Indian Contract Act , 1872

Presentation on Bailment

Introduction
Bailment is a concept of transfer of possession of goods
from one person to another for a specific purpose. It is
governed by the Indian Contract Act, 1872, under Sections
148 to 181. The Act defines bailment, the rights, and duties
of bailor and bailee, and the conditions under which the
bailment is created and terminated.
Defination of Bailment

According to Section 148 of the Indian Contract Act, 1872,

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.
Essential Elements of Bailment
• Delivery of Goods: There must be actual delivery of goods by the
bailor to the bailee. The bailee must have physical possession
and control over the goods.
• Purpose of Bailment: Bailment must be for a specific purpose,
such as storage, transportation, or repair. The purpose must be
lawful.
• Return or Disposal of Goods: The goods must be returned to the
bailor or disposed of according to the bailor's instructions once the
purpose of bailment is fulfilled.
• Agreement between Parties: Bailment must be based on a
contract or agreement between the bailor and bailee regarding the
terms and conditions of bailment.
Rights and Duties of Bailor
• Disclosure of Known Defects: The bailor must disclose any known
faults in the goods to the bailee.
• Payment of Necessary Expenses: The bailor must compensate
the bailee for any necessary expenses incurred during the
bailment.
• Compensation for Damages: The bailor is entitled to
compensation from the bailee for any damages caused to the
goods due to the bailee's negligence.
• Right to Terminate Bailment: The bailor has the right to terminate
the bailment at any time before the purpose is fulfilled, provided
that the bailee is given reasonable notice.
Rights and Duties of Bailee
• Duty of Care: The bailee must take reasonable care of the
goods entrusted to him.
• Return of Goods: The bailee must return the goods to the
bailor or dispose of them as per the bailor's instructions
once the purpose of bailment is fulfilled.
• Liability for Negligence: The bailee is liable for any loss or
damage caused to the goods due to his negligence.
• Right to Compensation: The bailee is entitled to receive
compensation from the bailor for any expenses incurred
during the bailment.
Types of Bailment
• Gratuitous Bailment: When the bailment is done without any
consideration, it is known as gratuitous bailment.
• Bailment for Reward: When the bailment is done for a reward or
consideration, it is known as bailment for reward.
• Bailment for the Benefit of Bailor: When the bailment is done for
the benefit of the bailor, it is known as bailment for the benefit of
the bailor.
• Bailment for the Benefit of Bailee: When the bailment is done for
the benefit of the bailee, it is known as bailment for the benefit of
the bailee.
Termination of bailment (sec 162)
• Fulfillment of Purpose: Bailment terminates when the
purpose for which the goods were bailed is accomplished.
For example, if goods were bailed for repair, the bailment
terminates when the repair is completed.
• Expiration of Time: If the bailment is for a specific period
of time, it terminates when that period expires.
• Mutual Agreement: Bailment can be terminated by mutual
agreement between the bailor and bailee. If both parties
agree to end the bailment before the purpose is fulfilled,
they can do so.
termination of bailment
• Loss or Destruction of Goods: If the goods are lost or
destroyed while in the possession of the bailee, the
bailment terminates.
• Unauthorized Use: If the bailee uses the goods in a
manner not authorized by the bailor, the bailment
terminates.
• Death or Insanity: If either the bailor or bailee dies or
becomes insane, the bailment terminates.