Lecture-8

Law of Contracts-II
(Law of Bailment)

Contract of Bailment

Date: 17/07/2013 Slide-1

 Lecture-8
Law of Contracts-II
(Law of Bailment)
‘Bailment’, ‘Bailor’ and ‘Bailee’ (S. 148)
• 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 direction of the
person delivering them. The person delivering the goods is
called the ‘bailor’. The person to whom they are delivered is
called the ‘bailee’.
• Explanation: If a person already in possession of the goods
of other contracts to hold them as a bailee, he thereby
becomes the bailee, and the owner becomes the bailor of
such goods, although they may not have been delivered by
way of bailment.
Date: 17/07/2013 Slide-2
 Lecture-8
Law of Contracts-II
(Law of Bailment)

Essentials
1.Delivery of possession of ‘goods’
2.Upon a contract
3.For some purpose
4.Returned or otherwise disposed of according to
the direction of the bailor

Date: 17/07/2013 Slide-3

 Lecture-8
Law of Contracts-II
(Law of Bailment)
Delivery of Possession
• Modes of Delivery (S. 149)
o Actual
o Symbolic
o Constructive or fictitious or by attornment/ acknowledgement
 Ultzen v Nicolls (1894) 1 QB 92. [A, 542] customer went to
restaurant- waiter took his coat- restaurant keeper liable as a
bailee
 Kaliaperumal Pillai v Visalakshmi AIR 1938 Mad 32. [A, 542] lady
handed over jewels to goldsmith for melting and making new
jewels- goldsmith used to give her half made jewels at the end of
every day- lady kept the jewels in a box in goldsmith’s room, key in
her possession- jewels lost- bailment over when jewel returned at
end of day- goldsmith not liable
Fazal v Salamat Rai (1928) 120 IC 421. [A, 543] defendant
held plaintiff’s mare under execution of decree- plaintiff
satisfied decree- court ordered redelivery of mare-
defendant refused to do so until maintenance charges were
paid- mare got stolen- relationship of bailment established
after passing of delivery order- bailee (defendant) liable
NR Srinivasa Iyer v New India Insurance Co (1983) 3 SCC
458: AIR 1983 SC 899. [A, 543] owner of car involved in
accident- insurance policy- went to garage on behalf of
insurance company- loss of car due to fire- HELD that
insurance co. was bailee and garage owner sub-bailee

Date: 04/07/2012 Slide-1

• Bank Lockers
Atul Mehra v Bank of Maharashtra AIR 2003 P&H 11. [B,
473]
National Bank of Lahore v Sohan Lal AIR 1962 Pun 534. [B,
469] locker- key only with customer- bank manager
fraudulently filed the levers of the lock so that it can be
opened without a key- valuables from the lock missing-
LIABILITY AS BAILEE- contended that no bailor bailee
relationship because only customer could open the lock-
HELD- in spite of the said contention, locker was opened- in
possession of bank- bank held vicariously liable

Date: 04/07/2012 Slide-1