Define Bailment and Pledge.

Question: Define Bailment and Pledge. 

Find the answer to the mains question of the Law of Contract only on Legal Bites. [Define Bailment and Pledge.]

Answer

Bailment refers to a legal relationship in which one person (the bailor) delivers goods to another person (the bailee) for a specific purpose upon a contract that the goods will be returned or dealt with as per the bailor's instructions. Bailment typically involves the transfer of possession, not ownership, of the goods. Section 148 of Indian Contract Act, 1872 defines bailment.

Essential elements of bailment include:

a. Delivery of Goods: The bailor transfers the possession of goods to the bailee.

b. Purpose and Return: The goods are delivered for a specific purpose, and the bailee must return or dispose of them according to the bailor's instructions.

c. No Transfer of Ownership: The bailor retains ownership of the goods during the bailment.

Pledge:

Pledge is a specific type of bailment that involves the transfer of possession of movable goods (such as jewellery, documents, or valuable items) by the owner (pawnor) to the creditor (Pawnee) as security for a debt or obligation. The Pawnee retains possession of the pledged goods until the pawnor fulfills their debt or obligation. Section 172 of Indian Contract Act defines Pledge.

Key elements of the pledge include:

a. Delivery of Possession: The pawnor delivers the possession of movable goods to the Pawnee.

b. Security for Debt: The pledge serves as security for a debt or obligation owed by the pawnor to the Pawnee.

c. Retention of Possession: The Pawnee retains possession of the pledged goods until the debt or obligation is discharged.

d. Right to Sell: If the pawnor defaults, the Pawnee may have the right to sell the pledged goods to recover the debt owed.