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S.B. PRAVEEN KUMAR M.B.

A 1(A) ROLL NO :- 6

Bailment is derived from a French word baillter which means to deliver or any kind of handing over. In legal sense bailment is change of possession. Bailment is only change in possession of good and does not account change in ownership.

BAILMENT
According to Contract Act 1872 Chapter 9 section 148 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". The person delivering the goods is called BAILOR and whom they are delivered is called BAILEE

A lends a book to B to be returned after the examination. There is a contract of bailment between A & B

A places his damaged car in possession of a repairer R. A is bailor and R is bailee in this case and there is a contract of bailment between A&R

CONTRACT DELIVERY OF POSSESSION DELIVERY FOR SOME SPECIFIC PURPOSE RETURN OR DISPOSAL OF SPECIFIC GOODS

Bailment is a special type of contract

Bailment is usually created by an agreement between bailor & bailee. The agreement may be expressed or implied In certain exceptional cases bailment is implied by law. All the essential of a valid contract are applied.

There must be transfer of possession of goods from bailer to bailee. Possession means control over goods and an intention to exclude other. Delivery of possession should be of movable property other than money and actionable claims Delivery of possession may be actual or constructive.

Delivery of goods should be for some specific purpose, task or performance. If the goods are delivered by mistake it should not be considered as Bailment.

The goods shall be returned to the bailer as soon the purpose is achieved. If in agreement disposal of goods is decided so they must be disposed of immediately after completion of purpose according to the directions of bailer There is no bailment if goods are not returned or disposed There will be bailment even if the goods bailed are in meantime altered

Bailment can be classified according to two types

According to benefit derived from bailment According to the involvement of consideration

For the exclusive benefit of bailer

Example: Delivery of some valuables to a neighbor for safe custody without charges For the exclusive benefit of bailee Example: Lending of bicycle to a friend for his use without charges

For the mutual benefit of bailer and bailee

Example: Giving a watch for repair

In a contract of payment consideration is generally in the form of money payment by bailor or bailee Gratuitous Bailment

Non Gratuitous Bailment

It is a bailment where no consideration is passed between bailor and bailee. Example: A lends a book to his friend B.

It is bailment where consideration is passed between bailor and bailee. Example: A hires a bicycle from B

To

disclose known fault It is the first and foremost duty of bailor to disclose known faults. If he do not do so he is responsible for any damage caused to bailee from such fault (Sec 150,para 1) Example: A lends a horse to B which he knows to be vicious and does not disclose it. The horse runs away B is thrown and injured. A is responsible to B for damage sustained.

To bear extraordinary expense of bailment The bailee is responsible to bear ordinary expenses of bailment but for extraordinary expenses bailor is responsible. Example: A lends his horse to B. The feeding charges are to be paid by B. If horse meets an accident. A will have to repay medical expenses to B.

To

indemnify bailee for loss in case of the pre mature termination of the gratuitous bailment:

the loss to bailee should not exceed the benefit he has derived from bailment. If loss exceeds benefit then bailor have to indemnify bailee. Example: A lends an old bicycle to B for three months gratuitously. B incurs Rs 120 on its repair. A ask for return of bicycle after one month. A has to compensate B for expense incurred by B in excess of benefit derived by him.

To receive back the goods It is the duty of bailor to receive back the goods when the bailee returns them after the expiry of the term of the bailment.

Enforcement of Rights The bailor can enforce by suit all the liabilities or duties of the bailee as his rights

Avoidance of contract (Sec 153) The bailor can terminate the bailment, if the bailee does with regard to the goods bailed any act which is inconsistent with the terms of bailment.

Return

of goods lent gratuitously (Sec 159) when the goods are lent gratuitously the bailor can demand their return whenever he wants even though he lent them for specific period or purpose. Compensation from a wrong doer (Sec 180) If a third person wrongfully deprives the bailee of the use or possession of the goods bailed or do them any injury the bailor may suit against third person for such deprivation or injury.

To take reasonable care of the goods bailed Not to make any unauthorized use of goods Not to mix the goods bailed with his own goods Not to set up an adverse title To return the goods

Delivery of goods to several bailors If several joint owners of goods bail them, the bailee may deliver them back to the directions of one joint owner without the consent of all in the absence of any agreement to the contrary. (Sec 165)

Delivery

of goods to bailor without title If the bailor has no title to goods, and bailee in good faith delivers them back to bailor, the bailee is not responsible to the owner in respect of such delivery.(sec166) to apply to court to stop delivery If the person other then bailor claims goods bailed , the bailee may apply to court to stop the delivery. (Sec 167)

Right

Right of the action against the trespassers If the third person wrongfully deprives the bailee of the use of possession of the goods bailed to him, he has right to bring an action against him Bailees lien Where the lawful charges of the bailee in respect of the goods bailed are not paid, he may retain the goods. This right of bailee to retain the goods is called particular Lien

Pledge is a special type of bailment where transfer of goods is for security of something.

According to Contract Act 1872 Chapter 9 section 172 The bailment of goods as security of payment of a debt or performance of a promise is called Pledge. The bailor in this case is called Pledger or Pawner and bailee is called Pledge or Pawnee

A borrows Rs 200 from B and keeps his watch as security for payment of the debt. The bailment of watch in this case in called pledge.

Pledge is a type of bailment so it possess the same requisites as of bailment

Agreement Delivery of Possession Return of goods after the performance of promise or payment of debt

Right to get back goods On the performance of promise or repayment of loan and interest the pawnor is entitled to get back the goods pledged

Rights to redeem debt If a time is stipulated for payment of debt or performance of promise, in such case if pawnor makes default in payment or performance at stipulated time he may still redeem the pledged goods before actual sale

Preservation and maintenance of goods The pawnor has a right to see that the pawnee preserves the goods pledged and properly maintain them. Right of an ordinary debtor In addition to above rights, the pawnor has the rights of an ordinary debtor which are conferred on him by various statutes meant for the protection of debtors.

Right of retainer The pawnee may retain the pledged goods until his dues are paid. He may also retain the goods for payment of interest due on debt and expenses incurred in respect of possession of goods. (Sec 173)

Right of retainer for subsequent advances When the pawnee lends money to same pawnor after the date of pledge, it is presumed that the right of retainer over the pledged goods extends to subsequent advance also.

Right t extraordinary expenses The pawnee is entitled to receive from the pawnor extraordinary expenses incurred by him for the preservation of goods pledged. Right against true owner When the pawnors title is defective and he has obtained possession of pledged goods under a void able contract, the pawnee can acquire a good title to the goods provided he acts in good faith

Right t when pawnor makes default When the pawnor fails to redeem his pledge the pawnee can exercise the following rights 1. He may file a suit against the pawnor
2.

He may sell the goods pledged after giving a reasonable notice of sale