Law of bailmentLaw of bailment

Law of bailment

INTRODUCTION:INTRODUCTION:  

Bailment means a legal relation that Bailment means a legal relation that arises whenever one person delivers arises whenever one person delivers possession personal property to possession personal property to another person under an agreement another person under an agreement by which the later is under an by which the later is under an obligation to return the property to obligation to return the property to the former.the former.

MEANING:MEANING:

The term bailment The term bailment is derived from a is derived from a French word French word 'baillior' which 'baillior' which means to deliver.means to deliver.

DEFINITION ACCORDING TO DEFINITION ACCORDING TO CONTRACT ACT SEC 148CONTRACT ACT SEC 148

"A bailment is the delivery of goods by "A bailment is the delivery of goods by one person to another for some one person to another for some purpose upon a contract that they shall purpose upon a contract that they shall when the purpose is accomplished be when the purpose is accomplished be returned or otherwise disposed of returned or otherwise disposed of according to the directions of the according to the directions of the person delivering them.person delivering them.

PARTIES OF THE CONTRACT OF PARTIES OF THE CONTRACT OF BAILMENTBAILMENT

There are two parties in the contract of There are two parties in the contract of bailment.bailment.

(a) Bailor: (a) Bailor: 

The person who deriveds the goods is called The person who deriveds the goods is called bailor.bailor.

(b) Bailee: (b) Bailee: 

The person to whom the goods are derived is The person to whom the goods are derived is called bailee.called bailee.

CONTRACTMOVABLE PROPERTY

DELIVERYOF

GOODS

CHANGE OF POSSESSION

PARTIES OFCONTRACT

OWNERSHIP ISNOT

CHANGED

SPECIFIC PURPOSE

RETURNABLE

ESSENTIALS OF CONTRACT OF BAILMENT

Duties OR ResponsibilitiesDuties OR Responsibilities

Proper useOf

goods

Care of goods

Act accordingTo the

contract

Return at ProperTime

Return ofprofit

Return thegoods

Not denyTheTitle

Recovery of lossRecovery of

compensationRecovery ofexpenses

Right against Third person

Right ofRemuneration

Right ofIndemnity

Right to Retain

Rights of Bailee

Laws of BailmentLaws of Bailment

Section 148: bailmentSection 148: bailment Section 149: delivery to bailee, how Section 149: delivery to bailee, how

made.made. Section 150: bailors duty to disclose Section 150: bailors duty to disclose

faults in goods bailed.faults in goods bailed. Section 151: care to be taken by the Section 151: care to be taken by the

bailee.bailee.

Section 149: (delivery to Section 149: (delivery to bailee, how made)bailee, how made)

The delivery to the bailee may be The delivery to the bailee may be made by doing anything which has made by doing anything which has the effect of putting the goods in the the effect of putting the goods in the possession of the intended bailee or possession of the intended bailee or of any person authorised to hold of any person authorised to hold them on his behalf. them on his behalf.

For example:For example: A lady employed a goldsmith A lady employed a goldsmith

for the purpose of melting old for the purpose of melting old jewellery and making new jewellery and making new jewels. Every evening she jewels. Every evening she used to receive the half-used to receive the half-made jewels from the made jewels from the goldsmith and put them into goldsmith and put them into a box which was left in a a box which was left in a room in the goldsmith’s room in the goldsmith’s house, of which she retained house, of which she retained the key. It was held that the key. It was held that there was a redelivery of the there was a redelivery of the jewels to the lady and that jewels to the lady and that they were not in the they were not in the possession of the goldsmith possession of the goldsmith when during one night they when during one night they were were stolen.

Section 150: (Bailor's duty Section 150: (Bailor's duty to disclose faults in goods to disclose faults in goods

bailed)bailed) The bailer is bound to disclose to the The bailer is bound to disclose to the

bailee faults in the goods bailed, of bailee faults in the goods bailed, of which the bailer is aware, and which which the bailer is aware, and which materially interfere with the use of materially interfere with the use of them, or expose the bailee to them, or expose the bailee to extraordinary risks; and if he does extraordinary risks; and if he does not make such disclosure, he is not make such disclosure, he is responsible for damage arising to the responsible for damage arising to the bailee directly from such faults. bailee directly from such faults.

For exampleFor example

A hires a carriage of B. The carriage A hires a carriage of B. The carriage is unsafe, though B is not aware of it, is unsafe, though B is not aware of it, and A is injured. B is responsible to A and A is injured. B is responsible to A for the injury. for the injury.

SectionSection 151 (Care to be 151 (Care to be taken by bailee)taken by bailee)

In all cases of bailment the bailee is In all cases of bailment the bailee is bound to take as much care of the bound to take as much care of the goods bailed to him as a man of goods bailed to him as a man of ordinary prudence would, under ordinary prudence would, under similar circumstances, take of his similar circumstances, take of his own goods of the same bulk, quality own goods of the same bulk, quality and value as the goods bailed. and value as the goods bailed.

For example:For example: a person hires a horse a person hires a horse

for riding in a sound for riding in a sound condition and the condition and the horse dies the same horse dies the same day while it is in his day while it is in his custody, it is for the custody, it is for the hirer to prove that he hirer to prove that he had taken such care of had taken such care of the horse as a man of the horse as a man of ordinary prudence ordinary prudence would, under similar would, under similar circumstances, have circumstances, have taken of his own taken of his own

152. BAILEE WHEN NOT LIABLE 152. BAILEE WHEN NOT LIABLE FOR LOSS, ETC, OF THING BAILEDFOR LOSS, ETC, OF THING BAILED

The bailee, in the absence of any The bailee, in the absence of any special contract, is not responsible for special contract, is not responsible for the loss, destruction or deterioration of the loss, destruction or deterioration of the thing bailed, if he has taken the the thing bailed, if he has taken the amount of care of it described in amount of care of it described in section 151. section 151.

153. TERMINATION OF BAILMENT BY 153. TERMINATION OF BAILMENT BY BAILEE'S ACT INCONSISTENT WITH BAILEE'S ACT INCONSISTENT WITH

CONDITIONSCONDITIONS

A contract of bailment is avoidable A contract of bailment is avoidable at the option of the bailor, if the bailee at the option of the bailor, if the bailee does any act with regard to the goods does any act with regard to the goods bailed, inconsistent with the bailed, inconsistent with the conditions of the bailment.conditions of the bailment.

154. LIABILITY OF BAILEE MAKING 154. LIABILITY OF BAILEE MAKING UNAUTHORISED USE OF GOODS BAILEDUNAUTHORISED USE OF GOODS BAILED

If the bailee makes any use of If the bailee makes any use of the goods bailed, which is not the goods bailed, which is not according to the conditions of the according to the conditions of the bailment, he is liable to make bailment, he is liable to make compensation to the bailor for any compensation to the bailor for any damage arising to the goods from damage arising to the goods from or during such use of them. or during such use of them.

EXAMPLEEXAMPLE

(a) A lends a horse to B (a) A lends a horse to B for his own riding for his own riding only. B allows C, a only. B allows C, a member of his family, member of his family, to ride the horse. C to ride the horse. C rides with care, but rides with care, but the horse accidentally the horse accidentally falls and is injured. B falls and is injured. B is liable to make is liable to make compensation to A for compensation to A for the injury done to the the injury done to the horse. horse.

155. EFFECT OF MIXTURE, WITH 155. EFFECT OF MIXTURE, WITH BAILOR'S CONSENT, OF HIS BAILOR'S CONSENT, OF HIS

GOODS WITH BAILEE'SGOODS WITH BAILEE'S

If the bailee, with the consent of If the bailee, with the consent of the bailor, mixes the goods of the the bailor, mixes the goods of the bailor with his own goods, the bailor bailor with his own goods, the bailor and the bailee shall have an and the bailee shall have an interest, in proportion to their interest, in proportion to their respective shares, in the mixture respective shares, in the mixture thus produced. thus produced.

156. EFFECT OF MIXTURE, WITHOUT 156. EFFECT OF MIXTURE, WITHOUT BAILOR'S CONSENT, WHEN THE GOODS BAILOR'S CONSENT, WHEN THE GOODS

CAN BE SEPARATEDCAN BE SEPARATED

If the bailee, without the consent of the If the bailee, without the consent of the bailor, mixes the goods of the bailor with bailor, mixes the goods of the bailor with his own goods, and the goods can be his own goods, and the goods can be separated or divided, the property in the separated or divided, the property in the goods remains in the parties respectively; goods remains in the parties respectively; but the bailee is bound to bear the but the bailee is bound to bear the expense of separation or division, and expense of separation or division, and any damage arising from the mixture. any damage arising from the mixture.

EXAMPLEEXAMPLE

A bails 100 bales of cotton marked with A bails 100 bales of cotton marked with a particular mark to B. B, without A's a particular mark to B. B, without A's consent, mixes the 100 bales with other consent, mixes the 100 bales with other bales of his own, bearing a different bales of his own, bearing a different mark. A is entitled to have his 100 bales mark. A is entitled to have his 100 bales returned, and B is bound to bear all the returned, and B is bound to bear all the expense incurred in the separation of expense incurred in the separation of the bales, and any other incidental the bales, and any other incidental damage.damage.

157. 157.  Effect of mixture without  Effect of mixture without bailor’s consent when the goods bailor’s consent when the goods

cannot be separated.cannot be separated.

If the bailee, without the consent of If the bailee, without the consent of the bailor, mixes the goods of the the bailor, mixes the goods of the bailor with his own goods, in such bailor with his own goods, in such manner that it is impossible to manner that it is impossible to separate the goods bailed from the separate the goods bailed from the other goods and deliver them back, the other goods and deliver them back, the bailor is entitled to be compensated by bailor is entitled to be compensated by the bailee for the loss of the goods.the bailee for the loss of the goods.

ExampleExample

““A bails a barrel of Cape flour worth A bails a barrel of Cape flour worth Rs. 45 to B. B, without A’s consent Rs. 45 to B. B, without A’s consent mixes the flour of his own, only Rs. 25 mixes the flour of his own, only Rs. 25 a barrel. B must compensate A for the a barrel. B must compensate A for the loss of his flour.”loss of his flour.”

158. Repayment by bailor of 158. Repayment by bailor of necessary expenses.necessary expenses.  

Where by the conditions of bailment, Where by the conditions of bailment, the goods are to be kept or be carried the goods are to be kept or be carried or to have work done upon them by or to have work done upon them by the bailee for the bailor, and the bailee the bailee for the bailor, and the bailee is to receive no remuneration, the is to receive no remuneration, the bailor shall repay to the bailee the bailor shall repay to the bailee the necessary expenses incurred by him necessary expenses incurred by him for the purpose of the bailment.for the purpose of the bailment.

159. Restoration of goods lent 159. Restoration of goods lent gratuitously.gratuitously.

The lender of a thing for use may at any time The lender of a thing for use may at any time required its return, if the loan was gratuitous even required its return, if the loan was gratuitous even though he lent it for a specified time or purpose. But, though he lent it for a specified time or purpose. But, if, on the faith of such loan made for a specified time if, on the faith of such loan made for a specified time or purpose, the borrower has acted in. such a or purpose, the borrower has acted in. such a manner that the return of the thing lent before the manner that the return of the thing lent before the time agreed upon would cause him loss exceeding time agreed upon would cause him loss exceeding the benefit actually derived by him from the loan, the the benefit actually derived by him from the loan, the lender must, if he compels the return, indemnify the lender must, if he compels the return, indemnify the borrower for the amount in which the loss so borrower for the amount in which the loss so occasioned exceeds the benefit so derived.occasioned exceeds the benefit so derived.

160. Return of goods bailed on 160. Return of goods bailed on expiration of time or expiration of time or

accomplishment of purposeaccomplishment of purpose..

It is the duty of the bailee to return, It is the duty of the bailee to return, or deliver according to the bailor’s or deliver according to the bailor’s directions, the goods bailed, without directions, the goods bailed, without demand, as soon as the time for which demand, as soon as the time for which they were bailed, has expired, or the they were bailed, has expired, or the purpose for which they were bailed purpose for which they were bailed had been accomplished.had been accomplished.

161. Bailee’s responsibility when 161. Bailee’s responsibility when goods are not duly returned.goods are not duly returned.

If, by the default of the bailee, the If, by the default of the bailee, the goods are not returned,’ delivered or goods are not returned,’ delivered or tendered at the proper time, he is tendered at the proper time, he is responsible to the bailor for any loss, responsible to the bailor for any loss, destruction or deterioration of the destruction or deterioration of the goods from that time.goods from that time.

162. 162. Termination of gratuitous bailment by Termination of gratuitous bailment by death, A gratuitous bailment is terminated death, A gratuitous bailment is terminated by the death either of the bailor or of the by the death either of the bailor or of the

bailee.bailee. The executors of persons who have borrowed The executors of persons who have borrowed

things, especially books, do not always remember things, especially books, do not always remember this, as is shown by common experience. On the this, as is shown by common experience. On the other hand, the executors of a lender may tacitly other hand, the executors of a lender may tacitly and discreetly, in many cases, treat the loan as a and discreetly, in many cases, treat the loan as a gift without fear of being Called to account for a gift without fear of being Called to account for a davastavit. The problems hence arising, if any, davastavit. The problems hence arising, if any, seem to be rather ethical than legal, save so far seem to be rather ethical than legal, save so far as the law of limitation cures this amongst other as the law of limitation cures this amongst other irregularities. The present section does not, of irregularities. The present section does not, of course, exempt the bailee’s estate from liability course, exempt the bailee’s estate from liability for any default in hisfor any default in his lifetime.

163. Bailor entitled to 163. Bailor entitled to increase or profit from increase or profit from

goods bailedgoods bailed In the absence of any contract to the In the absence of any contract to the

contrary, the bailee is bound to contrary, the bailee is bound to deliver to the bailor, or according to deliver to the bailor, or according to his directions, any increase or profit his directions, any increase or profit which may have accrued from the which may have accrued from the goods bailed. goods bailed.

Example Example

A leaves a cow in the custody of B to A leaves a cow in the custody of B to be taken care of. The cow has a calf. be taken care of. The cow has a calf. B is bound to deliver the calf as well B is bound to deliver the calf as well as the cow to A as the cow to A

164. Bailor's responsibility 164. Bailor's responsibility to bailee.to bailee.

The bailer is responsible to the bailee The bailer is responsible to the bailee for any loss which the bailee may for any loss which the bailee may sustain by reason that the bailor was sustain by reason that the bailor was not entitled to make the bailment, or not entitled to make the bailment, or to receive back the goods or to give to receive back the goods or to give directions, respecting them. directions, respecting them.

165. Bailment by 165. Bailment by several .joint ownersseveral .joint owners

If several joint owners of goods bail If several joint owners of goods bail them, the bailee may deliver them them, the bailee may deliver them back to, or according to the back to, or according to the directions of, one joint owner without directions of, one joint owner without the consent of all, in the absence of the consent of all, in the absence of any agreement to the contrary. any agreement to the contrary.

166. Bailee not responsible on 166. Bailee not responsible on

redelivery to bailer without title.redelivery to bailer without title.

If the bailer has no title to the goods, If the bailer has no title to the goods, and the bailee, in good faith, delivers and the bailee, in good faith, delivers them back to, or according to the them back to, or according to the directions of, the bailer, the bailee is directions of, the bailer, the bailee is not responsible to the owner in not responsible to the owner in respect of such delivery. respect of such delivery.

If a person, other than the bailor, If a person, other than the bailor, claims goods bailed he may apply to the claims goods bailed he may apply to the Court to stop the delivery of the goods Court to stop the delivery of the goods to the bailor, and to decide the title to to the bailor, and to decide the title to the goods.the goods.

SEC 167- RIGHT OF THIRD PERSON SEC 167- RIGHT OF THIRD PERSON CLAIMING GOODS BAILED.CLAIMING GOODS BAILED.

SEC 168- RIGHT OF FINDER OF SEC 168- RIGHT OF FINDER OF GOODS; MAY SUE FOR SPECIFIC GOODS; MAY SUE FOR SPECIFIC

REWARD OFFERED.REWARD OFFERED.The finder of goods has no The finder of goods has no right to sue the owner for right to sue the owner for compensation for trouble and compensation for trouble and expense voluntarily incurred expense voluntarily incurred by him to preserve the goods by him to preserve the goods and to find out the owner; and to find out the owner; but he may retain the goods but he may retain the goods against the owner until he against the owner until he receives such compensation; receives such compensation; and, where the owner has and, where the owner has offered a specific reward, for offered a specific reward, for the return of goods lost, the the return of goods lost, the finder may sue for each such finder may sue for each such reward, and may retain the reward, and may retain the goods until be receives it.goods until be receives it.

SEC 169- WHEN FINDER OF THING SEC 169- WHEN FINDER OF THING COMMONLY ON SALE MAY SELL IT.COMMONLY ON SALE MAY SELL IT.

When a thing which is commonly When a thing which is commonly the subject of sale is lost, if the the subject of sale is lost, if the owner cannot with reasonable owner cannot with reasonable diligence be found, or if he refuses, diligence be found, or if he refuses, upon demand to pay the lawful upon demand to pay the lawful charges of the finder, the finder charges of the finder, the finder may sell it.may sell it.

1.1.   when the thing is in danger when the thing is in danger of perishing or of losing the of perishing or of losing the greater part of its value, orgreater part of its value, or

2.2. when the lawful charges of when the lawful charges of the finder, in respect of the the finder, in respect of the thing found, amount to two-thing found, amount to two-thirds of its value. thirds of its value.

Where the bailee has, in accordance Where the bailee has, in accordance with the purpose of the bailment, with the purpose of the bailment, rendered any services involving the rendered any services involving the exercise of labour or skill in respect of exercise of labour or skill in respect of the goods bailed, he has, in the the goods bailed, he has, in the absence of a contract to the contrary, absence of a contract to the contrary, a right to retain such goods until he a right to retain such goods until he receives due remuneration for the receives due remuneration for the services he has rendered in respect of services he has rendered in respect of them.them.

SEC170- BAILEE’S PARTICULAR LIEN.SEC170- BAILEE’S PARTICULAR LIEN.

ExampleExample

1.1. A delivers a rough diamond A delivers a rough diamond to B; a jeweller, to be cut to B; a jeweller, to be cut and polished, which is-and polished, which is-accordingly done. B is accordingly done. B is entitled to retain the stone entitled to retain the stone till he is paid for the till he is paid for the services he has rendered.services he has rendered.

2.2. A gives cloth to B, a tailor, A gives cloth to B, a tailor, to make into a coat, B, to make into a coat, B, promises A to deliver the promises A to deliver the coat as soon as it is coat as soon as it is finished, and to give a three finished, and to give a three months’ credit for the price. months’ credit for the price. B is not entitled to retain B is not entitled to retain the coal until he is paid.the coal until he is paid.

SEC 171- GENERALSEC 171- GENERAL LIEN OF BANKERS, LIEN OF BANKERS, FACTORS, WHARFINGERS, ATTORNEYS FACTORS, WHARFINGERS, ATTORNEYS

AND POLICY-BROKERS.AND POLICY-BROKERS.bankers, factors, bankers, factors, wharfingers attorneys of wharfingers attorneys of High Court and policy-High Court and policy-brokers may, in the absence brokers may, in the absence of a contract to the contrary, of a contract to the contrary, retain, as a general balance retain, as a general balance of account, any goods bailed of account, any goods bailed to them; but no other to them; but no other persons have a right to persons have a right to retain, as a security for such retain, as a security for such balance goods bailee to balance goods bailee to them, unless there is an them, unless there is an express contract to that express contract to that effect. effect.