The Rights and Duties of Bailor and Bailee are co-relate with each other. Section 148 of the Indian Contract Act Define ‘Bailment’ as a contractual agreement between the Bailor and the Bailee. A bailor is a person who gives up temporary possession but not ownership of a good whereas a Bailee is a person to whom the possession of the good has been given. When goods are in the possession of the bailee, the ownership is still in the hands of the bailor. A strict duty of care has been placed on the bailee for the possession of the goods. For e.g., X gives a piece of cloth to Y to get it stitched, in this case, X is a bailor and Y is a bailee who has a duty of care to return the cloth to X.
TYPES OF BAILMENTS
- Gratuitous Bailment- Goods are given without any consideration is referred to as gratuitous bailment. E.g., lending notes to a friend.
- Non- Gratuitous Bailment- non-gratuitous bailment refers to the bailment under which the bailor and the bailee are entitled for a reward for bailment. E.g., Room let out for hire.
To make the agreement enforceable, both bailor and the bailee owes some duties and rights towards each other which are discussed below-
RIGHTS OF THE BAILEE
- If a bailee has been given defected goods, then in such case bailee has a right to get compensation from the bailor for the defected items.
- He has a right to claim contribution for the expenses.
- He has a right of indemnity for making involvement in Bailment contract.
- Bailee can return the goods to any of the owners in case there are joint owner for the goods.
- If required, Bailee has a right to approach the Court of law
DUTIES OF A BAILEE
- Bailee owes a duty if care towards the goods given to him by the bailor.
- He should act according to the act of bailment otherwise the contract can become voidable at the option of the bailor
- He cannot deny returning the goods back to the bailor or transfer of the title to the bailor.
- It is the duty of the bailee to return the goods bailed as the time and purpose of the bailment completes.
- Bailee is also entitled to deliver the profit, or any increase that occurred in the bailed goods to the bailor.
- He should not misuse the goods or mix them with his own goods.
RIGHTS OF THE BAILOR
- The bailor has a right to claim for any loss caused to him in case bailee fails to fulfill his duty of care towards the goods.
- He has a right to take goods back from the bailee whenever he desires so.
- He is entitled to receive any profits earned by the bailee during the agreement.
- Bailor is entitled to claim damages in case goods have been mixed by the bailee with his own goods.
DUTIES OF A BAILOR
- Bailor is required to disclose any fault in the goods bailed during the agreement.
- He is required to pay the necessary expenses in the case of gratuitous bailment and extraordinary expenses, if any, in the case of non-gratuitous bailment.
- The bailor must indemnify the loss if incurred by the bailee.
- Bailor also owes a duty to receive the goods back, he cannot deny taking the goods if he does so then he is liable to compensate the bailee.