The Indian Contract Act of 1872 was passed in British India. It came into
force on 1st September, 1872. It lays down the law relating to contracts in
India and is based on the principles of English Common Law.
Bailment is one of the types of special contracts under Indian Contracts Act,
1872. It is dealt under Chapter IX which extends from Article 148 to Article
181. Bailment, is a term originally derived from a French word which means ‘to
deliver’. According to Merriam Webster, it means:
The transfer of the possession
of goods by the owner (the bailor) to another (the bailee) for a specific
In other words, we can understand bailment is a relationship formed due to
temporary transfer of possession of goods for any specific purpose. The contract
of bailment is quite wide in its scope as it covers numerous events like
delivering gold to goldsmith for making an ornament, delivering garments for
dry-cleaning, delivering phone/ watch or any other article for repairing, etc.
There are two actors in the relationship of bailment:
A person with whom the ownership of the goods generally lies.
However, it is not the compulsory for him/her to be the owner. He/ She for a
specific purpose temporarily delivers the goods
A person who has the temporary possession of the goods of others
for a specific purpose.
The contract of bailment also includes the returning of the goods by the bailee
to the bailor or disposing the goods according to the directions of the bailor.
The following are the essentials of the contract of bailment:
- Two parties:
A valid contract of bailment requires the presence of two
parties, i.e. bailor and bailee
- Valid Contract:
The contract between the bailor and the bailee must be a
valid contract. It can be either express or implied. In case the goods are
delivered by mistake then it would not amount to a bailment.
- Delivery of the goods:
There must be delivery of the goods from bailor
to bailee. There are two kinds of delivery:
- Actual Delivery:
When the goods is delivered physically. For example, giving clothes for
- Constructive Delivery:
When there is no physical delivery of goods but an act is done in order to
put them in bailee’s possession. For example, if one takes
the delivery of goods on behalf of his/her neighbour acting under their
directions, it would amount to a constructive delivery.
- Delivery must be for a specific purpose:
There must be a purpose for the delivery of the goods to the bailee.
- Returning/disposal of the goods:
The final essential of a bailment contract is the disposal of the goods as
per the directions of the bailor,
either in original form or changed form according to the directions given by the
In this research paper, we are going to look at a comparative study of the
duties of Bailor and the Bailee in a Contract of Bailment.
Research Question 1:
- With the help of relevant sections of the Indian Contracts Act, 1872 and
case laws discuss the duty of bailor to disclose faults and duty of care by
- Discuss with the help of relevant illustrations and case laws, the
conditions where the bailee acts against the will of the bailor:
- If the goods are mixed by the bailee?
- If Bailee makes an unauthorised use of goods?
- Discuss the duties of Bailor and Bailee with respect to the returning of
The goods that are transferred under the contract of bailment have certain
conditions that need to be fulfilled in order for a successful contract of
bailment. These conditions impose duties and grants rights to the parties
involved in the process. Let us discuss the duties of the Bailor and Bailee in
Duty of bailor to disclose faults. (Bailor’s duty)
As per Section 15o of Indian Contracts Act of 1872, talks about the Bailor’s
duty to disclose faults in goods bailed. the Bailor is bound to disclose all
the faults in the goods given under bailment to the Bailee. Such faults are
necessary to come under the notice of bailee and failure to which might lead to
interference in the material usage of the goods or could expose it to
extraordinary risks. In case the bailor fails to disclose the facts, he would
be directly liable to the bailee for the losses incurred by him.
In order to understand the duty of bailor with respect to disclose the faults in
the goods being delivered, we need to first understand that there are two types
of bailors according to Section 15o of Indian Contracts Act, 1872.
The two types
The bailor is expected to disclose the faults in his
knowledge. There is benefit of only one party.
- Non- Gratuitous:
A non-gratuitous bailer has a greater responsibility. He/she would be liable
regardless of his knowledge about the fault. There is occurrence of mutual
For example, B asks A to take his car for a day to pickup his friend. This is
exclusive benefit for B. Here, A would be a gratuitous bailor. However, A did
not inform B that the breaks had been faulty for past few days. In this case, A
would be liable for the damage incurred as faulty break would expose the bailee
to extraordinary circumstances. (Illustration 1)
In the same illustration, if there was a fault in the lock of the backseat, then
A would not be liable as the fault in lock would not expose the bailee to
extraordinary circumstances. (Illustration 2)
If the goods have been hired, then the knowledge of the fault would not matter
as it is the duty of the bailor in this case to check the goods before giving it
under bailment. For example, in the illustration 1, the car was not borrowed by
but was taken under the rental basis from X (defendant). The faulty brakes of
the car led to an accident. Here, X would be a non-gratuitous bailor. In this
case, the defendant can be held liable regardless of his knowledge about the
fault in the break. (Illustration 3)
Case law on the liability of Gratuitous bailor:
In Reed v. Dean
, a motor launch was hired by the plaintiff for the
holidays on the river Thames. Unfortunately, the launch caught fire and as the
fire-fighting equipment was out of order, the fire could not be put down.
Consequently, the plaintiffs were injured and suffered loss. It was held that
there was an implied undertaking that the launch was as safe for the purpose it
was hired, if used with the reasonable care and skill. The defendant was
accordingly held liable.
Case law on the liability of Non-Gratuitous bailor:
In the case of Hyman and wife v. Nye and Sons, the plaintiff had hired a
carriage (including a pair of horses and a driver) from the defendant for a
specific journey. However, during the journey, a bolt in the underpart of the
carriage broke which resulted in the plaintiff being injured. The court held
that the defendant would be liable as it was his duty to supply a carriage as
fit for the purpose for which it is hired as care and skill can render it.
Where the bailment is gratuitous, the bailor must compensate the bailee for any
expenditure done in keeping the goods.
Duty of Reasonable Care to be followed by bailee. (Bailee’s Duty)
As per Section 151 of Indian Contracts Act,1872, the bailee is entitled to take
care of the goods like a reasonable man in the same way he would have taken care
if the ownership of the goods was with him. If the bailee takes the amount of
care as mentioned in Section 151 and there is absence of any special contract
for care, then the bailor would not be liable for the losses incurred thereby.
In Maritn v London Country Council
, the plaintiff was taken to hospital,
where the officials took charge of her jewellery and a case of cigarette made of
gold, which was kept in a room. Unfortunately, it was later stolen by a thief
who broke in the same room. The court held that the defendant was liable and was
liable to pay damages as they did not take proper care of the goods as a
reasonable man would have.
In a similar case of Blount vs war office , a house was demanded by the
War office which belonged to the plaintiff. He was, however, allowed to keep
certain articles in a room of the house which he had locked. The court held that
the War office did not take of the goods as an owner would have and hence the
War office was held liable to pay for the loss incurred.
Research Question 2:
Unauthorised use of goods. (Bailee’s Duty)
Section 153 of Indian Contract Act states that if the bailee uses the goods
against the conditions of the bailment, the contract of bailment would become
voidable at the option of the bailor.
Further, the bailee would be liable to pay for the losses incurred as per
Section 154. In such cases, bailee would be denied of the defenses including
‘vis major’ and inevitable accidents.
A landmark case under the unauthorised use of goods would be Alias v. E.M.
Patil[1o]. In this case, the plaintiff delivered his car to the owner of the
shop (defendant) for some repair work. However, the owner allowed an unauthorised worker to ride the car and as a result an accident occurred causing
the death of a person. The bailee or the defendant was held liable for the
unauthorised use of the car. Additionally, he was liable to pay for the loss
incurred due to his negligence.
Duty not to mix bailor’s goods. (Bailee’s Duty)
The sections 155, 156 and 157 deals with the mixing of goods. It is the duty of
the bailee to keep the goods separate and not mix it with your own or other. The
mixing of the goods can be done either the consent of the Bailor or without
With consent (Section 155)
Separable (Section 156) Non separable (Section
Section 155 talks about the situation where the Bailee mixes the goods with
the consent of Bailor. They will have an interest that would be proportional to
their shares in the mixed goods.
For example, Bailor and Bailee are business partners for the business of
sugarcanes. Bailor sends the goods under the contract of bailment to bailee and
bailee in turn mixes the sugarcane and sells them. Bailee and Bailor would be
entitled to get the profit proportional to their share of
sugarcanes. (Illustration 4)
Section 156 mentions the case where bailee mixes the goods without the
consent of the bailor. However, if the goods can be separated or be divided then
the bailee would be entitled to pay for the expenses the incurred in the
division of the goods as per the nature of the goods.
For example, if X bails 5o sacks of wheat to Y. Y, without the consent of X,
mixes the 5o sacks with other sacks of rice of his own. X will be entitled to
have his sacks returned, and Y would be bound to bear all the expense incurred
in the separation of the sacks, and any other incidental damage. (Illustration
Section 157 discusses the case where bailee mixes the goods without the
consent of bailor and the goods are non-separable. In this case, the bailee
shall be liable to compensated the bailor for the loss incurred.
For example, X bails a barrel of flour worth Rs. 5o per barrel to Y. Y, without
the consent of X, mixes the flour with the flour of his own, worth Rs. 3o per
barrel. Y shall be held liable to compensate X for the loss of his flour.
Research Question 3.
For a successful contract of bailment, the final essential is the
returning/disposing of the goods as per the directions of the bailor. Let us
look at the duties of Bailor and the Bailee in this respect.
Bailor’s right to demand the goods.
Section 163 states that the bailor, in the case of gratuitous bailment, has the
right to demand the goods back from the bailee before the expiration period.
However, if the bailee incurs any loss in the process, bailor shall be liable to
Bailee’s Duty to return the goods.
According to Section 16o, it is the duty of the Bailee to return the goods upon
the expiry of the term of the Bailment or when the purpose of the Bailment has
In case, the goods have not been duly returned upon at a proper time, the bailee
would be responsible for any loss, destruction or deterioration of the good from
that time onwards. This is stated under Section 161 of Indian Contracts Act,
Bailor’s Duty to receive back the goods.
Following section 164 of the Indian Contract Act, 1872, the Bailor must receive
back the goods when the Bailee returns them after the expiry of the term of the
Bailment or when the purpose for which Bailment was formulated has been
If such a situation arises wherein the Bailor refuses to take back the goods,
the bailee is empowered to collect reimbursement from the Bailor for the
required charges of custody
We can understand that Bailment is a legal relationship in which there is
transfer of possession of goods from one party (Bailor) to another (Bailee) for
a certain period of time with a specific purpose upon a contract (either express
or implied). The two parties in the entire process are conferred with certain
duties, rights and liabilities as per the Indian Contracts Act, 1872.
The bailor has to reveal the deficiency of the goods and has to reimburse the
expense incurred by a bailee for the safekeeping of goods and any losses against
the damage incurred to the bailee by the goods of the bailor. Likewise, the
bailee must keep the goods of the bailor secure must return them to the bailor
after fulfilment of the objective for which the bailment ensued.
From this research project, we can understand that the duties of the bailor are
the right of the bailee and the duties of the bailee are the rights of the
bailor. The contract of bailment can be successful only if the terms are adhered
by both the parties.
- Act No. 9 of 1872
- Section 148, Indian Contracts Act, 1872 (India).
- Reed v. Dean, (1949) 1 KB 188
- Hyman and wife v. Nye and Sons, (1881) LR 6 QBD 685
- Remarks by LINDLEY J.
- Maritn v London Country Council, 1947 KB 628
- Blount vs war office, 1953 1 WLR 736
- Similar case referring to this section is Houghland v R.R Low (Luxury
Coaches) Ltd 1962 1 QB 694 (CA)
- Vis major is a Latin maxim which means Act of God.
- Alias v. E.M. Patil, AIR 2oo4 Ker 214
- Section 155, Indian Contracts Act, 1872 (India).
- Section 156, Indian Contracts Act, 1872 (India).
- Section 157, Indian Contracts Act, 1872 (India).