Rights and duties of a Bailee

Rights and duties of a Bailee

INTRODUCTION

First of all, let us have a brief look on “What is a contract?”. Section 2(h) of The Indian Contract Act, defines contract as “an agreement enforceable by law is a contract.” But in simpler terms, we can understand contract as a legal binding agreement held between two parties that holds right and duties agreed by both the parties and is enforceable by law.

On the other hand, As per the section 148 of the Indian Contract Act, 1872, a bailment is a contract where one person delivers goods to another person for some purpose. The person delivering the goods is the Bailor and the person receiving the goods is the Bailee. After the accomplishment of the purpose, the Bailee needs to return these goods to the Bailor or dispose of them according to the directions of the Bailor.

A bailment takes place between two parties, bailor and bailee, which is also 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 a “bailee”

BAILMENT BASED ON BENEFIT: –

Benefit of the bailor: –

Example: – A is B’s neighbour. A says yes to take care of B’s car while he went out of town.

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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 hire chides both A and B are benefited.

BAILMENT BASED ON REWARD

GRATUITOUS: –

Without any remuneration.

Example: – A lends B , book as he is his friend.

NON GRATUITOUS :

With remuneration.

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

Duties of Bailee and Bailor

Bailment make reference to the independent consignment of goods. Also, such consignment is for a non-permanent ground and in the wake of the accomplishment of which the bailee shall either give back the goods in the same or modified form or dispose of them.

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. Such type of delivery of goods may be actual or constructive.

Actual Delivery: in the case where the goods are physically given into the possession of the buyer, the delivery is called an actual delivery.

Constructive delivery: The transfer of goods can be done even when the transfer is affected without a change in the possession or the guardianship of the goods.

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. Also, A is the bailor and B is the bailee.

Duties of a Bailee

Duties of a bailee in reference to bailment of goods are as follows:

1. Take proper care of 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 goods as a common man would take care of his goods of the same value, quality, and quantity.

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Therefore, if the bailee takes good care of goods then he will not be accountable for any loss, degradation of such goods. Also, the bailee needs to look after the goods to the same extent whether the bailment is for reward or gratuitous.

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.

2. Not to make unauthorized use

As per section 153 of the Indian Contract Act, the Bailee shall not make any unsanctioned use of goods bailed. In case he makes any unsanctioned use, then the bailor can put an end to the bailment.

Bailor can also claim for compensation for the damages caused to goods bailed due to unsanctioned use as per Section 154.

3. Keep goods separate

The bailee shall keep the goods detached from his own goods. He should not combine the goods under bailment with his own goods. In case bailee combines the goods with his own goods without the assent of the bailor, then:

Bailor also has an interest in the mixture.

If the goods can be detached or divided, the material in the goods remains with both the parties. But, the bailee bears the expenses of separation or any damages arising from the combination of such goods.

If it is not possible to detach the goods, the bailee shall compensate the bailor for the loss of goods.

4. Not set adverse title

A bailee must not set an adverse title to the goods bailed.

5. Return Goods

The responsibility of the bailee is to return the goods without request on the completion of the purpose or the expiration of the time period. In case if he fails to do so, he shall be held accountable for the loss, destruction, worsening, damages or destruction of goods even without dereliction of duty.

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6. Return increase or profits

A bailee shall return the bailed goods along with any escalation or profit arising to the goods to the bailor, in the non-appearance of any contract to the contrary.

For example, A leaves a hen in the custody of B. The hen gets a chick. B shall deliver the hen along with the chick to A.

BAILEE’S PARTICULAR LIEN

As per section 170 of the Indian Contract Act, 1872, the bailee has a lien on the goods that he acquires under the contract of bailment. When the bailor bails the goods to the bailee for a specific purpose and the bailee stretches skill and labour on these goods, he has a right to hold on to the goods until the bailor pays him his demand in respect of skill and labour. Nevertheless, the right of lien comes to light only if the bailee uses skill and labour on the goods to give out an added value on the goods.

For example, X gives a piece of cloth to Y for stitching a shirt. Y promises to deliver the shirt in a week’s time. After a week Y has the shirt ready. However, he has a right to retain it until X pays him his charges.

Section 171 states the provisions for a general lien. 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.

Author: RISHIKA VERMA,
Amity University Madhya Pradesh , 1st year

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