Bailment Contract

 Meaning: is delivery of goods by one person to

another person for some purpose, upon a contract
that they shall, when the purpose is accomplished,
be returned or otherwise disposed of according to
the direction of the person delivering them.
Features of Bailment Contract

 Delivery of goods
 Contract
 Purpose
Types of Bailment Contract
1. On the basis of reward
o Gratuitous benefit
o Non gratuitous benefit
2. On the basis of benefits
o Bailment for the exclusive benefits of bailor
o Bailment for the exclusive benefit of bailee
o Bailment for the mutual benefit
Duties of Bailor

 To disclose faults in the goods

 Liability for breach of warranty as to title
 To bear expenses in case of gratuitous bailment
 To bear extra ordinary expenses in case of non gratuitous
bailment.
 Duties of Bailee
 To take care of the goods bailed
 Not to take unauthorized use of goods
 Not to mix bailor’s goods with his own
 To return the goods bailed
 To return any accretion to the goods bailed
Rights of Bailee

 Claim compensation for damage for non disclosure of

fault.
 Claim for breach of warranty as to title
 Claim for extra ordinary expenses
 Lien
 Rights against wrongful deprivation of injury of goods.
 Rights of Bailor
 Suit all duties or liability of bailee
 In case of gratuitous bailment, the bailor can demand for
return of goods.
Termination of Bailment

 On the expiry of the stipulated period

 On the accomplishment of the specified purpose
 By bailee’s act inconsistent with conditions
 Termination of gratuitous bailment
Pledge

 Pledge is special kind of bailment, where delivery of

goods is for purpose of security for payment of a debt or
performance of a promise. Common example is keeping
gold with bank/money lender to obtain loan. The bailor is
in this case called the pawnor/
pledgor. The bailee is called the “pawnee”/
pledgee.
Rights of a Pledgee

 Disclose the defect

 Claim the loss to pledger due to defective title
 Rights against third party
 Claim the extra ordinary expenses
 Duties of a Pledgee
 Take care of goods pledged
 Duties regarding unauthorized use of goods.
 Return the goods pledged
 Return the accrual to the goods pledged.
Rights and Obligations of Pledgor

 Rights
 Claim the security pledged
 Reasonable notice in case of the pledgee intends to sell the goods
 In case of sale, the pledgor is entitled to receive from the pledgee any
surplus
 Claim for accrual
 Claim for loss
 Duties
 Disclose the fault
 To meet extra ordinary expenses
 To sale of goods
 To pay loss due to defective title to the goods