CONTRACT OF

BAILMENT

NAME: A V CHERISHMA
ID: 2200570002
COURSE CODE: 22BL12C4
COURSE TITLE: LAW OF
CONTRACTS
 DEFINITION OF BAILMENT

According to Section 148 in The Indian Contract

Act, 1872: 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.
EXAMPLE: X delivers a piece of cloth to Y, a tailor, to be
stitched into a suit. Here, X is bailor and Y is the bailee and
the purpose is to stitch the cloth.

ESSENTIALS OF BAILMENT
 CONTRACT: It must follow the essential elements of a
valid contract.
 DELIVERY OF POSSESSION: The possession can be
actual or constructive.
 PURPOSE: The goods should be transferred by the
bailor to the bailee for some purpose.
 RETURN OF GOODS: The goods can be returned in
original form or altered form.
NATURE OF BAILMENT:

A bailment arises where goods belonging to one person are

delivered to another for some purpose.
Bailment includes hiring, lending and safekeeping of goods.
Bailment is only for movable goods and not for immovable
goods.
The delivery of goods under a bailment is distinct from a
sale or exchange. A bailment implies an obligation to
redeliver the same goods.
KINDS OF BAILMENT ON THE BASIS OF
REWARD
1. GRATUITOUS BAILMENT
A gratuitous bailment is one in which there is no
consideration involved in the contract of bailment. Neither
the bailor nor the bailee is entitled to any remuneration.
Example, if you lend your bicycle to your friend for riding
then it is a gratuitous bailment because there is no
exchange of money or other consideration.
2. NON-GRATUITOUS BAILMENT
A non-gratuitous bailment is a contract of bailment in
which some consideration is exchanged between bailor
and the bailee.
For example, if you are hiring a bicycle from your local
bicycle shop then there is a non gratuitous bailment
between you and the shop owner.
KINDS OF BAILMENT ON THE BASIS OF
BENEFIT
1. BAILMENT FOR THE EXCLUSIVE BENEFIT
OF THE BAILOR
In this case a contract of bailment is undertaken solely
for the benefit of the bailor and the bailee receives no
benefit from it.
For example, if you are going to a different city and leave
your valuables with your neighbour for safe custody, this
contract only benefits you as the bailor and not the bailee.
2. BAILMENT FOR THE EXCLUSIVE
BENEFIT OF THE BAILEE
This contract of bailment is undertaken solely for
the benefit of the bailee and the bailor derives no
benefit from it.
For example, if you lend your books to your friend
for free during exam preparations, here you will
not gain any benefit by lending but your friend can
gain knowledge from the books lended.
3. BAILMENT FOR THE MUTUAL BENEFIT OF
THE BAILOR AND THE BAILEE
In this case, both the bailor and the bailee benefit from
the contract of bailment.
For example, A rents out his car to B. A is the bailor and
receives the hire charges, while B is the bailee and gets
to use the car. Here both the bailor and bailee gets
benefit unlike the before cases.