Types of Bailment
Types of Bailment
1. What is Bailment?
Bailment is a contract where one person (the bailor) delivers goods to another person (the bailee) for some purpose under the condition that the goods will be returned or otherwise disposed of according to the bailor’s directions.
Governed by Sections 148 to 171 of the Indian Contract Act, 1872.
2. Classification of Bailment
Bailment can be classified based on benefit and consideration:
A. Based on Benefit to Parties
| Type | Explanation | Example |
|---|---|---|
| Gratuitous Bailment for Bailor's Benefit | Only the bailor benefits; bailee does the job without compensation. | Lending a watch to a friend for safekeeping free of charge. |
| Gratuitous Bailment for Bailee's Benefit | Only the bailee benefits; bailor does the job free. | Bailor lends a car to a friend for free use. |
| Bailment for Mutual Benefit | Both parties get some benefit; usually a contract with consideration. | Hiring a car for use with payment to the owner. |
B. Based on Possession and Ownership
| Type | Explanation | Example |
|---|---|---|
| Pledge (or Pawn) | Bailment of goods as security for repayment of a debt or performance of a promise. | Giving gold jewelry as security for a loan. |
| Simple Bailment | Bailment not involving any security or pledge. | Leaving goods with a warehouse for safekeeping. |
3. Duties and Responsibilities Based on Type
In gratuitous bailments, the standard of care expected differs:
Bailor’s benefit: Bailee is liable only for gross negligence.
Bailee’s benefit: Bailee is liable for even slight negligence.
In mutual benefit bailment, bailee must exercise reasonable care.
4. Important Case Laws
a. Kamlakar V. Savalram (1913)
Defined the duties of bailee in a gratuitous bailment.
Held that if the bailment is for the bailor’s benefit, the bailee is liable only for gross negligence.
b. Lalchand Moolchand v. CIT (1969)
Clarified that in a pledge, the bailee has a special duty to take care of the goods.
Emphasized that pledgee must not mix the pledged goods with their own.
c. Mohori Bibee v. Dharmodas Ghose (1903)
Though primarily about contract capacity, referenced in bailment cases to stress valid contracts must exist.
5. Summary Table
| Type | Description | Duty of Bailee | Example |
|---|---|---|---|
| Gratuitous Bailment (Bailor’s Benefit) | Bailee benefits free; minimal care required | Liable for gross negligence only | Lending goods for safekeeping free of charge |
| Gratuitous Bailment (Bailee’s Benefit) | Bailor benefits free; bailee gains use/advantage | Liable for slight negligence | Lending vehicle for bailee’s use without charge |
| Bailment for Mutual Benefit | Both parties benefit; contract with consideration | Reasonable care required | Hiring goods or equipment for payment |
| Pledge (Pawn) | Bailment as security for debt | Strict duty of care | Jewelry pledged for loan repayment |
6. In Simple Terms
Bailment means you give something to someone to look after or use.
If one side benefits and the other doesn’t, the duty of care varies.
Pledge is a special kind of bailment where goods are security for a loan.
RELATED Blog
0 comments