TABLE OF CONTENTS

INTRODUCTION..................................................................................1
THE DOCTRINE OF DUTY OF CARE..............................................2
EVOLUTION OF STANDARD OF CARE FOR A BAILEE IN
JURISPRUDENCE & COMMON LAW.............................................3
BAILEE’S DUTY OF CARE................................................................4
Under Indian Contract Act, 1872.................................................................................................4
1. Standards of care in present law.......................................................................................4
2. Extent of Duty...................................................................................................................6
3. Exemption From liability by virtue of a contract to contrary...........................................6
4. Duty of Bailee for Common Carriers................................................................................7
5. The defences the bailee cannot take:.................................................................................9
6. Whether the burden is on the bailee to disprove negligence on his part...........................9

Relating the Bailee’s Duty of care to tort law....................................11

1. Vicarious Liability..............................................................................................................11
2. Act of God as defence and strict liability...........................................................................12

Conclusion.............................................................................................12
INTRODUCTION

The word “Bailment” has been derived from the French word “ballier” which means “to
deliver”. According to Merriam Webster dictionary, Bailment is a transfer of custody of a piece
of property rather than a transfer of ownership of a piece of property1. Bailment has always been
a intrinsic part of commercial contracts in India and in common law.

As per the section 148 of Indian Contract Act, 18722, a bailment is a contract where one person
delivers goods to another person for some purpose. The person delivering the goods is the Bailor
and the person receiving the goods is the Bailee. After the accomplishment of the purpose, the
Bailee needs to return these goods to the Bailor or dispose of them according to the directions of
the Bailor.

Out of the contract of bailment there arise duties of Bailee and Bailor. One of most vital duties of
Bailee is the duty to take reasonable care of goods delivered.

This project focuses on Bailie’s duty of care, which has been given under section 151 & 152 of
Indian Contract Act, 18723. This project would try to explain and analyze the present status of
law on Duty of care taken by Bailee and how it has evolved over the period of time and would
also explore its relation with common law & torts. This would also shed light on how law has
taken its position for common carriers by relying on the judgments given by courts in India and
how bailee are seen as insurer of goods for carriers in contrast to Contract Act.

In tort law we can see how a employer can be held vicariously liable and for an act one can take
the defence of Act of God , this can be related to Bailee’s duty of care which is been Elucidated
further in this project.

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THE DOCTRINE OF DUTY OF CARE

We found the first mention of this concept at middle of 19th century, in a chapter of the
influential textbook An Institute of the Law Relative to Trials at Nisi Prius k which was titled
“Of Injuries Ari sing from Negligence or Folly’, suggested that: Every man ought to take
reasonable care that he does not injure his Neighbor; therefore wherever a Man receives any Hurt
through the Default of another, though the same were not willful, yet if it be occasioned by
Negligence or Folly, the law gives him an Action to recover Damages for the injury so
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sustained.”

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The legal basis of the Doctrine has its roots in Donoghue v Stevenson , the facts of the case are
On the 26 August, 1928, May Donoghue and a friend were at a café in Glasgow (Scotland).
Donoghue's companion ordered and paid for her drink. The cafe purchased the product from a
distributor that purchased it from Stevenson. The ginger beer came in a Dark bottle, and the
contents were not visible from the outside. Donoghue drank some of the contents and her friend
lifted the bottle to pour the remainder of the ginger beer into the tumbler. The remains of a snail
in a state of decomposition dropped out of the bottle into the tumbler which caused the plaintiff a
severe gastro-enteritis, while giving the Judgment lord Atkin in House of Lords , recognized a
new duty – duty to take Reasonable care which is as follows “A manufacturer of products, which
he sells in such a form as to show that he intends them to reach the ultimate consumer in the
form in which they left him with no reasonable possibility of intermediate examination, and with
the knowledge that the absence of reasonable care in the preparation or putting up the products
will result in an injury to the consumer's life or property, owes a duty to the consumer to take
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reasonable care.”

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EVOLUTION OF STANDARD OF CARE FOR A BAILEE IN
JURISPRUDENCE & COMMON LAW

At the outset in English law, obligation in bailment for a bailee was supreme. Thus, when
products were looted from a bailee who was accountable for its sheltered care, he was naturally
held at risk absolutely.7 The duty of a bailee for reward in English law is “to exercise the same
degree of care towards the preservation of the goods entrusted to him from injury which might
reasonably be expected from a skilled storekeeper, acquainted with the risk to be apprehended
either from the character of the storehouse itself, or of its locality.”8However a distinction was
made in Coggs v. Bernard9, in measuring the duty of care between bailees of two types, namely,
gratuitous bailee and bailee for consideration. The duty of a bailee for consideration is to
exercise the same degree of care towards the safeguarding of the goods kept with him which
might be expected from a reasonable prudent man responsible for the safety of such goods. Lord
Holt, in the same case said that, in case of duty of care for a gratuitous bailee, the latter has no
liability except for a case of gross negligence, the reason being that the bailee himself is not
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deriving any benefit out of the goods .

11
The standard of care principle was further elaborated in Joseph Travers & Sons Ltd v Cooper

Joseph Travers & Sons Ltd v Cooper

It is one of the leading judgement which set guidelines for establishing the concept of standard of
care. In this case, the defendant bailee who was in the possession of salmon fish lost the goods
on account of him being absent for a long time and finding good at the final stage of submersion
on the banks of Thames river. The defendant, although being clearly negligent claimed that they
should not be held liable as the firstly, plaintiff failed to establish any casual connection between
default of plaintiff and sinking of barge. Secondly, they said that the barge was sunk when it
became mud-sucked while resting on the river bed which couldn’t be rectified even by human
efforts.12 Although, it is clear that defendants filed to take reasonable care when the goods were
bailed to them but it is also established that defendants cannot be held liable for something which

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12
Ibid.
is not foreseeable. Furthermore, it is also clear from the facts that even proper care from the
bailee would not have prevented the damage which was clearly held by the judge correctly.

Over the time though Common law favored the view that duty of every bailee is to take
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reasonable care, and not to convert them. The Court of Appeal in Houghland v R.R. Low
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(Luxury Coaches Ltd) said that the standard of care of a bailee was that of reasonable care
and was same, irrespective of the bailment being gratuitous or for reward.

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BAILEE’S DUTY OF CARE
Under Indian Contract Act, 1872

Under the Indian Contract Act, the duty of care for a bailee applies across the board uniformly in
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all cases of bailment and it is provided for in the S.151-152.

1. Standards of care in present law

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As per the S.151 , in all cases of bailment, 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.

Under Contract Act, the duty of care in the case of a bailee is uniform, whether it is gratuitous, or
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for hire, or for gain, it is the duty to take care of goods as a prudent man, whether he is a
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Government official attaching goods and keeping them in custody; a gratuitous bailee ; or a
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Pawnee. And it makes no distinction on the nature of bailment whether it is gratuitous or for
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reward

In judging the question of the amount of care to be taken by the bailee, it is proper to take note of
the opportunities and means that are properly and reasonably available to the bailee for
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safeguarding the interests of the Bailor .

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The case of Shipping Corps of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd , establishes
how a bailee cannot be exempted from the liability if he has not obligated his standard duty of
care, the facts of the case were, A carrier ship was carrying some cleansing solvent placed in
drums, these drums were kept in the hold of the ship. Ship was passing through Stretch of
Atlantic ocean , adjacent to South-West Coast of Australia , the stretch is notorious for its stormy

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weather conditions , while passing through this there were vibrations and jerks due to bad
weather because of which Drums which were not properly fastened collided and spilled and
significant portion of cleansing solvent was lost , owner of the solvents sued the ship as bailee
and carrier ship said it owes a reasonable duty of care under normal weather conditions and
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cited Hague Rules , Article (iv) Rule 2( c) , for perils of the sea carrier will be immune for any
loss occurring to the goods. This rule was incorporated in Australian law as well. The Concept
of forseeabilty was followed in determining duty of care that whether it could have been averted
by taking reasonable duty of care and since the intensity of weather conditions was not
unforeseeable , it could have been easily voided for the purpose of determination Captain Drones
and Captain Goodson were appointed to examine how the goods were kept and they affirmed
that if the goods were started and fastened properly , damage could be prevented , Court said it
was negligence of the carrier and bad weather was only a cooperative / Contributory factor .

Principle that was given by Justice Stephen in this case was:

“The sole Question Must be whether the negligence or a breach of a fundamental Contractual
obligation is the cause of damage. If the Question is answered in Affirmative, the owner of the
carrier is liable, though there were other Cooperating Clauses. Example- Perils of the sea, fire
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and similar matters.”

The duty of care also depends on type and quality of goods. If the bailee is not negligent such as
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in the Shantilial case, where the bailor’s goods were lost due to floods, then the former is not
held to be liable. The Allahabad High Court, in the same case has said, “no cast-iron standard
can be laid down for the measure of the care due from him and the nature and amount of care
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must vary with the posture of each case.”

Even when the bailee’s goods are stolen, the onus is on him to show that he made all reasonable
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efforts to retrieve them; otherwise, he will be liable for negligence

The bailee’s duty does not end with the expiry of the contract of bailment. After the expiry of the
contract, it is the bailee’s duty to ask the bailor to collect the goods and if need be serve a notice
of sale to the bailor. He will be liable for the safety of the goods as long as they are in his
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possession

2. Extent of Duty

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In case of Lakhichand Ramchand v GIP Rly C , the Extent of duty of care has been set, the
court in the present case said, “The obligation of a bailee includes not only the duty to take all
reasonable precautions to obviate the risks, but also the duty of taking all proper measures for the
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protection of the goods when such risks had already occurred”

3. Exemption From liability by virtue of a contract to contrary

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S. 152 add that if the care given under the above section is taken, then the bailee will not be
liable unless, there is a contract to the contrary.

The words, “in the absence of any contract” in S.152 may indicate that the law-maker’s objective
was to enable the bailee to limit the extent of his liability. In the Bombay Steam Navigation Co v
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Vasudev Baburao case, the court held that the section does not explicitly prohibit a person to
reduce his scope of liability and even if it were so, it would be curbing the liberty of people to
enter into a contract of bailment of their choice.
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Rangoon High Court in the case of Fut Chong v. Maung Po Cho , said that if bailor has agreed
to the condition voluntarily, he should be bound by Exemption or limitation of liability. The Law
commission of India, too, in its thirteenth report, had taken cognizance of this view and
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recommended to amend S.151 to enable reduction of liability of the bailee

The opinion of Hugh Evander Willis that all types of bailees should be allowed to exempt
themselves from liability for negligence, unless prohibited by special statutory enactments was
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also based on the principle of freedom of choice of contract.

Although the above Interpretation of S152 can be looked upon as contradictory to Minimum duty
of care prescribed under S151.When both the sections are read together, a plausible
interpretation can be that S.151 requires the bailee to have a minimum standard of care and if
that standard of care has not been enhanced with the help of a contract as given in S.152, then the
bailee will only be liable when he fails to meet the obligations under S.151. This interpretation
also hints at the unjust and unreasonable notion of allowing a bailee to escape liability in cases of
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his negligence. As can be seen in the case of M. Siddalingappa v T. Nataraj , A dry cleaner
could not repudiate himself on the basis of exemption clause printed on the back of receipt, and
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clause said that the clothes are given at owner risk, after the clothes were lost, owner sued bailee,
court in this case held that such exemptions clause are not permitted as it would lead bailee out
of Contractual liability, and bailee have to follow minimum duty of care.
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In RS Deboo v M.V. Hindlekar , a stipulation sought to restrict the liability of a launderer in
case of loss or damage to goods to lesser of the amount of 50% of the price of goods, or 20 times
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the laundry charges. This clause was held opposed to public policy.

Nevertheless, when the bailee has enhanced his liability by a special contract, then the standard
of care will measured according to S.152 and the bailee cannot take the defence of adhering to a
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minimum standard of care as per S.151 .

4. Duty of Bailee for Common Carriers

The provisions of sections 151 and 152 of the Contract Act embody in effect the Common Law
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rule as to the liability of bailees other than common carriers . The measure of care required of
these bailees in respect of goods entrusted to them was the same as a man of ordinary prudence
would take of his own goods; in other words, the liability was one for negligence only, in the
absence of special contract. Common carriers and innkeepers, on the other hand, were under the
common law liable as insurers of goods; i.e. they were responsible for every injury to the goods
occasioned by any means whatever, except only the act of God and the King’s enemies.
Therefore, the mere non-proof of delivery of goods and injury thereto, unless caused by the act
of God or the King’s enemies, was sufficient to entitle the plaintiff to compensation without
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proof of negligence on the part of the defendant .These principles of the English Common Law
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applied in India , but they were subsequently modified by legislation as respects common
carriers, and the Carriers Act, 1865, which now enables a bailee of this class to limit his liability
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by special contract in the case of certain goods, but not so as to get rid of liability for
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negligence.

High Courts in India have interpreted contradictorily as to whether the liability of common
carriers was still further reduced by the enactment of sections 151 and 152 of the Contract Act,
so as to render them liable for negligence only as in the case of other bailees, this came up first
before the High Court of Bombay in 1878, where it held that the definition of “bailment” in
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section 148 was large enough to include bailment for carriage,46 and that the provisions of those
sections, therefore, applied to common carriers, so as to supersede altogether the stringent rule of
the English Common Law47 , the High Court of Calcutta have taken a different approach in an
subsequent matter and held that the liability of common carriers was not affected by the Contract
Act.48

Later, the Privy Council held, approving the Calcutta decision, that the duties and liabilities of a
common carrier in India are governed by the principles of the English Common Law in
conjunction with the provisions of the Carriers Act and that, notwithstanding some general
expressions in the chapter on bailment’s, the responsibility of a common carrier is not within the
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Contract Act

After reviewing the decisions of the various High Courts, the Supreme Court held that the
position of law has to be taken to be fairly well settled that the liability of a common carrier
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under the Carriers Act, 1865 is that of an insurer. This absolute liability is subject to two
exceptions: an act of God and a special contract which the carrier may choose to enter with the
customer

5. The defences the bailee cannot take:

The bailee cannot take recourse to the defence that others too would have acted in the same way.
The director of a cooperative society who was entrusted with cash stored in the usual
conventional manner, but the court in this case found that the conventional manner was not
reasonable and held the bailee liable for negligence.51

If the bailee’s goods are stolen along with the bailor’s he cannot just take the defence of acting to
his best possible ability or take the defence of generally being a negligent man, unless the bailor
knew of that fact, but even then, reasonability of the degree of care in the given case would be
explored.52

Thus we see that in all cases, test of an ordinary prudent man will be applicable

6. Whether the burden is on the bailee to disprove negligence on his part.

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For establishing whether the onus of proving non negligence is on bailee, let’s have a look a look
at the following cases;

In Hollier v. Rambler Motor ltd.53, Plaintiff had given his car to defendant for Conducting some
repairs. Car was kept in Defendant’s Garage, while it was kept in, due to negligence of defendant
, car got fire .while giving the car there was a contract wherein a bill stated that car is given on
owner’s risk and Defendant does not take any responsibility for damage . Plaintiff sued
Defendant for negligence and defendant took defense of the contract signed and the blanket
exemption therein . Court in this case set two conditions that must be fulfilled these are:

(i) Between the plaintiff and defendant this transaction has become an Established
and accepted commercial practice.
Were these parties familiar with each other, how many times they dealt with each
other because this would show that plaintiff knew about the risk and the
consequences of dealing?
If the frequency of transaction is on higher side , then Defendant can be
exempted, So Plaintiff must be aware about risks. This is subjective and it does
not lay down what frequency.
In this case the car was given 4 times in 5 years. Court said this does not give the
requisite level of familiarity, it is not sufficient to exempt Defendant
(ii) The exemption must be clear by worded and specific , i.e. you cannot have a
blanket exemption clause (for all damages) , this was also not fulfilled .

Both these conditions are cumulative. Court held that when there is a Dispute for want of
care resulting in damage, we will always assume that bailee was negligent, i.e. Bailee has the
Burden of proof as he has the possession so the level of knowledge is higher and hence the
accountability is higher and Bailee has to establish that he was negligent.

In the case of Central Bank of India v. Grains and Gunny Agencies and ors. 54, it was given
that the loss or damage entrusted to a bailee is prima facie evidence of negligence and the
burden of proof to disprove negligence lies on the bailee. This is because the bailee being in
the possession of goods would only know how the loss was caused. if he proves exercise of
due care and that he was not negligent and in spite of this, the loss has occurred, he would
be absolved of all responsibility . The onus is on the bailee to prove that he had taken the
necessary precautions and care required of him under the law and that he had taken
reasonable care to avoid the damage which was reasonably foreseeable or all reasonable
precautions to obviate the risks which could be reasonably apprehended. The onus is on the

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 bailee to prove absence of any causal connection between a negligent act on his part and the
loss or damage to the goods Bailed.

So from the above decisions it is clear that burden of proof lies solely on Bailee to disprove
negligence, but there is one Exception, in which case the burden of proof on bailee is slightly
lower, this was recognized in River Steam Navigation Co. v. Choutmull Doogar and ors. 55 ,
court said if danger emanated from an unknown source in that case burden of proof shall
reduce , and there are 2 stages of evidentiary aspect;

(i). you place evidence before the court

(ii). You draw inference out of the evidence

Burden of proof is just to place evidence before the court and the Bailor will have to draw
inferences out of evidence.

In another Case of Calcutta Credit Corp. ltd. v. Prince Peter of Greece 56, here a car was
given to motor garage for repair , area where repair was conducted was fenced with wooden
Walls , having oil, petrol, thinner, etc, in vicinity , some workers were cooking their meal ,
that moment there was a spark ,and substantial part of garage was damaged and car was also
damaged , car owner filed a suit , Garage owner said the contract was regarding repair and
the duty of care should also be confined to repair , in which there is no negligence , Court
said some special duty should be there , if the contract is of such nature that there is
requirement of a specialized knowledge or special duty of care , so the duty of care will be
higher on part of bailee and what happens on and around the car is also important . Thus
ensuring the safety of car from surrounding elements is also part of duty of care and bailee
was held liable.

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RELATING THE BAILEE’S DUTY OF CARE TO TORT LAW

1. Vicarious Liability

In torts the concept of vicarious liability of principal to agent can be seen as allegorical to
Bailee’s duty of care.

What is vicarious liability theory?

Vicarious liability occurs “where the defendant, generally one conducting a business, is
made liable (though without personal fault) for the bad conduct of someone else, generally
his employee.” Vicarious liability does away with ““personal actus reus,” rendering one
liable for the acts of subordinates or agents.57

Vicarious liability is a legal doctrine that assigns liability for an injury to a person who did
not cause the injury but who has a particular legal relationship to the person who did act
negligently

The doctrine of respondeat superior (Latin for "let the master answer") is based on the
employer-employee relationship. The doctrine makes the employer responsible for a lack of
care on the part of an employee in relation to those to whom the employer owes a duty of
care. For respondeat superior to apply, the employee's negligence must occur within the
scope of her employment.

The employer is charged with legal responsibility for the negligence of the employee because
the employee is held to be an agent of the employer. If a negligent act is committed by an
employee acting within the general scope of her or his employment, the employer will be
held liable for damages. For example, if the driver of a gasoline delivery truck runs a red
light on the way to a gas station and strikes another car, causing injury, the gasoline delivery
company will be responsible for the damages if the driver is found to be negligent. Because
the company will automatically be found liable if the driver is negligent, respondeat superior
is a form of Strict Liability.

Similarly we see the responsibility of bailee doesn’t add with employing men in his service
with reasonable care58. As Employers are liable for the negligent act of their Employee ,
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 Bailees are liable for negligence on the part of their agents or servants committed in the
course of their employment, about the use and custody of the thing bailed, but not on account
of an unauthorized act done outside the course of their employment59

2. Act of God as defence and strict liability

Act of God - An Act of God may be defined as a direct act of nature without intervention of
human beings, i.e., an event or circumstance which happens or occurs only due to natural force
and not because of human efforts. Whether such act or event is terrible, horrible, violent or
sudden, but it must be a direct” result of some natural phenomenon. To give more objectivity to
the expression ‘act of god’, it may be submitted that ‘an act which cannot be foreseen or if
foreseen, it cannot be avoided by any amount of human care, diligence, skill or any sort of
human ingenuity whatsoever. Such eventualities are ‘an act of god’ and has epiphenomenal
factors such as tempest, storm, tornadoes, gale, hurricane, earthquake, rainfall, tidal waves,
lightning, cloudburst, volcanic eruptions, landslide and frost etc.60

In tort law, strict liability is the imposition of liability on a party without a finding of fault (such
as negligence or tortious intent). The claimant need only prove that the tort occurred and that the
defendant was responsible.

In context of strict liability, the significant relevance of the act of God is that it has been regarded
as one of the potential limitations on the principle of strict liability ever since the principle came
into prominence61

As in S.151 of Indian Contract Act, 1872 62it has been given that bailee must exercise a duty of
care and with diligence must avoid an event which is forseeable but an act of god is something
which cannot be presumably foreseen or predicted thus a bailee couldn’t have taken reasonable
or prudent measures in these cases, thus bailee wasn’t held liable.

Similarly in tort law one can take a defence of act of god to escape strict liability.

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CONCLUSION

With this, I have maintained to show how the doctrine of ‘Reasonable care’ came into existence
and how it has evolved over the time in common law and English jurisprudence. The degree of
liability first in English law was absolute which has been transformed to strict. Though, liability
to take standard duty of care in India has always been Uniform.

This is an assessment on how the courts have decided on this matter and how under the Carrier
Act the bailee is treated as an insurer of goods and has higher degree of duty.

The standard of care expected of a bailee as given in S.151 is that of an average prudent man
taking care of his goods of the same type in the similar circumstances. Though the words in this
section might be apparently subjective, there are numerous case laws to establish the standard of
care of a bailee. In addition, the circumstances prevailing in a given case will also play a major
role in determining the Bailee’s liability. Finally the jury is still out on the fact weather the
standard of care can be diminished with help of a special contract. Courts have the discretion to
limit the liability of the bailee but it is a unanimously accepted fact that liability of bailee can be
enhanced with help of a special contract. The legislature needs to define certain standards to
measure the duty of care so that it doesn’t create a situation of injustice towards any of the
parties whether it be gratuitous bailment or bailment for reward. Further, we need to eliminate
the discrepancies under both § 151 and 152 as it has created a stir on position of law. Both § 151
& 152 should be read together and position of 152 should be determined as it leaves much scope
for a very wide interpretation regarding liability arising out of special contracts. Also, scope of
increasing and decreasing liability under § 152 should be ascertained to establish a firm position
of law in order to prevent further controversies

I have further delve into the area as to determine who has burden to show negligence or non
negligence and after analyzing the judgments it is apprehended that The burden, is on the bailee
to show that he acted as a reasonable prudent man or loss had happened to the goods, irrespective
of his negligence. We can find a relation to bailee duty of care in tort law as well which has also
been given attention

The different opinions have been juxtaposed. To conclude, we can say that bailee’s duty of care
and after liability is a situation based concept and is a question of what, in the final analysis, the
bailee has promised to do.