Bailment unit 15

UNIVERSITY OF LUSAKA
SCHOOL OF LAW
L200 – COMMERCIAL LAW
UNIT 15: BAILMENT
George Mpundu Kanja
gmkanja@live.com

STRUCTURE OF THE PRESENTATION
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Introduction
Definition of Bailment
Parties to Bailment
Essential Features of a Valid Bailment
Duties of a Bailor
Duties of a Bailee
Rights of a Bailor
Rights of a Bailee
Termination of Bailment

INTRODUCTION
• The term ‘bailment’ is derived from a French
word ‘bailler’ which means to deliver a thing
under a contract for return at a specified
time or under specified conditions.
• Like the contracts of ‘guarantee’ and ‘pledge’
the contract of ‘bailment’ is also special types
of contract.

DEFINITION OF BAILMENT
• A bailment is a contract, which results from delivery
of goods.
• It implies a sort of relationship in which the
personal property of one person, temporarily, goes
into the possession of another person for some
specific purpose, while the ownership is with
another person.
• Therefore, the bailment involves a change of
possession only (not ownership) from one person to
another, for example, delivering a car, cycle, radio,
T.V., etc., for repair or delivering garments to a

• The term bailment may be defined as 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.
• Therefore, the delivery of goods by one
person to another for some specific purpose,
is known as bailment.

• The delivery of goods may also be for some
specified period.
• The goods are delivered on the condition that
they shall be returned back on the fulfillment
of the specific purpose.

PARTIES TO A CONTRACT OF BAILMENT
• The following are the two parties to a contract of
bailment:
• 1. Bailor: The person who delivers the goods is
known as a bailor.
• 2. Bailee: The person to whom the goods are
delivered for specific purpose is known
as the
bailee.
• Example: A gave his T.V or car to B, a mechanic, for
repair .This is a contract of bailment between A and
B.

ESSENTIAL FEATURES OF A VALID
BAILEMENT
• The essential features of bailment which are
as under:
• 1. The delivery of possession
• It is an essential and important element of the
bailment that the possession of the goods
must be delivered by the bailor to the bailee.
• If the possession is not delivered to the
bailee, then there will not arise any contract
of bailment.

BAILEMENT
• In the case of Ultzen v.Nicolls (1894)QB 92 an
old customer went into a restaurant for the
purpose of dinning there. When he entered
the room, B, a waiter, took A’s coat, without
being asked, and hung it on the hook behind
him. When A rose to leave the restaurant, the
coat was missing.
• It was held that the possession of the coat
was given to the waiter and the restaurant
keeper was liable to the bailor.

BAILEMENT
• In this case ,the waiter by taking the coat into
his possession had relieved A of its care, and
thus, assumed the responsibility of bailee.
• However had A instructed B where and how
the coat should be put ,perhaps the results
would have been otherwise.
• The delivery of the possession to the bailee
may be of two kinds, namely: (a) actual
delivery, (b) constructive delivery.

BAILEMENT
• The ‘actual delivery’ means the delivery when the
bailor hands over the physical possession of the
goods to the bailee.
• The ‘constructive delivery’, on the other hand,
means the delivery when there is no change of
physical possession.
• Example: A purchased an air conditioner from B’s
shop. A left the air conditioner at B’s shop and
requested him to send it to his (A’s) residence. In this
case, B has taken the constructive delivery of A’s air
conditioner, and therefore, B has become the bailee.

BAILEMENT
• It is worth noting that there is a difference between
the ‘delivery of possession’ and the ‘custody of
goods’ from the view point of bailment.
• A mere custody of goods does not create any
relationship of bailor and bailee. Therefore, a
person who has the mere custody of goods, without
possession, is not a bailee, e.g., a servant using a
master’s goods, or a guest using his host’s goods, is
not bailee.
• The reason for the same is that the possession of the
goods remains with the master or host.

BAILEMENT
• Sometimes, money is deposited by a customer
with a bank in his account.
• In such cases, there is not a bailment as there
is no obligation on the part of the bank to
return the same currency notes. But it
establishes a relationship of a creditor and
debtor.

BAILEMENT
2. The delivery should be on the basis of some
contract
• According to this element, the delivery of the
goods to the bailee should be made on the
basis of some contract.
• This is so because the bailmnet is always
created by a contract between the bailor and
the bailee.
• However ,the contract may be express (that is
oral or writing) or implied (that is infered from

BAILEMENT
• Example: A delieverd car to B ,the owner of a
service station ,for the purpose of servicing
the car.
• In this case, there is express contract of
bailment between A and B.
• It also worth noting that sometimes the
bailment may arise even without a contract,
for example, the finder of the goods is
treated as a bailee.

BAILEMENT
3. The delivery should be for some purpose.
• It is an essential element that the goods
should be delivered by the bailor to the bailee
for some specific purpose.
• It is however, not necessary that the purpose
should be expressly stated, in that it may
implied from the circumstances of each
particular case.

BAILEMENT
4. The delivery should be upon a condition to
return
• The goods must be delivered to the bailee for
some purpose and subject to the condition
that the purpose is achieved, the goods
should be returned to the bailor of disposed
of according to his directions.
• If the bailee is not bound to return the goods
or to dispose them according to bailor’s
direction, there is no bailment at all.

BAILEMENT
• However, goods my be returned in its original form
or in its altered form, for example, delivery of a piece
of cloth to the tailor to be stitched into a coat.
• This element of bailment distinguishes it from many
other contracts of the same kind, such as, sale,
barter or exchange.
• In these transactions, the person, to whom the
goods have been delivered, is under no obligation to
return the same.
• Besides, there is a transfer not only of the possession
but also of the ownership of the goods.

CLASSIFICATION OF BAILMENT
• The following are among the more important
types of bailment.
• Hire
• Custody
• Carriage
• Pledge
• Loan of chattel for use
• Delivery of chattel for treatment, as where a
car is taken for repair.

DUITIES OF A BAILOR
• The duties of a bailor, in the bailment, may be
broadly grouped under the following heads:
1. Duty to disclose faults in the goods bailed
• It is the first and the foremost duty of the bailor.
• In Hyman & Wife v. Nye & Sons (1881) 6 QBD685, A
hired from B a carriage along with a pair of horses
and a driver for a specific journey. During the journey
a bolt in the under-part of the carriage broke away.
As a result of this, the carriage became upset and A
was injured.

DUITIES OF A BAILOR
• It was held that B was liable to pay damages
to A for the injury sustained by him. The
court observed that it was the bailor’s duty
to supply a carriage fit for the purpose for
which it was hired.
• Sometimes, the goods bailed are of dangerous
nature(e.g., explosives). In such cases it is the
duty of the bailor to disclose the nature of
goods. [Great Northern Ry’.case (1932) 2 KB
742]

DUITIES OF A BAILOR
2. Duty to bear extraordinary expenses
• It is the duty of the bailor to bear the
extraordinary expenses incurred by the bailee
for the purpose of bailment.
• However, the ordinary and reasonable
expenses are to be borne by the bailee.

DUITIES OF A BAILOR
• Example: A hired a taxi from B for the purpose
of going to Ndola from Lusaka, during the
journey, a major defect occurred in the
engine. A had to pay K2 million as repair
charges.
• These are the extraordinary expenses and it is
the bailor’s duty to bear such expenses.
However, the usual and ordinary expenses
such as the expenses for petrol and minor
repairs, etc. are to be borne by the bailee

DUITIES OF A BAILOR
3. Duty of indemnifying the bailee
• Sometimes, the bailor has no title to the goods
bailed and the bailee suffers some loss due to the
defective title of the bailor.
• In such cases, it is the duty of the bailor to
indemnify (i.e., compensate) the bailee for the loss
suffered by him.
• The bailors title to the goods may be defective at the
time of bailment, or at the time of receiving back the
goods from the bailee, or at the time of giving
directions in respect of the goods bailed.

DUITIES OF A BAILOR
• If the bailee suffers any loss due to any of such
defects, the bailor must compensate him.
• Example: A delivered his car to B for safe
custody. Subsequently, A sold the car to C and
same has been registered in the name of C.
• In this case, on the sale of car , A’s title to the
car ceases, and A must compensate B if he
suffers any loss by reason of returning the car
to A or disposing it according to his directions.

DUITIES OF A BAILOR
4. Duty to receive back the goods
• It is the duty of the bailor to receive back the
goods when they are returned by the bailee
on the expiry of the term of bailment or on
the fulfilment of the purpose of the
bailment.
• If the bailor refuses to receive back the
goods, then he becomes liable to pay the
compensation to the bailee for the necessary
expenses of custody.

DUITIES OF A BAILOR
• Example: A delivered his car to B for two days
for safe keeping. However A did not take back
the car for one month.
• In this case, B can claim the necessary
expenses incurred by him for the custody of
the car.

DUITIES OF A BAILEE
• The duties of a bailee may broadly be grouped
under the following heads:
• 1. Duty to take reasonable care of the goods
bailed
• It is the first and foremost duty of the bailee.
• According to this duty, the bailee is required
to take reasonable care of the goods bailed to
him.

DUITIES OF A BAILEE
• The degree of care required by the bailee is similar to
that of a man of ordinary prudence. Thus, the bailee
is bound to take care of the goods bailed to him.
• He must take as much care as an ordinary sensible
man would take under the similar circumstances, in
respect of his own goods of the same type.
• The standard of care to be taken by the bailee is the
same in all types of bailment, i.e., whether the
bailment is ‘gratuitous’ or ‘non-gratuitous’.

DUITIES OF A BAILEE
• The measure of care depends upon the nature,
quality, quantity and value of the goods bailed. If
the bailee is negligent in taking the care of the
goods bailed, then he is liable to pay damages for
loss or destructive of the goods.
• In Houghland v. R.R. Luxury Coarches (1962) 1QB
694: A was a passenger in one of B’s luxury coaches.
A put her suit-case in the boot of the coach from
where it was lost.
• It was held that B was liable for damages. In this
case, it was B’s duty to take reasonable care for the

DUITIES OF A BAILEE
• Also Martin v. London Country Council (1947)
KB 628: A was admitted in a hospital as a
patient. On her entry, the hospital officials
took charge of her jewellery for safe custody.
The jewellery was stolen from a room where it
was kept.
• It was held that the hospital officials were
bailee for reward, and were liable for the loss
of jewellery. In this case, the bailee had
failed to exercise a care which the nature

DUITIES OF A BAILEE
• (2) Duty not to make unauthorised use of the
goods
• (3) Duty not to mix the goods bailed with his
own goods
• (4) Duty to return the goods to the bailor
• (5) Duty to return the increase in the goods
bailed
• (6) Duty not to step an adverse title against
the bailor.

RIGHTS OF A BAILOR
• (1) Right to terminate the bailment
• (2) Right to demand back the goods at any
time
• (3) Right to file a suit against any wrong-doer
• (4) Right to file a suit for the enforcement of
the duties imposed upon a bailee.

RIGHTS OF A BAILEE
• (1) Right to compensation
• (2) Right to return the goods to anyone of the
joint bailors
• (3) Right to recover agreed charges
• (4) Right to file a suit to decide the title of
the goods bailed.
• (5) Right to file a suit against a wrong-doer
• (6) Right to a lien

TERMINATION OF BAILMENT
• (1) Expiry of the specified period
• (2) Achievement of the object
• (3) Inconsistent use of goods

Bailment unit 15

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