Duties and Liabilities of Bailor (Indian Contract Act 1872)

Introduction :    

            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.

• Who is Bailor :  The person delivering the goods is called the ‘bailor’.

• Who is Bailee : The person to whom they are delivered is called the ‘bailee’.

 Duties and Liabilities of Bailor :

 Duties and Liabilities of Bailor are as follows -

1) To put bailee into possession (Section 149)

           The delivery to be bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorised to hold them on his behalf.
Kaliaperumal Vs. Visalakshmi (1938) AIR 1938 Mad 32, In this case Madras high court held that delivery is an essential element of bailment.



2) To disclose Material faults (Section 150)

    Section 150 of Indian Contract Act 1872 says that, The bailor is bound to disclose to the bailee faults in the goods bailed, of which the bailor is aware, and which materially interfere with the use of them, or expose the bailee to extraordinary risk; and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults.

Examples

•   A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for damage sustained.

3) To pay expenses of bailment (Section.158)

        Section 158 of the Indian Contract Act says that, where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailors shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.

4) To indemnify the loss (Section 159)

        Indemnity means promise to make good the loss. (See in detail Contract of indemnity ) According to Section 159 of the Indian Contract Act 1872 bailor has a duty to indemnify the loss suffered by the bailee under the contract.
     
        The lender of a thing for use may at any time require its return, if the loan was gratuitous, even through he lent it for a specified time or purpose. But if, on the faith of such loan made for a specified time or purpose, the borrower has acted in such a manner that the return of the thing lent before the time agreed upon would cause him losses exceeding the benefit actually derived by him from the loan, the lender must, if he compels the return. indemnify the borrower for the amount in which the loss so occasioned exceeds the benefits so derived.
      

5) To pay damages for Non Disclosure (Section 150 )

       Second part of Section 150 of the said Act says that,  .....if bailor does not make disclosure to the bailee faults in the goods bailed, he is responsible for damage arising to the bailee directly from such faults.

Example :

            (a) A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for damage sustained.

(See... Kinds of damages )

(b) A hires a carriage of B. The carriage is unsafe, though B is not aware of it, and A is injured. B is responsible to A for the injury.


6) To pay damages for defect in bailor's title  (Section 164)

             The bailor is responsible to the bailee for any loss which the bailee may sustain the reason that the bailor was not entitled to make the bailment, or to receive back the goods, or to give directions, respecting them.
 

See also

1) Distinction/ Difference between Bailment and Pledge

2) Distinction/ Difference between Bailment and Agency

3) Difference/ Distinction between Bailment and Contract of sale

4) Types / Kinds / Classification of Bailment

5) Distinction / Difference between Contract of Indemnity and Guarantee