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Bailment
1.
2. Bailment & pledge
Section 148 of indian contract act 1872
Delivery of goods by 1 person to another for some
purpose
Contract to return after use or to dispose as asked by
the person who delivered the goods
Bailor: who gives
Bailee : who takes
Bailment: transaction
3. Examples
Hiring a bicycle
Giving cloth to a tailor
Delivering watch for repair
4. Kinds of bailment
Kinds of bailment Based on benefit:
Bailment for the exclusive benefit of :
1] bailor: leaving goods in safe custody without paying
2] bailee :a loan of some article like a pen
3] mutual benefit: contracts for hiring, repair ,etc
5. Kinds of bailment:
Based on reward:
1] Gratuitous bailment: neither bailor nor bailee is
entitled for remuneration, example: lending a book to a
friend
2] Non-gratuitous bailment: bailment of reward: either
bailee or bailor is entitled to a remuneration , example:
hire, tailor, etc
6. Difference between sale &
bailment
Ownership transferred?
Buyer under no obligation to return goods?
7. Duties of bailee:
Take reasonable care of goods[S.151]
Not to make unauthorized use of goods[S.154]
Not to mix goods with his own goods[S.155-157]
Duty to return goods[S.160&161]
Not doing any act inconistent with terms of
bailment[S.153]
Returning any profit [S.163]
8. Rights of bailee
Right to compensation for loss on account of fault in
goods bailed[S.150]
Right to receive necessary expenses[S.158]
Right against premature termination of
bailment[S.159]
Right to compensation in case of defective title[S.164]
Delivery of goods to one of the joint owners[S.165]
Right against third parties
9. Duties of bailor
To Disclose faults in goods bailed [S.150]
To repay the necessary expenses [S.158]
To indemnify the bailee [S.164]
Liability on premature breach of bailment[S.159]
10. Rights of bailor
Right of indemnity for losses due to negligence by
bailee[S.152]
Termination of bailment on inconsistent use by the
bailee[S.153]
Compensation for unauthorised use by the
bailee[S.154]
Compensation when the bailee mixes the goods bailed
with own goods [S.155]
Right of return of goods back[S.160]
Right to profit from goods bailed[S.163]
11. Termination of bailment
Doing an act inconsistent with terms of
bailment[S.153]
At desire of the bailor in case of gratuitous
bailment[S.159]
On expiry of period[S.160]
On accomplishment of object[S.160]
Death of the bailor or bailee [S.162]
12. PLEDGE OR PAWN :
Bailment of goods as security for payment of debt or
performance of a promise :PLEDGE
Bailor: PAWNER
Bailee: PAWNEE
Example: A borrows Rs.100 from B & keeps his watch
as security : pledge
13. Difference between bailment &
pledge:
PURPOSE: security? ; repairs?
RIGHT OF SALE:
sale on default?
no right to sale?
RIGHT OF USING THE GOODS: no right?
14. Rights of Pawnee:
Right of retainer{S.173}: right to retain goods until dues
paid
Right of transfer for subsequent advances:{S.174}: on
lending money to same debtor without further security
right to retain earlier goods extends Right to
extraordinary expenses {S.175} Right to use the pawner
or sell the goods on default.
15. Rights of Pawner
Rights of Pawner:
Enforcement of pawnee’s duties Defaulting pawnor’s
right to redeem
