Bailment

The word bailment is derived from the French word bailer which means To Deliver. Section 148 of Indian Contract Act 1872, Bailment is the delivery of goods by one person to another from some purpose, when the purpose is accomplished, the goods is returned to or otherwise disposed off according to the direction of the person delivering them. Bailor is a person who delivers the goods & Bailee is a person who receives the goods. Characteristics of Bailment: Delivery: It is a delivery of good by one person to anther. Purpose: The goods are delivered for some purpose. Return: It is agreed, that when the purpose is accomplished the good are to be returned or disposed off according to the direction of the bailer. Ownership: In Bailment the bailer continues to be the owner of the goods, Therefore bailment does not cause any change of ownership. Movable goods: bailment is concerned with only movable goods. Deposit of money is not a bailment

Duties/ Responsibilities of a Bailor bailor may give his property to the bailee either without any consideration or reward or for a consideration or reward. In the former case, he is called a gratuitous bailor, while in the latter, a bailor for reward. The duties in both the cases are slightly different. Section 150 specifies the duties for both kinds of bailor. It says that the bailor is bound to disclose any faults in the goods bailed that the bailor is aware of, and which materially interfere with the use of them or which expose the bailee to extraordinary risk. This means that if there is a fault with the goods which may cause harm to the bailee, the bailor must tell it to the bailee. For example, if a person bails his scooter to his friend and if the person knows that the brakes are loose, then he must tell this to the friend. Otherwise, the bailor will be responsible for damages arising directly out of the faults to the bailee. But the bailor is not bound to tell the bailee about the fault if the bailor himself does not know about it.

Duties/Responsibilities of a Bailee
Duty to take reasonable care : Under Section 151 the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances take, of his own goods of the same bulk, quality, and value as the goods bailed. The bailee must treat the goods as his own in terms of care. Duty not to make unauthorized use: As per Section 154 says that if the bailee makes any use of the goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them.

Duty not to mix ( (Section 155-157): The bailee should maintain the separate identity of the bailor's goods. He should not mix his goods with bailor's good without bailor's consent.

Duty to return (Section 160): Section 160 - It is the duty of the bailee to return or deliver according to the bailor's directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired or the purpose for which they were bailed has been accomplished.

Rights of a Bailee:
Right to necessary expenses (Section 158): The bailee is entitled to lawful charges for providing his service. Right to compensation (Section 164): sustain

The bailor is responsible to the bailee for any loss which the bailee may

Right of Lien (Section 170-171): The bailee has the right to keep the possession of the property of the bailor until the bailor pays lawful charges to the bailee.

Pledge
As per Section 172 of Indian Contract Act 1872, the bailment of goods as a security for the payment of a debt or performance of a promise is called Pledge. Pledge is a special kind of Bailment. Thus, all Pledges are Bailments but the reverse is not true. The bailor in this case is called a Pawnor and the bailee is called Pawnee.

Rights of a Pawnee Right of retainer (Section 173- 174): s per section 173, the pawnee may retain the goods pledged, not only for a payment of a debt or the performance of the promise, but also for the interest of the debt, and all necessary expenses incurred by him in respect of the possession or for the preservation of the goods pledged. Further, as per section 174, in absence of any contract to the contrary, the pawner shall not retain the goods pledged for debt or promise other than the debt or promise for which they have been pledged. Right to extra ordinary expenses (Section 175) - As per section 175, the pawnee is entitled to receive from the pawner extra ordinary expenses incurred by him for the preservation of the goods pledged. Right of sale (Section 176) : If the pawnor makes default in payment of the debt or performance at the stipulated time, of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or the promise and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.

Right of Pawner Defaulting pawners right to redeem Preservation & Maintainance Protection of debtors

Termination of Bailment Efflux of Time: If the Bailment is for a specific purpose, the bailment terminates as soon as the purpose is fulfilled. Act inconsistent with the terms: If the bailee does any act , with regard to the goods bailed, which is inconsistent with the terms of the bailment, the bailment terminates Sec 153

Goods lent gratuitously: A gratuitous bailment can be terminated any time but if premature terminatation causes any loss to the bailee, the bailer must indemnify the bailee Sec 159 Death: A gratuitous bailment terminates upon the death of either the bailer or the bailee. Sec
Bailment Pledge A pledge is bailment done for a specific type of purpose, which is to secure a loan or performance of a promise. A pawnee has a right to sell the goods in case of default. A pawnee gets a right of retainer and a special interest in the goods, which is more that just the lien. The pawnee has no right to use the goods. The pawnee is absolutely liable for the upkeep of the goods.

Bailment can be for many reasons ranging for reward to gratuitous. The bailee does not get a right to sell the goods. The bailee only get a right of lien over the goods. The bailee can use the goods bailed. The bailee is not responsible for the loss, destruction, or deterioration if he uses the goods with reasonable care.