Topic: Bailment
Presented to: Vanshika Tainwala
Presented by:
Siddhant Kumar Jha (LLB/24/033)
Preeti Lata Bage (LLB/24/034)
INTRODUCTIO
• Bailment is an agreement that could be oral or written
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mutually agreed upon between the person giving possession
and the person taking possession, which might involve
consideration.
• Bailment as defined in Section 148 of the Indian contract Act,
1872 is the delivery of goods by one person to another for
some specific purpose, upon a contract that these goods are to
be returned when the specific purpose is complete.
⚬ For example, A delivering his car for service at the service
center is an example of bailment.
⚬ Illustration: If A gives his car to B, his neighbor, for 10 days,
but at the same time he keeps one key with himself and
during this period of 10 days he used to take the car. Now
this will not be a case of bailment as A is keeping control
Essentials of Bailment
Delivery of Possession
⚬ The main characteristic of a bailment is that the delivery contemplated
is for a temporary purpose. Delivery may be actual or constructive.
￭ Actual delivery may be made by handing over something to the
bailee.
￭ Constructive or symbolic delivery may be made by doing something
which has the effect of putting the goods in the possession of the
intended bailee.
• Delivery should be upon contract
⚬ Delivery of goods should be made for some purpose and upon a contract
that when the purpose is accomplished the goods shall be returned to
the bailor.
• Delivery should be upon same purpose
⚬
Kinds of Bailment
On the basis of reward
• Gratuitous bailment:
⚬ The bailment of products without any charges or reward is Gratuitous
bailment. In this type, there is no requirement to pay any charges by
the bailee for the bailment.
• Non gratuitous bailment:
⚬ The bailment for some reward or charges is non gratuitous bailment. It
is required to pay some charges to the bailor by the bailee.
On the basis of benefit
• Bailment contract made for the exclusive benefits of the bailor.
• Bailment made for the exclusive benefits of the bailee.
• Bailment made for mutual benefits of both bailor and bailee.
Duties of Bailor
• Disclose the Facts- The bailor must disclose all the facts of the
goods delivered to bailee. It was defined under Section 150 of the
Indian Contract Act of 1872.
• To Bear all the Expenses- The bailor must pay the ordinary expenses
to bailee. If there are any extra expenses, he is bound to pay the
extraordinary expenses.
• To Indemnify the Bailee- The duty to indemnify the bailee refers to
the responsibility of the bailor to compensate the bailee for any
loss, damage, or liability incurred during the period of bailment. It is
an essential aspect of a bailment relationship, where the bailor
entrusts their property to the bailee for a specific purpose.
• Compensation for Premature Termination- It is the duty of the bailor
to compensate the bailee if the bailor has terminated the bailment;
in case of incurring any loss, then it is the duty of the bailor to
compensate.
• To Take Back the Goods- The bailor must take back the goods from
Duties of Bailee (Section151)
• Duty to take care of goods- Bailee must take care of the goods until he
returns the goods to the bailor. It means bailee has to take reasonable care of
the bailed property. This means the bailee has to protect the bailed property
from damage, theft, and any harm that may occur during the period of
bailment.
• Duty to use the property for the agreed purpose- The bailee must use the
bailed property only for its entrusted purpose. Without the consent of the
bailor, if he deviates, it would lead to the liability of the bailee.
• Duty to not mix the property- The bailee is responsible for not mixing the
bailor's goods with the other goods. If the goods are mixed, he will be held
liable if the goods are unable to separate. If the goods can be separated, the
bailee will bear the expenses to separate the mixed goods.
• Duty to return the property- If the purpose of the bailment is fulfilled upon
the agreed period, the bailee must return the property to the bailor.
• Duty to render Accounts- When the bailor approaches the bailee for
information regarding the status of the property bailed and the condition of
the property, the bailee must provide accurate reports of all transactions
connected to the bailment and the bailee is required to maintain correct
Rights of Bailee
• Right to Possession- One of bailee's rights is to have
possession of the goods that are subject to the matter of the
bailment. But the right to possession is limited. The Bailee
has to use the goods only for a specific purpose, not for any
other purpose, without the consent of the Bailor.
• Right to Lien- The bailee has the right to lien, which means
the bailee can take back the possession of the goods bailed
by the bailor until the charges are paid in respect of the
goods. This right would be applicable when there is a legal
contract between the parties, i.e., a contract of bailment.
• Right to Recover Compensation-If the bailor does not
disclose any facts, then any expenses incurred by the bailee,
the bailee has the right to compensate for the damages he
incurred.
Rights of the Bailor
• Right to terminate the contract- The bailor has the
right to terminate the contract before the purpose of
the bailment has been completed. But the bailor has
to compensate the bailee for any loss incurred due to
termination of bailment.
• Right to take the goods back- The bailor has the right
to take back the goods after the purpose of the
bailment has been completed in a specified time if
mentioned.
• Right to Sue- The bailor has a right to sue the bailee
in case of breach of contract. If the bailee fails to
Case Law
• Kavita Trehan v. Balsara Hygiene Product Ltd. (1992):
⚬ In this case, the Supreme Court decided that one of the very
requirements of bailment is the delivery of goods to the bailee, where
there is no change of possession, there is no bailment.
• Annamalai Timber Trust Ltd. v. Thrippunithura Dewas, (1954):
⚬ The Kerala High Court held that where there is no obligation to return
identical subject matter is an altered manner there is no bailment.
CONCLUSION
Contracts of bailment are unique transactional relationships created
by contracts and agreements between parties for fulfilling various
purposes. Therefore, they are necessary for human civilisation to
ensure that the transactions and the goods forming the subject
matter of the transaction are well protected in every manner. They
constitute all essential ingredients of a valid contract. While
traditionally, bailment has been viewed as a relationship formed by
the existence of a contract, its present understanding is changing
quite a lot with non-contractual bailment relationships being
recognised with quasi-contractual obligations. With the change of
time and creation of various forms of services for making human lives
easier, newer forms of bailments emerge and must be considered in
the folds of contractual relationships for better implementation of the
legal provisions.
THANK YOU
