Bailment is the delivery of movable goods by one person (bailor) to another (bailee) on the condition that the latter will return them or deliver them as per the bailor's instructions (Section 148, Indian Contract Act 1872).
## Core concept
Bailment is a special type of contract involving possession (not ownership) of movable property. Key elements:
- Bailor: person who delivers goods
- Bailee: person who receives goods in possession
- Goods: must be movable property (not land or immovable property)
- Delivery: actual or constructive possession to bailee
- Condition of return: bailee must return goods or deliver as instructed
- No transfer of ownership: bailee holds goods in trust
### Essential differences from pledge - Pledge is for security; bailment is not necessarily for security - Pledge is governed by Section 172; bailment by Section 148 - Bailee in bailment has no right to sell; pledgee can sell on default
## Formula / rule
Elements of valid bailment (Section 148):
- Delivery of movable goods
- From bailor to bailee
- Bailee accepts possession
- With condition to return or deal with goods as instructed
- No transfer of ownership
Rights of bailee (Sections 150–162):
- Right to retain goods until bailor pays charges (Section 152)
- Right to reimbursement of expenses necessarily incurred (Section 158)
- Right to use goods if permitted by agreement
- Right to take reasonable care of goods
Duties of bailee (Sections 151–154, 157):
- Duty to take reasonable care of goods (Section 151)
- Duty to bear liability if loss due to his negligence (Section 152)
- Duty not to use goods without permission (Section 154)
- Duty to return goods within stipulated time (Section 160)
Duty of bailor (Sections 164–166):
- Disclose known faults in goods (Section 164)
- Indemnify bailee against loss from unknown faults (Section 166)
- Bear extraordinary risk not due to bailee's negligence
## Common exam applications
Scenario: Watchmaker bailment A person delivers a broken watch to a watchmaker for repair. The watchmaker: - Is a bailee (Section 148) - Must take reasonable care (Section 151) - Can charge for repairs and retain watch until payment (Section 152) - Must return the same watch (Section 160) - Is liable only if loss is due to negligence
Innkeeper bailment (Section 155): A guest deposits luggage at a hotel. Hotel is bailee and liable for loss unless guest was negligent or loss was caused by force majeure.
Gratuitous vs non-gratuitous bailment: - Gratuitous: bailee owes slight care; bailor bears extraordinary risk (Section 152, Exception) - Non-gratuitous: bailee must show ordinary care; bailor claims indemnity only for unknown faults (Section 166)
## Common mistakes
- Confusing bailment with custody: mere temporary possession without contractual agreement is not bailment
- Forgetting "movable property" restriction: land and houses cannot be bailed
- Mixing bailment and pledge: pledgee can sell on default; bailee cannot
- Ignoring "return" obligation: if goods are consumed in delivery (e.g., grain), it's not bailment but loan
- Misunderstanding negligence standard: even in gratuitous bailment, bailee is liable for gross negligence or willful misconduct
- Assuming ownership transfer: delivery of goods does not transfer title; bailee holds in trust only
Exam tip: Questions often test duty of bailee, rights on non-return, and liability for loss. Always identify whether bailment is gratuitous or for consideration—it changes the negligence standard.