What is Knowledge Career World Legal More Sign in / Join

C
 -2.2
Innichen Sunday, December 12, 2021    

WHAT IS KNOWLEDGE CAREER  WORLD LEGAL MORE 

Home  Law Academic  Contract of Bailment, Rights And Duties of Bailor and Bailee, License, Sale

Law Academic Law of Contract- II

Contract of Bailment, Rights And

Duties of Bailor and Bailee,
License, Sale
By LAWNN.COM - March 25, 2019  4

   

Contract of Bailment, Rights And Duties of Bailor and Bailee, License, Sale

Synopsis
Introduction

Essential Features of Bailment

Difference between Bailment and License

Difference between Bailment and Sale

Duties of Bailor and Bailee

Rights of Bailor and Bailee

Conclusion

Introduction-
The word “bailment” has been derived from the French
word “ballier” which means “to deliver”. In general,
Bailment means the delivery of goods of a person to whom
permission is given to have the goods of another person.

The contracts of bailment come under a special class of

contract and are dealt under Sections 148 to 181 of the
Indian Contract Act, 1872. Though the Contract Act
covers the general principles related to contracts of bailment
but it does not deal with all types of bailment. The Carriers
Act, 1865, The Carriage Act of Goods by Sea Act, 1925 and
The Railways Act, 1890, are the few Acts which deal with
special types of bailment.

According to Section 148 of the Contract Act, “Bailment

means 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 “bailer” and

the person to whom they are delivered is called the
“bailee”.

Illustrations-

1. Sanju delivers a piece of cloth to Manju, a tailor, to be

stitched into a suit. There is a contract of bailment
between Sanju and Manju.

2. ‘Z’ lends a novel to ‘Y’ to be returned after a month.

There is a contract of bailment between ‘Z’ and ‘Y’.

3. Najuk sold some goods to Komal who left them in the

possession of Najuk. The relationship between Najuk and
Komal.

Essential Features of
Bailment-
Agreement: Bailment is always created by an agreement
between the bailer and the bailee. It can be either express
or implied.

Delivery of Goods: Bailment involves the change of

possession without giving ownership. The possession
means the right to keep control over the delivered goods.

Movable Property: Goods in Bailment involves all

types of movable goods except money. Thus, bailment of
immovable goods cannot be done.

Definite Purpose: Goods are delivered for a definite

purpose. For ex. repairing, tailoring, security, etc.

Difference between
Bailment and License
Bailment License

a) The concept of Bailment a) The concept of License is

is governed by the   Indian governed by the Easement
Contract Act, 1872. Act, 1882.
b) Section 52 of the
b) Section 148 of the
Easement Act defines
Contract Act, defines
Licenses as “a transfer of
Bailment as “the delivery
right in a specific
of goods by one person to
immovable property to do or
another for some purpose,
continue to do in or upon
upon a contract that they
the immovable property of
shall, when the purpose is
the grantor, something in
accomplished, be returned
absence of which would be
or otherwise disposed of
unlawful but such right does
according to the directions
not amount to an easement
of the person delivering
and interest in the
them.”
immovable property.”
c) Bailment is in regard to c) License is in regard to
movable property. immovable property.

d) Bailment always
requires consideration d) License may or may not
except in certain require consideration.
circumstances.

e) In the case of bailment,

the goods are delivered by
e) In case of license, the
the bailer to bailor for a
licensee is authorized to do
certain purpose with a
or continue to in or upon
condition that on
immovable property of the
fulfillment of such
grantor.
conditions, the goods shall
be returned back.

Difference between Bailment and Sale

Bailment License

a) The concept of
a) Sale is covered under Sale
Bailment is governed by
of Goods Act and Transfer
the   Indian Contract Act,
of Property Act.
1872.

b) The parties involved in b) The parties involved in

a Contract of Bailment are Sale are “vendor” and
“bailor” and “bailee.” “purchaser.”

c) Sale can be in respect of

c) Bailment is in regard to
movable as well as
movable property.
immovable property.

d) In case of bailment, the

d) In case of sale, the goods
goods are delivered by the
or the property are
bailer to bailor for a
transferred by the seller to
certain purpose and the
buyer. Thus, the buyer can
goods can be used by the
use the goods the way he
bailee only as per the
wants.
instructions of the bailor.

e) Bailment may be
without any consideration
e) Sale always requires
(gratuitous) or with
consideration.
consideration (non-
gratuitous).

f) Ownership is not
f) Ownership is transferred
transferred in case of
in case of sale.
bailment.

g) A sale of immovable
g) Registration is not property which is of more
mandatory for the contract than one hundred rupees, the
of bailment. sale must be in writing,
registered and attested.

Duties of Bailor and

Bailee-
Duties of Bailor:

1) Disclosure of known faults (Section 150): Bailor is

supposed to disclose the known faults in the goods bailed to
the bailee and if he fails to do so, he will be held liable for
the damage casued to the bailee due to such faults. If the
bailor bails goods for hire, he will be liable for even the
faults which he isn’t aware of. However, in a bailment for
consideration, he can be held responsible only for the faults
which he is aware of and failed to disclose them.

2) Bear unordinary expenses of bailment (Section 158):

The bailor has to bear any unordinary expenses incurred
under contract of bailment. In case of bailment for
consideration, when the goods are required to be carried or
kept or some work is done in relation to them by the bailee,
the bailor is required to repay all the expenses incurred by
the bailee to him.

3) Indemnification of bailee for incurring loss when

bailment is terminated prior to its term (Section 159): A
bailment for consideration can be terminated at any time by
the bailor even when the bailment was for a specific
purpose or time. Any loss accrued to the bailee from such
termination shall not more than the benefit derived from the
bailment. In case the loss is more than the benefit, the bailee
shall be indemnified by the bailor.

4) Receive back the goods: The bailor shall receive the

goods back when the bailee returns them after the expiry of
term or fulfillment of purpose of bailment. If the bailor
denies the receipt of goods, the bailee shall receive
compensation from bailor for the expenses incurred due to
custody of such goods.

5) Indemnification of the bailee (Section 164): If the

bailor’s title to the goods is defective and he is not entitled
to make bailment and the bailee suffers any loss or damage
as a consequence, the bailor will be liable for such loss or
damage.

Duties of Bailee-

1) Reasonable care of the goods (Section 151): The bailee has a

duty to take care of the goods bailed as any reasonable man would

take of his own goods under similar circumstances. The burden of

proof that he exercised reasonable care negligently when he fails to

return the goods or return them in a damaged condition lies on the

bailee. If the goods are destroyed or damaged even after bailee’s

reasonable care, then the bailee is not responsible for such loss

under section 152.

2) Not use the goods inconsistently with the contract

(Section 154): A bailee shall be liable for the loss incurred
due to use of goods inconsistent with the terms of contract
even if he did not act negligently and the damage has
resulted due to an accident.

3) Not to mix the goods bailed with his own goods

(Section 155, 156): The bailee has a duty not to mix his
goods with the goods of the bailor and shall keep them
separate. If he does so:

1. with the consent of the bailor, the bailor and the bailee
shall have an equal proportion of interest in this mixture
of goods.

2. without the consent of the bailor, the bailee has to bear

the expenses of division and separation and the damages
arising from such mixture, if the goods can be
divided/separated.

without the consent of the bailor, the bailee shall

compensate the bailor for the loss if the goods mixed
cannot be separated.

4) Not to set up an adverse title (Section 117): The bailee

shall not hold the goods for the bailor on behalf of him as
per Section 117 of the Evidence Act, 1872. The bailee
cannot deny the rights of the bailor to have the goods and
receive them back. The bailor is bound to prove that the
other person had a right to goods as against the bailor if he
delivers them to person other than the bailor.

5) Return accretion to the goods (Section 163): The bailer

shall deliver any increase or profit accredited from the
goods bailed to the bailor except as otherwise provided in
the contract.

6) Return the goods (Section 161): The bailee has a duty

to return or deliver the goods bailed according to the
bailor’s directions when the time of the bailment expires or
the purpose of bailment has been fulfilled.

Rights of Bailor and

Bailee-
Rights of Bailor

1) Enforcement of Rights: The bailor has a right to sue the

bailee for enforcing all the liabilities and duties of him.

2) Avoidance of Contract (Section 153): The bailor has a

right to terminate the bailment if the bailee doesn’t any act
inconsistent with the terms of the bailment with regard to
the goods bailed.

3) Return of goods (Section 159): When the goods are lent

for consideration, the bailor has a right to demand their
return as and when he wants even if he lent them for a
specific period of time or purpose.

4) Compensation from wrongdoer (Section 180): If a

bailee is deprived of the use or possession of the goods
bailed by a third person wrongfully or if the goods are
damaged, the bailee or bailor has a right to sue the third
person for such damage or deprivation.

Rights of Bailee-

1) Delivery to one of several joint bailors of the goods

bailed (Section 165): If goods of several joint owners are
being bailed, the bailee may deliver them back to one joint
owner without the consent of all owners when there is no
agreement to the contrary.

2) Delivery of goods to bailor without title (Section 166):

If any person other than the bailor claims the goods bailed,
the bailee has a right to apply to Court to prevent the
delivery of goods to the bailor and to decide the title of such
goods.

3) Right to take action against trespassers (Section 180):

If any third person deprives the bailee wrongfully of the
possession or use of goods bailed to him, the Bailee can file
a suit against that person in respect of the goods bailed.

4) Bailee’s Lien: When the charges incurred by the bailee

in regard to the goods bailed are not paid to him, he has a
right to lien i.e. right to retain the goods with him.

Conclusion-
On the basis of above discussion, it can be analyzed that
bailment is a contract in which a delivery of possession of
specific goods is given to another person for a specific
purpose and it is different from the concept of license and
sale. The bailee and the bailor have to perform in
accordance with the provisions of the Indian Contract Act,
1872 and the contract of bailment.

   

Previous article Next article

Patient Rights in the Medical Pledge under Contract Law-

Sector in India- Know What are Pawnor, Pawnee Rights, Mortgage,
your rights as a Patient Lien

LAWNN.COM
https://www.lawnn.com

RELATED ARTICLES MORE FROM AUTHOR

Contract of Guarantee, ADR- Arbitration vs Know the Formation,

Kinds, Functions under Conciliation vs Mediation Independence And
the Indian Contract Act, And their Differences, Functions of the Election
1872 Advantages Commission of India

 

4 COMMENTS

Sarchinthong T eron
June 7, 2019 At 12:46 pm

Thank you

Admin Lawnn
June 11, 2019 At 11:11 am

Thank you too! Very happy to know you liked it:)

Badrul Hoque T apadar

March 15, 2020 At 8:40 am

Very interesting notes.

LAWNN.COM
April 2, 2020 At 5:01 am
 Thank you lots!

LEAVE A REPLY

Comment:

Name:*

Email:*

Website:

Save my name, email, and website in this browser for the next time I
comment.

Post Comment

About Us Editor Picks

ABO UT US What Is Legal Tender Money And
What Is Fiat Money?
TE RMS & C O ND I TI O NS
PRI V AC Y PO LI C Y
AD V E RTI S I NG & PUBLI C I TY What Is Alimony And How Is
Alimony Calculated? 
C O NTAC T US

Legal Govt Jobs- NALCO

Recruitment for Managerial
Vacancies In Law

    