A bailment is the giving of some good(s) by an individual to another for a specific purpose for a certain period of time. After the purpose is fulfilled, the good(s) must be returned or otherwise disposed of following the instructions of the person who gave them. Here goods indicate only those which are movable. The one who gives the goods is known as the bailor. The one who has obligation to return the goods is known as bailee. The contract of bailment is the contract between the bailor and bailee. 

Essentials of a bailment contract: 

  • There should be the delivery of goods
  • The process of delivering goods should be done on the basis of the contract
  • There should be a purpose for delivering goods


1) The bailor has the duty to disclose the fault in the goods[1] 

The bailor is obligated to report to the bailee any defects in the items bailed that he is aware of and that significantly interfere with their usage or subject the bailee to unusual risks; and if he fails to do so, he is liable for any harm resulting directly from such defects.[2]

2) The bailor has the duty to bear expenses of the bailment 

The bailor has the obligation to refund the cost incurred by the bailor while storing the goods, carrying the goods, or by the activities carried out on them.  Section 158[3] of the Indian Contract Act deals with it. 

3) To indemnify bailee 

The bailor has the duty to compensate the bailor if the bailment is terminated in the middle. If the bailor takes back his goods before the completion of the bailment period, then he has to compensate the losses incurred by the bailor due to the termination of the bailment contract. Section 164[4] of the Indian Contract Act deals with it. 

4) To collect the bailed goods back 

After the time limit or the objective for which the good was bailed has finished, the Bailor is required to return his goods. If the Bailor fails to claim the good, he is responsible for compensating the Bailee for the costs incurred as a result of the Bailor’s delay.[5] 


1) The bailor has the duty to take reasonable care of the goods 

The bailee has the obligation to take necessary care which an ordinary man would take care of his own goods, which are of the same type. If the damage occurred to the goods even after the reasonable care taken by the bailee, then he is not liable. But if the damages caused to the goods are due to the bailee’s negligence then he is liable for damages. 

2) The bailor has the duty not to use the bailed goods in an unauthorized way 

The bailee has the obligation to use the goods in such a manner authorized by the bailor. The bailor delivers the goods to the bailee to serve some purpose. The bailee is allowed to use the good only for that purpose. If the bailee uses the bailed good for some other purpose that is not authorized by the bailor, then the bailee is liable.  

3) The bailor has the duty not to mix his goods with the goods of the bailor 

The bailor is s obliged to take care so that the bailed goods will not mix with his own goods. 

  • If the mixing of goods is done after the consent of the bailor

If the bailor conveys his consent, the bailee may combine the bailor’s goods with his goods, and they both are interested in the mixed goods proportionate to their respective shares.[6]

  • If the mixing of goods is done without taking the bailor’s consent and the mixed goods can be separated

Without the bailor’s consent, if the bailee mixes bailed goods and his own goods and the mixture is separable, then each of them will get their part of goods after separation. However, the bailee is obliged to incur the costs for the separation of the mixture.[7]

  • If the mixing of goods is done without the bailor’s consent and the separation of mixed goods cannot be done

Without the bailor’s acceptance, if the bailee mixes the bailed goods with his own goods and the mixture is inseparable due to which the bailee cannot return the bailed goods, then the bailee is liable to pay the damages incurred by the bailor by the loss of goods.[8]

4) The bailee has an obligation to return the goods after the purpose is served 

A bailment contract is generally made for a specific purpose or for a specific time period. The bailee has the obligation to give back the goods after the purpose served or after the completion of the time period. If the goods were not delivered by the bailee within a reasonable time then the bailee is liable to pay any loss faced by the bailor. 


In Martin v. London County Council casea woman (plaintiff) was admitted to a private hospital for the purpose of treatment. She had some jewelry in her possession when she got admitted. She had given this jewelry to the hospital staff member for safekeeping. This jewelry was stored in the drug room and on a later day, they found that it was stolen. In this case, the hospital administrators were found to be responsible for the loss of the jewelry. 

In Sundar Lal V. Ram Sarup and Anr. case, the bailor leased the wooden shop to the bailee with the condition that it would be handed over in the same condition as when it was leased, and that the hirer would be responsible for any loss or damage. During communal riots in that area, the protesters set fire to the shop. In this case, the court ruled that the shop’s damage was not caused by the hirer’s negligence, and so he was not found liable to pay the plaintiff. 


The bailee is required to fulfill the duties set out in the bailment contract. He is accountable under different provisions of law if he is inconsistent or negligent in performing his duty. He has some uniform or established duties to comply with every legal contract, and he cannot abandon those fundamental obligations even if the contract does not provide for them. The essence of a bailment contract is these obligations. The duties may vary based on the facts, but there are some implied duties, and the bailee must exercise reasonable care. 

Author(s) Name: Kethana Tamminaina (Damodaram Sanjivayya National Law University, Visakhapatnam)


[1] Indian Contract Act 1872, s 150

[2] H.P., ‘Liability of Bailors and Other Suppliers of Personal Property for Injuries Due to Defects’ (1930) 78(3) University of Pennsylvania Law Review and American Law Register < www.jstor.org/stable/3307336> accessed 24 July 2021

[3] Indian Contract Act 1872, s 158

[4] Indian Contract Act 1872, s 164

[5] ‘Bailments. Special Contract. Liability of Bailee’ (1915) 3(3) Virginia Law Review <www.jstor.org/stable/1063259> accessed 25 July 2021

[6] Indian Contract Act 1872, s 155

[7] Indian Contract Act 1872, s 156

[8] Indian Contract Act 1972, s 157

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