What is a Contract of Bailment?

Bailment is defined in Section 148 of the Indian Contract Act, 1872, “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.”

A Legal arrangement known as Bailment occurs when an individual, the Bailor gives personal property to another individual, the Bailee, for a defined purpose, with the expectation that the property will be returned or handled as per the Bailor’s instructions. The Bailee is responsible for providing the bailed property with reasonable care. Usually, a written or implicit agreement specifies the terms of the bailment, including any Payments, Obligations, and Requirements. For example, Lending a book to a friend, Leaving a car at a repair shop, Placing items in a warehouse, etc.

Contract of Bailment and Contract of Pledge are the two types of special contracts that are regulated under the Indian Contract Act, 1872. Contract of Bailment refers to when certain goods are transferred from one party to another for a specific purpose; whereas, Contract of Pledge implies when certain goods are transferred from one party to another as a security against a debt. Both contracts safeguard the best interest of both the parties involved and are very crucial for business transactions.