Bailment

Sec 148: define

Bailment is the delivery of goods from person to another for some
purpose, upon a contract that they shall, when the purpose id
accomplished be returned or otherwise disposed of according to the
directions of the person delivering them.
Essentials of bailment:
1. Contract
2. Specific purpose
3. Transfer of possession
4. Return of goods
Kinds of bailment:
1. Benefit
 Benefit of bailor
 Benefit of bailee
 Benefit of both bailor and bailee
2. Reward
 Gratuitous
 Non gratuitous
Duties and rights of bailor
Duties of bailor:
1. Disclosure of fault (150 sec)
2. Payment of expenses (sec 158)
3. Compensation of termination (sec 159)
4. Compensation for defective title (sec 164)
5. Recovery of goods (sec 164)
Rights of bailor:
1. Recovery of damages (sec 152)
2. Termination of bailment (sec 153)
3. Unauthorized use (sec 154)
4. Mixture of goods
(sec 156: when goods can be separated
Sec 157: when goods can not be separated)
5. Demand for goods
(sec 160 : when purpose is completed
Sec 159: in gratuitous bailment when purpose id not completed)
6. Demand of increase (sec 163)
7. Suit against 3rd party (sec 180)
Durties and rights of bailee
Duties of bailee:
1. Reasonable care
(sec 151: care to be taken by bailee
Sec 152: when bailee is not liable for loss)

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2. Unauthorized use (sec 154)
3. Mixing if goods (sec 155-157)
4. Return of goods (160-161)
5. Return of increase (sec 163)
Rights of bailee:
1. claim damages (sec 150)
2. Recovery of expenses (sec 158)
3. Right of indemnity (sec 159)
4. Recovery of loss (sec 164)
5. Return to joint owners (sec 165)
6. Rights to lien (sec 170)
7. Suit against 3rd party (sec 180)
Termination of bailment
1. Expiry of time
2. Accomplishment of purpose
3. Unauthorized use (sec 153)
4. On death (sec 162)
5. Termination by bailor (sec 159)
6. Destruction of subject matter
Finder of lost goods
Define (sec 70)
A person who find goods belonging to another person and takes them into
his custody is liable to the same responsibility as a bailee.
Duties of finder:
1. Find owner
2. Reasonable care (sec 151)
3. Unauthorized use
4. Mixture of goods
Rights of finder: (sec 169 and 169)
1. Right to retain
2. Right of lien
3. Suit against 3rd party
4. Suit for reward
5. Right to sale:
 When goods are perishing
 When lawful charges of the finder amount to 2/3 of the value of
goods
Pledge or pawn
Sec 172: define
The bailment of goods as a security for payment of a debt or performance
of a promise id called pledge.
Essentials of pledge:
1. Moveable goods

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2. Limited interest
3. Transfer of possession
Rights and duties of pledgee
Rights of pledgee:
1. Right to retain (sec 173)
2. Particular debt (sec 174)
3. Recovery of expenses (sec 175)
4. Sell goods (sec 176)
Duties of pledgee:
1. Take reasonable care of goods pledged
2. Must not make any unauthorized use of goods
3. Must not mix the goods pledged with his own goods
4. Must not do any act contrary to the term of the contract
5. Must return goods on receipt of his full payment
6. Must deliver the profit or increase to the goods pledged if occurred
Rights and duties of pledgor
Rights of pledgor
1. Redeem the goods (sec 177)
2. Recovery of damages
3. Claim of increase
Duties of pledgor:
1. Payment of expenses (sec 175)
2. Payment of debt
Situations in which the void pledge contracts are considered to be
valid:
1) Pledge by mercantile agent (sec 178)
2) Pledge by person in possession under voidable contract (sec 178 A)
3) Pledge where powner has only limited interest
Difference between pledge and bailment:
1. Purpose
2. Rights
3. Use of goods
4. Return of goods
5. Lien

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Hypothication
 The creation of security on moveable goods of the buyer to secure the
payment of loan
 Possession of goods remains with borrower
Mortgage:
 The creation of security on immovable goods/ property of the buyer
to secure the repayment of loan
 The transfer of interest in the immovable property to secure the loan
is called mortgage
 The possession transfers to the loan giver till the repayment of loan
 The transferor of property is called mortgagor and the transfee is
called mortgagee