Bailment

A type of special Contract

Prepared By: Jinesh A Shah

Meaning
In

legal terms Bailment

involves change of possession
of goods from one person to
another person for some
specific purpose.

Prepared By: Jinesh A Shah

Essential elements of Bailment

1) Contract:
A bailment is usually created by agreement between the
bailor (owner) and baily (agent). The agreement may be
expressed or implied.

2) Delivery of Possession
A bailment necessarily involves delivery of possession of
goods by bailor and bailee. Here the possasion of goods
must be changed from owner to agent

3) Only for Movable property or Goods

The bailment is possible only for movable properties and
not for immovable properties
Prepared By: Jinesh A Shah

4)

Only Transfer of Goods and Not Possession

Here the only goods are transferred from owner to agent but the
possession will not be transferred from owner to agent. Bailor
will become the ultimate owner of the goods.

5)

Return of Specific goods

It is agreed upon the bailor and the bailee that as soon as the
purpose is fulfilled or achieved, the goods shall be returned or
disposed of according to the directions of the bailor.

Prepared By: Jinesh A Shah

Duties and Rights of Bailee

Duties of Bailee
1. Care of Goods :It is the duty of the bailee that he should take as much
care of the goods as a man of ordinary prudence takes
care
about his own goods.
2. Act According The Bailment :Any act of the bailee should not be against the conditions
of the contract. Otherwise contract will be voidable at the
option of the bailor.
3. Mixing is Not Allowed :It is the duty of the bailee that he should keep the bailor
goods separate from his own goods. If he mixed without
the consent of the bailor then he himself will bear the
expenses of separation and loss.
Prepared By: Jinesh A Shah

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4. Should Not Deny The Title :It is the duty of the bailee that he should not deny or change
the title of the bailor about the ownership of goods.

5. Default of Responsibility :It is the duty of the bailee that he should not deny or change
the title of the bailor about the responsibilities of goods.

6. Return of Goods :It is the duty of the bailee to return or deliver the goods bailed
according to the bailors conditions.

Prepared By: Jinesh A Shah

Continue..
7. Return at Proper Time :It is the duty of the bailee that he should return the goods
bailed as the time or purpose of bailment completes without the
demand of the bailor.

8. Return of Profit :It is also the duty of the bailee that he should deliver the profit
or any increase occurred in the bailed goods to the bailor.

9. Proper Use of Goods :It is the duty of the bailee that he should use the goods
according the conditions of the contract. If he misuses the
goods then he will compensate the loss to the bailor.
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Rights of Bailee
1. Recovery of Losses :If the bailee suffers a loss or damage due to the defects of the bailed goods
he has a right to recover it from the bailor.

2. Compensation Right :It is the right of the bailee that he should received compensation from the
bailor for any loss which he has suffered due to defects in the title of the
bailor.

Prepared By: Jinesh A Shah

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3.

Right of Retain :-

Sometimes bailee performs some services for the purpose of

bailment. In such cases bailee has a right to detain such bailed goods
until he receives the reward of his services.

4. Recovery Of Expenses :All the expenses incurred for the bailment may be recovered by the
bailee from the bailor.

5. Right of Indemnity :Any loss which bailee has sustained may recover from the bailor on
the following grounds, "The bailor was not entitled to make the
bailment, or receive back the goods, or to give directions in this
respect."
Prepared By: Jinesh A Shah

Duties and Rights of Bailor

Duties of Bailer
1. Explain the Defect :It is the basic duty of the bailor that he should disclose all the defects of the
goods before delivering to bailee. If the bailor does not disclose then he
himself will be responsible for loss.

2. Warning to the Bailee :If a bailor feels that bailee is showing carelessness and goods
danger. He should give warning to the bailee.

are in

3. Payment of Necessary Expenses :It is the duty of the bailor that he should also pay necessary expenses
Prepared By: Jinesh A Shah
sustained by the bailee connection with the bailment.

Continue.
4. Duty with regard to defective title:

In case where bailer has delivered the goods with

defective title, the bailee may come across suffering from
the side of true owner due to bailers defective title. In
such a case bailer with defective title should compensate
bailee.

5. Duty to Indemnify:
Principal of indemnity operates between bailer and bailee,
where bailer becomes implied indemnifier and bailee
becomes implied indemnity holder. So bailer has duty to
indemnify bailee.

6. Duty to take the Goods back:

After fulfillment of purpose bailee returns the goods to
bailer. Then bailer should take them back. If bailer refuses
to take the goods back, bailer hasPrepared
to compensate
bailee
By: Jinesh A Shah

Responsibilities or duties of the finder of lost goods.

(I) Duty to find out the owner:
He should find out the true owner of the lost goods.

(II) Duty to take care:

It is duty to finder of goods to take care as bailee should take care of his
own goods.

(III) Duty not to use the goods:

The finder of lost goods should not use the goods.

(IV) Duty not to mix the goods:

He should not mix the goods to his own goods.

(V) He must restore the goods to owner:

If real owner is found he should restore the goods to him on demand.
Prepared By: Jinesh A Shah

Rights of finder of goods:

(I) Right to retain:
He can retain possession of goods against every body
the true owner is found out.

until

(II) Right to sue for reward:

He can file suit against the owner to recover any reward
which was offered by the owner for the return of the
goods.

(III) Suit for recovery of damages:

If any one deprives finder of the lost good the possession
of goods, he can file a suit for recovery of damages.

Prepared By: Jinesh A Shah

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(IV) Right of sale when owner is not found:
He has right of sale when owner is not found on the
following circumstances.

(a) When owner is not found:

When owner is not found, he can sell the goods.

(b) When owner refuse to pay the expenses:

When owner is found but he refuses to pay lawful charge
borne by the finder of lost foods.

(c) Perishable goods:

He can sell the goods if they are perishable.

(d)When charges of goods amount to two

When the lawful charges of the finder amount to
or more of the value of the goods found.

thirds:

two thirds

Prepared By: Jinesh A Shah