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BAILMENT AND PLEDGE:
Q). what is a contract of bailment? Explain its essential element?
ANS: The word bailment is derived from French word”bailor” which means to ‘deliver’. As per law it means any
kind of handing over. In legal sense it denotes change of possession of goods from one person to another for some
specific purpose without transferring its ownership with a condition that to redeliver the goods who supplied them or
as per his direction.
According to section 148 bailment means “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 off
according to the direction of the person delivering them.” The person delivering the goods is known as “bailer” &
the person to whom goods are delivered is called “bailee”.
FOR EX: A deliver a piece of cloth to B who is tailor to stich into a suit. This is a contract of
bailment where A is the bailor who delivers the cloth for the purpose of making a suit & B is the bailee to whom
cloth has been delivered.
Therefore, bailment is a contract between two parties where one party promises the other to hand
over his goods for a special purpose & the other promises to perform such special purpose for a consideration and
also aggress to take back the goods when purpose is achieved. It is contract of simply delivering of goods not the
ownership for some purpose.

ESSENTIAL ELEMENTS OF BAILMENT:

(I) Contract: A bailment is usually created by agreement between two parties one is bailer & other is
bailee. A contract of bailment may be expressed or implied. FOR EX: In case of finder of goods it is
implied by law .other examples are goods wrongly send, excess quantity send etc.
(II) Deliver of goods: The first most important feature of bailment is the delivery of goods from one person
to another .Delivery means change of possession from one person to another without change of
ownership. Delivery of goods may be actual ,constructive or symbolic
Ex. A lady employed a goldsmith for making new ornament out of old jewellery. Every evening she
received the unfinished jewellery and put it into a box at the goldsmith’s shop. She kept the key of that
box with himself. One night the jewellery was stolen from box. It was held that there is no bailment as
the goldsmith had redelivered to the lady (the bailer) the jewellery bailed with him (kaliperumal v
Visalakasmi)
(III) Purpose: The delivery of goods from bailer to bailee must be for the same purpose .Therefore, if goods
are delivered by mistake to a person is not under bailment.
(IV) Moveable goods: The bailment can only be of moveable goods. Money is not included in movable
goods.
(V) Return of goods: Bailment of goods is always for some purpose & is subject to the condition that when
the purpose is accepted the goods will be returned to the bailer or disposed. Off according to the
direction of bailer.
(VI) Distinct: A bailment is distinguished from sale, exchange or barter in all the above cases both
ownership & possession are transferred not in bailment only possessions of goods are transferred.
(VII) Kinds of bailment : Bailment may be classified as :
(a) Voluntary & involuntary bailment: - Voluntary bailment is the result of an express contract between the
parties where as involuntary bailment arises by the operation of laws for e.g. (i) Finder of goods (ii)
Goods wrongly send to a person. (iii) Gods excess quantity ,order & supply
(b) Gratuitous & non-gratuitous bailment: If the bailee keeps the goods for the bailer without any
consideration & reward .It is a gratuitous bailment where as some consideration passes from bailer to
bailee fro keeping the goods by the bailee is called non-gratuitous bailment. It is the otherwise know as
‘reward bailment’ .For e.g. Moor car given for repairment purpose for Rs.3000 cloth given for stitching
purpose for Rs.300 etc.
(c) According to benefit delivered by parties bailment may be made :-
(i) Exclusive benefit of bailer.
(ii) Exclusive benefit of bailee.
(iii) For mutual benefit.

Q.: Who is a bailee? Explain the rights and duties of bailee?

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Ans: Bailee is a party of a contract of bailment. Therefore before understanding the meaning of bailee it is
essential to know the term bailment first
Same as previous upto ex.
Therefore bailee is a person who receives the goods from bailer under the bailment to accomplished a
particular purpose and redeliver the goods to bailer after the purpose is accomplished pr time is expire.
RIGHTS OF BAILEE
(a) Enforcement of right: The duties of bailer are the rights of bailee, as soon as the bailee can be suit
enforce the duties of the bailer.
(b) Delivery of goods : If several joint owner of goods bailed them, the bailee may deliver them back to or
according to the direction of one joint owner, without the consent of all if nothing is specially mention
(c) Delivery of goods to bailer without title (sec. 166) If the bailer has no title to the goods and the bailee on
goods faith delivered the m back to or according got the direction of the bailer .In such a case bailee
would not be responsible to the real owner irrespective of such delivery.
(d) Right to apply to court stop delivery of goods (sec. 167) Right to third parties claiming goods bailed : If
a person, other than the bailer claims goods bailed .The bailee may apply to the court to stock delivery
of goods to the bailer and to decide the tile of the goods
(e) Right to sue: (sec. 180) if a 3rd person wrongfully deprives the bailee of the use or possession of the gods
nailed to him. Ha has the right to file a suit against that party.
(f) Right to lien: Where the lawful changes of the bailee irrespective of goods bailed are not paid .He may
retain the goods this right of the bailee to retain ht gods is known as particular lieu.
(g) Right to remuneration : (sec. 158) ; - the bailer is entitle to lawful charges for providing services .In
addition to this bailee has a right for the necessary expenses incurred by him, if goods are of gratuitous
nature.
(h) Right to claim damages : (sec. 150) : bailee has a right to know the faults in the goods bailed to him, of
which bailer is aware and which materially interfere with the use of them are the expose of which
reduces the chances of extraordinary risk. Bailee is entitled to receive compensation from its bailer for
nay loss or damages arising directly from such fault.
DUTIES OF BAILEE
1) Duty to take reasonable care :sec. 151 );according to sec. 151 the bailee is bound to take as much
are of the goods bailed to him as a man of ordinary procedure the duty of the bailee starts as a soon
as bailee except delivery or receive the property.
Bailee cannot be held responsible for any Act of goods e.g. fire, warm, flood.

2) Duty to make an unauthorized use of goods (sec. 254) Goods must be used by the bailee strictly for
the purpose for which they have been delivered to him .If the bailee uses the goods bailed in a
manner which is consistent with the terms of the bailment the bailee will be liable for nay loss even
though the damages is the result of an accident. For e.g. A lends a gorse to c for his own riding
only .C allows b a member of his family to right the horse. C rides with care but the horse
accidentally falls and is injured. C is liable to make compensation to A for the injury done to the
horse.
3) Duty not to mix up bailed goods with his own goods (sec. 155,156,157) It is the duty of bailee not to
mix the bail goods with his own goods. He is bound to keep bail goods separate from his own goods
with those of bailer goods following rules shall be apply.
(a) With the bailers consent (sec. 155 )If the bailee with the consent of he bailer mix-up the
goods the bailer & the bailee shall have a proportionate interest in the mixture.
(b) Without the bailers consent (sec. 156):Sec. 156 provides that if the bailee without the
consent of bailer mix-up the goods, the bailee is bound to bear the expenses of separation
&also for any damages arising from such unauthorized mixing.
(c) Without bailer consent (sec. 157) Sec.157 applicable where the goods mixed cannot be
separate or it is beyond the separation .Ins such a case the bailer is entitle to be compensate
by the bailee for the loss of goods .
4) Duty not to setup any adverse title against the bailer (sec 117) The bailee must hold the goods on
behalf of & for the bailer .he cannot deny the rights of the bailer to bail the goods and receive then back .If
other than bailer claim that these are his goods than the bailee with safety return to the original owner in
such a case he will not be responsible for such a conversion of owner or change of owner.

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5) Duty to return any accretion to the goods (sec. 163): a bailee is bound to deliver to the bailer any interest
or profit earning from the goods bailed for e.g. A lives a cow in a custody of B to B taken care of the cow
has a calf .B is bound to deliver the calf as well as the cow to A .
6) Duty to return the goods (sec. 160,162) It is the duty of bailee to return the bailed goods to the bailer or
according to his direction without demand, as soon as the purpose his achieve or time expired (sec. 160).If
he face to do so he will be held responsible to the bailer for nay loss according to that Inspite of taking
reasonable care.
E.g. P delivers certain books to F who is a book binder .F could not complete the job
within a reasonable time or complete the job but fails to deliver the bail goods. Accidentally,
fires broke out and books were burn. In such a case F, book binder shall be responsible for all
losses .Sec. 161 also provides that the bailee will be responsible. For any loss, deterioration or
destruction of goods from that time.

Q. Who is a bailer? Explain his rights & duties?

Ans: Before developing the meaning of bailer, it is essential to know the meaning of contract of bailment
first because he is a party of bailment.
According to section 148, bailment means, “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 off
according to the direction of the person delivering them.” The person delivering the goods is known as “bailer” &
the person to whom goods are delivered is called “bailee.”
FOR EX: A deliver a piece of cloth to B who is tailor to stitch into a suit. This is a contract of
bailment where A is the bailer who delivers the cloth for the purpose of making a suit & B is the bailee to whom
cloth has been delivered.

RIGHTS OF BAILOR:
(1) Enforcement of right: As a matter of fact duties of bailee are rights of bailer; a bailer can enforce such
rights in a court of law. A bailer has the following rights against the bailee:
a) Right to claim compensation for loss caused to the goods by negligence of the bailee.
b) Right to claim damages for unauthorized use of goods.
c) Right to demand goods back after the expiry of the purpose or period
d) Right to claim any natural accretion to the goods bailed.
e) Right to claim compensation for unauthorized mixing in bailed goods.

(2) Right of termination: (sec 153) : A contract of bailment is voidable at the option of the bailer if the
bailee does any Act with regards to the goods bailed which is inconsistent with the condition of bailment. In
such a case the bailer has a right to terminate the contract of bailment. For Ex.: A lets a horse to B for his
own riding only. but B uses the horse for the carriage purpose. Hence A has the right to terminate the
contract of bailment.

(3) Return of goods lent gratuitously (sec 159): When the goods are lent gratuitously (non-reward) the
bailer can do demand their goods return whether he pleases even though he lent them for a specified time
on purpose.

(4) Right to file a suit against any wrong doer (sec 180): If a third party or person wrongfully deprives the
bailee of the use or possession of the goods bailed or does some injury to the goods bailed, the bailer and
the bailee both has a right to file a suit against the wrong doer & can claim compensation from him. For Ex:
A deprives 100 bags of sugar to B Who is godown keeper for safe custody .C by fraud prepare a false
delivery order for 10 bags of sugar & claim the delivery from B .B delivered 10 bas of sugar to C in good
faith. Here A may file a suit against C for the recovery of damages.

DUTIES OF BAILER:
(I) Duty to disclose known faults (sec 150,para-i) : It is the duty of the gratuitous bailer to
disclose to the bailee all those defects of which he is aware & who is exposed the bailee to
extraordinary risks. If bailer does not disclose such facts he will responsible for all damages
arising out of such faults .But a gratuitous bailer will not be liable for defects which are not
with in his knowledge. For Ex. A lends a horse which he knows to be vicious to B .He does

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not disclose the facts that the horse is vicious .The horse runs away & B is thrown & injured.
Here A is the bailer who is responsible to B for all damages sustained.
(II) Duty to bear extra ordinary expenses of bailment (sec 158): Where the bailment is gratuitous
& the bailee is to receive no remuneration ,the bailer should pay all the necessary expenses
incurred fro the purpose of bailment.
Ex. Naveen lends his horse to Rajesh for two days here the expense of feeding which is
ordinary expense is to born by Rajesh the bailee, but if horse met with an accident, all
expanse of medical is to be born by Naveen the bailer.
(III) Duty to indemnify bailee (sec 16): According to section 164, a bailer is responsible to the
bailee for any loss due to his imperfect title in the bailed goods. Here under bailee has the
right to be indemnified by the bailer when his title is defective.
(IV) Duty to receive back the goods: It is the duty of bailer to receive back the goods when the
bailee returns them after the expiry of the period or fulfillment of the purpose .If the bailer
refuses to receive back the goods, the bailee is entitled.
(V) Duty to bear normal risks: It is the duty of the bailer to bear the risks of losses on detoriation
& destruction of the bailed goods .If the bailee has taken reasonable care after that.
(VI) Duty to indemnify bailee for pre mature termination Bailer has a right to take back the goods
even before maturity. But if bailment if gratuitous and for a specific period then bailer shall
indemnify the bailee for loss incurred by bailee
Q) What is the contract of pledge? Who are the parties? Differentiate it with the contract of bailment
along with rights & duties of parties to a pledge.
Ans:
MEANING: Pledge is a special kind of a bailment .it is transfer or bailment of goods as a security for the
payment of a debt or performance of promise .All those contract in which the possession of goods is
transferred as security is deemed to be a pledge. The word pawn is the synonyms to the word pledge. The
bailer is in this case is called pledger or pawner & the bailee is called pledgee or the Pawnee.(sec 172)
FOR EX: X delivered a machine for taking a loan as security to Y .The security will be return back after
the payment of loan. This is a contract of pledge, where X who delivers the goods is called pledger & Y to
whom it is delivering for a loan is called pledgee.

ESSENTIAL FEATURES OF PLEDGE:

According to sc 172, the contract of pledge has he following essential elements:
(a) Delivery s: Delivery of goods is must to constitute a pledge. The delivery of goods to the Pawnee
may be actual or constructive.
For ex: Delivery of the key of a warehouse is an example of constructive delivery .As like bailment
pledge involves a transfer of possession of goods & not of title (ownership).The ownership remains with
the pawner or pledger.
(b) Contract there must be a contract. Such contract may be express or may be implied
( c) Goods – There must be a goods . a pledge can be possible only with goods .
(d) Purpose of Delivery- The purpose of delivery of goods for
i) Payment of debt
ii) Performance of a promise
Debt may be present, past or future .The Pawnee does not have a right of ownership over the goods
pledged but he has a lien on the goods for the payment of a debt or performance of a promise
(e) The delivery of goods should be by way of security: A contract of pledge must be supported by a valid
consideration .The pawner must give some security for securing a loan from the Pawnee.
(f) Return of goods – the delivery of goods must be conditional. The condition shall be that the goods shall
be –
Returned (either in original form or alter)
Disposed of according to the direction of pawner when the purpose is
accomplished.
Difference between PLEDGE & BAILMENT

BASIS PLEDGE BAILMENT

PURPOSE Pledge is the bailment of goods as a Bailment is for a purpose of any kind.

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security for the performance of a
specific promise i.e. the payment of a
debt or performance of a promise.
DEFAULT In case of default by the pawner to
repay the debt the Pawnee may after
giving a notice sell the goods pledge
with him.
DELIVERY May be constructive or actual
USE The Pawnee has no right to use the
goods
CONSIDERATION Pledge is always based on for a valid
consideration
5
The bailee may retain the goods or sue
for his charges in case of default of
bailer.
Only actual delivery
In the case of bailment the bailee has a
right with the consent of bailer may
use the goods bailed as per the terms
of the contract.
In case consideration is not
necessary .It may be gratuitous or non
gratuitous

RIGHTS AND DUTIES OF PAWNEE (SEC153)

RIGHTS OF PAWNEE:
(A) Right of retainer (sec 173): The Pawnee has a right to retain the goods pledge not only for the
payment of debt or performance of the promise but also for the interest of the debt and all
necessary expenses incurred by Pawnee in respect of the possession & for their preservation .This
sec gives only a right to retain the goods & does not confer the power to sell.
(B) Right of particular lien (sec 174): A Pawnee cannot retain the goods for any debt other than that
fro which the pledge was made.
(C) Right to claim for extra ordinary expenses(sec 175): The Pawnee is entitled to receive from the
pawner extraordinary expenses incurred by him for the preservation of the goods pledge but he
has no right to lien over the goods for extraordinary expenses for such expenses he can only sue
to recover them.

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