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Unit 10: Contract of Bailment

2. On the accomplishment of the specifi ed purpose: In case, bailment is for specific purpose it Notes
terminates as soon as the purpose is accomplished.

Examples: (i) A suit length is given to a tailor to be stitched into a suit. The tailor
is bound to return it as soon as the cloth is stitched into suit.
(ii) A hires from B certain tents and crockery on marriage of his daughter. The same must
be returned as soon as marriage is accomplished.

3. By bailee’s act inconsistent with conditions of bailment: If the bailee does any act with
regard to the goods bailed, inconsistent with the conditions of the bailment, the bailer may
terminate the bailment (S.153).

Example: A lets to B for hire a horse for his own riding. B drives the horse in his
carriage. A shall have the option to terminate the bailment.

4. A gratuitous bailment may be terminated at any time (s.159): However, if premature

termination causes any loss to the bailee exceeding the benefit derived from the bailment,
the bailer must indemnify. Further, a gratuitous bailment terminates by the death of either
the bailer or the bailee (S.162).

10.4 Finder of Lost Goods

Finding is not owning. A finder of lost goods is treated as the bailee of the goods found as
such and is charged with the responsibilities of a bailee, besides the responsibility of exercising
reasonable efforts in finding the real owner. However, he enjoys certain rights also. His rights are

summed up hereunder.

10.4.1 Right to retain the Goods (S.168)

A finder of lost goods may retain the goods until he receives the compensation for money spent

in preserving the goods and/or amount spent in finding the true owner. A fi nder, however,

cannot sue for such compensation. But where, a specifi c reward has been offered by the owner
for the return of the goods lost, the finder may sue for such reward and may retain the goods

until he receives it.
10.4.2 Right to Sell (S.169)

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 fi nder, the
finder may sell it. (i) when the thing is in danger of perishing or of losing the greater part of

its value; (ii) when the lawful charges of the finder in respect of the thing found, amount to
two-third of its value.

Task X lends his car to Y for going to attend the annual general meeting of ABC
Limited, being held at Juhu, a place in Mumbai. The brakes of the car are not in working
order. This fact is already known to X, but he did not tell Y about the defect. Y holds a valid
driving licence. Y, instead of going to attend the annual general meeting at Juhu, drives the
car to the Gateway of India on a pleasure trip. The car meets with an accident and Y gets
injured. Y wants to hold X liable for the injury. Decide whether Y would succeed? [Hint: Y
would not succeed s.154.].

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