The term ‘bailment’, is derived from ‘Bailler’, a French word that means ‘to deliver’. A bailment relationship occurs when goods are given to another party for a specific purpose on the condition that the goods are returned to the owner, dealt with according to the owner’s instructions, or it is kept until the goods are returned. Ownership of the goods does not change in bailment the only variable being the party that has possession of the goods.
A bailment relationship exists and certain duties are imposed on both parties. Examples of bailment include where goods are supplied subject to a holding of title clause, goods are supplied to a company for delivery to another party or a customer bears the cost for goods and requests that they pick them up afterward.
Contracts of Bailment are a special kinds of contracts. These are dealt with in Chap. IX from S.148 to 181 of the Indian Contract Act, 1872. Bailment may be a sort of special contract, so all essential elements of a valid contract like consent, competency, etc are required for it to be valid. But, a valid bailment can arise even without a valid contract between the two parties, for example, a lost good finder becomes a bailee and has the responsibility to return it to its
owner, the bailer, notwithstanding no contract exists between them. Bailment implies a sort of one person temporarily goes into the possession of another. The circumstance in which this happens is numerous. Delivering a cycle, watch, or the other article for repair, delivering gold to a goldsmith for creating ornaments, delivering garments to a cleaner, delivering goods for carriage, etc. are all familiar situations that make the connection of ‘Bailment’
Section 148 of the Act covers the term bailment. It states that bailment is that the act under which goods are transferred or delivered from one party to a different party for a few purposes and after that purpose is completed, they’re returned back to the party or disposed of as per the directions laid down by the party who delivered the goods. The party that delivers the goods is known as a bailor and therefore the party to whom the goods are delivered is understood as a bailee.
A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called, the “bailee”.
Bailor:- The person delivering the goods is called ‘Bailor’.
Bailee:- The person to whom they (goods) are delivered is ‘Bailee’.
Bailment occurs usually where there is an agreed contract that obliges or requires one party to have control of the other party’s goods for a specific purpose or for a limited period of time.
The party who is in receipt of the goods must demonstrate that the recipient consents to hold the goods in order to establish a bailment. However, bailment may also arise informally, for instance, where one party makes a promise on taking possession of goods and as such could be held liable for that promise. The claim against them would not however be brought in the contract but in tort.
An involuntary bailment can also arise where a person, without their permission, finds themselves in possession of goods which is of another party.
An involuntary bailee is not a true bailee in that they do not voluntarily consent to hold the goods although an involuntary bailee may still owe a duty of care. When assessing the standard of care is required, the court is likely to consider the nature and value of the goods, the circumstances in which they have been deposited, the facilities at the defendant’s disposal, the readiness with which the goods could have been returned to the owner, and the conduct of the owner (if known to the involuntary bailee).
Despite the ease with which one can be subject to a bailment, many are not aware of the obligations imposed on the parties. Failure to comply with one obligations could result in a claim by the other party for breach of contract or in tort.
How can Bailment be differentiated from the sale of the good?
Sales involve the transfer of the ownership of the good in exchange for something of value while on the other hand, Bailment involves the transfer of the possession of the good, not the ownership.
The goods that can be bailed are the goods that are movable in nature can be bailed. Nonetheless, current money or legal tender cannot be bailed and deposition of money will not be counted as bailment as money is not good and the same money will not be delivered back to the client.
Essential Features of Bailment
- Delivery of possession
- Delivery upon Contract
- Delivery must be for some purpose in Bailment
- Return of Goods in Bailment
 Section 148 of Indian Contract Act 1872.
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