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3 Case: Goods and Contracts A person gives his furniture to a person to transport to his new house in another town. A person gives his jacket to a drycleaner. A company hires out public address system to a person organising a music function. What is common to the contracts?
4 Bailment Owner gives the custody and possession of his goods to another person as a part of the contract. The goods would need to be returned back to him. The owner who gives his goods is called Bailor The person receiving the goods is called Bailee The giving of goods is called Bailment
Essentials of Bailment: Delivery of goods Delivery for some purpose Contract Movable goods Return of goods 5
Kinds of Bailment: Voluntary and Involuntary Bailment Gratuitous and non- gratuitous Bailment On the basis of benefit 6
Rights of Bailor Enforcement of Bailee’s duties Right to claim compensation for loss caused to the goods by the negligence of the bailee Right to claim compensation for unauthorized mixing of goods with the bailee’s own goods Right to claim damages for unauthorised use of goods
(iv) Right to demand goods back after the expiry of purpose or period (v) Right to claim any accretion to the goods bailed 2. Right to termination: Inconsistent act 3. Restoration of goods lent gratuitously 4. Right to file a suit against any wrongdoer and claim compensation
Duties of Bailor Duty to disclose known defects (a) Gratuitous Bailment: Known defects (b) Bailment for reward: Known & unknown 2. Duty to bear extraordinary expenses of bailment 3. Duty to indemnify bailee: loss due to imperfect title 4. Duty to receive back goods 5. Duty to bear normal risks
Rights of Bailee Enforcement of rights Bailment by several joint owners Right to compensation: imperfect title Right to remuneration:extraordinary damages Right to claim damages: defects Right to sue Right of lein
Duties of Bailee Duty of reasonable care Duty not to make unauthorised use of goods Duty not to mix bailor’s goods with his own Section 155 Section 156 Section 157
4. Duty not set up any adverse title against the bailor 5. Duty to return any accretion to the goods 6. Duty to return the goods
13 Case: Washing for Repair A person gave his washing machine for repairing to a shop. As the shop did not have space inside, it left the washing machine outside in its corridor. There was no security or attendant for guarding the premises. The washing machine was stolen. Is the shop responsible for the loss of the washing machine to the owner?
14 … Cond A person gave his washing machine for repairing. The shop had stored it properly and safely. However, an unprecedented rain created a deluge and all the washing machines in the shop as well as all the expensive testing equipment of the shop got damaged. Is the person responsible for the loss of the washing machine?
15 Facts R. S. Deboo: Drycleaner- M/s Leach and WaBomy Customer: Hindlekar and family There was a fire in the factory and the clothes got destroyed. The drycleaner offered to pay 20 times the drycleaning charges as this was stipulated on the back of the receipt limiting the liability of the drycleaner.
16 Judgement: High Court Terms and conditions printed on the reverse of a receipt issued by the owner of the laundry or any other bailee do not necessarily form part of the contract of bailment in absence of the signature of the bailer on the document relied upon. In absence of signature of the bailer on the document relied upon, the onus is on the bailee to prove that the attention of the bailer was drawn by the bailee to the alleged special conditions before the contract was concluded and the bailee had consented thereto expressly or by necessary implication as a contractual term.
Finder of Lost Goods Rights of finder of goods Right of lien Right to sue for reward Right of sale If owner can not be found If charges are 2/3 rd of value of goods and owner refuses to pay If goods are perishable in nature
Obligations of finder of lost goods Take reasonable care of goods Not to use for his own purpose Not to mix goods with his own goods Try to find out the true owner of goods Termination of Bailment
Bailor is known as pledger or pawner and bailee is known as pledgee or pawnees
Rights of Pawnee Right of retainer Right of retainer for subsequent advances Right to extraordinary expenses Pawnee’s rights where pawnor makes default
Rights of Pawnor Right to get back goods Right to redeem debt Preservation or maintenance of the goods Rights of an ordinary debtor
Pledge by Non-Owners Pledge by mercantile agent Pledge by seller or buyer in possession after sale Pledge where owner has a limited interest Pledge by co-owner in possession Pledge by person to possession under a voidable contract
Pledge v/s Bailment Scope Right to sell Right to use Rights and duties of pawner and pawnee