Bailment

Section 148 to171 of the Indian Contract act 1872,contain the provision relating to contract of bailment .

Bailment Originated from a French word Bailer which means to deliver .

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 .

Bailor :- The person who delivers the goodsBailee :- Person to whom they are delivered is

called the bailee

Essentials of Bailment

1. Delivery of possession 2. Delivery of goods should be upon a contract 3. Delivery of goods must be for a specific

purpose 4. Return of goods

1.Delivery of possession The first unique feature of bailment is that the

bailor must transfer his possession of goods to the bailee.

The goods should be put in the leagal possession of the bailee.

2.Delivery of goods should be upon a contract When a persons ‘s goods go into the possession of another

without any contract there is no bailment .However a finder of lost goods of another is considered to be a

bailee even though there is no real contract .The contract may be express or implied

3.Delivery of Goods must be for a specific purpose

U/S 148 provides , the delivery of goods from bailor to bailee must be for some purpose .

If goods delivered by mistake to a person , there is really no bailment .

4.Return of Goods Goods should be returned to the bailor or

disposed of according to his direction ,either in their original or in an altered form , when the purpose of bailment is over .

Duties of Bailee

A. To take care of the Goods U/S 151 provides , the bailee is bound by the

contract of bailment to return the goods when the purpose of bailment is fulfilled .He has to take care of the goods while they are in his possession .

He is responsible for any loss or damage caused to the goods by virtue of his negligence .

B.Duty not to mix with his own goods U/S 155 to 157 : deal with the provisions governing the

rights of the bailor and bailee when there is an inter-mixing of their goods .

The bailee has an obligation to keep the goods of the bailor separate from his own .

C.Duty to Return the Goods Duty of the bailee to return the goods without

demand , on the expiration of the time specified or when the purpose is accomplished .

D.Duty not to use bailed goods in an Unauthorised Manner

Bailee is under an obligation not to use the goods in an unauthorised manner or for an unauthroised purpose

If bailee does so , the bailor can terminate the bailment , and claim damages for any loss or damage caused by the unauthorised use

F.Duty to return any accretion of the goodsThe bailee must return to the bailor any

increase or profits which have accured from the goods bailed .

U/S 163 states that the bailor is entitled to the profits accruing from the goods , unless there is a contract to the contrary .

G.Duty of Finder of Lost Goods A finder of lost goods is a bailee and such he is

bound to take reasonable care of those goodsHe has to return the goods to the real owner if

the real owner pays his lawful charges

Rights of Bailee

1. Right to compensation (S.164)The bailee can claim compensation form the

bailor for any loss resulting to him by the reason that the bailor was not entitled to make the bailment .

2.Right to Expenses or remuneration (S.158)If the bailee is required by the terms of bailment

to keep or carry the goods or to do some work upon them for the benefit of the bailor , he (bailee) is entitled to recover his agreed charge

The bailee has a right to ask the bailor for payment of necessary expenses incurred by him for the purpose of bailment .

3.Bailee’s Right of Lien (S.170-171)Lein is the right to retain the goods by a person in

possession of the goods of another until his lawful claims in respect of the goods are satisfied

A.Particular Lien (Skill and labour are used) B.General Lien(right to retain the property belonging

to the other and in the possession of the person trying to exercise the lien in respect of any payment lawfully due to him )

Duties of Bailor

a) Duty of Disclosure In the case of gratuitous bailment , the bailor

must disclose all the known faults to the bailee and if he doesn’t make such disclosure , he is responsible for the damage arising to the bailee directly from such faults .

In case of bailment for reward the bailor is responsible irrespective of the knowledge of the faults in the goods bailed .

b)Duty to bear expensesIf the bailement is gratuitous and the bailee is in

no way benefited , the bailor has to bear the expenses .

In the case of bailment for reward , even thought the bailee is to bear the ordinary and reasonable expenses of bailment (eg,feeding of horse lent),

c)Duty to indemnify the bailee The bailor should indemnify the bailee for any

cost or costs which the bailee may incur because of the defective title of the bailor to the goods bailed .

AgencySec 182-238

Contract of AgencyIs a contract whereby one person (agent) is engaged or

employed to do an act for and on behalf of another (principal) or to bring that another person (principal) into legal relationship with third person .

Principal : Person engaging or employing another to do an act for him

Agent : Person so employed or engaged to do an act for another .

One can appoint an agent to do any work which he can do in his right

Exceptions i) If the act to be performed is of personal in

character (eg .Marriage ) one cannot appoint another to act for him .

ii) If the act to be performed is annexed to a public office (eg.that of a magistrate or police ) one cannot engage another to act for him

“Qui facit per alium facit per se”

What a person does by another , does it by himself

Who can employ an Agent ?S.183 : A person who has attained the age of

majority and who is of sound mind can employ as an agent .

A lunatic or a minor or a drunken person cannot employ an agent .

Who may be an Agent ?S.184 : Any person may become an agent . An agent is

acting for another .He need not have the capacity to contract .

Even a minor or unsound person can act as agent . If a person who is not competent to contract is

appointed as agent ,*Principal is liable to the third party for the acts of the

agent.At the same time agent is not responsible to the principal .

Consideration Not necessary

No consideration is necessary to create an agency .