Section 148 of the Indian Contract Act of 1872 defines a bailment as a specific contract. It comes from the French term “bailer,” which meaning “to deliver.” Bailment’s etymological meaning is “handing over” or “changing of possession of property.” Bailment refers to the handover of goods from one person to another for a specific purpose with the condition that they will refund the items upon completion of the purpose or dispose of them according to the bailor’s instructions. Bailor refers to the person who delivers the goods. Bailee is the name of the person who receives the goods. Bailed Property is the name of the property that has been bailed. Balior is the person who provides products to another person, and Bailee is the person to whom bailor delivered goods.
There are certain essentials that need to be fulfiled for a contract to be that of bailment. Following are the essentials of bailement-
Agreement– For a legitimate bailment contract, both the bailor and the bailee must agree that the bailor will transfer items to the bailee for a defined purpose, that the bailee will return the goods to the bailor when the purpose is completed, and that the bailor will compensate the bailee for his services.
Delivery of goods- A legitimate bailment requires that the bailor transfer, i.e. deliver his commodities to the bailee, so that the bailee can proceed with the objective. Force, compulsion, undue influence, and other forms of coercion should not be used to obtain possession.
Purpose- Bailment occurs when the bailor transfers constructive to the bailee; the primary motive for the bailor’s transfer is to fulfil a specified aim. The bailor then returns the commodities to the bailee once the purpose has been fulfilled.
Return of goods– When the bailee returns the items to the bailor or disposes of them according to the bailor’s instructions, the bailment contract comes to an end.

Duties of a bailor –
–It is the bailor’s responsibility to inform the Bailee of any faults in the products that he is aware of and that could prevent the Bailee from using the items or expose him to extreme risks. Failure to do so will result in the bailor being held accountable for damages.

–This obligation is mostly concerned with products that are rented. According to this clause, when goods are bailed for hire, the bailor will be held liable for any injury caused by the flaw in the goods, regardless of whether the bailor is aware of the defect or not.

Duties of a bailee
-It is the Bailee’s responsibility to look after items as if they were his own. He is responsible for ensuring that all necessary safety precautions are taken to protect the items. The standard of care should be that which a prudent man would provide. Whether the commodities are gratuitous or non-gratuitous, they must be treated equally.

-Bailee has a legal obligation to utilise the items only for the stated purpose. If he utilises the commodities for a purpose other than what was agreed upon, the bailor has the right to terminate the bailment or seek compensation for any damages incurred as a result of the illegal use.

-It is the Bailee’s responsibility not to mix the bailor’s products with his own. If he intends to do the same, he must first obtain the bailor’s permission to mix commodities. If the bailor agrees to the items being blended, the interest in the mixed goods will be proportionately divided.

-The bailee has a legal obligation to return the items once the purpose has been fulfilled or the time period for which the commodities were bailed has expired. However, if the Bailee fails to return the goods on time, he shall be held liable for any loss, damage, or deterioration of the goods.

-Subject to a contract to the contrary, the Bailee has an obligation to return the goods with any increase or profit. The accretion that has accrued from the bailed goods is a part of the bailed goods, hence the bailor has the right to such accretions if any have accumulated. And, together with the bailed items, such accretions must be turned over to the bailor.

Rights of a bailor

-Enforcement of Bailee’s Duty: Because the bailor’s right is the same as the Bailee’s right, the bailor’s right is fulfilled when all of the Bailee’s obligations are completed. For example, it is the Bailee’s responsibility to provide the accretions, and it is the bailor’s right to demand them.

-Right to sue for damages: If the Bailee fails to properly care for the items, the bailor is entitled to sue for damages.

–Right to Terminate the Contract: If the Bailee fails to comply with the contract’s conditions and acts negligently, the bailor has the right to terminate the contract.

–Right to compensation: If the Bailee uses the products for an unapproved purpose or mixes the goods, resulting in goods loss, the bailor is entitled to reimbursement.

–Right to demand the return of goods: The Bailee is responsible for returning the goods, and the bailor has the right to demand it.

Rights of a bailee-

Right to recoup expenses: The Bailee incurs expenses to protect the safety of the items under the Bailment contract. The bailee has the right to sue the bailor for these costs. 

Right to payment: When the items are bailed to the Bailee, he is entitled to a specific amount of remuneration for his services.

Right to compensation: There are situations when a bailor does not have the financial means to enter into a bailment arrangement. Because such a contract causes the Bailee to suffer a loss, the Bailee has the right to seek compensation from the bailor.

Lien’s Right: Bailee has the right to Lien. This means that if the bailor does not pay the remuneration or the amount owed, the Bailee has the right to retain the things bailed in his custody until the debtor’s debts are paid. There are two sorts of liens: specific and general.

Referencs- https://lawtimesjournal.in/contract-of-bailment-and-pledge/

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