Page 110 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes 8.3 Termination of Bailment

A contract of bailment terminates or comes to an end under the following circumstances:

1. On the expiry of the stipulated period: Where bailment is for a specific period, it comes to

an end on the expiry of the specifi ed period.

Example: A room cooler is hired by X from Y for a period of 6 months. On the expiry of
6 months X must return the cooler.

2. On the accomplishment of the specifi ed purpose: In case, bailment is for specific purpose it
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 bailor 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 bailor must indemnify. Further, a gratuitous bailment terminates by the death of either
the bailor or the bailee (s.162).

8.4 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.
8.4.1 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.
8.4.2 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.

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