BAILMENT Prepared by Miss. Akshada Zurale (Assistant Professor)

BAILMENT

‘Bailment’ is derived from a French word‘bailer’ which means ‘to deliver’.But in law it refers to the contract whichresults from delivery of goods.In contract of bailment only possession ispassed on not the ownership.There cannot be bailment of immovableproperty.

Section 148

“ A bailment is the delivery of goods by oneperson to another for some purpose, upon acontract that they shall, when the purpose isaccomplished, be returned or otherwisedisposed of according to the directions ofthe person delivering them. The person towhom they are delivered is called the bailee”

Examples:X delivers a piece of cloth to Y, a tailor, to bestitched into a suit. It is contract ofbailment.X delivers a watch to Y, a watch repairer forrepair.Gold given to goldsmith to make ornament.Something left with a friend inadvertently.

When a person find lost goods – impliedcontract of bailment.

ESSENTIALS OF BAILMENT

ContractDelivery of goods – Delivery of possession ofgoods from one person to another. Merecustody of goods does not amount tochange in possession. Goods must behanded over to the bailee for some purpose.

The delivery of possession of goods is of thefollowing kinds:

1. Actual delivery – when goods are physicallyhanded over to the bailee by the bailor.

2.

3.

4.

5.

Constructive delivery or Symbolic Delivery –Handling over the keys of a warehouse,Document of title of goods.( immovable property)Delivery of goods must be for some purpose-The delivery of goods must be for somepurpose. Eg goldsmithDelivery upon a contract – There is nobailment where the delivery of goods iswithout contract. ( A minor )Return of goods.

KINDS OF BAILMENT

2.

3.

On the basis of benefit –Exclusive for the benefit of bailor.Exclusive for the benefit of bailee.On the basis of Reward –

1. Gratuitous Bailment – Goods are deliveredby the bailor to the bailee without anyreward. Lending a book to a friend forreading. ( Exclusive benefit of either of theparty)

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 jewelleryfor charges.

DUTIES OF BAILEE

1.To take reasonable care : as a prudent manwould take of his own goods. If any loss ordamage incurs to the goods bailed inspite ofthe due care, he will not be liable for anysuch loss or damage. The burden of proof ison the bailee to show that he was notnegligent.The bailee is not answerable for any loss togoods bailed, caused by an act of God,Lightning, flood.

E.g.X bailed the goods to Y. Inspite of Y’s takingreasonable care, goods were stolen & Y didnot inform the owner or police. Y was heldliable.X, had hired a wooden shop & it was burst bymobs during a communal riot. Held X was notliable.

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 thehorse. The horse accidentally falls & isinjured. B is laible to make compensation

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 isliable to bear all the expenses of separation.

E.g. A bails 100 bales of cotton marked with aparticular mark to B. B, without A’s consentmixes the 100 bales with other bales of hisown bearing a different mark. A is entitledto have his 100 bales returned & B is boundto bear all the expenses for separation ofbales.

4.

5.

Where the goods mixed cannot be separated– The bailor is entitled to be compensated bythe bailee for the loss of goods.Not to set up adverse title – Bailee must holdthe goods on behalf of & for the bailor. ( Evenhe comes to know about the true owner ofthe goods )To return increase or profit – It happens incase of animals. A leaves a cow in thecustody of B to be taken care of. The cowhas a calf. B is bound to deliver the calf aswell as cow to A.

5. To return the goods – If he fails to do so, hebecomes liable for any loss. Responsible alsofor act of god.

Case: Shaw & co. vs. Symmons & sons – Xdelivered books to Y to be bound. Y promisedto return the books within a reasonable time.X pressed for the return of the book. But Y,failed to deliver them back even after theexpiry of reasonable time. Subsequently thebooks were burnt in an accidental fire at thepremises of Y. Y was held liable for the loss.

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

DUTIES OF BAILOR

1.To disclose fault in the goods bailed. 2.Torepay necessary expenses in case of

gratuitous bailment – Where the bailee isrequired to keep goods for the benefit of thebailor without any remuneration, it is duty ofbailor to repay all necessary expenses. E.g.X leaves a horse in the custody of Y to betaken care of & y is to receive noremuneration. All the expenses incidentalthereto i.e. feeding horse, medical expensesshould be paid to Y.

3.

4.

5.

To repay the ‘extra – ordinary expenses incase of non – gratuitous bailment:Y hires X’s horse for his carriage. The horsebecomes ill & Y spends Rs. 50 on medicalexpenses over & above Rs. 20 on feeding thehorse. X is liable to pay to Y Rs. 50 the extra-ordinary expenses only.To indemnify the bailee – the bailor has toindemnify the loss if incurred on defectivetitle of the goods.To received back the goods – If the bailorrefuses to receive back the goods, he is liableto compensate the bailee for the necessaryexpenses of custody.

RIGHT OF BAILOR

Right to claim for loss caused to the goods bythe bailee for not taking reasonable care.Right to claim damages for mixing goodswithout consent.Right to claim increase in goods.Right to demand back the goods.

RIGHTS OF BAILEE

Right to recover extra ordinary expensesincurred on goods.Right to claim damages incurred because ofnon disclosure of faults in goods bailed.Right to deliver goods to any one of theseveral joint owners.Right to receive compensation for lossincurred for bailor’s defective title.

BAILEE’S LIEN

Lien is a right of a person to retain theproperty or goods of another until he pays( Bailor ) the lawful charges or debt duethereupon.The right of lien is lost when possession islost.The right of lien extends only to thepossession of goods & not to a right of sale.

TYPES OF BAILEE’S LIEN

Particular lien – A retention of particulargoods in respect of which some charge isdue.A delivers a rough diamond to B, a jeweler, tobe cut & polished, which is accordingly done.B is entitled to retain the stone till he is paidfor the service he has rendered.

Conditions to be satisfied…

The bailee must have rendered someservices & must be entitled to someremuneration for it.The services must have been performed infull. ( no lien if part performance is done )The bailee cannot exercise the right of lienwhere he has agreed to render the serviceson credit until the expiry of period of credit.The goods must be in possession of thebailee: IF POSSESSION IS LOST LIEN ISLOST.

General Lien – It entitles the person to holdgoods of another for any amount due tohim whether in respect of those goods orany other.

3.

4.

5.

6.

TERMINATION OF LIEN…Agreement between parties .Payment of debt.Loss of possessionRefusal of tender ( By Bailee )

TERMINATION OF BAILMENT

On the expiry of period – Bailment is forspecific period.Accomplishment of purpose.Gratuitous bailment – in betweenDeath of bailor or bailee.

THANK YOU