupon.
The right of lien is lost when possession is
lost.
The right of lien extends only to the
possession of goods & not to a right of sale.

20. TYPES OF BAILEE’S LIEN
Particular lien – A retention of particular
goods in respect of which some charge is
due.
A delivers a rough diamond to B, a jeweler, to
be cut & polished, which is accordingly done.
B is entitled to retain the stone till he is paid
for the service he has rendered.

21. Conditions to be satisfied…
The bailee must have rendered some
services & must be entitled to some
remuneration for it.
The services must have been performed in
full. ( no lien if part performance is done )
The bailee cannot exercise the right of lien
where he has agreed to render the services
on credit until the expiry of period of credit.
The goods must be in possession of the
bailee: IF POSSESSION IS LOST LIEN IS
LOST.

22. General Lien – It entitles the person to hold
goods of another for any amount due to him
whether in respect of those goods or any
other.
TERMINATION OF LIEN…
3.Agreement between parties .
4.Payment of debt.
5.Loss of possession
6.Refusal of tender ( By Bailee )

23. TERMINATION OF BAILMENT
On the expiry of period – Bailment is for
specific period.
Accomplishment of purpose.
Gratuitous bailment – in between
Death of bailor or bailee.

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