At one time or another, you enter into a legal relationships, called bailment and pledge.Bailments are quite common in business also. Traders often store their surplus goods inwarehouses; and utilize the services of cold storages for keeping their goods to be takenback as and when required; and factory owners often send machinery back to vendors forrepairs. Also, goods are pledged for securing loans.ObjectivesAfter studying this unit, you should be able to:· Describe the bailment and its types· Explain the duties and rights of bailor· Define pledge· Explain the pledge by non-owner4.2 Bailment and its Kinds4.2.1 Definition of bailment (Sec.148)Bailment
is defined as the “delivery of goods by one to another person 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 person delivering them”. The person
ering the goods is called the „bailor‟ and the person to whom the goods are deliveredis called the „bailee‟. The explanation to the above Section points out that delivery of
possession is not necessary, where one person, already in possession of goods contracts tohold them as bailee.The bailee is under an obligation to re-deliver the goods, in their original or altered form,as soon as the time of use for, or condition on which they were bailed, has elapsed or
been performed”. Let‟s illustrate, (i) A del
ivers some clothes to B, a dry cleaner, for drycleaning. (ii) A delivers a wrist watch to B for repairs. (iii) A lends his book to B forreading. (iv) A delivers a suit-length to a tailor for stitching. (v) A delivers some goldbiscuits to B, a jeweller, for making jewellery. (vi) Delivery of goods to a carrier for thepurpose of carrying them from one place to another. (vii) Delivery of goods as security forthe repayment of loan and interest thereon, i.e., pledge.From the definition of bailment, the following characteristics should be noted:1.
Delivery of goods.
The essence of bailment is delivery of goods by one person toanother for some temporary purpose. Delivery of goods may, however, be actual orconstructive. Actual delivery may be made by handing over goods to the bailee.Constructive delivery may be made by doing something which has the effect of putting thegoods in the possession of the intended bailee or any person authorised to hold them onhis behalf (Sec.149).
A holding goods on behalf of B, agrees to hold them on behalf of C, there is aconstructive transfer of possession from C to A.2.
Bailment is based on a contract.
In bailment, the delivery of goods is upon a contractthat when the purpose is accomplished, they shall be returned to the bailor. For
,where a watch is delivered to a watch repairer for repair, it is agreed that it will bereturned, after repair, on the receipt of the agreed or reasonable charges.