If the bailment is for the mutual benefit of bailee and bailor, then the ordinary negligence standard of care will govern. For example, imagine you park your car in a commercial parking lot, or you take your suit jacket to a dry cleaner (see Figure 21.1 “Duty of Care”). In this case, the Allahabad High Court overlooked the first issue regarding bailment but paid serious importance to the second issue of tortious liability. The High Court regarding the issue of bailment took the position that in the lack of a contractual agreement, there exists no relationship of bailment between the government and the appellant. The High Court strictly held that the government cannot be treated as a bailee of the appellant.
Moreover, the bailee is obligated to use the property strictly according to the terms of the bailment agreement. Any deviation from the agreed-upon use can result in liability for any damage or loss that occurs. For example, if a bailee borrows a car for personal errands but uses it for a road trip instead, they could be held responsible for any additional wear and tear or mechanical issues that arise from the unauthorized use. This duty underscores the importance of adhering to the specific conditions set forth by the bailor. In this case, the plaintiff was a pharmaceutical company who filed a suit on the airline company for losing the shipment.
The Apex Court held that the relationship of a bailment cannot commence without the bailee having knowledge and exclusive control over the goods. Since there was no written contract or agreement between the parties, it cannot be said that the bank was a bailee to the customer/ appellant. Essentially, the quasi-contractual relationship formed between the owner and the finder of lost goods has been envisaged under Section 71 is such that the finder is a bailee and the owner is the bailor with pari passu responsibilities and duties.
In a bailment relationship, the bailor entrusts their property to the bailee for a specific purpose, such as repair, storage, or safekeeping. This entrustment can be voluntary, where the bailor actively chooses to hand over the property, or involuntary, where the property is entrusted due to circumstances beyond the bailor’s control. In an involuntary bailment, one person takes possession of someone else’s property by mistake, such as when someone loses his car keys and another person finds those keys on the street. In this example, the bailor rightfully expects the bailee to protect those keys until they can be properly returned to their rightful owner. Bailments that mutually benefit both parties exist when there is an exchange of services between the parties. This is known as a “constructive bailment.” For instance, when a parking garage is in possession of a car for the purposes of repairing it, the owner will ultimately pay for that repair.
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- Later, the notes were misappropriated by a servant at the treasury and the man filed a suit against the state to hold it responsible as a bailee.
- From leaving a car with a valet to entrusting goods to a warehouse, the principles governing a bailor’s rights and duties play a fundamental role.
- A bailment is defined by the intent of the bailor to give temporary possession of the property into the bailee’s care, and the intent of the bailee to accept responsibility for the property.
- A bailee is generally responsible for damages to the bailed property if they have failed to exercise the appropriate degree of care, breached the terms of the bailment agreement, or acted negligently.
The bailee is simply agreeing to do the good deed without expecting anything in return. A bailment is different from a sale or a gift of property because it concerns only the transfer of possession, and not ownership. The property is also typically off-limits to the bailee in that he is not permitted to use it while it is in his possession, though this is not a requirement. Existence of the bailed goods, delivery of possession of the goods, mention of the purpose for which goods are bailed and condition for return of the goods are some of the essentials for creating a bailment. In this case a partnership firm had pledged certain goods to the bank who is the plaintiff. The pledged goods were kept in a godown which belonged to the partnership firm and the bank simply held the keys to the godown and kept it locked.
Rights and Duties of Bailee and Bailor in a Contract of Bailment.
The plaintiff sued the establishment and argued that when the waiter took his coat from him without his request, he became the bailee of his coat and had the duty of taking reasonable care of the same. It was held that even though the waiter acted in courtesy to the customer, when he took the voluntary possession of someone else’s goods, he became obligated to return the same to the one he took it from. Therefore, there was a non-contractual bailment relationship between the customer and the waiter, who assumed physical control over the goods, assumed the duty to take reasonable care of it.
Delivery upon contract
This was held when government officials were allowed to seize the contents of the safe deposit boxes. In this case, there existed no explicit agreement between the customer and service provider creating a bailment relationship but the presumption of a contractual relationship worked against the bank. This is an interesting proposition which presents an intersection of torts and contract law.
Most states have enacted statutes providing exceptions to this extraordinarily broad common-law duty. The hotelier might face liability for valuables lost or stolen from the safe but not from the rooms. The innkeeper’s liability extended not merely to loss of goods through negligence. His was an insurer’s liability, extending to any loss, no matter how occasioned, and even to losses that occurred in the guest’s room, a place where the guest had the primary right of possession. But courts often refuse to honor the disclaimers, usually looking to one of two justifications for invalidating them.
Duties of the bailee
According to Section 159, in case of gratuitous bailment, the bailor can terminate bailment at any time even if the bailment was for a specific time or purpose. However, in cases of early termination of bailment, the bailor has to indemnify the bailee for any loss that he may face due to the abrupt termination of the transaction. In such a situation, both parties derive some benefits out of transaction and rights and duties of bailor agreement.
There are various differences between the bailor and the bailee based on different criterias. Section 155- Mentions that Bailee, with the consent of the bailor, can mix bailor’s goods with his own goods and in such case, both shall have an interest in proportion to their respective shares, in the mixture produced. Facts- The plaintiff went to defendant’s restaurant for the purpose of dining there.
