Notes on Bailment in Contracts

Bailment is a concept within contract law that pertains to the temporary transfer of possession and control of personal property from one party to another. 

What is Bailment?

Bailment refers to a legal relationship where one party (the bailor) delivers personal property to another party (the bailee) for a specific purpose or duration. The bailee holds possession of the property on behalf of the bailor, who retains ownership rights. The bailee is responsible for the safekeeping and proper care of the property while it remains in its possession.

Legal Provisions Dealing with Bailment

The Indian Contract Act 1872 primarily govern Bailment in India. The act defines the rights and obligations of both the bailor and the bailee. It outlines various legal provisions that regulate the bailment relationship, including the responsibilities of the bailee to exercise reasonable care, the liability of the bailee in case of loss or damage to the property, and the circumstances under which the bailment may be terminated.

Essentials of Bailment

To establish a valid bailment, certain essential elements must be present.

Delivery of Possession

The bailor must voluntarily deliver the property to the bailee, transferring physical possession and control.

Acceptance by the Bailee

The bailee must willingly accept the responsibility of holding the property in their possession.

Purpose of Bailment

The bailment must have a specific purpose or objective, such as safekeeping, storage, transportation, or repair.

Return of the Property

The property must be returned to the bailor or disposed of according to the bailor’s instructions once the purpose of the bailment is fulfilled or the agreed-upon time has elapsed.

Examples of Bailment

Deposit of Valuables

A bailment relationship is established when an individual deposits their jewellery in a bank locker for safekeeping. The bank becomes the bailee, and the customer remains the bailor.

Car Repair

A bailment occurs if someone leaves their vehicle at an authorized repair shop for maintenance or repairs. The repair shop acts as the bailee, responsible for the vehicle’s care and return.

Coat Check Service

A bailment is created when a person leaves their coat with a coat check attendant at an event venue. The attendant becomes the bailee, and the person retains ownership as the bailor.

Summary

Within the context of contracts, bailment involves the temporary transfer of possession and control of personal property from a bailor to a bailee. It is governed by legal provisions outlined in the Indian Contract Act 1872. 

The essential elements of bailment include:

• Delivery of possession.
• Acceptance by the bailee.
• A specific purpose.
• The return of the property.

Practical examples demonstrate how bailment applies in real-life scenarios, such as depositing valuables, car repairs, and coat check services.