Duties of the Bailor and Bailee

A. Duties of the Bailor

1. Transfer of Ownership: Following the terms of the agreement, the bailor is required to deliver the property to the bailee and transfer physical custody.
2. Complete Disclosure: It is the bailor’s responsibility to give full and correct information regarding the kind and state of the property being transferred. This covers any recognized flaws or unique factors that might have an impact on how the property is used.
3. Title Warranty: By granting custody to the bailee, the bailor essentially guarantees that they are the property’s legitimate owner.
4. Defend against Losses: If the bailee is not aware of any faults or concealed conditions of the property, the bailor is liable for compensating the bailee for any losses or damages.

B. Duties of the Bailee

1. Acknowledgment of Ownership: According to the conditions of the bailment agreement, the bailee is in charge of taking possession of the property.
2. Use for Agreed Goal: The property must be used by the bailee for the intended use alone, as stated in the bailment agreement, and not for any unauthorized purposes.
3. Return of Property: The bailee is required to return the property to the bailor in the same condition as when it was received after the purpose of the bailment is completed or the predetermined time has passed.
4. Notification of Problems: Generally, the bailee has to notify the bailor if they become aware of any problems or concerns about the property, such as damage or prospective damage.

Bailment is defined in the Indian Contract Act, 1872 under Section 148 as “A Bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them”. Bailment is a legal agreement that occurs when one person known as the Bailor, gives personal property to another, known as the Bailee, for a set amount of time or a specific reason. In a Bailment arrangement, the property is temporarily given to the Bailee, but the Bailor owns it. For a specific amount of time, the property is given to the bailee’s care, possession, and control. Once that time has passed, the item is returned to the bailor.

Geeky Takeaways:

• The person who delivers the goods is known as Bailor.
• The person who receives the goods for a specific purpose is called a Bailee.
• It is covered under Chapter IX of the Indian Contract Act, 1872 and is a special type of contract.
• Bailor gives property to the Bailee for a specific amount of time and once that time is completed, the item is returned to the bailor.