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Bailment and Pledge
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BAILMENT
BAILMENT
“A bailment is a transaction whereby one person delivers goods to another person for some purpose, upon a contract that they are, when the purpose is accomplished to be returned or otherwise disposed of according to the directions of the person delivering them.”
Examples of Bailment Hiring of Goods Delivering of cloth to tailor for
stiching Delivering a car or scooter for repair
BAILOR & BAILEE
The person who delivers the goods is called the Bailor and the person to whom they are delivered is called the Bailee. The transaction is called a Bailment
TYPES OF BAILMENT
GRATUITOUS BAILMENTBAILMENT- FOR REWARD OR
NON- GRATITIOUS BAILMENT
GRATUITOUS BAILMENT Bailment in which neither the bailor nor
the bailee is entitled to any remuneration. eg- lending a book to friend
BAILMENT- FOR REWARD Bailment in which either the bailor or the
bailee is entitled to remuneration is called Non-Gratitious Bailment.
eg- Motor Car let out for Hire.
Diff btw Sale & Bailment
In sale, the ownership is transferred and he is under no obligation to return the goods.
In Bailment, only possession is transferred and not the ownership of goods.
Right of Bailor
1. Enforcement of Bailee’s Duty 2. Right to terminate bailment if the
bailee uses the goods wrongfully 3. Right to demand return of goods
at any time in case of gratitious bailment
Duties of Bailee
1. Duty to take reasonable care of goods delivered to him.
2. Duty not to make unauthorised use of goods.
3. Duty not to mix goods bailed with his own goods.( goods can be separated or can’t be separated)
4. Duty to return the goods 5. Duty to deliver any accretion
(increase/ decrease)
Duties of bailor
1. Duty to disclose faults in goods bailed.
2. Duty to repay necessary expenses in case of gratitious bailment.( eg- horse and its feeding expenses)
3. Duty to repay any extra ordinary expenses in case of non-gratitious bailment.(eg- horse falls ill , then his medical expenses)
4. Duty to receive the goods back. 5. Duty to indemnify bailee.
Right of the Bailee
1. Enforcement of Bailor’s Duties 2. Rights to deliver goods to one of
the several joint bailor 3. Right to apply to court to stop
delivery of goods. 4. Right of lien.
FINDER OF LOST GOODS
FINDER OF THE LOST GOODS
A finder of lost goods is under no obligation to take charge of the goods when he comes across them. But if he does take charge , he becomes responsible for the goods like a bailee in the gratitious bailment.
Right of Finder
1. Right to take permission of the goods until the true owner is found.
2. Right of lien over the goods for the expenses.
3. Right to sue for rewards. 4. Right to Sale
Duties of Finder
1. The finder must try to find out the true owner of the goods.
RIGHT OF LIEN
Right of Lien
Lien means the right to retain property until all debt or claim is paid. It means that if the lawful charges of the bailee are not paid, then he has right to retain the goods till all expenses are met.
Types of Lien
There are two types of lien:- 1. General Lien 2. Particular Lien
General Lien
General Lien means the right to retain all the goods of the other party until all claims of the holder are paid.
Eg- If there are two loans from bank by a same person, then the bank has a right to retain the security of both the loans even if the amount of first loan has been paid.
Particular Lien
A bailee has a particular lien when he has rendered any service upon an article and is entitled to some remuneration for it. It is exercised if the services rendered involve the exercise of labour or skill.
PLEDGE
“ The bailment of goods as security for payment of a debt or performance of a promise is called a pledge”.
PLEDGER & PLEDGEE
The bailor in this case is called a pledger and the bailee is called the pledgee.
Diff btw Bailment & PledgeeBAILMENT PLEDGE
The delivery of goods may be for any purpose.
The delivery is for specific purpose i.e. to provide a security for a loan.
In case of default by a bailor, the bailee may retain the goods or sue the bailor for non-payment of the dues.
In case of default by the pledger, the pledgee may retain the goods , he may also sell the goods after giving a reasonable notice of sale to the pledger.
The bailormay use the goods if the contract of bailment so provides.
The pledgee can’t use the goods which are pledged to him.
RIGHT OF PLEDGER
1. Enforcement of pledgee’s duty. 2. Defaulting pledger right to
redeem. 3. Preservation and Maintenance. 4. Protection of debtors
DUTIES OF PLEDGER
1. To compensate pledgee for any extra ordinary expenses incurred by him.
2. To meet his obligations on stipulated date and comply with the terms of the contract.
RIGHT OF PLEDGEE
1. Right of Retainer 2. Right of retainer for subsequent
advances 3. Right of extra ordinary expenses. 4. Pledgee’s right where the pledger
makes default.
DUTY OF PLEDGEE( same as bailee)
1. To return the goods pledge on receipt of his full due.