Transfer of personal property by one party (the bailor) in the possession, but not ownership, of another party (the bailee) for a particular purpose. Such transfer is made under an express or implied contract (called bailment contract or contract of bailment) that the property will be redelivered to the bailor on completion of that purpose, provided the bailee has no lien on the goods (such as for non-payment of its charges). The bailee is under an obligation to take reasonable care of the property placed under its possession.
What are the Essential Features of Bailment?
1. There should be a contract:
A bailment is based on a contract, i.e., it is created by a contract. The contract of bailment may be express or implied. In some cases e.g., in case of finder of goods, a contract of bailment can be implied by law.
2. Delivery of goods by one person to another:
In bailment, there must be delivery of goods by one person to another. However, the word, ‘delivery’ is very wide. It may be actual or constructive. It should be noted that in bailment, only possession of the goods passes from one person to another. Possession means control of goods to the exclusion of others. Mere custody of goods as against possession is not sufficient. For example, a master while giving his goods to his servant retains the possession with him and parts only with the custody of the goods. It should be noted that in bailment, only the possession of the goods is transferred not the ownership. Again, only movable goods can be bailed as immovable goods cannot be delivered.
3. The goods are delivered for certain purpose:
The purpose may vary from safe-keeping or safe custody to repairing or changing the form of the goods.
- A leaves his suit-case with a Railway Cloak Room for safe custody.
- A gives his watch for repair to a watch-maker.
- A gives a piece of cloth to a tailor for stitching it into a shirt.
4. The same goods must be returned:
For a transaction of bailment, it is necessary that the same goods must be returned. Where money is deposited in a savings bank account or any other account, it is not a transaction of bailment because the bank is not going to return the same currency notes but
will return only an equivalent amount. However, where money or valuables are kept in safe custody, it will amount to a transaction of bailment as these will be returned in specie. It should be noted that return of goods in specie does not mean that their form cannot
change. For example, old ornaments can be changed into new one. A piece of cloth can be stitched into a shirt.
5. Moveable Property
It is the main feature of bailment that it is only for the moveable property and not for the immoveable property
6. Ownership Right of ownership remains with bailor and it does not change by the delivery of goods to other person.
7. Change In Shape
If bailed goods shape changes in the mean time even then it remains a contract of bailment.
8. Parties of the Contract
In the contract of bailment there are two parties, the bailor and the bailee.
Consideration is not necessary in case of Contract of Bailment:
In case of bailment for mutual benefit of the bailor and bailee, consideration is there for both the parties e.g., A gives his watch for repair to B for Ksh 10. For A, consideration is repair of his watch and for B, consideration is Ksh 10. However, in case of bailment either for the benefit of the bailor or bailee alone, consideration in the form of something in return is not there. In such cases the detriment suffered by the bailor in parting with the possession of goods is considered as a sufficient consideration to support the promise on the part of the bailee to return the goods.