Page 57 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes make compensation to the bailor for any damages arising to the goods from or during
such use of them.

Examples:
(a) A lends a car to B for his own driving only. B allows C, his wife, to drive the car.
C drives with care, but the car is damaged in an accident. A is liable to make
compensation to B for the damage done to the car.
(b) A hires a car in Kolkata from B expressly to drive to Varanasi. A drives with due
care, but drives to Cuttack instead. The car meets with an accident and is damaged.
B is liable to make compensation to A for the damage to the car.
3. Not to mix bailor’s goods with his own (Ss. 155-157): 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 bailee shall be bound to bear the expense of separation or division and any
damages arising from the mixture.

Example: A bails 100 bales of cotton marked with a particular mark to B. B, without A’s
consent, mixes the 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 expenses incurred in the separation of
the bales and any other incidental damage.

But in case goods are mixed 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.

Example: A bails a barrel of flour worth ` 450 to B. B without A’s consent mixes the flour
with flour of his own, worth only ` 250 a barrel. B must compensate A for the loss of his flour.
4. To return the goods bailed without demand (s.160): 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.
If bailee fails to return the goods at the proper time, he is responsible to the bailor for any
loss, destruction or deterioration of the goods from that time (s.161).
5. To return any accretion to the goods bailed (s.163): 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.

Example: A leaves a cow in the custody of B to be taken care of. The cow gives birth to a
calf. B is bound to deliver the cow as well as the calf to A.

Rights of a Bailee

1. The duties of the bailor are, in fact, if looked from the point of view of bailee, the bailee’s
rights: Thus, a bailee can sue bailor for (a) claiming compensation for damages resulting
from non-disclosure of faults in the goods; (b) for breach of warranty as to the title and the
damage resulting therefrom; and (c) for extraordinary expenses. Thus in the case of
wrongful deprivation the bailee has a right to use the same remedies which the owner
might have used in the like case.

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