Bailment Contracts

Bailment contracts are a contract where one party delivers goods to the other party upon the return basis in order to fulfil a specific purpose is called bailment contracts. It includes two parties ; bailee and bailer.  

  • Bailer:  The bailer is a person who is delivering the goods.
  • Bailee:  The person to whom the goods are delivered.

Types of Bailment Contracts:

Generally bailment contracts are classified into:

  1. Gratuitous Bailment:  These are contracts where only one party is benefited i.e one directional consideration.
    Example: If Ram is going to abroad for further studies and he hands over his old bicycle to his friend shyam for  safe custody. Here only bailer (Ram) is benefited.
  2. Non-Gratutious Bailment:  In this case both the parties are benefited i.e it is a two directional consideration.
    Example: B hands over his clothes to D (laundary owner) for washing purpose. Here B(bailer) is awarded with clean clothes and D(bailee) gets the payment of his service.

Rights of Bailor:

  1. Enforcement of bailee’s duties
    • Right to claim damages for loss caused to the goods bailed by bailee’s negligence.
    • Right to claim compensation for any damage arising from or during unauthorised use of the goods bailed.
    • Right to claim compensation for any loss caused by the unauthorised mixing of goods bailed with his own goods.
    • Right to claim any natural accretion to the goods bailed.
  2. Right to terminate bailment if the bailee uses the goods wrongfully.
  3. Right to demand return of goods in case of gratutious bailment.

Rights of Bailee:

  1. Enforcement of bailors duties
    • Right to claim damages for loss arising from the undiscovered faults in the goods bailed.
    • Right to claim reimbursement for extraordinary expenses incurred in relation to the things bailed.
    • Right to indemnify for any loss suffered by him by reason of defective title of the bailer to the goods bailed.
    • Right to claim compensation for expenses incurred for the safe custody of the goods if the bailor has wrongfully refused to take delivery of them after the term of bailemt is over.
  2. Right to deliver goods to one of several joint bailor.
  3. Right to deliver goods, in good faith, to bailor without title.
  4. Right of lien( Right of retaining goods till the debts are paid)
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