JAIIB LRAB Unit 43 - Contracts Of Bailment

JAIIB LRAB Unit 43 - Contracts Of Bailment (Year: 2019)

A 'bailment' is the delivery of goods by one person to another for some purpose. When the purpose is accomplished, the goods are to be returned or otherwise disposed of according to the direction of the person delivering them.


The person delivering the goods is called the 'bailor'.

The person to whom they are delivered is called the 'bailee'.




When one person delivers to another, certain goods to be used for a certain purpose, the contract is known as a contract of bailment. Here, the contract will specify the time for which the goods will remain with the person taking them. Also, the person who gives the goods can direct the other either to return the goods after the requisite time has expired or, direct him to dispose off the goods in a particular manner.




The bailor is bound to disclose to the bailee faults in the goods bailed


(a) of which the bailor is aware,

(b) and which materially interfere with the use of them,

(c) or expose the bailee to extraordinary risk;


and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults. If the goods are bailed for hire, the bailor is responsible for any damage whether he was aware of the existence of such faults in the goods bailed or not.

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