Duties and Rights of
Bailor and Bailee
Duties of Bailor
To disclose known faults
According to section 150, it is the first and foremost duty
of the bailor to disclose the known faults about the goods
bailed to the bailee
If the goods are bailed for hire the duty of the bailor is
greater
Duties of Bailor
To bear extraordinary expenses of the bailment
The bailee is bound to bear ordinary and reasonable
expenses of the bailment but for any extraordinary
expenses the bailor is responsible
In case of gratuitous bailment the bailor must repay all the
necessary expenses incurred by him for the purpose of
bailment (Sec. 158)
Duties of Bailor
To indemnify bailee for loss in case of premature
termination of gratuitous bailment
According to section 159, if the contract of bailment is
terminated before the time specified and because of which
the bailee suffering losses more than the benefit he has
derived from that, the bailor shall have to indemnify the
bailee
Duties of Bailor
To receive back the goods
If the bailor refuses to receive back the goods after
the termination of time specified he is liable to
pay the compensation to the bailee
Duties of Bailor
To indemnify the bailee
According to section 164, if the bailee is suffering losses
because of the title of the goods i.e. where the title of the
bailor to the goods is defective, the bailor has to pay the
compensation for the losses incurred by the bailee
Rights of Bailor
Enforcement of rights
The bailor can enforce by suit all the liabilities or duties of
the bailee as his rights
Avoidance of contract
the bailor can terminate the bailment if the bailee does any
act which is inconsistent with the terms of the bailment
(Section 153)
Rights of Bailor
Return of goods lent gratuitously
The bailor can demand the return of goods
whenever he pleases even though he lent them for
a specified time or purpose (Sec. 159)
Rights of Bailor
Compensation from a wrong-doer
If a third person wrongfully deprives the bailee of
the use or possession of the goods bailed, the
bailor or the bailee may bring a suit against the
third person for such deprivation (Sec. 180)
Duties of Bailee
To take reasonable care of the goods bailed
According to section 151, in all cases of bailment the bailee
is bound to take care of the goods as much as it is his own
goods of the same bulk, quality and value
If inspite of taking reasonable care the goods are damaged
or destroyed in any way, the bailee is not liable for the loss,
destruction or deterioation (Sec. 152)
Duties of Bailee
Not to make any unauthorised use of goods
If the bailee uses the goods bailed in a manner
which is inconsistent with the terms of the
contract, he shall be liable for any loss even though
he is not guilty of negligence, and even if the
damage is the result of an accident (Sec. 154)
Duties of Bailee
Not to mix goods bailed with his own goods
The bailee must not mix the goods of the bailor
with his own goods
If bailee mixes the with the bailor’s consent both shall
have a proportionate interest in the mixture (Sec. 155)
Duties of Bailee
Without the bailor’s consent and if the goods can be
separated or divided, the bailee is bound to bear the
expenses or separation or division as well as damage
arising from the mixture (Sec. 156)
Without the bailor’s consent, if the mixture is beyond
separation, the bailor is entitled to be compensated by
the bailee for the loss of the goods (Sec. 157)
Duties of Bailee
Not to set up an adverse title
The bailee must hold the goods on behalf of and for the bailor
He can not deny the right of bailor to bail the goods and
receive them back
To return any accretion to the goods
the bailee is bound to deliver to the bailor, or according to his
directions, any increase or profit which may have accrued
from the goods bailed (Sec. 163)
Duties of Bailee
To return the goods
It is the duty of the bailee to return or deliver, according to
the bailor’s directions, the goods bailed, without demand as
soon as the time has expired or the purpose of the bailment is
accomplished (Sec. 160)
If bailee fails to deliver the goods, he is responsible to the
bailor for any loss (Sec. 161)
Rights of Bailee
Delivery of goods to one of several joint bailors of
goods
If several joint owners of the goods bailed, the bailee may
deliver the goods back to one joint owner without the consent
of all, unless there is no contrary agreement (Sec. 165)
Delivery of goods to bailor without title
If bailor does not hold the title of the goods, bailee is not
responsible to the owner of the goods (Sec. 166)
Rights of Bailee
Right to apply to court to stop delivery
If a person other than the bailor claims the goods bailed, the
bailee may apply it to court to stop the delivery of the goods
to bailor and to decide the title to the goods (Sec. 167)
Right of action against trespassers
If a third person wrongfully deprives the bailee of the use or
possession of the goods bailed to him he has the right to bring
an action against that party (Sec. 180)
Rights of Bailee
Bailee’s lien
Where the lawful charges of the bailee in respect of
the goods bailed are not paid, he may retain the
goods
This right of the bailee is known as “particular lien”
Lien
Lien means the right of a person to retain possession
of some goods belonging to another until some debt
or claim of the person in possession is satisfied
Possession is essential for exercising the right of lien
Lien
In order to create a lien the possession must be
Rightful
Not for a particular purpose
Continuous
Types of Lien
A particular lien
Lien which is available to the bailee against only those
goods in respect of which he has rendered some service
involving the exercise of labour or skill
A general lien
It is a right to retain all the goods or any property of
another until all the claims of the holder are satisfied
Types of Lien
A particular lien
According to Section 170, where the bailee has in
accordance with the purpose of the bailment, rendered
any service involving the exercise of labour or skill in
respect of the goods bailed, he has in the absence of a
contract to the contrary, a right to retain such goods
until he recieves due remuneration for the service he has
rendered in respect of them
Types of Lien
Particular lien
If the bailee does not complete the work within the
agreed time, or a reasonable time, he cannot exercise his
right of lien
If the bailee voluntarily permits the bailor or regain
possession of the goods without payment of the charges,
he cannot exercise the right of lien
Types of Lien
Particular lien
If without any fault of the bailee, the goods are
destroyed or stolen, the bailee is entitled to be paid for
services performed upon the goods before they were
destroyed or stolen
Types of Lien
General Lien
According to section 171, general lien is availables to
bankers, factors, wharfingers, attorneys of High Court
and policy brokers
These persons are entitled to retain possession of the
goods bailed to them as security until their claims are
fully satisfied
Particular Lien Vs. General Lien
Right available to a bailee Right available to a bailee against
against only those goods in any property belonging to the
respect of which skill and other party in respect of any
labour have been expended by payment lawfully due (property
him should be in possession of bailee)
Right to retain the goods only Right to retain any property
for a charge for labour belonging to the other party for a
employed or expenses incurred general balance of account
upon the goods
Extinguishment of Lien
A lien is extinguished or lost by
Abandonment
Payment or tender of the amount due
Loss or surrender of possession of the goods
Finder of goods
According to section 71, a person, who finds
goods belonging to another and takes them
into his custody is subject to the same
responsibility as a bailee
Rights of finder of goods
Right of lien
According to section 168, the finder of lost goods has a
right of lien over the goods for his expenses
Right to sue for reward
According to section 168, the finder can sue for any
specific reward which the owner has offered for the return
of goods
Rights of finder of goods
Right of sale
According to section 169,finder may sell the goods
found
If the owner cannot with reasonable diligence found
If found, he refuses to pay the lawful charges
If the goods are in the danger of perishing or of losting the
greater part of their value
If the lawful charges of the finder, amount to two-third of their
value
Obligations of finder of goods
He must take reasonable care of the goods
He must not use the goods for his own purpose
He must not mix the goods with his own goods
He must try to find out the owner of the goods
Termination of Bailment
On the expiry of the period
On the achievement of the object
Inconsistent use of goods (Sec. 154)
Destruction of the subject-matter
Gratuitous bailment
Death of the bailor or bailee
