Faculty of Law

Topic - A brief overview of some sections of chapter-9 bailment

Submitted on: 24 June 2021

Submitted by: Kartik kaushal

ENROLLMEN no- 20FLUCHPD01010

Submitted to: Mr Parveen Yadav sir 

 INDIAN CONTRACT ACT, 1872

CHAPTER-IX
BAILMENT

Bailment an act of delivering goods to a bailee for a particular purpose, without

transfer of ownership (only movable goods)

Bailor The person delivering the goods (real owner)

Bailee The person to whom goods are delivered (temporary owner)

Essentials of Bailment
 The existence of a valid contract: - The existence of a valid contract
is a foremost condition in bailment which implies that goods are to be
returned when the purpose is fulfilled. Finder of lost goods is also
known as bailee although there may not be any existing contract
between him and the actual owner.

 Temporary delivery of goods: - The whole concept of bailment

revolves around the fact that the goods are delivered for a temporary
period and bailee cannot have permanent possession. Delivery of goods
can be done through actual delivery or through constructive delivery
which means that doing something which has the effect of putting the
goods in possession of bailee or any other person authorized by him.

 Return of specific goods: - The bailee is bound to return the goods to

bailor after the purpose for which it was taken is over. If the person is
not returning the goods then it will not be bailment.
 INDIAN CONTRACT ACT, 1872

Types of Bailments
 Deposit: - It is the simple bailment of goods by one man to another for a
particular use.
For example, A gives his computer to B for 7 days, it will be a case of a
deposit.

 Hire: - It includes goods delivered to the bailee for hire.

For example, A gives his car to B for 7 days on rent of Rs. 700 per day, it
will be a case of a hire.

 Pawn/ Pledge: - when goods are delivered to another person by way of

security for money borrowed.
For example, A takes a loan from the Bank and keeps his papers of the
house with a bank as security; it will be a case of pledge.

SECTION 148

Give definitions of ‘Bailment’, ‘Bailor’, and ‘bailee’

Here, the meaning of bailment under section 148 is that bailment is the delivery
of goods by bailor to bailee for some purpose, when so ever the purpose will be
completed the bailed good will be returned back to the bailor (real owner).

Constructive delivery means the possession of good which will be bailed are
already in area of bailee, in other words the good which will be bailed are
already in the possession of bailee, and bailee only requires the permission
(consent) of bailor.
 INDIAN CONTRACT ACT, 1872

SECTION 149

It is defined as a voluntary transfer of possession of a thing from one person to

another. It should be without fraud, misrepresentation, undue influence,
coercion, etc. to constitute a valid contract.

MODES OF DELIVERY OF GOODS Delivery of goods may be made in any

of the following three ways:

1. Actual Delivery: It takes place when the goods are physically handed over
by the bailor or his/her authorized agent to the bailee or his/her agent authorized
to take possession of the goods. It is also called physical delivery. For example,
A, the seller (bailor) of a watch hands it over to B, the buyer (bailee)

 Constructive Delivery: In this case neither physical nor symbolic delivery is

made. In constructive delivery, the individual (bailee) possessing the products
recognizes that he holds the merchandise for the benefit of, and at the disposal
of the purchaser (bailor). Constructive delivery is also called attornment.

SECTION 150 here, it give directions to bailor to disclose the faults in the
good (which he is aware of) which he bailed to the bailee and make bailee
aware with the risk factors if there is any faults. If the bailor does not give the
knowledge of faults which he already know then the bailor will only liable for
the damages arising to the bailee directly from such faults.

If the particular goods are bailed under bailment for reward (hire) the bailor will
be responsible for the damages, whether he was or was not aware of the
existence of faults in the goods bailed.

Illustrations

(a) A lends a horse, which he knows to be vicious, to B. He does not disclose

the fact that the horse is vicious. The horse runs away. B is thrown and injured.
A is responsible to B for damage sustained. A lends a horse, which he knows to
be vicious, to B. He does not disclose the fact that the horse is vicious. The
 INDIAN CONTRACT ACT, 1872

horse runs away. B is thrown and injured. A is responsible to B for damage

sustained."

(b) A hires a carriage of B. The carriage is unsafe, though B is not aware of it,
and A is injured. B is responsible to A for the injury. (b) A hires a carriage of B.
The carriage is unsafe, though B is not aware of it, and A is injured. B is
responsible to A for the injury."

SECTION 151 this section gives direction here to bailee to take the reasonable
care of the goods which are bailed to him by bailor. Bailee should not treat the
goods carelessly.

Illustration If A has bailed his car to his friend. B as a friend is required to take
care of the car in the same was as a man of reasonable prudence. If road is
bumpy, one should drive gently.

SECTION 152 this section tells that the bailee in the absence of any special
contract clause or request is not responsible for any loss, damage, deterioration
of the thing bailed, even if bailee has taken the reasonable care of the good (care
which is directed in section 151)

Care to be taken by bailee. 

In all cases of bailment, the bailee is bound to take as much care of the goods
bailed to him as a man of ordinary prudence would, under similar circumstances,
take of his own goods of the same bulk, quantity and value as the goods bailed and
Section 152 states Bailee when not liable for loss, etc., of thing bailed. 

The bailee, in the absence of any special contract, is not responsible for the loss,
destruction or deterioration of the thing bailed if he has taken the amount of care of
it described in section 151. Like, hotel keepers are strictly liable to guests for
personal property that is lost or stolen from the hotel keeper’s premises even if the
loss was not the hotel keeper's fault.
 INDIAN CONTRACT ACT, 1872

SECTION 153 talks about the termination of bailment by bailor, incase if

bailor found that the misuse is done of his property. In other words if the bailee
do any act against the conditions of bailment the bailor can terminate the
bailment.

Illustration A bail his car to B for a journey, and B instead of using A car for
going to journey use his car as a taxi. A have the power to terminate the
bailment if he wishes.

SECTION 154 talks about liability of bailee, if the bailee does any act which is
against the conditions of bailment and that act causes damage to the goods
which were bailed by bailor, then bailee in liable to compensate bailor for the
damages.

 Illustrations

A lends a horse to B for his own riding only. B allows C, his friend, to ride the
horse. C rides with care, but the horse accidentally falls and is injured. B is
liable to make compensation to A for the injury done to the horse.

SECTION 158 here bailee can claim for the compensation of necessary
expenses which are out from bailment conditions.

Bailor bailed the car to bailee. If there comes out to be problem with the engine
or problem with the battery and bailee has incurred the expenses then bailee
can ask for compensation.
 INDIAN CONTRACT ACT, 1872

SECTION 159 this section tells that if the bailor asks bailee to return the goods
before the purpose or time decided and bailee suffer loss due to this. The bailor
shall indemnify the bailee for the loss he suffered.

SECTION 160 gives direction to bailee to return the goods back to the bailor
after accomplishment of purpose and expiration of time.

It is the duty of bailee to return the goods even if the bailor doesn’t ask bailee.

SECTION 161 tells that if the bailee fails to return back the goods to bailor
after expiration of time granted, then bailee will be liable for any loss,
destruction or deterioration of the goods from the time.

SECTION 162 this section tells that the gratuitous bailment will be terminated
if death of any one bailor or bailee occurs.

SECTION 163 this section give directions to bailee that in the absence of
contract to contrary, it is duty of bailee to return the goods to bailor with any
increase or with the profit which may be originated from the goods bailed.
 INDIAN CONTRACT ACT, 1872

SOURCES:

 The Indian Contract Act, 1872 (Universal lexis nexis)

 Notes of Law of Contract
 INDIANKANOON.ORG
 WWW.TOPPR.COM