Business Lawlecture 9 Contract of Bailment.pptx

Business Lawlecture 9 Contract of Bailment.pptx

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  Contract of Bailment By Dr.Usman Shaukat Khan
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  Bailment Defined 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. The Person delivering the goods is called Bailor The person to whom goods are delivered for use is called a Bailee
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  How Delivery to be made toBailee? • The delivery to the bailee may be made by doing any thing which has the effect of putting the goods in the possession of the intended bailee or of any person authorized to hold them on his behalf. • 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 risks; and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults. • If the goods are bailed for hire, the bailor is responsible for such damage, whether he was or was not aware of the existence of such faults in the goods bailed.
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  Illustrations • (a) Alends 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. • (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.
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  Care to be takenby Bailee • In all cases of bailment, the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed • The bailee in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care (when the bailee is not liable for loss) • A contract of bailment is voidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment.
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  Illustration •A lets toB, for hire, a horse for his own riding. B drives the horse in his carriage. This is, at the option of A, a termination of the bailment.
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  Liability of Bailee making unauthorized useof goods bailed • If the bailee makes any use of the goods bailed, which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them. • Illustration • (a) A lends a horse to B for his own riding only. B allows C, a member of his family, to ride the horse. C rides with care, but the horse accidentally falls and is injured. B is liable to make compensation to A for the injury done to the horse. • (b) A hires a horse in Karachi from B expressly to march to Hyderabad. A rides with due care, but marches to Khairpur instead. The horse accidentally falls and is injured. A is liable to make compensation to B for the injury to the horse.
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  Effect of Mixture of Bailor’sgoods with Bailee • With Bailor’s Consent: If the bailee, with the consent of the bailor, mixes the goods of the bailor with his own goods, the bailor and the bailee shall have an interest, in proportion to their respective shares, in the mixture thus produced. • Without Bailor’s Consent when goods can be Separated: If the bailee, without the consent of the bailor, mixes the goods of the bailor with his own goods, and the goods can be separated or divided, the property in the goods remains in the par ties respectively; but the bailee is bound to bear the expense of separation or division, and any damage arising from the mixture.
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  Illustration •A bails 100bales of cotton marked with a particular mark to B, without A’s consent mixes 100 bales with other bales of his own, bearing a different mark. •A is entitled to have his 100 bales returned, and B is bound to bear all the expense incurred in the separation of the bailes, and any other incidental damage.
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  Effect of Mixtureof Bailor’s goods with Bailee without Bailor’s Consent When goods cannot be Separated • If the bailee without the consent of the bailor, mixes the goods of the bailor with his own goods, in such a manner that it is impossible to separate the goods bailed from the other goods and deliver them back, the bailor is entitled to be compensated by the bailee for the loss of the goods. • A bails a barrel of Cape flour worth Rs. 45 to B. B, without A’s consent mixes the flour with country flour of his own, worth only Rs. 25 a barrel. B must compensate A for the loss of his flour.
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  Repayment by bailor of necessary expenses •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 bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.
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  Restoration of goods lent gratuitously •The lender of a thing for use may at any time can require its return, if the loan was gratuitous, even though 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 loss 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 benefit so derived.
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  Return of goods bailedon expiration of time or accomplishment of purpose •It is the duty of the bailee to return, or deliver according to the bailor’s directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired, or the purpose for which they were bailed has been accomplished.
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  Bailee’s responsibility when goods are notduly returned •If, by the default of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time.
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  Termination of gratuitous bailment by death •Agratuitous bailment is terminated by the death either of the bailor or of the bailee.
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  Bailor entitled to increaseor profit from goods bailed • In the absence of any contract to the contrary, the bailee is bound to deliver to the bailor, or according to his directions, any increase or profit which may have accrued from the goods bailed. • A leaves cow in the custody of B to be taken care of. The cow has a calf B is bound to deliver the calf as well as the cow to A.
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  Bailor’s responsibility to bailee. •The bailoris responsible to the bailee for any loss which the bailee may sustain by reason that the bailor was not entitled to make the bailment, or to receive back the goods or to give directions, respecting them
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  Bailment by severaljoint owners: If several joint owners of goods bail them, the bailee may deliver them back to, or according to the directions of, one joint owner without the consent of all, in the absence of any agreement to the contrary •Bailee not responsible on redelivery to bailor without title. If the bailor has no title to the goods, and the bailee, in good faith, delivers them back to, or according to the directions of, the bailor, the bailee is not responsible to the owner in respect of such delivery
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  Right of third person claiminggoods bailed •If a person, other than the bailor, claims goods bailed, he may apply to the Court to stop the delivery of the goods to the bailor, and to decide the title to the goods.
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  Right of finder of goods •The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred by him to preserve the goods and to find out the owner; but he may retain the goods against the owner until he receives such compensation • Where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward, and may retain the goods until he receives it.
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  When finder of thing commonlyon sale may sell it • When a thing which is commonly the subject of sale is lost, if the owner cannot with reasonable diligence be found, or if he refuses, upon demand, to pay the lawful charges of the finder, the finder may sell it— (1) when the thing is in danger of perishing or of losing the greater part of its value, or, (2) when the lawful charges of the finder, in respect of the thing found, amount to two thirds of its value.
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  Bailee’s particular lien. • Where thebailee has, in accordance with the purpose of the bailment, rendered any service involving the exercise of labor or skill in respect of the goods bailed, he has, in the absence of a contract to the contrary, a right to retain such goods until he receives due remuneration for the services, he has rendered in respect of them. • (a) A delivers a rough diamond to B, a jeweler, to be cut and polished, which is accordingly done. B is entitled to retain the stone till he is paid for the services he has rendered. • (b) A give cloth to B, a tailor, to make into a coat. B promises A to deliver the coat soon as it is finished, and to give a three months’ credit for the price. B is not entitled to retain the coat until he is paid.
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  Thanks