BAILMENT

1. Duty to Take Reasonable Care – Section 151

A bailee is bound to take the same care of the goods bailed as a reasonable person would take of their own goods of the same bulk, quantity, and value.

2. Duty to Not Make Unauthorized Use – Section 154

If the bailee uses the goods in a manner not agreed upon in the contract of bailment and such use causes damage, the bailee must compensate the bailor for the loss.

3. Duty Not to Mix Goods Without Consent

• Section 155: If the bailee mixes the bailor’s goods with their own with the bailor’s consent, both parties share an interest in the mixed goods proportionally.
• Section 156: If goods are mixed without the bailor’s consent but can still be separated, the bailee must bear the cost of separation and any resulting damage.
• Section 157: If such mixing makes the goods inseparable, the bailee must compensate the bailor for the loss incurred.

5. Duty to Return the Goods – Sections 160 & 161

Section 160: The bailee must return the goods once the purpose is fulfilled or the agreed time has expired.
Section 161: If the bailee delays the return, they are liable for any loss, damage, or deterioration during the delay.

6. Duty to Deliver Any Profit – Section 163

If the bailed goods generate any profit, income, or increase, the bailee must deliver those gains to the bailor.

1. Right to Recover Necessary Expenses – Section 158

If the bailee performs work on the goods for the bailor under a bailment agreement without receiving any payment, the bailor is obligated to repay all necessary expenses incurred by the bailee. This ensures the bailee isn’t financially burdened for fulfilling their part of the agreement.

2. Right to Recover Compensation – Section 164

The bailee is entitled to compensation if they suffer any loss due to the bailor:

• not having the authority to bail the goods,
• not being entitled to receive the goods back, or
• giving incorrect directions regarding the goods.

In such cases, the bailor must compensate the bailee for any resulting damages or losses.

3. Particular Lien – Section 170

If the bailee has rendered services involving skill or labour on the bailed goods, they have the legal right to retain those goods until the payment for such services is made. This is known as a particular lien, and it protects the bailee’s interests.

4. General Lien – Section 171

Certain professionals such as bankers, factors, wharfingers, High Court attorneys, and policy-brokers have the special right to retain goods bailed to them as security for a general balance of accounts. No other person enjoys this right unless there’s a clear express contract permitting it.

1. Duty to Disclose Faults – Section 150

Section 150 imposes the duty on bailor to disclose faults in goods bailed. If the bailor does not tell the bailee about the faults in the goods due to which bailee suffer any damage then bailor will be responsible for the damage.

• 🔍 In the case of goods bailed for hire, the bailor must disclose faults even if unaware of them.

2. Duty to Pay Necessary Expenses – Section 158

If the bailee is performing any work or service on the goods without remuneration, it is the bailor’s responsibility to reimburse all necessary expenses incurred by the bailee.

3. Duty to Compensate for Wrongful Bailment – Section 164

The bailor must compensate the bailee for any loss suffered when:

• The bailor was not entitled to make the bailment,
• Or the bailor had no authority to take back the goods,
• Or the bailor gave incorrect instructions about handling the goods.

In such cases, the bailor is liable for damages resulting from the breach of trust.

1. Goods Lent Gratuitously – Section 159

Section 159 provides that if the lendor has given his goods gratuitously even for a specified time or purpose then he can take his goods back any time even before specified time or purpose.

⚠️ However, if this early demand causes the borrower any loss, the lender must indemnify the borrower for such loss.

2. Bailment by Joint Owners

When goods are owned by multiple people, the bailee may return the goods:

• To any one of the joint owners, or
• As per the instructions of any one joint owner,

…unless a different agreement exists between them.

3. Bailor Without Title

If someone who is not the actual owner delivers goods to a bailee, and the bailee returns them in good faith to the bailor, then the bailee is not liable to the real owner of the goods.

4. Finder of Goods – Sections 168 & 169

Section 168 – Right to Retain

A person who finds lost goods:

• Cannot sue the true owner for reward or compensation, but
• Can retain the goods until paid for the efforts or expenses in preserving them.
• If the owner has announced a specific reward, the finder can claim it upon returning the item.

Section 169 – Right to Sell

A finder of goods may even sell the goods in the following exceptional situations:

• 🧃 If the goods are of a perishable nature, or there is a risk of substantial value loss, or
• 💸 If the lawful expenses incurred by the finder are two-thirds or more of the item’s value.

This ensures that the finder is not unfairly burdened and that the goods are preserved or rightfully compensated.