Rights of Bailor and Bailee Under Indian Contract Act

A bailment, according to Section 148 of the Indian Contract Act of 1872, is a contract wherein one person gives or delivers goods to some other people for some purpose. The person who delivered the goods is known as the Bailor, and the person who received the goods is known as the Bailee. After accomplishing the task, the Bailee should return the product to the Bailor or try to get rid of it in line with the Bailor's guidelines.

Bailment refers to the voluntary delivery of products. Aside from that, such delivery is only for a limited period of time, after which the Bailee must either return them in their former or modified form, or try to get rid of them in accordance with Bailor's recommendations. The bailor's rights and duties are linked in the bailment contract.

Under the bailment contract, the Bailor retains ownership of the commodity, and only possession passes to the Bailee. This form of product delivery might be of the actual or constructive bailment type.

Rights of Bailor

Considering the products, he bailed out, the Bailor has the following rights over the Bailee. In addition to the authority stated below, a bailor has the right to cancel the contract under certain conditions.

Rights of the bailor to compel the performance of the Bailee

When the Bailor delivers goods to the Bailee for a specific purpose, the latter has a group entitlement to accomplish that intent or take advantage of the performance, particularly in the case of non-gratuitous bailment.

For example, if A gives B, his tailor, a thick jacket cloth to stitch a woolen outfit, A is the Bailor and must ensure that B, the tailor, does the work perfectly.

Rights of bailor to sue for damages

The Bailor has the right to claim damages for any loss suffered by the goods bailed as a result of the Bailee's carelessness or wrongdoing in all instances of bailment.

Rights of bailor to recover damages for unpermitted use of goods

Let's explain this with an example. Joe has a car. He allows Sam to use his car under the condition that only Sam drives it. Sam gives Amy, a family member, authorization to operate the vehicle. Amy drives with caution, but the car is injured in an accident. Amy's damages have now become Sam's duty. Sam is obligated to compensate Joe for the injury caused by the product because Amy is not directly involved in the contract.

Rights of bailor to demand the return of goods

If the bailment period has ended or the bailment's objective has been met, the Bailor has the exclusive right to have the goods bailed back to the Bailee in safe and healthy condition. Furthermore, the Bailor is obligated to accumulate the products bailed in the event of any direct contrast term not mentioned in the contract.

For example, A requests that B care for his brooding duck for a week while he is out of the office. When he returned, the ducklings had already hatched. A has a right to the duck and the ducklings.

Rights of Bailee

Right to Claim Damages

The bailee has the right to know about every flaw in the goods bailed to him that the bailor is aware of and that materially interferes with their use or exposes the bailee to extraordinary risks. A bailee is entitled to compensation from the bailor for any damage or loss caused directly by such flaws in the bailed goods. (Sec. 150).

Right to Remuneration

The bailee is entitled to legal costs for the services rendered. But if the goods are bailed and work is to be done on them by the bailee for no payment, the bailee is allowed to recover the necessary expenses incurred by him. This right is only given to gratuitous bailees (Sec 158).

Right to recover charges

If the bail is non gratuitous, the bailee has the right to recover charges that he agreed to pay. If the charges are not fixed or agreed on, the bailee can then recover reasonable charges or charges set by another bailee.

Right to return the goods in cases of joint bailers [S. 165]

In the absence of any agreement to the contrary, if several joint owners of goods bail them, the bailee may deliver them back to, or according to the directions of, one joint owner without the consent of all.

So, if the goods have been provided by multiple owners, Bailee may return the goods to any of the owners if there is no contrary agreement.

Right of Compensation [S. 164]

The bailor is responsible to the bailee for any losses that arise out of the bailor's inability to execute the bailment, receive the items back, or give directions in accordance with it. As a result, the bailee can recover the amount of loss he has experienced as a result of Bailor's defective title.

Right to apply to the court [S. 167]

If a person other than the bailor claims the items bailed, he may apply to the court to stop the goods from being delivered to the bailor and to decide the title to the goods.

Thus, where a person other than the bailor claims goods bailed, the bailee may apply to the court −

• To stop delivery of goods to the bailer; and

• To decide the title of the goods

Right against wrong does [S. 180–181]

If a third person wrongfully deprives the bailee of the use or possession of the goods bailed or causes them damage, the bailee is entitled to use the same remedies as the owner would have used in the same case if no bailment had been made, and either the bailor or the bailee may sue a third person for such deprivation or injury.

S. 181 − Any relief or compensation obtained in any such suit should be dealt with in accordance with the bailor's and bailee's respective interests.

Right of lien [S. 170, 117]

The bailee may keep possession of the bailor's goods until the bailor's charges are paid.

Conclusion

Bailment is a formal agreement between a bailor and a bailee in which the bailor gives possession of his products to the bailee for a clearly defined objective. When that objective is accomplished, the Bailor delivers his products to the Bailee. Bailor can also tell the Bailee to discard or dispose of the products in accordance with bailor guidelines. The person who gives another person possession of his personal possessions is referred to as the Bailor in the bailment.

Frequently Asked Questions (FAQ)

Q1. What are the rights of the bailor and bailee against a third party?

Ans. A bailee has the right to sue a third party if he deprives the bailee of the bailed goods, according to Section 180 of the ICA. The possessor of the goods, as if he were the owner, has the right to sue any third party who takes the bailed goods from the bailee's possession or causes damage to the goods.

Q2. What is the benefit of a bailor and bailee?

Ans. In a bailment for the sole benefit of the bailor, the bailor has the right to have the bailed property properly stored and returned when the bailment expires. The bailee is obligated to protect the bailed property with due care and to return the property when the bailment ends.

Q3. What are the rights of the bailor and bailee?

Ans. After the term of the bailment expires or the purpose is fulfilled, the bailor is obliged to restore the goods to the bailee. But if the bailor refuses to do the same, he will be entitled to pay the bailee for the necessary custody and care expenses.