Duties and Rights of a Bailer and a Bailey

Last updated on September 19th, 2021 at 07:49 pm

As per the section 148 of the Indian Contract Act, 1872, a bailment is a contract where one person delivers goods to another person for some purpose. The person delivering the goods is the Bailor and the person receiving the goods is the Bailee. After the accomplishment of the purpose, the Bailee needs to return these goods to the Bailor or dispose of them according to the directions of the Bailor. Let us now discuss the duties of bailee and bailor.

Duties of Bailee and Bailor

Bailment refers to the voluntary delivery of goods. Also, such delivery is for a temporary purpose and after the fulfillment of which the bailee shall either return the goods in the same or altered form or dispose of them.

In the contract of bailment, the ownership of the goods remains with the Bailor and only the possession transfers to the bailee. Such delivery of goods may be actual or constructive.

For example, when A hands over the keys of a godown to B, it amounts to the delivery of goods in the godown. Also, A is the bailor and B is the bailee.

Duties of a Bailee

Duties of a bailee in respect of goods are as follows:

1. Take proper care of goods

According to section 151, it is the duty of a bailee to take care of goods bailed to him. Bailee should take care of these goods as an ordinary man will take care of his goods of the same value, quality, and quantity.

Thus, if the bailee takes due care of goods then he will not be liable for any loss, deterioration of such goods. Also, the bailee needs to take the same degree of care of goods whether the bailment is for reward or gratuitous.

However, the bailee is not liable for any loss due to the happening of any act by God or public enemies though he agrees to take special care of the goods.

2. Not to make unauthorized use

As per section 153, the Bailee shall not make any unauthorized use of goods bailed. In case he makes any unauthorized use, then bailor can terminate the bailment.

Bailor can also claim for damages caused to goods bailed due to unauthorized use as per Section 154.

3. Keep goods separate

The bailee needs to keep the goods separately from his own goods. He should not mix the goods under bailment with his own goods. In case bailee mixes the goods with his own goods without the consent of the bailor, then:

1. Bailor also has an interest in the mixture.
2. If the goods can be separated or divided, the property in the goods remains with both the parties. But, the bailee bears the expenses of separation or any damages arising from the mixture.

• If it is not possible to separate the goods, bailee shall compensate the bailor for the loss of goods.

4. Not set adverse title

A bailee must not set an adverse title to the goods bailed.

5. Return Goods

A bailee is under the duty to return the goods without demand on the accomplishment of the purpose or the expiration of the time period. In case of his failure to do so, he shall be liable for the loss, destruction, deterioration, damages or destruction of goods even without negligence.

6. Return increase or profits

A bailee shall return the goods along with any increase or profit accruing to the goods to the bailor, in the absence of any contract to the contrary.

For example, A leaves a hen in the custody of B. The hen gets a chick. B shall deliver the hen along with the chick to A.

Duties of a Bailor   

1. It is the duty of a bailor to disclose all faults. If bailor fails to disclose such faults then he will be responsible for the damage caused to goods or loss suffered by the bailee.
2. Also, bailor is under the duty to pay the extraordinary expenses incurred by the bailee for such bailment.
3. It is the duty of the bailor to accept the goods after the purpose for which such goods were bailed is accomplished.
4. It is the duty of the bailor to indemnify the bailee for cost incurred due to the defective title of goods bailed to the bailee.