Key aspects on bailment

  

Date Posted: 2/18/2013 1:53:17 AM

Posted By: Brendah Aroko  Membership Level: Gold  Total Points: 3317

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Bailment is the voluntary transfer of possession of 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. It doesn't involve transfer of ownership but is limited to possession.

Bailment is created in six main instances and this was stipulated in the case of Coggs vs Bernard. CJ Holt stated that bailment can be created ;
1. Where property is transferred to the bailee for purposes of safe custody and the most common example is when you deposit your luggage at the supermarket then you are issuer with a tag
2. When you give or lend your property to your friend gratis or to use free of charge.
3. When you as the bailor transfer your property to stand as a security for a debt owing to the bailee.
4. When you transfer property to someone to carry it for you or to do something to it like repair for payment. The most suitable example is when you leave your car with the mechanic to work on it.
5. When you hire out your property for use with another person who then becomes the bailor.
6. When you give someone your property for carriage or to repair it without paying them or to work on it free of charge.

The duties of a bailee are as follows; If the bailee is an employer then he owes the duty of care on the goods of the bailor and will be liable for any damage or loss occassioned by his servants. In the case of Morris vs CW Martin and Sons Ltd, the court held that the defendants were liable for the theft if the bailor's goods by their servant. It is

immaterial whether the employer benefits or not from the wrongful act of his servant. The only material question when theft irio fraud occurs or when it has been perpetuated by a servant is whether it was committed in the course of the servant's employment

The bailee is also under the obligation to take reasonable care if the goods which he is entrusted whether or not there is a reward for the bailment. What this simply means is that even if a chattel or good has been given for free or whether the bailee is going to receive any form of payment, the degree of care in both circumstances will not vary and the highest standard if care will be required . That standard is the reasonable man, which means that one is holding goods on behalf of another.

Failure to return the goods in their original condition in which they were delivered will render the bailee liable for the loss or damage to the goods from the date of default. This was determined in the case of Chatrishia and Co. Ltd vs Puranchand and sons where the appellant company had stored metal sheets in the respondent's go down. The appellant company's representative signed a letter setting out the conditions upon which the sheets were to be stored. And on of the conditions exempted the respondent for liability for any loss of the sheets. It was found that there was a shortage of the sheets and the appellant company sued. The court found that the respondents could not escape liability for the breach if the duty of care imposed on them by the common law unless they established that the loss occurred by reasons other than by their own negligence. If they failed to adduce satisfactory evidence as to how the loss occurred, then even the exemption clause on their letter could not protect them from liability.

The bailor on the other hand is under a duty to disclose the quality of the goods to the bailee. This will create a form of trust or a fiduciary relationship which will protect the bailee of any undisclosed facts about the state of the goods.
The bailor also is under the obligation to indemnify the bailee if any event occurs to the goods which as a result of the bailor's negligence. For example where the bailor does not hold a good title to the goods and the owner if the goods who has a good title to the goods comes to claim them. Here the bailee will be entitled to indemnification by the bailor.

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