Essential Features of a Contract of Bailment

1. Valid Contract: A contract of bailment needs the consent of both parties, just like any other type of agreement. For a contract to be enforceable, there must be a legitimate offer, acceptance, consideration, legal capacity, and legality of purpose.

2. Delivery of Possession: The property must be physically transferred from the bailor to the bailee. This delivery, which initiates the contractual connection, is a crucial component of bailment. The bailee assumes management for a limited time without gaining ownership.

3. Delivery upon Contract: Delivery of possession must take place inside the parameters of an enforceable contract. The terms and conditions of the bailment must be understood by the bailor and bailee, whether by express agreement or implied agreement.

4. Purpose of Bailment: The reason for giving the property to the bailee must be clear in the contract. Common uses include safekeeping, repair, transportation, and storage. It is important to specify the purpose of the bailment; i.e., whether it is for the benefit of both parties or just one.

5. Return of Goods: The terms under which the property will be restored to the bailor must be spelled out in the contract. This could involve specified deadlines, the accomplishment of a stated goal, or the happening of a certain event. One crucial component of the bailment agreement is still the requirement to return the items.

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.