Bailment

According to the law of contract act part IX section 100 (1) A bailment is 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 of according to the directions of the
person delivering them ,and the person delivering the goods is called the bailor white the person
to whom they are delivered is called the bailee
is a legal relationship in a common law where the owner transfers physical possession of
personal property (chattel) for a time but retains ownership.
The following are the duties of bailor
1. Duty to disclose faults
In case of gratuitous bailment, the bailor is expected to disclose to the bailee all the defects
known to him and which would get in the way with the use of goods bailed. A non-gratuitous
bailment or bailment for reward, however, carries a greater responsibility on the part of bailor.
He will be liable even if he was not in the know of the defects. The following instances drive
home the points.
Example 1
A lends his horse, which he knows to be frisky, to B. He does not disclose the fact that the horse
is frisky. When B tries to ride it, the horse throws him off its back, and Bis injured. A is
responsible to B for injury sustained.
Example 2
A hires a carriage of B, The carriage is unsafe, though B is not aware of it, and A is injured. B is
still responsible to A for the injury.

2. Duty to repay bailee’s expenses

A bailor is duty bound to repay to the bailee expenses incurred by him for work done on the
goods received under conditions of bailment, and for which he is not receiving any remuneration
or deriving any benefit. In this regard,

3. Duty to indemnify the bailee

The bailor is bound to make good the loss suffered by the bailee that is in excess of the benefit
actually derived, where he had delivered the goods gratuitously and compelled the bailee to
return them before the expiry of the period of bailment.

4. Duty to compensate bailee for breach of warranty

Every contract of bailment warrants the bailee about the bailor’s title being defect free. Thus, if
bailee subsequently suffers any loss by the reason of the bailor’s title being defective, it is the
duty of the bailor to compensate the bailee for breach of warranty.

5. Duty to claim back the goods

The bailor is bound to accept the goods upon being returned by the bailee in accordance with the
terms of bailment. If he refuses or fails to accept back the goods, if offered at a proper time and
at a proper place, without any reasonable ground, he shall be responsible for any loss or damage
to the goods and not the bailee.

The following are the rights of bailor

1.Right to enforce bailee’s performance

Since the bailor delivers goods to the bailee for some specific purpose, the former, especially in
case of non-gratuitous bailment, has an elemental right to achieve that purpose or obtain the
benefit (i.e., performance) through the latter.
For example, if X delivers a suit length to Y, his tailor, to stitch a suit for him, X (bailor) will see
that the tailor does the needful in the desired manner.

2. Right to claim damages

In all cases of bailment, the bailor has the right to claim for damages against the loss, if any,
caused to the goods bailed due to the bailee’s negligence or misconduct

3.Right to claim compensation against unauthorized use of goods

A good example for this is this situation, A lets B use his car but with a condition that
only B shall drive. B allows C, a member of his family, to drive the car. C rides with care, but the
car meets with some accident. Now  B is liable to compensate for the damages caused.

4.Right to demand return of goods along with accretion to, if any

The bailor enjoys the exclusive right to have the goods bailed delivered back to him in safe and
sound condition after the time of bailment has expired or the purpose behind the bailment has
been achieved. Moreover, in the absence of any contrary term in the contract, the bailor is also
entitled to any accretion to the goods bailed if it occurred while the goods were in the study of
bailee.

For example, A leaves his brooding hen in the custody of B to be taken care of for a week. The
hen has hatched the chicks. A is entitled not only to the hen but also to the chicks.

The following are the duties of bailee

1. Take proper care of goods

it is the duty of a bailee to take care of goods bailed to him. Bailee should take care of these goods
as an ordinary man will take care of his goods of the same value, quality, and quantity.

Thus, if the bailee takes due care of goods then he will not be liable for any loss, deterioration of
such goods. Also, the bailee needs to take the same degree of care of goods whether the bailment
is for reward or gratuitous.
 However, the bailee is not liable for any loss due to the happening of any act by God or public
enemies though he agrees to take special care of the goods.

2. Not to make unauthorized use

the Bailee shall not make any unauthorized use of goods bailed. In case he makes any
unauthorized use, then bailor can terminate the bailment.

Bailor can also claim for damages caused to goods bailed due to unauthorized use of bailee

3. Keep goods separate

The bailee needs to keep the goods separately from his own goods. He should not mix the goods
under bailment with his own goods. In case bailee mixes the goods with his own goods without
the consent of the bailor, then:

i. Bailor also has an interest in the mixture.

ii. If the goods can be separated or divided, the property in the goods remains with both the
parties. But, the bailee bears the expenses of separation or any damages arising from the
mixture.

iii. If it is not possible to separate the goods, the bailee shall compensate the bailor for the loss
of goods.

4. Not set adverse title

A bailee must not set an adverse title to the goods bailed.

5. Return Goods
The duty of the bailee is to return the goods without demand on the accomplishment of the
purpose or the expiration of the time period. In case of his failure to do so, he shall be liable for
the loss, destruction, deterioration, damages or destruction of goods even without negligence.

6. Return increase or profits

A bailee shall return the goods along with any increase or profit accruing to the goods to the
bailor, in the absence of any contract to the contrary.

For example, A leaves a hen in the custody of B. The hen gets a chick. B shall deliver the hen
along with the chick to A.
The following are the rights of bailee

1.Bailee has right of indemnity

for making involvement in bailment contract, bailor can make bailee answerable.

2.Bailee has a right of lien

It is only particular lien that means he can exercise right of lien against those goods amounts is
due.

3.In times of need bailee has right to approach court of law

4.Right to claim contribution for expenses

If it is gratuitous bailment, bailee can claim only extra ordinary expenses, but in case of non
gratuitous bailment, bailee can claim both ordinary and extra ordinary expenses.

5.In case where bailee has given goods with defective title and bailee therefore comes across
suffering, then such situation bailee has right to get compensated by defective titles bailor.

6. Right to claim compensation for injuries arising out of faults present in goods.

If it is gratuitous bailment, bailee can make bailor answerable with regard to known faults only
but not to Unknown faults. In case of non gratuitous bailment, bailee can make bailor answerable
to known as well as unknown faults.