Page 59 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes 3.1.4 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 specified 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 specified purpose: In case, bailment is for specific purpose it
terminates as soon as the purpose is accomplished.

Examples:
(a) 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.
(b) 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).

Self Assessment

Fill in the blanks:

1. The essence of bailment is delivery of goods by one person to another for some
……………….purpose.
2. In case, bailment is for specific purpose it terminates as soon as the purpose is …………..

3.2 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. They are:
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 finder, however, cannot sue for such compensation. But
where, a specific 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.

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