Download VTU (Visvesvaraya Technological University) MBA 2nd Semester (Second Semester) 17MBA24-Business Law BL Module 1 Important Lecture Notes (MBA Study Material Notes)
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
Factors: An agent entrusted with the possession of goods for the
purpose of selling on behalf of his principal.
If goods are delivered for some other purpose, no GL
Wharfingers: A person who owns or keeps a wharf.
Wharf: Place, adjoining to water, used for loading and unloading
goods from ships ? not to store
Attorneys (solicitor) of a HC : A person who acts legally for
another ? lien on all the papers and documents of the client
provided they are delivered in professional capacity
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
Factors: An agent entrusted with the possession of goods for the
purpose of selling on behalf of his principal.
If goods are delivered for some other purpose, no GL
Wharfingers: A person who owns or keeps a wharf.
Wharf: Place, adjoining to water, used for loading and unloading
goods from ships ? not to store
Attorneys (solicitor) of a HC : A person who acts legally for
another ? lien on all the papers and documents of the client
provided they are delivered in professional capacity
Finder of goods:
A person who finds the goods belonging to some other person
and takes them in his position.
A person finding goods not bound to take ? but if picks up and
takes its possession, he becomes bailee
Duties and rights
FirstRanker.com - FirstRanker's Choice
Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
Factors: An agent entrusted with the possession of goods for the
purpose of selling on behalf of his principal.
If goods are delivered for some other purpose, no GL
Wharfingers: A person who owns or keeps a wharf.
Wharf: Place, adjoining to water, used for loading and unloading
goods from ships ? not to store
Attorneys (solicitor) of a HC : A person who acts legally for
another ? lien on all the papers and documents of the client
provided they are delivered in professional capacity
Finder of goods:
A person who finds the goods belonging to some other person
and takes them in his position.
A person finding goods not bound to take ? but if picks up and
takes its possession, he becomes bailee
Duties and rights
Pledge
? A special kind of bailment
? Goods are delivered as a security for a loan or for the
fulfillment of an obligation
? Defined u/s 172
? ?The bailment of goods as security for payment of a debt or
for performance of a promise, is called pledge. The bailor in
this case is called the pawnor (pledger). The bailee is called
the pawnee (pledgee)?.
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Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
Factors: An agent entrusted with the possession of goods for the
purpose of selling on behalf of his principal.
If goods are delivered for some other purpose, no GL
Wharfingers: A person who owns or keeps a wharf.
Wharf: Place, adjoining to water, used for loading and unloading
goods from ships ? not to store
Attorneys (solicitor) of a HC : A person who acts legally for
another ? lien on all the papers and documents of the client
provided they are delivered in professional capacity
Finder of goods:
A person who finds the goods belonging to some other person
and takes them in his position.
A person finding goods not bound to take ? but if picks up and
takes its possession, he becomes bailee
Duties and rights
Pledge
? A special kind of bailment
? Goods are delivered as a security for a loan or for the
fulfillment of an obligation
? Defined u/s 172
? ?The bailment of goods as security for payment of a debt or
for performance of a promise, is called pledge. The bailor in
this case is called the pawnor (pledger). The bailee is called
the pawnee (pledgee)?.
Essential features of a valid pledge
1. Delivery of possession
2. Delivery should be upon a contract : when
3. Delivery should be for the purpose of security
4. Delivery should be upon a condition to return
5. Only of movable goods
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Bailment and Pledge
Bailment (derived from French word ?bailer?) : Delivering a thing
under a contract for return at a specified time or specified
conditions.
? e.g. giving a TV to a mechanic for repair ( a contract of
bailment)
Pledge: Delivering of goods as security for a loan or fulfillment
of an obligation
? Special types of contracts and Sections 148 to 181 deal
? Contract Act does not deal with all types of bailment and
pledge ? It only deals with general principles
? There are separate Acts for special bailments and pledges
Bailment
In which the personal property of one person, temporarily, goes
into the possession of another person for some specific
purpose.
Ownership with : one person who delivers
Possession with: another person who receives for a purpose
So, change of possession only
Definition u/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 directions of the person delivering them?
Two parties:
Bailor: who delivers
Bailee: To whom the goods are delivered
Essential features:
1. The delivery of possession
Delivery may be of two types:
a. Actual delivery: Handing over physical possession of the
goods
b. Constructive delivery: Only effect of putting the goods into
the bailee?s possession
Note: Delivery of possession and custody of goods
Bank and a customer
2. The delivery should be on the basis of some contract.
The contract may be express or implied
The bailment may also arise sometimes even without a contract
( Finder of the goods) ? accepted by SC in
(State of Gujarat v. Memon Mohd. -1967)
3. The delivery should be for some purpose
Not necessary that the purpose should be expressly stated
4. The delivery should be upon a condition to return ? Goods
may be returned in its original form or in its altered form
Note: The bailment can be made only of movable goods.
Duties of a bailor
1. Duty to disclose faults in the goods bailed
a. Duty of a gratuitous bailor : known and which are material
? Otherwise liable for damages
b. Duty of a non-gratuitous bailor: see that reasonably safe ?
liable whether known or not known
2. Duty to bear extraordinary expenses
3. Duty of indemnifying the bailee
? Arises when bailor has no title to the goods
Bailor title may be defective:
? At the time of bailment
? At the time of receiving back the goods from the bailee
? At the time of giving directions in respect of the goods bailed
? Premature termination of gratuitous bailment
4. Duty to receive back the goods
Duties of a bailee:
1. Duty to take reasonable care of the goods bailed
? If required degree of care is taken then not liable for loss
? Standard of care is same in all types
? Measure of care depends on nature, quality, quantity, and
value of the goods
? Bailee not liable, if events are beyond the control of bailee
? If stolen, reasonable steps otherwise liable
? Burden of proof on bailee
? Loss due to the negligence of the servant
2. Duty not to make unauthorized use of the goods bailed
If unauthorized use : can be voidable and terminated
liable for all losses even after utmost care
3. Duty not to mix the goods bailed with his own goods
a. Mixing the goods with bailor?s consent
b. Mixing the goods without the bailor?s consent and the
goods are separable
c. Mixing the goods without the bailor?s consent and the
goods are not separable
4. Duty to return the goods : without waiting for demand from
the bailor ? if failed, bailee is responsible for the any loss
? Need not be returned, if the bailee loses the possession by
operation of law
? If joint bailors
5. Duty to return the increase in the goods bailed
6. Duty not to set up an adverse title (denial of the title) against
the bailor : Bailee cannot say to the bailor that at the time of
the baliment, he had no authority to bail
Rights of the bailor
Duties of the bailee = Rights of the bailor
Additional rights:
1. Right to terminate the bailment
2. Right to demand back the goods lent gratuitously at any
time: However, if loss by bailee
3. Right to file a suit against any wrong-doer
4. Right to file a suit for the enforcement of the duties
imposed upon a bailee
Rights of a bailee
Additional rights:
1. Right to compensation : Due to defective title
2. Right to return the goods to anyone of the joint bailors
3. Right to recover agreed charges : if not agreed, then..
4. Right to file a suit to decide the title of goods bailed (suit is
called interpleader suit)
5. Right to file a suit against the wrong-doer
6. Right of lien : Right to retain the possession until charges
are paid ? Two types: Particular and General
Particular lien:
? Right to retain only those particular goods in respect of which
the charges are due.
? Generally, bailee has this lien only
? Condtions: (assignment)
? Bailee loses the lien, if possession is lost
General lien:
? Right to retain any goods bailed for any amount due
Right of general lien is a privilege and is given only to certain
kinds of bailees:
a. Bankers
b. Factors
c. Wharfingers
d. Attorneys of a High Court
e. Policy brokers
Factors: An agent entrusted with the possession of goods for the
purpose of selling on behalf of his principal.
If goods are delivered for some other purpose, no GL
Wharfingers: A person who owns or keeps a wharf.
Wharf: Place, adjoining to water, used for loading and unloading
goods from ships ? not to store
Attorneys (solicitor) of a HC : A person who acts legally for
another ? lien on all the papers and documents of the client
provided they are delivered in professional capacity
Finder of goods:
A person who finds the goods belonging to some other person
and takes them in his position.
A person finding goods not bound to take ? but if picks up and
takes its possession, he becomes bailee
Duties and rights
Pledge
? A special kind of bailment
? Goods are delivered as a security for a loan or for the
fulfillment of an obligation
? Defined u/s 172
? ?The bailment of goods as security for payment of a debt or
for performance of a promise, is called pledge. The bailor in
this case is called the pawnor (pledger). The bailee is called
the pawnee (pledgee)?.
Essential features of a valid pledge
1. Delivery of possession
2. Delivery should be upon a contract : when
3. Delivery should be for the purpose of security
4. Delivery should be upon a condition to return
5. Only of movable goods
DIFFERENCE BETWEEN BAILMENT AND
PLEDGE
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This post was last modified on 18 February 2020