Lecture 3

Bailment:

. A 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.

. Only applicable to Movable Property

Essentials Features of Bailment:

. Contract
. Delivery of Goods
. Specific purpose

. Bailment for carriage

. Bailment for use
. Bailment for safe custody
. Bailment as security
. Bailment for work

. No change of Ownership
. Return of goods

Rights and Obligations of Bailor and Bailee.

Rights of Bailor

. To claim damages
. To demand return of goods
. To claim increase
. To terminate bailment
. To sue

Duties of Bailor

. To disclose faults
. To pay necessary expenses
. To indemnify for demanding back
. To indemnify for defective title
. To receive back goods
Rights of Bailee:

. To claim damages
. To recover expenses
. To deliver goods
. To compensation
. To stop delivery
. To sue
. Right of Lien

Duties of Bailee

. To take reasonable care

. Not to make unauthorized use
. Not to mix goods
. To return goods
. To return increase

Termination of Bailment:

. Expiry of time
. Accomplishment of Purpose
. Unauthorised use
. On death
. Termination by bailor
. Destruction of Subject matter

Pledge or Pawn:

. The bailment of goods as security for payment of a debt or performance of a

promise is called pledge.

. Only movable property may be pledged and that too for just limited interest.

Rights and Duties of Pledgor and Pledgee

Rights of Pledgor

. To redeem
. To claim damages
. To claim increase/benefit
. To redeem to debt
Duties of Pledgor

. To compensate and pay for expenses

. To complete and comply with terms and conditions

Rights of Pledgee

. To retain
. To retain for other debts
. To claim expenses
. To sue and sell

Duties of Pledgee

. Reasonable Care
. No unauthorized use
. Not to mix goods
. Not inconsistent with terms and conditions
. Return of goods
. Give increase

Difference b/w Bailment and Pledge

Agency:

. “Agency connotes a relation existing where one person has authority or capacity
to create a legal relation between the principal and third party.”

Agent and Principal

. An agent is a person employed to do any act for another or to represent another in

dealings with third persons. The person for whom such act is done, or who is so
represented, is called the Principal.

. Who can be Principal and Agent

. Who can appoint agent

Classes of Agents

. General Agent
. Special Agent
. Universal Agent

Types of Agents:
. Auctioneer
. Factor
. Broker
. Commission agent
. Del credere agent
. Estate agent
. Indentor
. Banker
. Advocate
. Guardian

Basic Ingredients of Agency

. Agent has power to deal with third person as to bind his principal.
. Subject property is the property of Principal.
. The agent acts as intermediary.
. The liability of the agent is always to account for sale proceeds to the principal.

Classification of Agency

. Actual/Expressed Agency
. Apparent/Implied Agency

Creation of Agency

. Agency by Estoppel
. Agency by Holding Out
. Agency by necessity
. Agency by Ratification
. Agency by operation of law

Rights and Duties of Principal and Agent

Rights of Agent

. To retain
. To receive remuneration
. Right of Lien
. To be indemnified by lawful acts
. To be indemnified for acts done in good faith
. To compensate for injury
. Stoppage of goods

Duties of Agent

. To follow directions
. To work with reasonable skill
. To render accounts
. To communicate
. Not to make secret profit
. To pay sums received
. Not to delegate authority

There are some exceptions in which a sub-agency can be created

. permission of Principal
. Ordinary custom of trade
. Requirement of Agency
. Emergency

Rights of Principal

. To recover damages
. To obtain secret profit
. To refuse to indemnify agent

Duties of Principal

. To indemnify for lawful acts

. To indemnify for acts in good faith
. To indemnify for injury
. To pay dues and remuneration

Termination of Agency

. Agreement
. Revocation by Principal
. Revocation by Agent
. Completion of business
. Expiry of Time
. Death of Principal or Agent
. Insanity of principal or agent
. Insolvency of Principal
. Destruction of Subject matter
. On becoming alien enemy
. Change of law

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