Rights and Duties of Bailor

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. A lien is a legal right against the assets that are used as collateral to satisfy the debt and it also comes under the Rights of Unpaid Seller. If the bailor refuses to repay the expenses incurred by the bailee for the contract, it is the right of the bailee to retain the goods and securities in his possession until the bailor pays the expenses. The Bailor has the duty to take back his goods after the expiry of the time or the fulfilment of the purpose for which the good was bailed. In case the Bailor fails to claim back the good, it is his responsibility to compensate the Bailee for the expenses incurred because of the Bailor’s delay. The bailee must return the property to the bailor as soon as possible once it is no longer needed.

For the most part, to the extent that the bailment is voluntary and that the bailee benefits from the bailment, the bailee may owe a greater duty of care. In the contract of bailment, the ownership of the goods remains only in the hands of the Bailor and only the possession is provided to the bailee. In this article, we will define bailment and its essentials, what is a bailment, the essentials of bailment, various kinds of bailment, and the rights and duties of bailor and bailee in bailment. The bailee, on the other hand, has a duty to take reasonable care of the goods while they are in their possession. This includes taking steps to protect the goods from damage, theft or loss. The bailee must also ensure that the goods are used only for the purpose specified by the bailor.

  • Following completion of the purpose for the bailment, the bailee has a responsibility to return the property to its owner.
  • Raman Iron Foundry claimed that the Railways were responsible for the loss of their goods, and filed a suit for damages.
  • In all other situations, failing to return the property as scheduled or agreed, the bailee may be liable for the tort of conversion.
  • Suraj lends some books to Kunal for 10 days and it is to be returned after the completion of 10 days.

Bailor is expected to bear all the extraordinary expenses but the bailee is bound to bear all the ordinary and reasonable expenses of the bailment. Moreover, it is necessary for the bailee to follow the instruction given by the bailor for the purpose of the return of the good if any. 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. It is a right to detain any property belonging to another person which is in the possession of the person exercising the lien in respect of any payment lawfully due to him.

Non-Gratuitous Bailment

What are the rights and duties of bailor and bailee- The word ‘Bailment’ is derived from the french word ‘Balllier’. Generally, the contract of Bailment is the delivery of goods for a temporary period and it shall be returned after the accomplishment of the specific purpose. If the property is damaged or lost while in the custody of the bailee, the bailor has a right to seek compensation from the bailee.

  • This category of delivery of products could be either actual or constructive bailment type in nature.
  • You can read the book free of cost and gain knowledge for yourself, you will get benefits whereas the Bailor will get nothing.
  • In India, the concept of bailment is governed by the Indian Contract Act, 1872.
  • For example, if the bailor grants possession of a summer home to the bailee, they must disclose any known faults with the property.

In case he makes any unauthorized use, then bailor can terminate the bailment. 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, and quantity. Also, such delivery is for a temporary purpose and after the fulfilment of which the bailee shall either return the goods in the same or altered form or dispose of them.

Not to make unauthorized use

The bailee, in turn, may hold certain degrees of responsibility for the property while it is in their custody. The bailee could owe monetary compensation to the bailor in the event the property is damaged or otherwise mishandled while in possession. The bailor does not necessarily have to be the legal owner of the property they entrust to the bailee. A bailor could instead be a person who found a lost item such as a wallet dropped in a shopping mall, or a government during the process of escheatment for unclaimed or dormant accounts.

Only for the benefit of Bailee

The person who is giving possession of his personal property to another person is called Bailor in the bailment. The contract of bailment is created only about movable property. The contracts of bailment come under a special class of contract and are dealt under Sections 148 to 181 of the Indian Contract Act, 1872. Though the Contract Act covers the general principles related to contracts of bailment but it does not deal with all types of bailment. The Carriers Act, 1865, The Carriage Act of Goods by Sea Act, 1925 and The Railways Act, 1890, are the few Acts which deal with special types of bailment. The word “bailment” has been derived from the French word “ballier” which means “to deliver”.

Understanding these duties and rights can help in avoiding disputes and ensuring a smooth and effective transfer of goods. In India, Bailment is a legal agreement between two parties, i.e., Bailor and Bailee. Bailment is defined as the transfer of goods from one person to another for a specific purpose, without transferring the ownership of the goods.

Section 149 of the Indian Contract Act, 1872 talks about the same. The delivery of possession can either be actual or constructive. It means that either the good can directly be put in the actual physical possession of the bailee or put the bailee in a position of power over such goods that can be physically possessed later, if possible. In constructive delivery, the bailor gives the bailee means of accessing the custody of the good and not its actual delivery.

Essentials of Bailment in Indian contract act

Failure to fulfill these duties can result in legal liability for both parties. Every person has experience of bailment in their life that is why we need to understand the essentials of bailment given in the Indian contract act. In our daily needs, the time comes where we give our personal property or take the personal property from another person for some gain or for any other reason.

In the absence of any contract for the same, any profit which may have accrued from the goods bailed, the same must be delivered to the bailor. It is essential that there must be a purpose for which the delivery of the goods takes place. If after the completion of the purpose of bailment the good is not accounted for, then bailment cannot arise. This is an important feature as it separates it from other relations like agency, etc.. There must be a contract between the bailor and the bailee for such transfer or good and its return. Kevin pulls up to the entrance of an upscale restaurant with his wife.

Elements of Bailment

This means that the bailee may retain possession of the goods until they receive payment for any services they have provided related to the goods. However, this right is not absolute and the bailee must meet certain conditions before exercising the lien. The bailee must also act in good faith, meaning they must not do anything that would deprive the bailor of the value or enjoyment of their property. For example, A requests B to take care of his brooding duck for a week as he as not in station. According to Section 153, if the bailee does anything which is inconsistent with the terms of bailment, then, the bailor can terminate the bailment.

According to Section 148 of the Indian Contract Act of 1872, a bailment is a contract wherein one individual gives or delivers the goods to some other individual for some intent. The person who has delivered the goods is known as the Bailor, and the person who has received the goods is known as the Bailee. After accomplishing the task, the Bailee should return the product to the Bailor or try to get rid of them according to the Bailor’s guidelines. After the time for which the good has bailed is expired, or the purpose has been fulfilled, the bailee must return it to the bailor as per his direction.

The amount of compensation will be based on the value of the property at the time it was entrusted to the bailee. If the bailor asks for the property back before the end of an agreed period, then the bailee has a right to receive compensation for any expenses incurred or loss suffered due to having to redeliver the property. Also, for the contract of bailment to be valid, all the essential features need to be fulfilled. Moreover, bailment of goods is different from the sale of goods as bailment is involved with the transfer of possession while the sale is involved with the transfer of ownership. It does not matter whether the goods are gratuitously or non-gratuitously bailed, the bailor has a duty to disclose all the known faults about that good that is being bailed to the bailee.

Nevertheless, the bailee is not accountable 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. According to section 151 of the Indian Contract Act, it is the obligation of a bailee to look after the goods bailed to him. Bailee should look after and take care of these https://1investing.in/ goods as a common man would take care of his goods of the same value, quality, and quantity. For example, when A hands over the keys of a go down to B, it amounts to the delivery of goods in the go down. Section 153 clearly says that the bailor can void the contract if he found that the bailee has used the bailed goods unofficially.

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