Page 105 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes 10.5 Summary

In this Unit, you studied about the bailment and pledge.

Bailment is defined as the “delivery of goods by one to another person 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 person delivering them”.
The person delivering the goods is called the ‘bailer’ and the person to whom the goods are
delivered is called the ‘bailee’.

Lien is a right in one person to retain that which is in his possession, belonging to another,
until some debt or claim is paid.

10.6 Keywords

General Lien: The right to retain goods not only for demands arising out of the goods retained
but for a general balance of account in favour of certain persons.
Particular Lien: The right to retain the particular goods in respect of which the claim is due.

10.7 Self Assessment

State whether the following statement are true or false:
1. Delivery of goods is essential for effecting bailment.

2. Placing of ornaments in a bank locker is not a contract of bailment.
3. Bailee need not return to the bailer any accretion to the goods on completion of the contract
of bailment.

4. A finder may sell goods when they are in danger of perishing or losing the greater part of
their value.
5. The ownership of goods bailed passes to the bailee.

10.8 Review Questions

1. Define bailment. What are the requisites of a contract of bailment? Explain.
2. Distinguish between ‘gratuitous bailment’ and ‘bailment for hire’.
3. Comment:
(i) “Bailer is liable to the bailee for loss caused by faults in the goods bailed whether the
bailer was aware of the same or not.”
(ii) “Bailer must compensate the bailee for all expenses.”
(iii) “Bailee’s right of lien is a particular lien and does not extend to other goods of the
bailer in his possession.”

(iv) “The finder of lost goods has no right to file a suit for recovery of expenses incurred

by him for finding out the true owner.” Discuss.
4. A lends a horse, which t1e knows to be vicious, to B. He does not disclose the fact that
the horse is vicious. The horse runs away and B is thrown and injured. Explain the legal
relationship between A and B and advise B as to his rights.
[Hint: A is ‘responsible for damage sustained by B (Sec. 150)].

98 LOVELY PROFESSIONAL UNIVERSITY