Page 116 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes z The person delivering the goods is called the ‘bailor’ and the person to whom the goods are
delivered is called the ‘bailee’.
z 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.

z A pledge as the bailment of goods as security for payment of a debt or performance of a
promise.
z The person, who delivers the goods as security, is called the ‘pledgor’ and the person to
whom the goods are so delivered is called the ‘pledgee’.
z A pledgee has a right to recover any extraordinary expenditure incurred for preservation
of the goods pledged.

z The pledgee is required to take as much care of the goods pledged to him as a person of
ordinary prudence would, under similar circumstances, take of his own goods, of a similar
nature.

z The pledgee is bound to return the goods on payment of the debt.

8.9 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.
Pledgee: The person to whom the goods are so delivered.
Pledgor: The person, who delivers the goods as security.

8.10 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 bailor 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.

Fill in the blanks:
6. A ......................... bailment can be terminated by the bailor even before the stated time.
7. The right to retain goods not only for ......................... arising out of the goods retained but
for a general balance of account in favour of certain persons.
8. A ......................... as the bailment of goods as security for payment of a debt or performance
of a promise.
9. The person delivering the goods is called the ‘bailor’ and the person to whom the goods are
delivered is called the ......................... .
10. ......................... is a right in one person to retain that which is in his possession, belonging to
another, until some debt or claim is paid.

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