Bailee’s Duties

Introduction

A bailee is a person who receives goods for a specific purpose under a contract of bailment. The Indian Contract Act, 1872 lays down clear duties to ensure proper care and use of such goods. These duties protect the interests of the bailor and ensure accountability of the bailee.

Meaning / Definition

A bailee is the person to whom goods are delivered for a purpose, upon a contract that the goods will be returned or disposed of as directed after the purpose is completed. The bailee must follow certain legal duties while handling such goods.

Modes or Types

Duty to take reasonable care (Sections 151–152)

The bailee must take care of the goods as a person of ordinary prudence (reasonable person) would take care of his own goods.

• Same standard applies to both free and paid bailment
• If proper care is taken, bailee is not liable for loss
• If negligent (careless), bailee must compensate

Duty not to make unauthorized use (Sections 153–154)

The bailee must use the goods only as per the terms of the contract.

• Any use beyond agreed purpose makes contract voidable (can be cancelled)
• Bailee must compensate for any damage

Duty not to mix bailor’s goods (Sections 155–157)

The bailee must not mix bailor’s goods with his own.

• With consent → both share goods proportionately
• Without consent:
  • If separable → bailee pays separation cost and damages
  • If not separable → bailee must compensate for loss

Duty not to set up adverse title

The bailee must not deny the bailor’s ownership or claim ownership himself or for a third party.

Duty to return the goods (Sections 160–161)

The bailee must return or deliver goods:

• On completion of purpose or expiry of time
• Without demand by bailor

If delayed:

• Bailee is liable for any loss even without negligence

Duty to return accretions (Section 163)

The bailee must return any increase or profit from the goods.

• Example: If a cow gives birth, calf must also be returned

Important Case Law

• Bank of India v. Grains & Gunny Agencies
  Bailee is liable if goods are lost due to negligence of his servants.

Practical Example

A gives his car to B for a trip to Delhi.

• If B uses it to travel to another city or allows someone else to drive without permission, he is liable for damage.
• If the car is returned late and gets damaged due to an accident, B is still liable.

Summary

• Bailee must take reasonable care of goods
• Goods must be used only for agreed purpose
• Mixing goods without consent leads to liability
• Bailee cannot deny bailor’s ownership
• Goods must be returned on time
• Delay increases liability even without fault
• Any profit or increase from goods must also be returned