BAILMENT & THE RIGHTS AND LIABILITIES OF BAILOR AND BAILEE

BAILMENT & THE RIGHTS AND LIABILITIES OF BAILOR AND BAILEE By: ALI SALAR UNIVERSITY OF KARACHI, KARACHI November 2019 TABLE OF CONTENTS CONTENTS PAGE WHAT IS BAILMENT?………………………........................................................................1 WHAT IS BAILOR AND BAILEE?.....................................................................1 PURPOSES OF BAILMENT………………………………………………………………………….1 ESSENTIAL INGREDIANTS OF BAILMENT……………………………………………………1 2. WHAT ARE THE RIGHTS AND LIABILITIES OF THE BAILOR AND BAILEE?........................................................................................................................2 2.1 RIGHTS OF BAILOR………………………………………………………………………………..…..2 2.2 LIABILITIES OF BAILOR……………………………………………...…………………………..…..2 2.3 RIGHTS OF BAILEE……………...………………………………………………………………………2 2.4 LIABILITIES OF BAILEE…….………………………………………......................................3  WHAT IS BAILMENT? A bailment is a procedure and a kind of contract in which the goods are delivered for temporary period by one person to another for some purpose. It is a technical term used in the Common Law parlance which means any kind of handing over or change of possession. A bailment is a form of contractual relationship, even if no contract has been signed. However, when such purpose is achieved, then the goods are returned or disposed of according to the instructions by the one who is delivering them. In a bailment, ownership of the property does not transfer and transfer is never an intended consequence. In order for a bailment to exist, the Bailee must have the intent to possess the property. Example: A, the owner of a Cell-Phone, delivers his Cell-Phone to B, a mobile repairing technician for repairing. B accepts the Cell-Phone for repairment. This is Bailment. WHAT IS BAILOR AND BAILEE? In contractual diction, the person who is delivering the goods for some purpose to be achieved is called “Bailor” and the person who is receiving such goods is called “Bailee”. The Bailee has possession and control over the property for a specific period of time, during which he or she is responsible to take reasonable care of the property and the original owner of the property (the Bailor) maintains the ownership. 1.2 PURPOSES OF BAILMENT: The purposes of Bailment may be: FOR THE MUTUAL ADVANTAGE OF BOTH THE BAILOR AND BAILEE FOR THE SOLE ADVANTAGES OF THE BAILOR FOR THE SOLE ADVANTAGES OF THE BAILEE 1.3 ESSENTIAL INGREDIENTS OF BAILMENT: Some of the essential ingredients of Bailment are as under: Delivery of goods. Purpose of delivery. Delivery of goods for temporary period. Acceptance of the Bailee. With consideration/ without consideration. Return of goods. WHAT ARE THE RIGHTS AND LIABILITIES OF BAILOR AND BAILEE? 2.1 RIGHTS OF BAILOR: A contract of Bailment is voidable at the option of the Bailor, if the Bailee does anything inconsistent with the terms and conditions of the Bailment. The Bailor is entitled to receive compensation for the damages from the Bailee, if the Bailee makes any inconsistent or unauthorized act with the goods bailed against the terms and conditions of the Bailment. The Bailor is entitled to receive compensation for any loss, destruction, or deterioration from the Bailee, if the Bailee failed to return the goods bailed at specified time. The Bailor is entitled to receive the good bailed at any time when the goods bailed have increased or its profit is increased. 2.2 LIABILITIES OF BAILOR: The Bailor is bound to disclose to the Bailee whether he is aware or not, the faults of the good bailed. If the Bailor does not disclose to the Bailee, the faults of the goods bailed then the Bailor is liable to the damages to the Bailee. The Bailor is liable to pay expenses incurred by the Bailee for the purpose of bailment to the Bailee. The Bailor is liable for any loss to the Bailee in case when the Bailor was not entitled to make the bailment or to receive the goods back or to give directions regarding the goods bailed. 2.3 RIGHTS OF BAILEE: The Bailee is entitled to receive compensation for damages from the Bailor, If the Bailor does not disclose to the Bailee, the faults of the goods bailed. The Bailee is not responsible for any loss, destruction, or deterioration of the goods bailed in the case, if he has taken due care as ordinary prudent man would have done. The Bailee may retain the bailed goods until he receives due remuneration for the services he has rendered in respect of bailment. 2.4 LIABILITIES OF BAILEE: The Bailee is bound to take as much care of the goods bailed to him as an ordinary prudent man would do. If the Bailee makes any inconsistent or unauthorized act with the goods bailed against the terms and conditions of the Bailment then the Bailee is liable to make compensation for the damages to the Bailor. If the Bailee without the consent of Bailor mixes the goods of the Bailor with his own goods which can be separated or divided then in such case the Bailee is liable for expenses of separation or division of goods as well as compensation for any damages to the Bailor. However, if the Bailee without the consent of Bailor mixes the goods of the Bailor with his own goods which CANNOT be separated or divided then in such case the Bailee is liable for compensation of any damages to the Bailor. It is the duty of the Bailee to return the bailed goods to the Bailor as per the Bailor’s instructions, if the time for which they were bailed has expired or the purpose for such bailment is achieved. When there are several joint owners who bail the goods then the Bailee may deliver the goods back as per the instructions of one joint owner without the consent of others unless the contrary meaning appears from the bailment. 6