Bailment ( Indian Contract Act, 1872)

Detailed Presentation on Bailment
By: Ayush Patria, Sangam Univerity, Bhilwara
(For Law Laboratory)

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1. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS LAW LABORATORY www.lawlaboratory.in BAILMENT 'The Indian Contract Act' …………where legal minds generate

2. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate INTRODUCTION The word “Bailment” is derived from the French word “ Bailor ” which means “ To deliver”. But as per law, it refers to the contract which results in delivery of good. In Contract of Bailment, only possession is passed on, not the ownership. There cannot be Bailment of immovable property/goods. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

3. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate DEFINATION According to the Section 148 of the Indian Contract Act, 1872 – 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. There are 2 parties in the Contract of Bailment – 1. A person delivering the goods is called as “ Bailor ”. 2. A person to whom the goods are delivered is called as “ Bailee ” INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

4. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate EXAMPLES OF BAILMENT X delivers a piece of cloth to Y, a Tailor, to be stitched it 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. Book left with a friend inadvertently. When a person find lost goods – implied contract of Bailment. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

5. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate ESSENTIALS OF BAILMENT Movable Property [Except – Money] Delivery of Possession For the Specific Purpose Condition to return Back Contractual Liability INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

6. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate CHARACTERISTICS OF BAILMENT It consists in the delivery of goods of movable property only. The delivery must be for some temporary purpose, e.g. - Safekeeping, Repair, Carriage, Gratuitous use by the Bailee or Pawn. The delivery is made upon a contract, the contract may be express or implied. The contract is to the effect that the goods delivered shall be specifically returned or otherwise disposed of according to the direction of the Bailor , when the purpose of the bailment is over. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

7. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate TYPES OF BAILMENT Types of Bailment are following: Deposit – Delivering for security of Goods. E.g. – Bank Locker used for safekeeping of Jewelry. Commodatum – Gratuitous delivery of goods. E.g. – Giving Book to a friend for reading. Hire – Delivering the goods for rent. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

8. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Pawn – Keeping goods by creditors in consideration of security for debts. Carrier – Sending movable property/goods from one place to another. Mandatum Deposit- Delivering the goods for repairing/construction. E.g. – Vehicle, Cloth, Jewelry etc. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

9. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Right to receive back the goods in time [Section 160 of Indian Contract Act, 1872]. Right to take compensation, in case of – ~~ Loss. ~~ Not getting back the goods in proper time.. Right to rescind the Contract of Bailment [Section 153 of Indian Contract Act, 1872] . RIGHTS OF BAILOR INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

10. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Right to terminate the Bailment [Section 159 of Indian Contract Act, 1872]. Right to receiver the increase incurred when the goods/property is with the Bailee [Section 163 of Indian Contract Act, 1872]. Right to getting the goods separate when mixed by Bailee without consent [Section 156 & 157 of Indian Contract Act, 1872]. RIGHTS OF BAILOR INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

11. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Duty to disclose the fault/defect in the goods [Section 150 of Indian Contract Act, 1872]. 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 [Section 158 of Indian Contract Act, 1872]. E.g. - X leaves a horse in the custody of Y to be taken care of. All the expenses incidental thereto i.e. feeding horse, medical expenses should be paid to Y by X. Bailor to be liable for the damages incurred to the Bailee due to lack of authority to make the Bailment [Section 164 of Indian Contract Act, 1872]. Duty to compensate Bailee for taking the goods back before time [Section 159 of Indian Contract Act, 1872] DUTIES OF BAILOR INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

12. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Right to recover necessary expenses incurred on Bailor’s Goods [Section 158 of Indian Contract Act, 1872]. Right to recover compensation from Bailor [Section 164 of Indian Contract Act, 1872]. Right to have lien on the goods bailed [Section 170 & 171 of Indian Contract Act, 1872]. (# The right of lien extends only to the possession of goods & not to a right of sale.) Right to file suit against Wrongdoer [Section 180 of Indian Contract Act, 1872]. Right to deliver goods to any one of the several joint owners of the bailed Goods. Right to receive compensation for loss incurred for Bailor’s defective title. INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

13. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Duty to take reasonable care of the goods bailed [Section 151 & 152 of Indian Contract Act, 1872]. E.g. - X bailed the goods to Y. Inspite of Y’s taking reasonable care, goods were stolen & Y did not inform the own. Duty not to make a unauthorized use of the goods bailed [Section 153 & 154 of Indian Contract Act, 1872]. Duty not to mix the bailed goods with own goods [Section 155, 156, and 157 of Indian Contract Act, 1872]. Duty to return the bailed goods on the fulfillment of the purpose [Section 160, 161, 165, 166, and 167 of Indian Contract Act, 1872]. Duty to deliver the increase or profit gained from the bailed goods to the Bailor [Section 163 of Indian Contract Act, 1872]. DUTIES OF BAILEE INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

14. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate Lien is a right of a person to retain the property or goods of another until he pays his due payment/charges. Generally, Lien is of 2 Types: ~~ Particular Lien - Particular lien gives right to retain only such goods in respect of which charges due remain unpaid. ~~ General Lien - General lien gives right to retain any goods belonging to another person for any amount due from him CONCEPT AND TYPES OF LEIN INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

15. LAW LABORATORY www.lawlaboratory . in …………where legal minds generate The Bailee has the right to retain the goods delivered to him until the charges due to him are paid by the Bailor . 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. BAILEE’S RIGHT OF LEIN INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

16. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate DISTINCTION BETWEEN BAILEE’S PARTICULAR LIEN AND GENERAL LIEN Basis of Distinction Bailee’s Particular Lien Bailee’s General Lien NATURE OF RIGHT CONDITION FOR EXERCISING LIEN RIGHT TO WHOM? Particular Lien gives right to retain only such goods in respect of which charges due remain unpaid. Particular Lien can be exercised only when some labour or skill has been expended on the goods, resulting in an increase in value of goods Every Bailee is entitled to Particular Lien General Lien gives right to retain any goods belonging to another person for any amount due from him. General Lien may be exercised even though no labour or skill has been expended on the goods. General lien can be exercised by only such persons as are specified under Section 171 of the Indian Contract act, 1872. E.g. - Bankers, Policy brokers etc INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

17. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate TERMINATION OF BAILMENT ? Expiry of Specified Period of the Bailment - When bailment is for specific period, it terminates on the expiry of the specified period. E.g. - Z lends a moped to Y for a period of 3 months, April – June. The Bailment terminates by the end of June. Accomplishment of specified purpose - Where bailment is for a specified purpose, it terminates when such purpose is accomplished. E.g. - G hires tables and chairs, utensils, etc. from H for organizing his son’s engagement. G shall return them once the engagement functions are over INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

18. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate ? Bailee’s act inconsistent with conditions of the Bailment (Section 153) - When bailee does some act which is inconsistent with the terms and conditions of bailment, the Bailor may terminate the bailment. E.g. - J gives his car to K keeping it in K’s garage. K gives it to his son for racing. J can terminate the bailment. Destruction of subject matter - When goods bailed are destroyed, Bailment comes to an end. E.g. - K hires a cycle from L. When the cycle is damaged beyond repair in an accident, bailment ends . INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS

19. LAW LABORATORY www.lawlaboratory.in …………where legal minds generate ? Gratuitous Bailment (Section 159 ) - Gratuitous Bailment can be terminated at any time. Also, a Gratuitous Bailment ends by the death of either Bailor or Bailee (as per Section 162 of the Indian Contract Act, 1872). Note : Where premature termination of bailment by the Bailor causes loss to the Bailee exceeding the benefits derived by him, the Bailor shall indemnify the Bailee. Bailment will be terminated on the death of any party. Contract of Bailment can be terminated by any party by giving the notice of termination to the another party INTERNSHIP LEGAL UPDATES LEGAL NOTES QUESTION BANK COMPETITIONS