Bailment

According to Section 148 of the Contract Act – “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.”
 The person delivering the goods is called the
‘bailor,’
 The person to whom they are delivered is called the
‘bailee,’
 The transaction is called the ‘bailment,’
Essential features.
1. It is a delivery of movable goods by one person to
another person.
2. The goods are delivered for some purpose.
 When goods are delivered by mistake without any
purpose, there is no bailment.
3. The goods are delivered subject to the condition that
when the purpose is accomplished the goods are
to be returned in specific or disposed of according
to the directions of the bailor,
 Bailment is concerned with only movable goods.
 Money is not included in the category of movable
goods.
Kinds of Bailment
I. Kinds from ‘benefit’ point of view.
1. Bailment for the exclusive benefit of the bailor,
2. Bailment for the exclusive benefit of the bailee,
3. Bailment for the mutual benefit of the bailor and
the bailee.
II. Kinds from ‘reward’ point of view.
1. Gratuitous bailment.
 It is one in which neither the bailor nor the bailee
is entitled to any remuneration,
e.g., loan of a book to a friend,
2. Non-gratuitous bailment.
 It is also called as a ‘bailment for reward.’ either
the bailor or the bailee is entitled to a
remuneration, e.g., motor car let out for hire,
Duties of Bailee
1. Duty to take reasonable care of goods delivered
to him.
2. Duty not to make unauthorized use of goods
entrusted to him.
 It is the duty of the bailee to use the goods strictly in
accordance with the terms of the bailment.
3. Duty not to mix goods bailed with his own goods.
 It is also the duty of a bailee that he should not
mix his own goods with those of the bailor,
without bailor’s consent.
 If the bailee, without the consent of the bailor,
mixes up his own goods with those of the bailor,
whether intentionally or accidentally, the
following rules apply:
(a) Where the goods can be separated or divided, the
property in the goods remains in the parties
respectively, but the bailee is bound to bear the
expenses of separation as well as any damage
arising from the mixture.
(b) Where the goods mixed cannot be separated, the
bailee must compensate the bailor for his loss.
4. Duty to return the goods. “It is the duty of the
bailee to return, or deliver, according to the bailor’s
directions the goods bailed, without demand, as
soon as the time for which they were bailed has
expired, or the purpose for which they were bailed
has been accomplished.”
5. Duty to deliver any accretion to the
goods. It is the duty of the bailee to deliver to the
bailor any natural increase or profit accruing from
the goods bailed unless there is a contract to the
contrary.
III. Duties of Bailor
1. Duty to disclose faults in goods bailed.
(a) A gratuitous bailor is bound to disclose to the
bailee all those faults in the goods bailed, of which
he is aware and materially interfere with the use
of them, or expose the bailee to extraordinary
risks,
(b) A bailor for reward is responsible for all defects in
the goods bailed whether he is aware of the
defects or not, if he does not disclose them to the
bailee.
 Unlike a gratuitous bailor, ignorance of the
defects is no defense for him.
2. Duty to repay necessary expenses in case of
gratuitous bailment.
 Where, by the conditions of the bailment, the goods
are to be kept by the bailee for the bailor, and the
bailee is to receive no remuneration, it is the duty of
the bailor to repay all the necessary expenses
incurred by the bailee for the purpose of the
bailment.
3. Duty to repay any ‘extraordinary’
expenses in case of non-gratuitous
bailment. Where under the terms of the bailment,
the bailee is to receive remuneration for his
services, it is the duty of the bailor to bear
extraordinary expenses, if any, incurred by the
bailee in relation to the thing bailed.
4. Duty to indemnify bailee. A bailor is also
bound to indemnify the bailee for any loss
suffered by the bailee, by reason of the fact that the
bailor was not entitled to bail the goods because
of the defective title.
5. Duty to receive back the goods. It is the duty
of the bailor to receive back the goods when the
bailee returns them after the time of bailment has
expired or the purpose of bailment has been
accomplished.