Every person has the experience of bailment in their life because in our daily needs the time comes where we give our personal property or take the personal property from another person for some gains or for any other reasons. In simple terms,[bailment] is a legal relationship between two parties where the physical possession of the personal property of one person is transferred to another person who gets the possession of that property but not the owner of that property for some purpose. When the purpose of the bailment is fulfilled the person gives back the possession of the property to the owner or account for it. Now, let’s discuss the definition of bailment, types of bailment and Essential elements of bailment.
In this article, we will discuss what is bailment and its essentials, various kinds of bailment, and about bailor and bailee in bailment.
What is Bailment?
Bailment is a legal relationship between both the parties. In this, one person gives his personal property to another person for security. There must be consent for bailment from both sides. The Bailee must have the intention of physical possession. Section 148 in The Indian Contract Act, 1872 deals with [bailment].
Who is Bailor?
The person who is giving the possession of his personal property to another person is called Bailor in the bailment.
Who is Bailee?
The person who is taking possession of the property and gives back the property after the fulfilment of the purpose of bailment is called Bailee.
Under the bailment, normally, the Bailor has no right to use the property when it is under the possession of Bailee. But the Bailee has the superior right on that property.
What are the Essential elements of bailment?
Essentials of bailment
There are various Essentials of bailment which must be there. Let’s discuss essential elements of a contract of bailment:-
The [bailment] is always based upon the contract. there must be a contract between Bailor and Bailee. Though, the contract can be “Express” or “implied.”
Example: A gives his car to B for repair, here A is the Bailor and the B is the Bailee and the purpose of the [bailment] is expressed by the A that he wants to repair the car by B.
Delivery of possession
This is a very essential element of the contract of [bailment]; there must be the giving of possession of the property by the Bailor to the Bailee to perform the purpose of bailment. If the possession is not given there is no [bailment]. The possession can be actual or constructive.
Essentials of bailment
Example: The Ram was holding the property on the behalf of Shyam, agrees to hold the same on the behalf of Mohan, there is the constructive transfer of the possession.
There should be the purpose of the bailment or giving personal property to another person. The goods should be transferred by the Bailor to the Bailee for some purpose.
Example: A gives his car to X to repair that car. Here the repairing of the car is the purpose of bailment.
Return of goods
The goods transferred by the Bailor to the Bailee are transferred on the condition that it will be returned back to the Bailor after the fulfilment of the purpose of the bailment. However, the goods can be returned back to the Bailor in its original form or in altered form as the contract may be.
All the said points are the essentials of bailment. All the elements of bailment which are also known as essentials of bailment must be fulfilled to be a legal bailment.
Types of bailment
There are mainly 3 types of bailment under the act, which are as follow:
- A bailment for the benefit of Bailor and Bailee
The bailment whereby contracting the bailment, both the person ie Bailor and Bailee get benefits comes under this type.
Example: the best example for this when a Bailor parks his car in the paid parking of Bailee. The Bailor will get the benefit to park his car and the Bailee will get the money for parking.
Types of bailment
- Only for the benefit of Bailor
Where the bailment gives benefit to the Bailor only is cover under this.
Example: Free parking of the car of Bailor in the free parking lot of bailee.
- Only for the benefit of Bailee
[bailment] which on gives the benefit to the Bailee only is comes under this. These will be no profit to the Bailor.
Example: the best example of this is to read the books in the common library; here you are the Bailee and the owner of the library is Bailor. You can read the book free of cost and gain knowledge for yourself, you will get benefits whereas the Bailor will get nothing.
These three are the main types of bailment.
Termination of bailment
There are various situations when the [bailment] can be ended which are:
- On the expiry of the term of bailment: where it is already specified that the bailment will be for a specific period of time, the [bailment] will be considered ended on that date.
- On the fulfilment of the object: the bailment will be considered ended when the object of the [bailment] has been fulfilled.
- Destruction of goods: if the goods which were used in the [bailment] were destroyed due to any reason, the contract of bailment will be terminated.
- On the death of Bailor or Bailee: on the death or either of the party, the [bailment]will be terminated.
- On the inconsistent act: if either of the party failed to comply with the terms of the [bailment], the [bailment]will be terminated.
- By notice: the [bailment] can be terminated by notice.