What are Bailor and Bailee under Indian Contract Act 1872?

The bailment is defined in the Indian Contract Act. Bailment is used regularly in our daily life. When one person gives his goods to another person for a specific time limit. So to protect the rights of the parties the contract of bailment is required. It is a legal relationship between them who can make a contract of bailment to transfer their possession of goods to another person for a specific time. After the purpose of the contract is fulfilled the person has to give back the property to his owner.

We will discuss the bailment, who the is bailor, who the is bailee, and their rights and duties in this article.

What is Bailment?

Under section 148 of the Indian Contract Act, bailment means when there is a legal relationship between the bailor and the bailee for the delivery of his possession of goods to the bailee for a specific purpose or a specific period. In this period the bailee takes care of the goods for the bailtment and after the bailment is over the bailor can take back his goods and possessions. For the bailment, there must be free consent from both parties.

Who is Bailor?

Bailor means the person who gives the possession of his goods with consent to the other person is called bailor in the bailment.

Who is Bailee?

Bailee is the person who takes possession of the goods from the bailor and gives them back after completing the period of bailment. In this, after giving possession by the bailor to the bailee the bailor has no right on that property for the period of bailment.

What are the Rights and duties of bailor and bailee under the Indian Contract Act?

Under section 148 of the Indian Contract Act, bailment means when there is a legal relationship between the bailor and the bailee for the delivery of his possession of goods to the bailee for a specific purpose or a specific period. But under this, the ownership remains to the bailor only the transferred deliver to the bailee.

Rights and duties of bailor and bailee under bailment

There are different types of rights and duties of bailor and bailee under the Indian Contract Act. Under the contract of bailment, both parties can enjoy their legal rights.

 

Rights of bailor

The bailor is the owner of the goods so he has certain rights protected under the bailment contract. This includes:

1. Right to claim compensation for damages: under the bailment, the bailor has the right to claim compensation for the damages or loss that occur to the goods during the period of bailment from the bailee.
2. Right to demand back the goods: after the period of bailment is over the bailor has all rights to take back his goods from the bailee and the bailee has to return the goods or dispose of the goods according to the instruction of the bailor, as per the bailment agreement the bailee is bound.
3. Right to terminate the contract of bailment: under this bailment contract, the bailor can terminate the bailment at any time before the bailment time is not completed. But the bailor has to compensate the bailee if any loss occurred to him due to the termination of bailment.
4. Right to sue: under bailment, if the bailee fails to fulfill the terms and conditions which are mentioned in the contract, the bailor can sue the bailee for the breaching of the contract.

Duties of Bailor

Under baiment, the bailor has some duties which must be fulfilled. This is:

1. Duty to disclose the defects: before the transfer of possession of goods to the bailee, the bailor has to disclose every defect or damage that is known to him because after the transfer of goods the bailee knew about those defects then the bailor has responsible for the losses occur.
2. Duty to give proper instruction: the bailor must give clear instructions about the purpose of bailment or the condition of good. The bailor is responsible for giving the proper and clear instructions regarding the contract of bailment.
3. Duty to pay expenses: the bailor must pay all the necessary expenses that occurred during the bailment. It includes storage costs, transportation charges, and any expenses for preserving the goods during the bailment time.
4. Duty to indemnify: the bailor must indemnify the loss or damages of the goods for the bailee that are not disclosed at the time of bailment.
5. Duty to take for inspection: the bailor must allow the bailee to check the condition of the goods before accepting the bailment. At this time the bailor must disclose the damages or defects that are not known to the bailee.

Rights of Bailee

Some rights for bailee are given under the Indian Contract Act, of 1872 for baiment. It includes:

1. Right to possession: the bailee has the right of possession to the goods that are delivered by the bailor. But the bailee uses the goods only for the purpose that is mentioned at the time of delivery, and not to do any other use without the consent of the bailor.
2. Right of compensation: the bailee has a right to claim compensation for the expenses that occur in the ordinary course of bailment like: for the expenses of preservation of the good or the maintenance, the bailee can compensate the expenses from the bailor.
3. Right to lien: the bailee has the right to not give the possession of goods back until the bailor pays the charges or expenses to the bailee that occur during the bailment.
4. Right to terminate: the bailee has the right to terminate the contract of bailment if the bailor is not working according to the terms and conditions decided by both parties while making the contract.

Duty of Bailee

Some duties of bailee are given under the Indian Contract Act, 1872 for baiment. It includes:

1. Duty to take care of goods: under bailment, the baile must take care of goods as required for the preservation. The bailee has to take care of the goods as the other person is taking care of his goods. If he fails then he will be liable for the charges that occur due to the breach of duty. But in the act of god, he is not liable.
2. Duty to return the goods: in this the bailee duty to return the goods after the period of bailment is over. The bailee cannot keep the possession after the accomplishment of bailment.
3. Duty not to mix the goods: the bailee has a duty not to mix the products with other products so at the time of returning there is no confusion to identify the real one. If the bailee fails to separate the goods from others then he is liable for the loss.
4. Duty not to do unofficial use: under section 153 the bailor can void the contract if he knows that the bailee uses the goods unauthorized. The bailee has to use the goods that are specific in bailment and not for personal use.
5. Duty to return profit: the bailee must return the profits that come from the goods. The bailee cannot take the profit without the consent of the bailor.
6. Duty to recognize title: the bailee must acknowledge the bailor’s title and ownership rights of the goods and not take any right or interest that is inconsistent with the bailor’s title.

Termination of Bailment Contract

There are different types of reasons for termination of a bailment contract when the period of bailment is over, the bailment is over when the purpose has been fulfilled, when the goods are destroyed by any reason, or by the mutual consent of both parties or on the death of bailor or bailee, the bailment can terminated by the notice issued by any of the party.

Conclusion

The bailment is when one person delivers his possession of goods to another person legally for a specific period. Who delivers the goods is the bailor and who receives is the bailee. Under the Indian Contract Act, of 1872 the bailment is defined. It is the legal relationship for bailment.