DUTIES OF A BAILOR

The various duties of a Bailor are as follows :

1. DUTY TO DISCLOSE DEFECTS [Sec. 151] :

a) In case of Gratuitous Bailment -

The Bailor must disclose all the known defects in the goods -
- which materially interfere with the use of them, or
- Expose the Bailee to extra-ordinary risks.
Effect of Non-Disclosure - If the Bailor does not disclose such defects and the
Bailee suffers some loss due to such defects, the Bailor is liable to Bailee for such
loss.

b) In case of Non-Gratuitous Bailment-

The Bailor must disclose all the faults whether known to him or not .

Effect of Non-Disclosure- If the Bailee suffers any loss due to any defect in the
goods, the Bailor is liable to Bailee for such loss whether he knows those defects
or not.

2. DUTY TO BEAR EXPENSES [Sec. 158] :

a) In case of Gratuitous Bailment - The Bailor must repay to the Bailee all the
necessary expenses ( whether ordinary or extraordinary) which the Bailee has
already incurred for the purpose of bailment.

b) In case of Non-Gratuitous Bailment - The Bailor must repay to the Bailee all
the extraordinary expenses which the Bailee has incurred for the purpose of
Bailment.
It is to be noted that ordinary expenses are to be borne by Bailee .

3. DUTY TO INDEMNIFY THE BAILEE IN CASE OF PREMATURE

TERMINATION OF GRATUITOUS BAILMENT [Sec. 159] :

A gratuitous bailment may be terminated by the Bailor at anytime even though the
bailment was for a specified time or purpose. The Bailor must indemnify the Bailee
in case the loss arising due to premature termination of the bailment exceeds the
benefits actually derived by the bailee.

4. DUTY TO INDEMNIFY THE BAILEE AGAINST THE DEFCTIVE TITLE

OF THE BAILOR [Sec. 164] :

The Bailor is responsible to the Bailee for any loss which the Bailee may suffer
because of the defective title of the Bailor.

Eg., Y asks X , his friend to give him horse for one hour. X, instead of his own horse
delivers Z’s horse to Y . While Y was riding, Z catches Y and hands him over to the
police. Y is entitled to recover from X all costs which he had to incur in getting out of
this situation.

5. DUTY TO RECEIVE BACK THE GOODS [Sec. 164] :

The Bailor must receive back the goods when the Bailee, in accordance with the
terms of bailment, returns the goods to him. If the Bailor refuses to receive back the
goods , he must repay to the Bailee all the expenses which the Bailee has incurred for
the safe custody of goods.

Eg., X lent a horse to Y for five days. On the expiry of five days , X refused to receive
back the horse but two days thereafter, he agreed to receive back the horse. During
these two days, Y incurred ₹100 as feeding expenses. X must repay ₹100 toY.

6. DUTY TO BEAR THE RISK OF LOSS [Sec. 152] :

The Bailor must bear the risk of loss of goods provided the Bailee has taken all
reasonable steps to protect the goods from loss.

Eg.,X lent a horse to Y for five days. On the third day, the horse became sick and was
hospitalised but died. Y is not liable to X for this loss.

RIGHTS OF A BAILOR
Basically , the duties of a Bailee are the rights of a Bailor and the Bailor can enforce
his rights against the Bailee by suing him in case of a default. The various rights of a
Bailor are as follows :

1. RIGHT TO CLAIM DAMAGES IN CASE OF NEGLIGENCE [Sec. 152]:

If the Bailee has not taken reasonable care (in the absence of any special contract) or
special care ( in case of special contract to that effect), the Bailor has a right to claim
damages for the loss, destruction or deterioration of the goods bailed.

 2. RIGHT TO TERMINATE THE CONTRACT IN CASE OF

UNAUTHORISED USE [Sec. 153] :

If the Bailee does any act in respect of goods bailed , which is inconsistent with the
conditions of the bailment, the Bailor has a right to terminate the contract of
bailment.

3. RIGHT TO CLAIM COMPENSATION IN CASE OF UNAUTHORISED

USE [Sec. 154]:

If the Bailee does not use the goods bailed according to the conditions of the
bailment, the Bailor has a right to claim compensation from Bailee for any damage
arising to the goods from or during such use of them.

4. RIGHT TO CLAIM SEPARATION OF GOODS IN CASE OF

UNAUTHORISED MIXTURE [Sec. 156] :

If the Bailee, without the consent of the Bailor mixes Bailor’s goods with his own
goods and the goods can be separated, the Bailor has a right to claim his goods after
separation.

5. RIGHT TO CLAIM COMPENSATION IN CASE OF UNAUTHORISED

MIXTURE OF GOODS WHICH CANNOT BE SEPARATED [Sec. 157] :

If the Bailee, without the consent of the Bailor mixes Bailor’s goods with his own
goods and the goods cannot be separated, the Bailor has a right to claim
compensation from Bailee for the loss of the goods.

6. RIGHT TO DEMAND RETURN OF GOODS [Sec. 160] :

The Bailor has a right to demand return of goods after the accomplishment of the
purpose or after the expiry of period of bailment.

7. RIGHT TO CLAIM COMPENSATION IN CASE OF UNAUTHORISED

RETENTION OF GOODS [Sec. 161] :

If the Bailee does not return or deliver the goods according to the Bailor’s directions,
after the accomplishment of purpose or after the expiry of period of bailment, the
Bailor has a right to claim compensation for any loss, destruction or deterioration of
the goods from that time.

8. RIGHT TO DEMAND ACCRETION TO GOODS [Sec. 163] :

In the absence of contract to the contrary, the Bailor has a right to demand any
increase or profit which may have accrued from the goods bailed.

 DUTIES OF A BAILEE

The various duties of a Bailee are as follows :

1. DUTY TO TAKE CARE OF THE GOODS BAILED [ Sec.151 & 152] :

a) In the Absence of any Contract- 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. If he has taken care as an ordinary prudent person, he is not responsible for
the loss , destruction or deterioration of of he goods bailed.

b) In case of Special contract - The Bailee is bound to take as much care as provided
by the term of contract. If he has taken the amount of care described in the special
contract , he is not responsible for the loss, destruction or deterioration of the goods
bailed.

It is to be noted that the bailee is bound to take care whether the bailment is
gratuitous or non-gratuitous.
Eg., X, who was going out of station delivered a horse to his friend Y for safe custody
for 5 days without any charge.The horse became sick on the second day but y did not
bother about any medical treatment of the horse. The horse died. Y was liable as he
failed to exercise reasonable care.

2. DUTY NOT TO MAKE ANY UNAUTHORISED USE OF GOODS [ Sec.

154] :

The bailee must use the goods bailed according to the conditions of the bailment. If
he does not use the goods bailed according to the conditions of the bailment, he is
liable to make compensation to the Bailor for any damage (due to any reason) arising
to the goods from or during such use of them.

3. DUTY NOT TO MIX BAILOR’S GOODS WITH HIS OWN GOODS [Sec.
155 to 157 ] :

The bailee must not mix Bailor’s goods with his own goods. In case of mixing, the
following provisions shall apply:

CASE PROVISON

1. In case of mixture with Bailor’s consent The bailor and the bailee shall have an interesting
[Sec.155] proportion to their respective shares in the mixture
thus produced.

2. In case of mixture without the Bailor’s consent
when the goods can be separated [Sec. 156]
3. In case of mixture without Bailor’s consent
when the goods cannot be separated [Sec. 157]
The property in the goods remains with the parties
respectively, but he bailee is bound to bear the
expenses of separation or division and any damage
arising from the mixture .
The bailor is entitled to be compensated by the
bailee for the loss of the goods.

4. DUTY TO RETURN THE GOODS [ Sec. 160 & 161] :

The bailee must return or deliver the goods according to the Bailor’s directions
without demand , after the accomplishment of purpose or after the expiry of period of
bailment. If he fails to do so , he is responsible to the bailor for any loss, destruction
or deterioration of the goods from that time.

Eg., X lent a horse to Y for 5 days. On the expiry of 5 days, Y did not return the horse.
The horse died without any fault on part of Y. Y was responsible to X for the loss.

5. DUTY TO RETURN ACCRETIONS TO THE GOODS [ Sec. 163] :

In the absence of any contract to the contrary, the bailee is bound to deliver to the
bailor , or according to his directions, any increase or profit which may have accrued
from the goods bailed.

Eg., A leaves a cow in the custody of B to be taken care of. The cow has a calf. b is
bound to deliver the calf as well as the cow to A.

6. DUTY NOT TO SET UP ANY ADVERSE TITLE .

The bailee must not do any act which is inconsistent with the title of the bailor. He
must not set up his own title or a third party’s title on the goods bailed to him.

 RIGHTS OF A BAILEE

Basically, the duties of a bailor are the rights of a Bailee, and a bailee can enforce his
rights against the bailor by suing him in case of default. The various rights of a bailee
are as follows :

1. RIGHT TO CLAIM DAMAGES [Sec. 150]:

a) In case of gratuitous bailment- If the bailor does not disclose the defect in the
goods which are known to him and the bailee suffers some loss due to such
defects , the Bailee has right to claim damages.
b) In case of Non-Gratuitous bailment- If the bailee suffers any loss due to any
defect in the goods , the bailee has a right to claim damages.

2. RIGHT TO CLAIM REIMBURSEMENT EXPENSES [Sec. 158]:

a) In case of Gratuitous Bailment- The Bailee has a right to claim reimbursement

of all the necessary expenses (whether ordinary or extraordinary) which he has
already incurred for the purpose of bailment .
b) In case of Non-Gratuitous Bailment-The Bailee has a right to claim
reimbursement of all the extraordinary expenses which the Bailee has already
incurred for the purpose of bailment.

3. RIGHT TO BE INDEMNIFIED IN CASE OF PREMATURE

TERMINATION OF GRATUITOUS BAILMENT [Sec. 159]: The bailee has
a right to be indemnified in case the loss arising due to premature termination of
the gratuitous bailment exceeds the benefits actually derived by him.

4. RIGHT TO RECOVER LOSS IN CASE OF BAILOR’S DEFECTIVE

TITLE [Sec. 164]: The bailee has a right to be indemnified in case he suffers any
loss because of the defective title of the bailor.

5. RIGHT TO RECOVER LOSS IN CASE OF BAILOR’S REFUSAL TO

TAKE THE GOODS BACK [Sec.164]: The bailee has a right to be indemnified
in case he suffers any loss because of Bailor’s refusal to take the goods back.

6. RIGHT TO DELIVER GOODS TO ANYONE OF THE JOINT BAILORS

[Sec. 165]: In the absence of any contract to the contrary, the bailee has a right to
deliver back the goods to anyone of the joint owners or may deliver the goods
back according to the directions of one joint owner without the consent of all.

7. RIGHT TO DELIVER THE GOODS TO BAILOR IN CASE OF

BAILOR’S DEFECTIVE TITLE [Sec. 166]: If the Bailor has no title to the
goods, and the bailee, in good faith, delivers them back to, or according to the

 directions of the bailor, the bailee is not responsible to the owner in respect of
such delivery.

8. RIGHT TO PARTICULAR LIEN [Sec. 170] :

Where the bailee has , in accordance with the purpose of the bailment, rendered any
service involving the exercise of labour or skill in respect of the goods bailed, he has,
in the absence of a contract to the contrary , a right to retain such goods until he
receives due remuneration for the services he has rendered in respect to them.

Eg., A delivers a rough diamond to B, a jeweller, to be cut and polished which is

accordingly done. B is entitled to retain the stone till he is paid for the services he has
rendered.

FINDER OF GOODS

Meaning of finder of goods :

Finder of goods is a person who finds some goods which do not belong to him.
For eg. If X finds a purse or a diamond ring or a watch, which does not belong to
him, he will be called as finder of goods.

Rights of a Finder of Goods:

The rights of a finder of goods are as follows :

1. Right to lien [sec. 168] : The finder of goods has a right to retain the goods
found until he receives the compensation fo trouble and expenses voluntarily
incurred by him-
a. To preserve the goods and
b. To find out the owners.

(It is to be noted that the finder of goods has no right to sue the owner for such
compensation)

2. Right to sue for reward [sec.168]: Where the owner has offered a specific
reward for the return of goods lost, the finder has a right to sue the owner for
such reward and to retain the goods until he receives it.

3. Right to Sell [sec.169] : A finder of goods has aright to sell the goods found
under the following circumstances :
i. If the owner cannot be found with reasonable diligence ; or
ii. If the owner when found refuses to pay the lawful charges of the finder; or
iii. If the goods are in danger of perishing or of losing the greater part of their
value; or

 iv. If the lawful charges of the finder in respect of goods found , amount to two-
third of it’s value.

Duties of a Finder of Goods:

A finder of goods is subject to the same responsibility as a Bailee. The duties of

finder of goods are as follows :

1. Duty to take reasonable care : The finder of goods must take reasonable care of
the goods found like a person of ordinary prudence.

2. Duty not to use for personal purpose: The finder of goods must not use the
goods found for personal purpose.

3. Duty not to mix with his own goods : The finder of goods must not mix the
goods found with his own goods.

4. Duty to find the owner : The finder of goods must find the owner of the goods
found and return those goods to him, subject to his right to lien.
For eg. X , a guest , found a diamond ring at a birthday party of Y. X told Y and few
other guests about it. He has performed his duty to find the owner. If he is not able to
find the owner, he can retain the ring as bailee.