This document provides an overview of bailment under Indian contract law. It defines bailment as the delivery of goods by one person to another for a specific purpose, to be returned once that purpose is fulfilled. Key points include: - Bailment requires a contract, delivery of possession of goods from bailor to bailee for a purpose, and return of the goods once the purpose is accomplished. - Duties of the bailee include taking reasonable care of the goods, not making unauthorized use, not mixing goods with their own, not setting up adverse title, and returning any increase in goods. - Duties of the bailor include disclosing faults, repaying necessary expenses,

1. BAILMENT
THE LAW OF AGENCY,
BAILMENT AND PARTNERSHIP
Course Conductor: Sadia Sharmin
Email: sadia.sharmin3@gmail.com

2. BAILMENT
 ‘Bailment’ is derived from a French word ‘bailer’
which means ‘to deliver’.
 But in law it refers to the contract which results
from delivery of goods.
 In contract of bailment only possession is
passed on not the ownership.
 There cannot be bailment of immovable
property.

3. SECTION 148 OF CONTRACT ACT
“A bailment is 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 to whom
they are delivered is called the bailee”

4. Examples:
 X delivers a piece of cloth to Y, a tailor, to be
stitched into a suit. It is contract of bailment.
 X delivers a watch to Y, a watch repairer for
repair.
 Gold given to goldsmith to make ornament.
 Something left with a friend inadvertently.
 When a person find lost goods – implied
contract of bailment.

5. ESSENTIALS OF BAILMENT
 Contract
 Delivery of goods - Delivery of possession of
goods from one person to another. Mere
custody of goods does not amount to change in
possession. Goods must be handed over to the
bailee for some purpose.
 The delivery of possession of goods is of the
following kinds:
1. Actual delivery - when goods are physically
handed over to the bailee by the bailor.

6. 2. Constructive delivery or Symbolic Delivery –
Handling over the keys of a warehouse,
Document of title of goods.
( immovable property)
3. Delivery of goods must be for some purpose-
The delivery of goods must be for some
purpose. Eg goldsmith
4. Delivery upon a contract – There is no
bailment where the delivery of goods is
without contract. ( A minor )
5. Return of goods.

7. 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 without any
reward. Lending a book to a friend for
reading. ( Exclusive benefit of either of the
party)

8. 2. Non – Gratuitous bailment – Where bailor
& bailee is entitled to reward for bailment.
Example:
A car let out for hire,
Gold given to goldsmith for making jewellery for
charges.

9. DUTIES OF BAILEE
1. To take reasonable care:
As a prudent man would take of his own goods. If
any loss or damage incurs to the goods bailed in
spite of the due care, he will not be liable for
any such loss or damage. The burden of proof is
on the bailee to show that he was not negligent.
The bailee is not answerable for any loss to
goods bailed, caused by an act of God, Lightning,
flood.

10. Examples:
 X bailed the goods to Y. In spite of Y’s taking
reasonable care, goods were stolen & Y did
not inform the owner or police. Y was held
liable.
 X, had hired a wooden shop & it was burst by
mobs during a communal riot. Held X was not
liable.
2. Not to make any unauthorized use of goods:
A lends a horse to B for his own riding only. B
allows C, member of the family, to ride the
horse. The horse accidentally falls & is injured. B
is liable to make compensation

11. 3. Not to mix the goods with his own goods:
(a) Mixing with bailor’s consent.
(b) Mixing without bailor’s consent
 Where goods can be separated – Bailee is
liable to bear all the expenses of separation.
Example: A bails 100 bales of cotton marked with
a particular mark to B. B, without A’s consent
mixes the 100 bales with other bales of his own
bearing a different mark. A is entitled to have
his 100 bales returned & B is bound to bear
all the expenses for separation of bales.

12.  Where the goods mixed cannot be separated –
The bailor is entitled to be compensated by
the bailee for the loss of goods.
4. Not to set up adverse title:
Bailee must hold the goods on behalf of & for
the bailor. ( Even he comes to know about the
true owner of the goods )
5. To return increase or profit:
It happens in case of animals. A leaves a cow in
the custody of B to be taken care of. The cow
has a calf. B is bound to deliver the calf as well
as cow to A.

13. 6. To return the goods:
If he fails to do so, he becomes liable for any
loss. Responsible also for act of god.
Case Ref:
Shaw & co. vs. Symmons & sons – X delivered
books to Y to be bound. Y promised to return the
books within a reasonable time. X pressed for
the return of the book. But Y, failed to deliver
them back even after the expiry of reasonable
time. Subsequently the books were burnt in an
accidental fire at the premises of Y. Y was held
liable for the loss.

14.  Where there are several joint owners of goods
bailed – the bailee may return the goods to
any of the bailor.
 Where there is a gratuitous bailment, the bailee
is bound to return the goods to the bailor on
demand even before the expiry of the fixed
period or accomplishment of purpose. The bailor
is liable to pay if there is any loss incurred due to
termination of bailment. (books for reading)

15. DUTIES OF BAILOR
1.To disclose fault in the goods bailed.
2.To repay necessary expenses in case of
gratuitous bailment:
Where the bailee is required to keep goods for
the benefit of the bailor without any
remuneration, it is duty of bailor to repay all
necessary expenses. E.g. X leaves a horse in
the custody of Y to be taken care of & y is to
receive no remuneration. All the expenses
incidental thereto i.e. feeding horse, medical
expenses should be paid to Y.

16. 3. To repay the extra ordinary expenses:
in case of non–gratuitous bailment:
Y hires X’s horse for his carriage. The horse
becomes ill & Y spends Rs. 50 on medical
expenses over & above Rs. 20 on feeding the
horse. X is liable to pay to Y Rs. 50 the extra-
ordinary expenses only.
4. To indemnify the bailee:
The bailor has to indemnify the loss if incurred
on defective title of the goods.
5.To received back the goods:
If the bailor refuses to receive back the goods,
he is liable to compensate the bailee for the
necessary expenses of custody.

17. RIGHT OF BAILOR
 Right to claim for loss caused to the goods
by the bailee for not taking reasonable care.
 Right to claim damages for mixing goods
without consent.
 Right to claim increase in goods.
 Right to demand back the goods.

18. RIGHTS OF BAILEE
 Right to recover extra ordinary expenses
incurred on goods.
 Right to claim damages incurred because of
non disclosure of faults in goods bailed.
 Right to deliver goods to any one of the
several joint owners.
 Right to receive compensation for loss
incurred for bailor’s defective title.

19. BAILEE’S LIEN
 Lien is a right of a person to retain the
property or goods of another until he pays
(Bailor) the lawful charges or debt due
thereupon.
 The right of lien is lost when possession is
lost.
 The right of lien extends only to the
possession of goods & not to a right of sale.

20. TYPES OF BAILEE’S LIEN
 Particular lien:
A retention of particular goods in respect of which
some charge is due.
Example:
A delivers a rough diamond to B, a jeweler, to be
cut & polished, which is accordingly done. B is
entitled to retain the stone till he is paid for the
service he has rendered.

21. CONDITIONS TO BE SATISFIED
 The bailee must have rendered some services &
must be entitled to some remuneration for it.
 The services must have been performed in full.
(no lien if part performance is done)
 The bailee cannot exercise the right of lien
where he has agreed to render the services on
credit until the expiry of period of credit.
 The goods must be in possession of the bailee:
IF POSSESSION IS LOST LIEN IS LOST.

22.  General Lien:
It entitles the person to hold goods of another for
any amount due to him whether in respect of
those goods or any other.
 TERMINATION OF LIEN:
1. Agreement between parties .
2. Payment of debt.
3. Loss of possession
4. Refusal of tender (by Bailee)

23. TERMINATION OF BAILMENT
 On the expiry of period – Bailment is for
specific period.
 Accomplishment of purpose.
 Gratuitous bailment – in between
 Death of bailor or bailee.

24. THANK YOU
Copyright: Komma Naveen Kumar (Guntur, Student at Tata Docomo)