Bailments
Bailments
Bailments
I. DEFINITION OF BAILMENTS
Bailment is the delivery of the property of one person to another in trust for a specific
purpose, with a contract, express or implied, that the trust shall be faithfully executed
and the property returned or duly accounted for when the special purpose is
accomplished or kept until the bailor reclaims it. The bailee is responsible for
safekeeping and return of the property.
B. Bailment for hire It arises when goods are left with the bailee for some
use or service by him and is always for some compensation.
a. Hire of things (Locatio Rei) Where goods are delivered for the
temporary use of the hirer.
b. Hire of service (Locatio Operis Faciendi) Where goods are
delivered for some work or labor upon it by the bailee.
c. Hire for carriage of goods (Locatio Operis Mercium
Vehemdarum) Where goods are delivered either to a common
carrier or to a private person for the person of being carried from
place to place.
d. Hire of custody (Locatio Custodae) Where goods are
delivered for storage.
V. VOLUNTARY vs INVOLUNTARY
A. Voluntary bailment - another person accepts responsibility for the items.
B. Involuntary bailment - someone ends up with the goods without ever
intending to do so.
A. On the expiry of the period - When the bailment of good is made for a
specific period and that period expires then the bailment also comes to an
end.
B. On the completion of the task or the achievement of the objective - When
bailment of goods is made for a particular purpose and that purpose gets
accomplished then the bailment comes to an end.
C. Inconsistent uses of goods by the bailee - When bailment is made and the
bailee does an act which is inconsistent with the terms of contract then the
bailor can terminate the contract.
D. Destruction of the subject matter - When the subject matter of the contract
gets destroyed or becomes incapable of being used for the purpose of
bailment then the bailment ends
E. Gratuitous Bailment - It can be terminated anytime subject to conditions
laid down in section 159
F. Death of the bailor/bailee - In case any of the parties to the contract of
bailment expires the contract terminates.
IX. REMEDIES
A. For the value of services rendered:
For contractual bailees regular contract remedies apply (usually for non-
payment)
Can sue for damages
Usually cannot obtain rescission
Can sue for Quantum Meruit in situations where there has been
part performance
B. For liens
Gives the right to the bailee to retain possession of the goods
Payment must come due while the goods are still in the possession
of the bailee
Common Law right for bailees are:
a. Repairers of goods
b. Innkeepers
c. Common Carriers
d. Bankers or Lawyers
C. Right of Sale
Only available by statute or by contract (not a Common Law right)
Provides the bailee the right to sell the goods in their possession to
cover goods. Must follow a prescribed formula to sell:
a. Provide a specified period of time to bailor to come up with
funds
b. Advance notice of the bailees intention to sell the goods must
be provided to the bailor
c. Sale must be advertised
d. Sale must be made by public auction