Bailment&

pledge

Bailment & pledge Section 148 of indian contract act 1872Delivery of goods by 1 person to another for

some purpose Contract to return after use or to dispose as

asked by the person who delivered the goodsBailor: who givesBailee : who takesBailment: transaction

ExamplesHiring a bicycle Giving cloth to a tailor Delivering watch for repair

Kinds of bailment Kinds of bailment Based on benefit: Bailment for the exclusive benefit of :1] bailor: leaving goods in safe custody without paying2] bailee :a loan of some article like a pen 3] mutual benefit: contracts for hiring, repair ,etc

Kinds of bailment: Based on reward: 1] Gratuitous bailment: neither bailor nor bailee is entitled for remuneration, example: lending a book to a friend 2] Non-gratuitous bailment: bailment of reward: either bailee or bailor is entitled to a remuneration , example: hire, tailor, etc

Difference between sale & bailment Ownership transferred? Buyer under no obligation to return goods?

Duties of bailee: Take reasonable care of goods[S.151] Not to make unauthorized use of

goods[S.154]Not to mix goods with his own goods[S.155-

157] Duty to return goods[S.160&161]Not doing any act inconistent with terms of

bailment[S.153]Returning any profit [S.163]

Rights of baileeRight to compensation for loss on account of

fault in goods bailed[S.150]Right to receive necessary expenses[S.158]Right against premature termination of

bailment[S.159]Right to compensation in case of defective

title[S.164]Delivery of goods to one of the joint

owners[S.165]Right against third parties

Duties of bailorTo Disclose faults in goods bailed [S.150]To repay the necessary expenses [S.158]To indemnify the bailee [S.164]Liability on premature breach of

bailment[S.159]

Rights of bailorRight of indemnity for losses due to

negligence by bailee[S.152]Termination of bailment on inconsistent use

by the bailee[S.153]Compensation for unauthorised use by the

bailee[S.154]Compensation when the bailee mixes the

goods bailed with own goods [S.155]Right of return of goods back[S.160]Right to profit from goods bailed[S.163]

Termination of bailmentDoing an act inconsistent with terms of

bailment[S.153]At desire of the bailor in case of gratuitous

bailment[S.159]On expiry of period[S.160]On accomplishment of object[S.160]Death of the bailor or bailee [S.162]

PLEDGE OR PAWN :Bailment of goods as security for payment of

debt or performance of a promise :PLEDGE Bailor: PAWNER Bailee: PAWNEE Example: A borrows Rs.100 from B & keeps his watch as security : pledge

Difference between bailment & pledge: PURPOSE: security? ; repairs? RIGHT OF SALE: sale on default? no right to sale? RIGHT OF USING THE GOODS: no right?

Rights of Pawnee: Right of retainer{S.173}: right to retain

goods until dues paidRight of transfer for subsequent advances:

{S.174}: on lending money to same debtor without further security

right to retain earlier goods extends Right to extraordinary expenses {S.175} Right to use the pawner or sell the goods on default.

Rights of PawnerRights of Pawner: Enforcement of pawnee’s duties Defaulting pawnor’s right to redeem

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