Types of Bailment: Gratuitous and Non-Gratuitous Bailment

By | October 7, 2019
Types of Bailment Gratuitous and Non-Gratuitous Bailment

Bailment is a special type of contract. Bailment can be divided into two broad types Gratuitous Bailment and Non-Gratuitous Bailment/For Hire.

DEFINITION

Bailment is a special type of contract enshrined in Sections 148- 181 of the Indian Contract Act 1872. Section 148 defines bailment 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.” The section further defines the terms bailor and bailee as follows- The person delivering the goods is called the “bailor”. The person to whom they are delivered is called, the “bailee”.

Be that as it may, for the purposes of this article, the bailment can be simply described as the delivery of goods by the owner (bailor) to another (bailee) on the condition that they will be restored by the bailee to the bailor, or according to his directions, as soon as the purpose for which they are bailed shall be answered.[1]

To understand the concept of bailment it is essential to understand the different types of bailment: Bailment can be divided into two broad types:-

  1. Gratuitous Bailment and
  2. Non-Gratuitous Bailment/For Hire

Gratuitous Bailment

In a bailment, gratuitous would mean that there is no involvement of consideration. For the formation of a valid contract, all the ingredients enshrined in section 10 have to be present. However, for bailment ad for other “special” contracts the one or more of the requirements can be missed. Gratuitous bailment would mean that there is no consideration involved, for example, a neighbour asks you to keep her jewellery with you until you return.

Gratuitous bailment means the benefit of one of the parties to the contract. It is notable to mention here that the bailee would be liable for the negligence of not maintaining the good with proper prudence of an ordinary man.  In a gratuitous bailment, the party doing the gratuitous act has no expectation of compensation in return of the gratuitous act.

There are various examples of gratuitous bailment which include the providing of cloakrooms in restaurants, bailment of goods like keys, expensive items of the house between neighbours going out of the station, depositing shoes before entering temples,

Non-Gratuitous Bailment/ For Hire

In a bailment for hire, there is the amalgamation of compensation within the contract. It provides mutual benefit to both the parties in the contract of bailment. The bailee is responsible to look after the goods bailed and return them to the bailor after the completion of the tenure or when the bailor asks for the goods.

Consciously and unconsiously we entre into a number of contracts in daily lives which amount to bailment for hire and thereby gives rise to the rights and obligations for both the bailor as well as the bailee. For example: Parking the car at the stand, giving a vehicle for repair, giving the clothes in the laundry, giving any chattel like watches, guitar etc for repair.

Furthermore, bailment can be classified according to the benefit that the parties receive by the bailment. In this classification, bailment can be divided into the following 3 types:  

(1) Where a bailment is beneficial for both the bailor and the bailee;

(2) Where the bailment is beneficial solely for the bailor; and

(3) Where the bailment is beneficial solely for the bailee.

  1. A nature for bailment which is beneficial for both the parties is generally for hire. Compensation flows from both the parties. Both the parties have to perform some action which would be beneficial for the other party. For example in the case of laundry service, the bailor deposits his clothes in the laundry which is washed by the bailee. For performing that function the bailee receives consideration in the form of money, therefore, benefitting both the parties. Similarly in the case of locker services provided by the bank promises safekeeping of the jewellery of the bailee on the consideration of money.
  2. The nature of the bailment which is beneficial for the bailor is mainly of a gratuitous nature. —for example, provision of a coatroom in a restaurant to the people is because of the fact that the people who come to avail the services of the restaurant can rightfully enjoy a comfortable stay in the restaurant. Nothing extra is charged from the people for the services of the coatroom. Similarly, in temples and gurudwaras there are often established rooms for keeping of the shoes before entering the premises. Most of such rooms provide services free of cost. Such services are meant for allowing the safekeeping of the shoes of the people who have come to visit the temple. This is a case where the bailment is beneficial solely to the bailor because the bailee does not receive anything in return of the goods bailed or for keeping the safe custody of the goods.
  3. The nature of the bailment where it is beneficial for only the bailee an also is also of the nature of gratuitous bailment. In this case, the bailment is beneficial to the bailee. For example, when a friend lends another friend a bike to be used for some time, or a girl lends another girl her jewellery to be worn for some time.

On the basis of different types of bailment contracts and examples, bailment can be classified in the following subheadings:-

  1. Storage of Goods

There are several relationships that arise out of goods been given for storage by the bailor to the bailee.  For example, the goods stored for safekeeping in the house of some friend etc.

  1. Warehouse Storage

Warehousing facilities are included for agricultural products for the user in the offseason. The warehousing facility is beneficial solely for the bailor because the bailor gets more benefit from the system of warehousing than anyone else.

  3. Parking Lots

Parking lots can be both paid and unpaid. If the parking lots are unpaid then it will be a gratuitous bailment for the bailor. However, if the parking lot service is paid then it becomes mutually beneficial bailment for the parties.

  1. Bailment for Repair or Service

Bailment for repair services can extend to a plethora of goods from automobiles to machines. All the goods which are subject to regular wear and tear are subject to bailment on behalf of the bailor for repairing.

  1. Security of goods

One of the major reasons for entering into a bailment contract for ensuring the security of goods. For example in the goods kept for security in neighbours or friends house is for security. One of the most notable thing in the bailment for security is the fact that if the bailee is negligent in handling the goods the bailor can make him liable for the same

In the day to day life, we enter into several contracts of bailment whether knowingly or unknowingly. For a law student, it is essential to distinguish between normal contracts and contracts of bailment. Understanding bailment and knowing the duties that we unknowingly entre upon would save us from a lot of difficulties.

[1] Osborn’s Concise Law Dictionary, 6th Ed, John Burke, Sweet & Maxwell, 1976.


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Avishikta Chattopadhyay
Author: Avishikta Chattopadhyay

Avishikta is a student at the Rajiv Gandhi National University of Law, Patiala. As a researcher, she passionately engages in contemporary legal issues and believes in law beyond the books.

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