Bailment under Section 148 – 181 of Indian Contract Act

BAILMENT SECTION 148- 181 OF INDIAN CONTRACT ACT 1872

First of all let us have a brief look on “what is a contract?” It is mentioned in “section 2(h)” which says “ an agreement enforceable by law is a contract.” But in simple language we can say basically contract is a legal binding agreement held between two parties that holds right and duties agreed by both the parties and is enforceable by law.

If we talk about bailment it is a transfer of goods from one person to another for a purpose, after the completion of purpose good is redelivered to the owner, bailment involves possession of goods to the person whom goods is delivered, this take place between two parties, bailor and bailee is defined under “section 148”, namely:

BAILOR  :- the one who owns the good and deliver it to bailee.

BAILEE:- The person who gets the delivery of that good as well as possession is called “bailee”

BAILMENT BASED ON BENEFIT:-

Benefit of the bailor :-

Example- A is B’s neighbor, A says yes to take care of B’s car while he went out.

2)Benefit of the bailee:-

Example:- A lends B car to use it for vacation.

3)Mutual benefit:-

Example:- A hires B’s car, by payment of hiring car both A and B are benefited.

BAILMENT BASED ON REWARD

GRATUITOUS:-

Without any remuneration.
Example :- A lends B, book as he is his friend.

2)NON GRATUITOUS :

With remuneration.

Example:- A gives his cycle for repairing to B, and B gets paid for it job.

ESSENTIALS OF CONTRACT OF BAILMENT

“ ACCORDING TO SECTION 148 OF INDIAN CONTRACT ACT 1872”

  • THERE MUST BE A CONTRACT BETWEEN “BAILOR AND BAILEE”
  • Contract should be express or implied.
  • Bailment should be made of goods only.
  • There must be delivery of goods by “ bailor to the bailee.”
  • There should be always a purpose for delivering the goods and once purpose is accomplished goods must be return to “bailor”.
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MODES OF DELIVERY “

ACCORDING TO SECTION 149 OF INDIAN CONTRACT ACT 1872”
THERE ARE THREE TYPES OF DELIVERY :-

1) ACTUAL DELIVERY
2) SYMBOLIC DELIVERY
3) CONSTRUCTIVE DELIVERY

ACTUAL DELIVERY :- In it there is transfer of physical possession of goods from “bailor to bailee”
SYMBOLIC DELIVERY:- In it there is no actual transfer of possession of goods, a person does some act to transfer the possession to other person.
Example:- Delivery of cars keys to a friend.
CONSTRUCTIVE DELIVERY :- In It delivery of good is collected by other person on behalf of bailee.
Example:- Delivery of goods accepted by his friend on behalf of him is an example for constructive delivery.

CLASSIFICATION OF BAILMENT

GRATUITOUS BAILMENT :- Is bailment without any charges and rewards.
NON GRATUITOUS:- Is bailment with charges and rewards.

DUTIES OF A BAILOR

“ ACCORDING TO SECTION 150;158,159 AND 164.”

DISCLOSE FAULTS IN GOODS “ACCORDING TO SECTION 150”:- Bailor should disclose the faults of goods to bailee he is bound to do so.
In case of gratuitous bailment :- Bailor is liable for those losses which arise due to non disclose of default.
In case of non gratuitous :- Bailor is liable for damages whether or not he was aware of the existence of faults.

BEAR EXPENSES “ACCORDING TO SECTION 158”:-
In case of gratuitous bailment:- Bailor shall repay to bailee all the necessary expenses incurred by him for the purpose of bailment.
In case of non gratuitous:- Bailor is liable to repay only extraordinary expenses.

INDEMNIFY THE BAILEE FOR PREMATURE TERMINATION.
RECEIVE BACK THE GOODS :- Bailor is bound to receive and accept the goods returned by bailee, if he refuses to receive them back he is liable to pay expenses incurred by bailee while performing the purpose of bailment.

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DUTIES OF BAILEE

“ ACCORDING TO SECTION 157 AND 151”

TAKE REASONABLE CARE OF GOODS
BAILEE MUST TAKE CARE OF GOODS DELIVERED BY BAILOR, AS HE TAKES CARE OF HIS OWN GOODS.
Bailee won’t be liable of any losses caused by act of God.

NOT TO MAKE AN UNAUTHORIZED USE OF GOOD DELIVERED BY BAILOR TO THE BAILEE:-
IF bailee do so bailment becomes voidable at the option of bailor and will be liable to pay damages incurred.

NOT TO MIX GOODS:-
If goods are mixed with the consent of bailor, then bailor and bailee will have proportion in such mixture. But if goods are made without bailors consent, then bailee is bound to separates the goods and also have to suffer alone from the expenses occur during separation of goods and if goods can’t be got separated or bailee fails to separate goods than he is bound to pay loss caused to bailor.

RETURN THE GOODS:-
Bailee is liable to return goods to bailor once time expires mentioned in bailment contract.

RETURN PROFIT:-
If goods delivered to the bailee and after sometimes its false to get increases or something like this happens then all the additional profit bailee have to return it to bailor with original goods.
Example:- If A gives B a cow and cow gave birth to a calf before expiring of the bailment date than B is bound to return cow with her calf to A.

RIGHTS OF BAILOR

“ACCORDING TO SECTION 153,159,163,180,181”

  • Bailor can terminate the bailment if bailee does any act inconvenient to terms and conditions of bailment and bailment will become voidable at the option of bailor.
  • Bailor can demand goods back if bailment is gratuitous and is for specific period of time and can pay the losses incurred by baliee while taking care of bailers goods.
  • Bailor has right to sue any third party makes damages to the goods.
  • Bailor can sue bailee if he fails to perform his duties well as mentioned in contract of bailment.
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RIGHTS OF BALIEE

“ACCORDING TO SECTION 165,166,167,170,180”

  • Bailee has right to get compensated if bailor has no title of goods sand as a consequence he suffered from any loss while taking care of goods.
  • Bailee has duty as well has right to return goods to the bailor, in case of joint bailor the goods may be returned to any of joint bailers.
  • Bailee has right to get compensate for extraordinary expenses incurred while taking care of goods.
  • Bailee has right to retain goods till he don’t get compensate by bailor for his losses.

Conclusion

To sum up, “Bailment is a process where the owner of certain goods places them in the non-permanent possession of another person”. In simpler words, bailment is giving another person a possession of a certain good for a particular cause and there is a hinted apprehension between the two people that once the cause has been achieved, the goods will be returned to the real owner — the person who bailed them. In addition, for the contract of bailment to be valid, all the crucial attributes need to be satisfied. Furthermore, bailment of goods is non-identical from the sale of goods as bailment is involved with the transfer of possession while the sale of goods is involved with the transfer of ownership.

The Concept of bailment is applicable on our day-to-day lives. So, it becomes essential to know the rights and duties that comes out of Concept of bailment. Awareness helps to decrease the wrongful acts. Understanding of the Concept of Bailment helps to protect our rights and our interests.

Author: RISHIKA VERMA,
AMITY UNIVERSITY MADHYA PRADESH, STUDENT

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