Essentials of a Bailment

1. There should be a contract:

A bailment is based on a contract, i.e., it is
created by a contract. The contract of bailment
may be express or implied. In some cases e.g.,
in case of finder of goods, a contract of
bailment can be implied by law.

2. Delivery of goods by one person to
another:

In bailment, there must be delivery of goods
by one person to another. However, the word,
'delivery' is very wide. It may be actual or
constructive.
It should be noted that in bailment, only
possession of the goods passes from one
person to another. Possession means control
of goods to the exclusion of others. Mere
custody of goods as against possession is not
sufficient. For example, a master while giving
his goods to his servant retains the possession
with him and parts only with the custody of
the goods.
Thus to create bailment, there must be delivery
of goods.

Examples:

(1) A delivers his watch to a watch-maker for
repair.

(2) A lady handed over her old jewellery to a
jeweler for melting and making it into a new
one. Every evening, she used to collect the
half-made jewellery and put in into a box kept
in the shop of the jeweler. She used to keep
the key of the box with her.
One day the box was stolen. Held, the jeweler
was not liable as the jeweler had re-delivered
the jewellery to the lady and as such, the
jeweler could not any more be regarded as a
bailee. The lady must bear the loss herself.
[Kaliaperumal Pillai v. Visolakshmi]
It should be noted that in bailment, only the
possession of the goods is transferred not the
ownership. Again, only movable goods can be
bailed as immovable goods cannot be
delivered.

3. The goods are delivered for certain
purpose:

The purpose may vary from safe-keeping or
safe custody to repairing or changing the form
of the goods.

Examples:

(1) A leaves his suit-case with a Railway Cloak
Room for safe custody.

(2) A gives his watch for repair to a watch-
maker.

(3) A gives a piece of cloth to a tailor for
stitching it into a shirt.

4. The same goods must be returned:

For a transaction of bailment, it is necessary
that the same goods must be returned.
Where money is deposited in a savings bank
account or any other account, it is not a
transaction of bailment because the bank is
not going to return the same currency notes
but will return only an equivalent amount.
However, where money or valuables are kept
in safe custody, it will amount to a transaction
of bailment as these will be returned in specie.
It should be noted that return of goods in
specie does not mean that their form cannot
change.

For example, old ornaments can be
changed into new one. A piece of cloth can be
stitched into a shirt.

Consideration is not necessary in case of
Contract of Bailment :

In case of bailment for mutual benefit of the
bailor and bailee, consideration is there for
both the parties e.g., A gives his watch for
repair to B for Rs. 10. For A, consideration is
repair of his watch and for B, consideration is
Rs. 10. However, in case of bailment either for
the benefit of the bailor or bailee alone,
consideration in the form of something in
return is not there. In such cases the
detriment suffered by the bailor in parting
with the possession of goods is considered as a
sufficient consideration to support the promise
on the part of the bailee to return the goods.