ASSIGNMENT V – SPECIAL CONTRACT

RIYA SINGH

19FLICDDN01106

BBA.LLB (HONS) SEC B

Q.1. Write a short note on Bailment with reference to Rights and Duties of
Bailor and Bailee.
As per the section 148 of the Indian Contract Act, 1872, a bailment is a contract where one
person delivers goods to another person for some purpose. The person delivering the goods is
the Bailor and the person receiving the goods is the Bailee. After the accomplishment of the
purpose, the Bailee needs to return these goods to the Bailor or dispose of them according to
the directions of the Bailor.

Rights of Bailee

1. Right to get compensation.

2. Right to terminate the contract of Bailment.

3. Right to get expenses.

Duties of Bailee

1. Duty to take care of the goods.

2. Duty to return goods.

3. To make proper use of goods Bailed.

4. Duty not to mix his own goods with the goods of Bailor.

5. Duty not to question the title of the Bailor.

6. Duty of Bailee to pay increase or profit from goods Bailed.

Duties of Bailor
1. It is the duty of Bailor to disclose faults in goods bailed.

2. Duty of the Bailor to give compensation to the Bailee.

3. Duty to give expenses.

Rights of Bailor

1. Right to get his goods back.

2. Right to get the increase or profit from the goods bailed.

3. Right to get compensation.

4. Right to terminate the contract.

Q.2. Write a short note on Pledge with reference to Rights and Duties of
Pawnor and Pawnee.
As per section 172 of the Indian Contract Act, 1872, a Pledge is a contract where a person
deposits an article or good with a lender of money as security for the repayment of a loan or
performance of a promise. Pledge is also known as a pawn. The depositor or the bailor is the
Pawnor and the bailee or the depositee is the Pawnee. The Pawnee is under the duty to take
reasonable care of the goods pledged with him.

Rights of the pawnee

The pawnee has been given some right under the Indian Contract Act so that his interest
doesn’t get hurt unduly. Indian Contract Act provides for 3 rights to the pawnee which are as
follows:-

A. Right to retainer- Section 174 of the Act states that “The pawnee shall not, in the
absence of a contract to that effect, retain the goods pledged for any debt or promise
other than the debt or promise for which they are pledged; but such contract, in the
absence of anything to the contrary, shall be presumed in regard to subsequent
advances made by the pawnee.”
B. Right to extraordinary expenses - Right to extraordinary expenses has been stated in
section 175 of the Act. The section states that “The pawnee is entitled to receive from
the pawnor extraordinary expenses incurred by him for the preservation of the goods
pledged.”
C. C. Right to sell- Pawnee’s right to sell the lodged goods has been stated in section 176
of the Act. the section states that “If the pawnor makes default in payment of the debt,
or performance, at the stipulated time of the promise, in respect of which the goods
were pledged, the pawnee may bring a suit against the pawnor upon the debt or
promise, and retain the goods pledged as a collateral security; or he may sell the thing
pledged, on giving the pawnor reasonable notice of the sale.

Duties of pawnee
A pawnee has the following duties:

1) Duty to take reasonable care of the pledged goods.

2) Duty not to make unauthorised use of goods pledged.

3) Duty to return the goods when the debt has been repaid or the promise has been performed.

4) Duty not to mix his own goods with the goods pledged.

5) Duty not to do any act which is inconsistent with the terms of pledge.

6) Duty to deliver increase (if any), to the goods pledged.

Rights of pawnor

A. Right to get back goods - after performance of promise or repayment of loan and
interest and necessary expenses, if any.
B. Right to redeem debt - if default made in fulfilment of promise, but anytime before
sale of goods pledged by pawnee, pawnor can redeem the goods pledged and also
make payment of interest and expenses, if any.
C. Preservation and maintenance of goods can ask pawnee to preserve and maintain the
goods pledged.
D. Right of an ordinary debtor has right given under various statutes for protection of
debtors.

Duties of Pawnor:

1. It is the duty of the pawnor to repay the loan taken from the pawnee within the time and in
the manner specified in the contract.

2. He has to compensate the pawnee for any extraordinary expenses incurred by him.

3. Default or risk, if any, in the goods pledge should be known to pawnee.