Rights of the Bailor and Bailee

A. Rights of the Bailor

1. Right to Terminate the Bailment: If the bailee violates the conditions of the agreement or the bailment’s goal is accomplished, the bailor is entitled to end the agreement.
2. Right to Demand Return: When the agreed-upon length of the bailment expires or the objective of the bailment is fulfilled, the bailor is entitled to seek the return of the property.
3. Right to Compensation: If compensation is part of the bailment agreement, the bailor has the right to obtain the agreed-upon sum from the bailee.
4. Right to be Informed: If the bailee has any problems with the property or if any situation could influence the bailment, the bailor has the right to be informed regarding the same.

B. Rights of the Bailee

1. Right to Possession: As stated in the bailment agreement, the bailee is entitled to possess and use the property for the designated purposes.
2. Right to Compensation: The right of the bailee to obtain the agreed-upon money from the bailor exists if compensation is included in the bailment agreement.
3. Right to Terminate: If both parties agree to end the bailment or if the bailor violates the conditions of the arrangement, the bailee may terminate the agreement.
4. Right to Lien: Under some conditions, the bailee may be able to place a lien on the asset and refuse to give up until the bailor pays any unpaid fees or damages.

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.