Duties and Rights of

Bailor and Bailee

 Duties of Bailor
 To disclose known faults
 According to section 150, it is the first and foremost duty
of the bailor to disclose the known faults about the goods
bailed to the bailee
 If the goods are bailed for hire the duty of the bailor is
greater
 Duties of Bailor
 To bear extraordinary expenses of the bailment
 The bailee is bound to bear ordinary and reasonable
expenses of the bailment but for any extraordinary
expenses the bailor is responsible
 In case of gratuitous bailment the bailor must repay all the
necessary expenses incurred by him for the purpose of
bailment (Sec. 158)
 Duties of Bailor
 To indemnify bailee for loss in case of premature
termination of gratuitous bailment
 According to section 159, if the contract of bailment is
terminated before the time specified and because of which
the bailee suffering losses more than the benefit he has
derived from that, the bailor shall have to indemnify the
bailee
 Duties of Bailor

 To receive back the goods

 If the bailor refuses to receive back the goods after
the termination of time specified he is liable to
pay the compensation to the bailee
 Duties of Bailor
 To indemnify the bailee
 According to section 164, if the bailee is suffering losses
because of the title of the goods i.e. where the title of the
bailor to the goods is defective, the bailor has to pay the
compensation for the losses incurred by the bailee
 Rights of Bailor
 Enforcement of rights
 The bailor can enforce by suit all the liabilities or duties of
the bailee as his rights

 Avoidance of contract
 the bailor can terminate the bailment if the bailee does any
act which is inconsistent with the terms of the bailment
(Section 153)
 Rights of Bailor

 Return of goods lent gratuitously

 The bailor can demand the return of goods
whenever he pleases even though he lent them for
a specified time or purpose (Sec. 159)
 Rights of Bailor

 Compensation from a wrong-doer

 If a third person wrongfully deprives the bailee of
the use or possession of the goods bailed, the
bailor or the bailee may bring a suit against the
third person for such deprivation (Sec. 180)
 Duties of Bailee
 To take reasonable care of the goods bailed
 According to section 151, in all cases of bailment the bailee
is bound to take care of the goods as much as it is his own
goods of the same bulk, quality and value
 If inspite of taking reasonable care the goods are damaged
or destroyed in any way, the bailee is not liable for the loss,
destruction or deterioation (Sec. 152)
 Duties of Bailee

 Not to make any unauthorised use of goods

 If the bailee uses the goods bailed in a manner
which is inconsistent with the terms of the
contract, he shall be liable for any loss even though
he is not guilty of negligence, and even if the
damage is the result of an accident (Sec. 154)
 Duties of Bailee

 Not to mix goods bailed with his own goods

 The bailee must not mix the goods of the bailor
with his own goods
 If bailee mixes the with the bailor’s consent both shall
have a proportionate interest in the mixture (Sec. 155)
 Duties of Bailee
 Without the bailor’s consent and if the goods can be
separated or divided, the bailee is bound to bear the
expenses or separation or division as well as damage
arising from the mixture (Sec. 156)
 Without the bailor’s consent, if the mixture is beyond
separation, the bailor is entitled to be compensated by
the bailee for the loss of the goods (Sec. 157)
 Duties of Bailee
 Not to set up an adverse title
 The bailee must hold the goods on behalf of and for the bailor
 He can not deny the right of bailor to bail the goods and
receive them back

 To return any accretion to the goods

 the bailee is bound to deliver to the bailor, or according to his
directions, any increase or profit which may have accrued
from the goods bailed (Sec. 163)
 Duties of Bailee
 To return the goods
 It is the duty of the bailee to return or deliver, according to
the bailor’s directions, the goods bailed, without demand as
soon as the time has expired or the purpose of the bailment is
accomplished (Sec. 160)
 If bailee fails to deliver the goods, he is responsible to the
bailor for any loss (Sec. 161)
 Rights of Bailee
 Delivery of goods to one of several joint bailors of
goods
 If several joint owners of the goods bailed, the bailee may
deliver the goods back to one joint owner without the consent
of all, unless there is no contrary agreement (Sec. 165)

 Delivery of goods to bailor without title

 If bailor does not hold the title of the goods, bailee is not
responsible to the owner of the goods (Sec. 166)
 Rights of Bailee
 Right to apply to court to stop delivery
 If a person other than the bailor claims the goods bailed, the
bailee may apply it to court to stop the delivery of the goods
to bailor and to decide the title to the goods (Sec. 167)

 Right of action against trespassers

 If a third person wrongfully deprives the bailee of the use or
possession of the goods bailed to him he has the right to bring
an action against that party (Sec. 180)
 Rights of Bailee
 Bailee’s lien
 Where the lawful charges of the bailee in respect of
the goods bailed are not paid, he may retain the
goods
 This right of the bailee is known as “particular lien”
 Lien
 Lien means the right of a person to retain possession
of some goods belonging to another until some debt
or claim of the person in possession is satisfied
 Possession is essential for exercising the right of lien
 Lien

 In order to create a lien the possession must be

 Rightful
 Not for a particular purpose
 Continuous
 Types of Lien
 A particular lien
 Lien which is available to the bailee against only those
goods in respect of which he has rendered some service
involving the exercise of labour or skill

 A general lien
 It is a right to retain all the goods or any property of
another until all the claims of the holder are satisfied
 Types of Lien
 A particular lien
 According to Section 170, where the bailee has in
accordance with the purpose of the bailment, rendered
any service involving the exercise of labour or skill in
respect of the goods bailed, he has in the absence of a
contract to the contrary, a right to retain such goods
until he recieves due remuneration for the service he has
rendered in respect of them
 Types of Lien

 Particular lien
 If the bailee does not complete the work within the
agreed time, or a reasonable time, he cannot exercise his
right of lien
 If the bailee voluntarily permits the bailor or regain
possession of the goods without payment of the charges,
he cannot exercise the right of lien
 Types of Lien

 Particular lien
 If without any fault of the bailee, the goods are
destroyed or stolen, the bailee is entitled to be paid for
services performed upon the goods before they were
destroyed or stolen
 Types of Lien

 General Lien
 According to section 171, general lien is availables to
bankers, factors, wharfingers, attorneys of High Court
and policy brokers
 These persons are entitled to retain possession of the
goods bailed to them as security until their claims are
fully satisfied
 Particular Lien Vs. General Lien
 Right available to a bailee  Right available to a bailee against
against only those goods in any property belonging to the
respect of which skill and other party in respect of any
labour have been expended by payment lawfully due (property
him should be in possession of bailee)
 Right to retain the goods only  Right to retain any property
for a charge for labour belonging to the other party for a
employed or expenses incurred general balance of account
upon the goods
 Extinguishment of Lien

 A lien is extinguished or lost by

 Abandonment
 Payment or tender of the amount due
 Loss or surrender of possession of the goods
 Finder of goods

 According to section 71, a person, who finds

goods belonging to another and takes them
into his custody is subject to the same
responsibility as a bailee
 Rights of finder of goods
 Right of lien
 According to section 168, the finder of lost goods has a
right of lien over the goods for his expenses

 Right to sue for reward

 According to section 168, the finder can sue for any
specific reward which the owner has offered for the return
of goods
 Rights of finder of goods
 Right of sale
 According to section 169,finder may sell the goods
found
 If the owner cannot with reasonable diligence found
 If found, he refuses to pay the lawful charges
 If the goods are in the danger of perishing or of losting the
greater part of their value
 If the lawful charges of the finder, amount to two-third of their
value
 Obligations of finder of goods

 He must take reasonable care of the goods

 He must not use the goods for his own purpose
 He must not mix the goods with his own goods
 He must try to find out the owner of the goods
 Termination of Bailment
 On the expiry of the period
 On the achievement of the object
 Inconsistent use of goods (Sec. 154)
 Destruction of the subject-matter
 Gratuitous bailment
 Death of the bailor or bailee