Assignment Business Law

Name: Danish Aamir ID: 18E01016
What is the difference between bailment and pledge?
Bailment:
1. Sections 148 to 171 of the Indian Contract Act 1872 deals with bailment
2. Meaning: The term bailment is derived from the French word ‘Bailor’, which means ‘to deliver. It
means possession voluntarily from one person to another.
3. Definition: Delivery of goods by Bailor to Bailee for a definite purpose on condition of their return or
disposal, when purpose is accepted. (Section.148, I.C.A)
4. It is made for any purpose
5. The Bailee can use the goods
6. The Bailee has no right to sell the goods bailed
7. Bailee can exercise lien on goods only for labour and service
8. Example: Sam delivers a cloth to John, a tailor making a shirt . The contract between Sam and John is
bailment
Pledge:
1. Sections 172 to 181 of the Indian Contract Act deals with Pledge.
2. Meaning: Pledge is a special kind of bailment. If the goods are bailed as a security for payment of a
debt or performance of a promise, it is called Pledge.
3. Definition: The Bailment of goods as security for payment of a debt or performance of a promise is
called pledge. (Section.178, I.C.A)
4. It is made for specific purpose
5. Pledgee cannot use the goods
6. The Pledgee / Pawnee has a right to sell the goods pledged if the pledger could not redeem them
within the stipulated period.
7. Pledgee can exercise lien even for nonpayment of interest.
8. Example: If a Farmer delivers to bank 50 bags of wheat as security for obtaining a loan, it is called
pledge.
What are the rights of the finder of the goods under the contract act 1872
Rights of the Finder of Goods
The rights of the finder of goods are the same as that of the bailee. These are discussed in detail below:
1. Right of lien
According to Section 168 of the Indian Contract Act, the finder of the goods has no right to sue the
owner of the goods for compensation for the trouble and expenses that have been incurred by him
voluntarily. However, he has the right to retain the goods unless the compensation is paid to him.
For example, If A the finder of goods belonging to B has incurred expenses for preserving the gold chain
of B, then B can not sue B for the compensation but can only retain the goods unless such an amount is
paid to A by B.
2. May sue for a specific reward
Under section 168 of the Indian Contract Act, the finder of goods can sue the owner of the goods if he
has offered a specific reward for the return of the goods lost. He also has the right to retain the goods
unless he receives the reward offered. Thus, if a reward is offered by the owner then the finder has both
the rights (i) right of lien (ii) right to sue.
Thus, If A found a wallet belonging to B. B advertises that he will pay a sum of Rs 1,000 to a person
whosoever finds the wallet and return it. Here, if B denies paying the rewarded sum then A has two
options with him (i) He has the right to sue B for the reward offered and, (ii) He has the right to retain
the wallet unless B pays the reward.
3. When finder of thing commonly on sale may sell it
According to Section 169 of the Indian Contract Act, if the finder of goods is unable to find the true
owner after due diligence or if the owner refuses to pay the lawful charges to the finder then he may sell
the goods if:
The thing is perishable or is such of nature that it will lose the greater part of its value.
When lawful charges of the finder amount to two-thirds of the value of goods.
Another description of rights of finder of goods in reference to rights of bailee are:
RIGHT TO DELIVER THE GOODS TO ANY ONE OF THE JOINT BAILORS
If several joint owners bailed the goods, the bailee has a right to deliver them to any one of the joint
owners unless there was a contract to the contrary.
Example: A, B and C are the joint owners of a harvesting combine. They delivered it on hire to D for one
month. After the expiry of one month, D may return the “combine” to any one of the joint owners
namely, A, B or C.
2. RIGHT TO DELIVER THE GOODS TO BAILOR WITHOUT TITLE
If the bailor has no title to the goods, and the bailee in good faith delivers them back to or according to
directions of the bailor, the bailee is not responsible to the owner in respect of such delivery.
3. RIGHT TO APPLY TO COURT TO DECIDE THE TITLE TO THE GOODS
If the goods bailed are claimed by the person other than the bailor, the bailee may apply to the court to
stop its delivery and to decide the title to the goods.
Example: A, a dealer in T.V. delivered a T.V. to B for using in summer vacation. Subsequently, C claimed
that the T.V. belonged to him as it was delivered only for repairs, to A and thus, B should deliver it to him.
In this case, B may apply to the Court to decide the question of ownership of the T.V. so that he may
deliver it to the right owner.
4. RIGHT OF LIEN
The bailee has a right to exercise lien i.e., to refuse to return the goods to the bailor until his lawful
charges are paid to him.

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Name: Danish Aamir ID: 18E01016

What is the difference between bailment and pledge?

4. It is made for any purpose

5. The Bailee can use the goods

6. The Bailee has no right to sell the goods bailed

4. It is made for specific purpose

5. Pledgee cannot use the goods

7. Pledgee can exercise lien even for nonpayment of interest.

Rights of the Finder of Goods

2. May sue for a specific reward

3. When finder of thing commonly on sale may sell it

Another description of rights of finder of goods in reference to rights of bailee are:

RIGHT TO DELIVER THE GOODS TO ANY ONE OF THE JOINT BAILORS

2. RIGHT TO DELIVER THE GOODS TO BAILOR WITHOUT TITLE

3. RIGHT TO APPLY TO COURT TO DECIDE THE TITLE TO THE GOODS

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