Bailment occurs daily when we leave our car for repair, deliver clothes to dry cleaners, or lend a book to a friend.
1. Statutory Definition: Section 148
Under Section 148, 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.
- Bailor: The person delivering the goods.
- Bailee: The person to whom the goods are delivered.
2. Essential Requisites of Bailment
- Delivery of Possession: Possession must be transferred from bailor to bailee. The delivery can be actual or constructive (e.g. delivering the keys of a warehouse). Mere custody without possession (like a servant keeping an eye on goods) is not bailment.
- Specific Purpose & Return: Bailed goods must be returned or disposed of. If the goods are not to be returned (like depositing cash in a bank), it is not a bailment (cash is a loan, as the bank returns different notes, not the exact same notes).
3. Duties of Bailee
- Reasonable Care (Section 151): The bailee must 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. Under Section 152, if he takes this care, he is not liable for loss or destruction.
- No Unauthorized Use (Section 154): If the bailee uses the goods in a manner not authorized by the contract, he is liable to make compensation to the bailor for any damage arising from such use.
- Return Bailed Goods (Section 160): It is the duty of the bailee to return or deliver the goods on expiration of time or accomplishment of purpose. Failure to do so makes the bailee liable for any subsequent loss under Section 161.
4. Particular vs. General Lien
- Particular Lien (Section 170): The right of a bailee to retain the specific goods bailed until charges for services involving labor, skill, or improvement on those goods are paid (e.g., a tailor retaining a stitched suit).
- General Lien (Section 171): The right to retain any goods bailed as security for a general balance of account. This right is restricted by law to bankers, factors, wharfingers, High Court attorneys, and policy-brokers.