Topic-Contracts of

Bailment and Pledge

SUB-LEB

COURSE-PGDM

P resnted by-:
.Kr Harsh Vardhan Singh
.Rahul Piyush Mishra
.Himanshu Yadav
.Chetan Bhardwaj
.Gagan vashisth
.Chaudhary Vikrant Singh
.Lal Ninay Nath Sahdeo
• What Is Contract of bailment?
• Section 148 of the Indian Contract Act 1872 states
bailment. Under a contract of bailment, one
person has the goods to the other for some
purpose, and when the goal is fulfilled, the goods
are returned to the owner. The person who has the
goods is called a 'Bailor'. The person who accepts
the goods for a specific goal is called 'Bailee.' In the
Contract of bailment, the goods are kept as
security for a debt or the performance of a promise
as specified in the Contract. Section 172 of the
Indian Contract Act limits that the bailment of
goods for security or for payment of debt or
version is viewed as a pledge. A contract of the
pledge is regarded as the subset of a contract of
bailment
• Essential Features Of The Contract Of Bailment
• There are certain features of the Contract of bailment; a few of the key essential features are examined
below
• A Valid Contract
• A contract of bailment is a special type of Contract. The Essential elements of a valid contract must be
present in it. Essential elements include offer and acceptance, lawful consideration, the parties' capacity
and legal intentions. Without these elements, the Contract will not be enforceable by law. But a contract
of bailment in certain cases can be valid without regard. There are two types of bailment, as stated below.
• One is bailment without consideration - Gratuitous Bailment
• Another one is bailment with consideration - Non - Gratuitous Bailment
• Delivery Of Possession
• Delivery of goods in case of a bailment contract can be actual and constructive. Actual delivery of goods
means the bailor physically gives goods to the position of the bailee. In the case of constructive delivery of
goods, goods are not physically yielded, but a few actions imply that the bailee has been given custody of
the goods.
• Delivery Upon Contract
• After creating a contract, the goods are relaid from the bailor to the bailee. The Contract must have details
about the transfer and the return of the goods. Contract of bailment can be expressly signed by parties or
told by the parties
• .Exception - Lost Goods Found
• When the lost goods are found by a third party or a stranger, in that case, the founder of the goods acts as
the bailee of the goods that are found
• Duties Of The Finder Of Lost Goods
• The duties of the finder of lost goods are defined below.
• The finder of the Lost goods must try to keep the goods safe.
• The finder of Lost goods must ensure the goods are delivered to the real owner.
• She cannot use it for personal use.
• The finder of Lost goods must make crucial efforts to find the owner of the Lost goods.
• Rights Of The Finder Of Lost Goods
• The rights of the finder of lost goods have been stated below.
• The founder of the Lost Goods must be paid for the expenses he has made on the Lost
Goods.
• He must also be paid for his trouble to keep the goods safe and find the real owner.
• It is the right of the finder of Lost goods to sell the goods in case.
• The goods are perishing in nature.
• And the owner of the Lost goods could not be found.
• Purpose
• There must be a specific goal to transfer the goods from
the bailor to the bailee. The Contractbailment contract is
terminated if the bailee makes unauthorized use of the
goods. A particular purpose is very vital in the case of the
bailment of goods. A bailee cannot use the goods other
than for the purpose that has been stated in the
Contract.
• Also, study about
• Return Of Goods
• When the purpose is fulfilled, for which the goods were
moved from the bailor to the bailee, then the goods are
returned to the bailor. The bailee must return the goods
to the bailor as per the directions, without demand, as
soon as the contract period expires.
• Duties Of The Bailor And The Bailee
• Duties Of The Bailor
• The duties of the bailor are explained briefly below.
• To reveal faults in goods - It is the duty of the bailor to disclose the faults in the good if there are any. If the bailor fails
to do so, then in case of loss, the bailor is liable.
• To cover necessary and extraordinary expenses - All the expenses, whether necessary or extraordinary, that the bailee
has incurred to keep the goods safe, then the bailor is liable to cover those expenses.
• Indemnify the bailee of all the losses - If the bailor asks to return the goods before the contract's fixed time, he has to
indemnify the losses incurred to the bailee.
• To collect the bailed goods - The bailor's responsibility is to collect the goods after the expiration of the specified date. If
the date has expired and the bailor did not collect the goods, then he is liable for what has been incurred to the bailee.
• Duties Of The Bailee
• In the Contract of Bailment, there are certain duties that Bailey needs to follow; a few of the key points are revealed
below.
• To Take Proper Care Of Goods
• Section 151 of the Indian Contract Act 1872 defines that the bailee is required to take care of the goods bailed to him as
of his own. But in section 152, it has been stated that in the absence of any kind of special Contract, the bailee is not
liable for the loss or collapse of the goods bailed if he has taken care of the goods as stated in the Contract.
• To Use The Goods For The Authorized Purpose Only
• It is the responsibility of the bailee to use the goods only for the purpose stated in the Contract. If the bailor finds out
that the bailee is using the goods for unauthorized Purposes, then the bailor can declare the contract void.

This Photo by Unknown author is licensed under CC BY-SA.

• Contract Of Pledge-Introduction
• In the Contract of pledge, the goods are kept as a security for a debt. Section 172 of the Indian Contract Act 1872 defines 'the bailment of the goods as security for a
payment of a
debt or performance of a promise is called pledge'. In this case, the bailor is known as the pawnor, and the bailee is called the pawnee.