This presentation talks about concept of Bailee, Bailor and Bailment. Their rights and duties as well under Indian Contract Act

1. BAILMENT
By : KASHMIRA SAHANI

2. BAILMENT
 Derived from a French word ‘bailer’ word which
means to deliver
 In law of contracts it means delivery of goods.
 Under contract law, only possession is passed on
and not the ownership

3. SEC 148 OF INDIAN CONTRACT ACT 1872
 Bailment is 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.
 Bailor – a person or party that entrusts goods to
bailee
 Bailee – a person or party who takes goods from
bailor
 Bailment – Transaction

4.  Examples:
 X delivers a watch to Y, a watch repairer for repair
 Gold given to goldsmith to make ornament
 X delivers a piece of cloth to Y, a tailor, to be stitched into a
suit. It is know as contract of bailment.

5. ESSENTIALS OF BAILMENT
1.Contract
The first condition is that there must be a contract between the two parties for the
delivery of goods. Such contract may be expressed or implied, written or oral.
2. Delivery of Possession
Possession of goods from one person to another and mere custody of goods does
not amount to change in possession
Case: Kaliaperumal vs. Visalakshmi AIR 1938 Mad 32
Jewels kept in a box with the jeweller, locked by the the plaintiff herself.
Goldsmith not a bailee here.
3. Delivery should be made upon a contract
There is no bailment where the delivery of goods is without contract
Cases: State of Gujarat vs. Memon Mohammad AIR 1967 SC 1885
Lasalgaon Merchants Coopertaion Bank ltd. Vs. Prabhudas Hathibhai

6.  4. Delivery for specific purpose
 5. Return of goods
 KINDS OF BAILMENT
On the basis of benefit
1. Exclusive for the benefit of bailor
2. Exclusive for the benefit of bailee.
On the basis of Reward
1. Gratuitous Bailment: Goods are delivered by the
bailor to the bailee and neither bailor nor bailee is
entitled for remuneration.
example: Lending a book to a fund

7.  2. Non gratuitous Bailment – Either bailor or bailee is entitled
o a remuneration.
 Example: A car let out for hire
DUTIES OF THE BAILOR
1. To disclose faults
Illustration: A lends a horse, which he knows to be vicious to B. He does not
disclose the fact that the horse is vicious and the horse runs away and B is thrown
and injured. A is responsible to B for damage sustained.
2. To repay necessary expenses
Illustration: A is a friend of B and repairs B’s Tv free of cost and on this repair, he
bears rs.500 actual expenses due t o a replacement of parts. B is bound by law to
pay Rs. 500, the actual cost of repair to A.

8. 3. To repay extra ordinary expenses
Illustration: A keeps his bicycle for safe custody with B for reward the bicycle
gets punctured without negligence of B and B repairs it, now A is bound to pay
these repair expenses to B in excess of the original amount.
4. To indemnify Bailee
Illustration; A gives B’s car for use to C without the permission of B. Later on, B
gets compensation from C. Now C’ has legal right 10 be indemnified by A.

9. RIGHTS OF THE BAILOR
 1. Right to get back the goods
 2. Right to terminate the contract
 3. Expenses of separation
 4. Compensation for goods
 5.Right to share profit
 6.Compensation for delay in time
 RIGHTS AND DUTIES OF BAILEE
 1. To recover damages
 2. Recovery of expenses
 3. Recovery of compensation
 4. Right of action against the third party
 5. Right of lien – sec 170 of Indian contract act

10. DUTIES AND LIABILITIES OF THE BAILEE
 1. To take care of goods – sec 151
 2. Expenses of separation – sec 156
 3. Unauthorised use of goods – sec 154
 4. Inconsistent act – sec 153
 5. Compensation - sec 157
 6. Return of goods – Sec 160
 7. Return of goods at proper time – sec 161
 8. Return of profit – sec 163

11. DIFFERENCE BETWEEN BAILMENT AND AGENCY
 1. Bailee does not represent
bailor.
 2. Bailee does not have
power to make contract on
bailor’s behalf.
 3. Bailor not liable for any
acts of bailee
 1. Agent represents principal
 2. Agent can make contract on
principal’s behalf
 3. Principal is bound by agent’s
act.
Bailment Agency

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