SLS 2219: COMMERCIAL LAW
BAILMENT
Bailment is the voluntary transfer of possession of personal property or a chattel
by means of a contract or any other acceptable mode from one person called the
bailor to another known as the bailee
Unlike a sale or gift of personal property, a bailment involves a change in
possession but not in title
Bailment relationship may also result from the actions and conduct of the
parties when dealing with the property in question
BAILMENT
A bailment relationship can be implied by law whenever the personal property
of one person is acquired by another and held under circumstances in which
principles of natural justice require the recipient to keep the property safely and
return it to the owner thereafter
General principles of the law of contract apply to bailment
Purposes of Bailment
There are many situations in which the law recognizes that a bailment exists.
These include bailments created:
a) For the mutual benefit of both the bailor and the bailee
b) For the sole benefit of the bailor
c) For the sole benefit of the bailee
Elements of Bailment
A contract of bailment has the following essential features:
a) Contract; Acceptance, Consideration
b) Two parties
c) Delivery of goods; constructive delivery
d) Change of Possession; custody and possession
e) Purpose of delivery is temporary
f) Right of ownership
Elements of Bailment
A contract of bailment has the following essential features:
g) Change of form
h) Goods in possession of bailee
i) Re-delivery of goods
j) Right of reward
Types of Bailment
Coggs v Bernard [1703] – any person who undertakes to do an act (e.g. carry
goods) is liable to an action if because of his neglect, damage occurs to the
goods or they are lost
Six instances of bailment:
1) Depositum (simple deposits)
2) Commodatum (goods lent for bailee’s use, gratis)
3) Locatio et conductio
4) Vadium (pawn or pledge)
Types of Bailment
5) Locatio operis
6) Mandatum (Coggs case)
Bailment for safe custody
Constructive bailment
Bailment for mutual benefit
Bailment for sale
Involuntary bailment/ involuntary deposit
Bailee’s Standard of Care
The standard of care owed by the bailee depends on who benefits from the
bailment relationship
Gratuitous bailee - In such a scenario, the bailee’s duty of care is at its
lowest; liability for ‘gross negligence’
Bailment for hire – Liability for ‘ordinary negligence’
If the bailee is the sole beneficiary – Liability for ‘slight negligence’
Bailee not liable when damage not their fault - BAT Kenya Ltd & Another v
Express Transport Co. Ltd & Anor. [1968] EA 171; EA Industries Ltd v B.R.
Nyarangi [2001]eKLR
All bailees are held to strict liability when it comes to re-delivering the
property to the true owner. Cf. BAT Kenya case (supra)
Rights and Duties
Rights of the bailor
Right to get back the goods
Right to terminate the contract
Expenses of separation
Compensation for goods
Compensation for unauthorised use
Compensation for delay in re-delivery
Right to share profit
Rights and Duties
Duties of the bailor
To disclose faults
To repay necessary expenses
To repay extra-ordinary expenses
To indemnify the bailee
Rights and Duties
Rights of the bailee
To recover damages
Recovery of expenses
Recovery of compensation
Right of action against third parties
Right of lien
Rights and Duties
Duties of the bailee
To take care of goods - Kingsway Motors Ltd v Corner Garage Transport
Ltd [2010]eKLR; EA Industries Ltd v B.R Nyarangi [2001]eKLR
Expenses of separation
Liability for unauthorised use of goods
Inconsistent acts
Compensation
Return of goods
Return of goods at a proper time
Return of profit
Termination of Bailment
1. Accomplishment of purpose
2. Effluxion of time
3. Death of a party
4. Bailee’s inconsistent act
5. Illegality
6. Operation of the law
7. Mutual agreement of the parties
Q&A
