Bailment Contracts

Bailment Contracts

A Contract where one party delivers goods to the other upon return basis to fulfil a specific purpose is called bailment contract. It includes two parties namely; bailer and bailee. The person who is delivering the goods is called bailer and the person to whom goods are delivered, is called bailee.

Example: A has handed over his fan to B for the purpose of repairs. It is bailment contract. A is bailer and B is bailee. Similarly X has handed over his dress Y for the purpose of washing. It is also bailment Contract where X is bailer and Y is bailee.

Types of Bailment Contracts

The bailement contracts are classified into Gratuitous bailments and Non – Gratuitous bailments.

Gratuitous Bailments: If there is only one directional consideration, it is called Gratuitous bailment. In here, the bailment contract is for the benifit of either the bailer or the bailee only.

Example 1: Mr. A, while going to abroad, has handed over his gold to this friend namely B for Safe custody. Here bailer only is getting benefited.

Example 2: Y has taken Scooter for X who is his friend for 1 day. Here only bailee is being benefited.

Non – Gratuitous bailments: If there is two directional consideration it is called Non-Gratuitous bailment. In here, the bailment contract is for the benefit of both parties.

Example: X has handed over his dress to B who is owner of a laundry for washing. At a charge of Rs. 10/-. Here both parties are being benefited.

Features of Bailment

1.                   In case of bailment, as there is delivery of goods, there will be change in procession.

2.                  Though there is change in procession, there will be no change in title.

3.                  Bailment includes return of goods after fulfilment of purpose.

4.                  In delivering the goods, there must be specific purpose.

Difference between Bailment and Sale

BAILMENT	SALE
1. Here parties are called bailer and bailee.	1. Here parties are called buyer and seller.
2. There must be returnable.	2. Such rule is not applicable.
3. There is no question of Shipping of title. Though procession goes to bailee, title rests with bailer.	3. Here title will get shifted from seller to buyer.
4. The concept of bailment is applicable to movable property only.	4. The concept of Sale is applicable to both movable and immovable.
5. Bailment may be with one directional consideration or two directional consideration.	5. Sale always will be with two directional consideration.