Legal and Regulatory Duties and rights of bailee

Environment of
The rights and duties of bailee are discussed as under.
Business
Duties of the bailee
Notes
The bailor and the bailee are reciprocally related to one another. Hence rights of the bailor are
the duties of the bailee and vice versa. Accordingly, the bailee owes the following duties in
respect of goods bailed to him.
Duty to take reasonable care of the goods whilst they are in his possession  In all cases of
bailment, the bailee is bound to take as much care of the goods bailed to him as a man of ordinary
prudence, under similar circumstances, would take of his own goods of the same bulk, quality, and
value [Section 151]. The degree of care required from the bailee is the same whether the bailment
is for reward, or gratuitous.
Duty not to make any unauthorised use of the goods bailed  The bailee is under an obligation
not to resort to unauthorised use of the goods bailed to him. In this regard, an unauthorised use refers
to any act in relation to goods bailed, inconsistent with the condition of bailment. As per Section 153,
a contract of bailment is voidable at the option of the bailor, if the bailee does any act with regard to
goods bailed, inconsistent with the conditions of the bailment. Section 154 further provides that if
the bailee makes any unauthorised use of the goods bailed, he is liable to make compensation to
the bailor for any damage arising to the goods from or during such use of them.
Duty not to set up jus tertii  The bailee should not set up jus tertii, i.e., adverse title (his own title
or the title of a third party) to the bailed goods, as the same will be inconsistent with the conditions
of bailment. Even if a third person claims a better title to the goods other than that of the bailor, the
bailee is duty bound to return the goods to the bailor only.
Duty not to mix the goods bailed with his own goods  A bailee is duty bound not to mix the bailed
goods with his own goods, without the consent of the bailor. In other words, he must keep the goods
bailed to him separate from his own goods. If the bailee, with the consent of the bailor, mixes the
goods of the bailor with his own, the bailor and the bailee shall have an interest, in proportion to their
respective shares, in the mixture thus produced.
Duty to return the goods in accordance with the contract  It is the duty of the bailee to return, or
deliver the goods bailed, according to the bailor’s directions, without any demand, as soon as the
time for which they were bailed has expired, or the purpose for which they were bailed has been
accomplished [Section 160].
If by the default of the bailee, the goods are not returned, delivered or tendered at the proper
time, he will be liable to the bailor for any loss, destruction, or deterioration of the goods from that
time.
Duty to return any accretion to the goods  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 [Section 163]. For example, A leaves a pregnant cow in the
custody of B to be taken care of. The cow gives birth to a calf. B is bound to deliver the calf as well
the cow to A.

Rights of the bailee

Because of the reciprocity of relationships, most of the duties of the bailor are the rights of the
bailee. Accordingly, a bailee enjoys the following rights.
Right to enforce bailor’s duties  The bailee has a right
1. to claim damages from the bailor if he has suffered some loss due to non- disclosure of de-
fects in the goods on the bailor’s part. If the goods were bailed for hire, the bailee would be
entitled to recover damages from the bailor even if the latter was not aware of the existence
of such faults in the goods bailed [Section 150].
2. to claim from the bailor all necessary expenses incurred by him for the purpose of the bail-
ment if the bailment was non-gratuitous [Section 158].
3. to be indemnified against any loss or damage sustained by him by reason of defective title
of the bailor [Section 164].
Self-Learning Similarly, in case of bailment for reward, the bailee will be entitled to recover from the bailor, all
100  Material extraordinary expenses, borne by the bailor for the purpose of bailment.