Bailment

 Bailment is a common-law relationship among parties involved in the contract where assets are moved from one individual to another. Bailor and Bailee are the parties involved. Under the contract of bailment, goods are transferred by an individual who will later obtain possession of the goods.

Bailment means an agreement that exists when an individual assigns an asset to another individual for custody. Assets are owned by the bailor, who temporarily transfers them. When a bailor does not intend to resume portfolio management duties, a bailee is appointed to oversee an investment portfolio. 

Categorization of Bailment

There are different categories of bailments, which are as follows:

• Gratuitous Bailment: Consideration does not exist either for the bailor’s advantage or the bailee’s advantage under gratuitous bailment
• Non-Gratuitous Bailment: An non-gratuitous bailment is held for reward, and it is beneficial not only for the bailor but also for the bailee

1. Bailment to the bailor’s advantage: Bailment to the bailor’s advantage, in this case, without receiving any advantage, the bailor keeps the goods with a bailee for safe custody.
2. A bailment to the advantage of the bailee: This is a bailment to the advantage of the bailee in which the bailor delivers goods
3. Bailment to the bailor’s & bailee’s advantage: Bailment to the bailor & bailee’s advantage, in this case, when goods are exchanged for payment, both the bailor & the bailee make the most of the contract. 

Rights and Duties of Bailor

Right of Bailor

• Right to seek repayment:  In the contract of bailment, it is the bailor’s right to seek repayment if the goods bailed suffer damage due to the bailee’s negligence.

• Right to request to return the goods: After the bailment period expires, the bailor has the right to have his goods returned in good condition.

Duties of Bailor

• Obligation to reveal faults: In the gratuitous bailment, the bailee should be notified of any defects discovered while working on the goods bailed by the bailor. When the bailor knows the flaws, he bears a large portion of the blame as he was already aware of it.

• Reclaiming the goods: The contract of bailment requires the bailor to take the goods when the bailee returns them for any reason. If the bailor refuses to accept returned goods for any reason, the bailor, not the bailee, will be held liable for all damages caused to the products.

Rights and Duties of a Bailee

Duties of Bailee

A Bailee is that person to whom the goods are delivered.

• Duty to take care of goods: The bailee must take reasonable maintenance of the goods bailed.

• Duty not to mix goods: The bailee must keep the goods bailed separated from his goods. He cannot mix the goods without the bailor’s prior permission. 

• Duty to return goods: It’s the bailee’s duty to return the goods to the bailor in safe and good condition after the expiry of the period of bailment.

Bailee’s Rights

The Bailor’s duties are typically the bailee’s rights.  

• Right to seek damages: Bailee can seek repayment for any damages due to the bailor’s actions from the bailor.

• Right to recover expenses: Bailor is obligated to reimburse the expenses incurred for work performed upon the goods which are in bailment.

Pledge

A pledge is a superior kind of bailment. Here the goods are delivered as a security for paying a debt or the performance as promised. Pledger delivers the goods for security for payment of a debt or fulfilling as per promise is called pawnor or pledger. 

 Pledgee is an individual to whom the goods are given in the form of security. This is for repayment of a debt or acting upon the promise, and a change in the ownership of the property does not happen.

Rights and Duties of a Pawnor

Rights of a Pawnor

• Right to redeem: By the contract of bailment, the pawnor is held responsible for redeeming the goods pawned by him to the pawnee. Whenever the loan repayment gets defaulted, he can pay extra expenses incurred for not paying the loan off.
• Right to seek for damage: If the pawnee mixes the goods pledged with his goods without the pawnor’s consent, the pawnor can sue for damages.

Duties of a Pawnor

• The pawnor must follow all the terms and conditions of the goods pawned, like repaying the loan amount within a stipulated period. 
• Moreover, the pawnor must pay the extra cash expensed incurred upon the pawnee for keeping safe the goods pawned.

Rights and duties of a Pawnee

Rights of a Pawnee

• Right of a retainer: The pawnee can retain the goods pledged with him until he is paid money in advance, necessary expenses, interest paid on debt by him with regards to the possession, or the protection of goods pledged. 
• Right to seek reimbursement of unusual expenses relates to the products from the pawnor for the safeguarding of goods pledged by him. 
• Right to sale, If the pawnor fails to pay the debt or perform the promise, the pawnee can sell the goods pledged after giving the pawnor realistic notice of the intended sale.

Duties of a Pawnee

• Duty to take reasonable care of goods pledged, not to perform unauthorized use of goods, commitment to return goods, and return accretions.

Conclusion  

It is concluded that the bailment meaning refers to the delivery of things in trust for some particular object or purpose and upon a contract expressed or implied to conform to the object or purpose of the faith and trust. Bailment is the transfer of ownership of goods between individuals of the contract.