Contract of Bailment by Sesa Gill at LexCliq

Meaning of bailment :
The term bailment is derived from French word ‘bailor’ which means to deliver. Bailment is a delivery of goods on condition that the recipient shall ultimately restore them to the Bailor or dispose of them according to the direction of the Bailee or dispose of them according to the direction of the Bailor.

Section 148 defines ‘Bailment’ as “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”.

Bailor:- The person delivering the goods is called ‘Bailor’.
Bailee:- The person to whom they (goods) are delivered is ‘Bailee’.

 Essential elements of bailment:


The bailment is always based upon the contract. there must be a contract between Bailor and Bailee. Though, the contract can be “Express” or “implied.”

2. Delivery of possession

This is a very essential element of the contract of [bailment]; there must be the giving of possession of the property by the Bailor to the Bailee to perform the purpose of bailment. If the possession is not given there is no [bailment].


There should be the purpose of the bailment or giving personal property to another person. The goods should be transferred by the Bailor to the Bailee for some purpose. Example: A gives his car to X to repair that car. Here the repairing of the car is the purpose of bailment.

4.Return of goods.

The goods transferred by the Bailor to the Bailee are transferred on the condition that it will be returned back to the Bailor after the fulfilment of the purpose of the bailment. However, the goods can be returned back to the Bailor in its original form or in altered form as the contract may be.

Types of bailment

1.A bailment for the benefit of Bailor and Bailee

The bailment whereby contracting the bailment, both the person i.e. Bailor and Bailee get benefits comes under this type. Example: the best example for this when a Bailor parks his car in the paid parking of Bailee. The Bailor will get the benefit to park his car and the Bailee will get the money for parking.

2.Only for the benefit of Bailor

Where the bailment gives benefit to the Bailor only is cover under this. Example: Free parking of the car of Bailor in the free parking lot of bailee.

3.Only for the benefit of Bailee

bailment which on gives the benefit to the Bailee only is comes under this. These will be no profit to the Bailor. Example: the best example of this is to read the books in the common library; here you are the Bailee, and the owner of the library is Bailor. You can read the book free of cost and gain knowledge for yourself, you will get benefits whereas the Bailor will get nothing.

Termination of bailment

1.On the expiry of the term of bailment: 

where it is already specified that the bailment will be for a specific period of time, the bailment will be considered ended on that date.

2. On the fulfilment of the object: 

the bailment will be considered ended when the object of the bailment has been fulfilled.

3.Destruction of goods: 

if the goods which were used in the bailment were destroyed due to any reason, the contract of bailment will be terminated.

4.On the death of Bailor or Bailee:

on the death or either of the party, the bailment will be terminated.

5.On the inconsistent act:

if either of the party failed to comply with the terms of the bailment, the bailment will be terminated.

6.By notice:

the bailment can be terminated by notice.

Rights and Duties of Bailee:

Duties of Bailee

1.Take proper care of goods

According to section 151, 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.

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

As per section 153, 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 as per Section 154.

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.

Rights of Bailee

1.Right to know Material faults in goods.

The bailee has right to know material faults in goods. According to Section150 of the Indian Contract Act, the bailor is bound to disclose to the bailee faults in the goods bailed, of which the bailor is aware and which materially interfere with the use of them or expose the bailee to extraordinary risk and if he does not make such disclosure he is responsible for damage arising to the bailee directly from such faults. Ex. A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for damage sustained.

2. Right to claim expenses of bailment

The bailee has right to claim expenses of bailment  Section 158 of the Indian Contract Act, 1872 confers on bailee right to recover expenses of bailment.

3.Right to claim lien for remuneration
The Bailee has right to claim lien for remuneration. The term ‘Lien’ means  right of one person to retain possession of goods owned by another until the possessor’s claims against the owner have been satisfied.


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