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Bailment

This document discusses the law of bailment in commercial transactions. It defines bailment as the voluntary transfer of possession but not ownership of personal property from the bailor to the bailee. The key elements of a bailment are delivery of goods, change of possession for a temporary purpose, and redelivery of goods. Bailments can be for the benefit of both parties, the bailor alone, or the bailee alone, and the standard of care owed by the bailee depends on who benefits. The document outlines the rights and duties of bailors and bailees, as well as how a bailment can be terminated.

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37 views15 pages

Bailment

This document discusses the law of bailment in commercial transactions. It defines bailment as the voluntary transfer of possession but not ownership of personal property from the bailor to the bailee. The key elements of a bailment are delivery of goods, change of possession for a temporary purpose, and redelivery of goods. Bailments can be for the benefit of both parties, the bailor alone, or the bailee alone, and the standard of care owed by the bailee depends on who benefits. The document outlines the rights and duties of bailors and bailees, as well as how a bailment can be terminated.

Uploaded by

imaan.surani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SLS 2219: COMMERCIAL LAW

BAILMENT
 Bailment is the voluntary transfer of possession of personal property or a chattel
by means of a contract or any other acceptable mode from one person called the
bailor to another known as the bailee
 Unlike a sale or gift of personal property, a bailment involves a change in
possession but not in title
 Bailment relationship may also result from the actions and conduct of the
parties when dealing with the property in question


BAILMENT
 A bailment relationship can be implied by law whenever the personal property
of one person is acquired by another and held under circumstances in which
principles of natural justice require the recipient to keep the property safely and
return it to the owner thereafter

 General principles of the law of contract apply to bailment


Purposes of Bailment
 There are many situations in which the law recognizes that a bailment exists.
These include bailments created:
a) For the mutual benefit of both the bailor and the bailee
b) For the sole benefit of the bailor
c) For the sole benefit of the bailee
Elements of Bailment
 A contract of bailment has the following essential features:
a) Contract; Acceptance, Consideration
b) Two parties
c) Delivery of goods; constructive delivery
d) Change of Possession; custody and possession
e) Purpose of delivery is temporary
f) Right of ownership
Elements of Bailment
 A contract of bailment has the following essential features:
g) Change of form
h) Goods in possession of bailee
i) Re-delivery of goods
j) Right of reward
Types of Bailment
 Coggs v Bernard [1703] – any person who undertakes to do an act (e.g. carry
goods) is liable to an action if because of his neglect, damage occurs to the
goods or they are lost
 Six instances of bailment:
1) Depositum (simple deposits)
2) Commodatum (goods lent for bailee’s use, gratis)
3) Locatio et conductio
4) Vadium (pawn or pledge)
Types of Bailment
5) Locatio operis
6) Mandatum (Coggs case)

 Bailment for safe custody


 Constructive bailment
 Bailment for mutual benefit
 Bailment for sale
 Involuntary bailment/ involuntary deposit
Bailee’s Standard of Care
 The standard of care owed by the bailee depends on who benefits from the
bailment relationship
 Gratuitous bailee - In such a scenario, the bailee’s duty of care is at its
lowest; liability for ‘gross negligence’
 Bailment for hire – Liability for ‘ordinary negligence’
 If the bailee is the sole beneficiary – Liability for ‘slight negligence’
 Bailee not liable when damage not their fault - BAT Kenya Ltd & Another v
Express Transport Co. Ltd & Anor. [1968] EA 171; EA Industries Ltd v B.R.
Nyarangi [2001]eKLR
 All bailees are held to strict liability when it comes to re-delivering the
property to the true owner. Cf. BAT Kenya case (supra)
Rights and Duties
Rights of the bailor
 Right to get back the goods
 Right to terminate the contract
 Expenses of separation
 Compensation for goods
 Compensation for unauthorised use
 Compensation for delay in re-delivery
 Right to share profit
Rights and Duties
Duties of the bailor
 To disclose faults
 To repay necessary expenses
 To repay extra-ordinary expenses
 To indemnify the bailee
Rights and Duties
Rights of the bailee
 To recover damages
 Recovery of expenses
 Recovery of compensation
 Right of action against third parties
 Right of lien
Rights and Duties
Duties of the bailee
 To take care of goods - Kingsway Motors Ltd v Corner Garage Transport
Ltd [2010]eKLR; EA Industries Ltd v B.R Nyarangi [2001]eKLR
 Expenses of separation
 Liability for unauthorised use of goods
 Inconsistent acts
 Compensation
 Return of goods
 Return of goods at a proper time
 Return of profit
Termination of Bailment
1. Accomplishment of purpose
2. Effluxion of time
3. Death of a party
4. Bailee’s inconsistent act
5. Illegality
6. Operation of the law
7. Mutual agreement of the parties
Q&A

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