Meaning and Definition
A bailee is a person who receives goods from another (called the bailor) for a specific purpose under a contract of bailment. After the purpose is accomplished, the bailee must return or dispose of the goods according to the bailor’s directions. Under the Indian Contract Act, 1872, Section 148 defines bailment as “the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the bailor’s directions.” Thus, a bailee is under a legal duty to take reasonable care of the goods, use them lawfully, and return them once the purpose of bailment is complete.
Duties and Rights of a Bailee
The duties of a bailee are outlined under Sections 151 to 165 of the Indian Contract Act, 1872. The bailee must take as much care of the goods as a reasonable person would take of their own property (Section 151). If any loss occurs due to negligence, the bailee is liable (Section 152). He must not make unauthorized use of the goods (Section 153) and must return them after the purpose is achieved (Section 160). The bailee has the right to be reimbursed for necessary expenses (Section 158) and can exercise a particular lien over the goods for charges due (Section 170). These rights and duties maintain fairness and trust between the parties in a bailment contract.
Termination of Bailment and Bailee’s Liability
Bailment can be terminated in several ways — when its purpose is achieved, when the time agreed upon expires, or when either party acts inconsistently with the terms. According to Section 153, a bailment becomes voidable if the bailee uses the goods contrary to the bailor’s instructions. If goods are lost or damaged due to negligence, the bailee must compensate the bailor (Section 161). However, if the loss occurs despite reasonable care, the bailee is not liable. The bailee’s role thus carries a fiduciary character — based on trust, honesty, and diligence. The Indian courts have often emphasized that a bailee is not an insurer but a custodian bound by a duty of reasonable care.
Real-Time Example
In Ultzen v. Nicolls (1894), a customer left his coat with a restaurant waiter who failed to return it. The court held that a bailment relationship was created, and the waiter, being a bailee, was liable for the loss due to negligence. Similarly, in India, under Section 151, if a car is given for repair at a garage and the mechanic fails to take reasonable care leading to theft, the mechanic (bailee) is responsible for the loss. These examples highlight how bailment operates in everyday life — from dry cleaners and warehouses to logistics services — ensuring that goods entrusted to others are protected by law.
Mnemonic to Remember Bailee’s Duties and Rights
Mnemonic: 🔹 “CARE-RETURN-LIEN”
Breakdown:
- C – Care: Take reasonable care of goods (Sec. 151)
- A – Avoid misuse: Do not use goods without permission (Sec. 153)
- R – Return: Return goods after purpose (Sec. 160)
- E – Expenses: Entitled to necessary expenses (Sec. 158)
- LIEN – Right: To retain goods until payment (Sec. 170)
This mnemonic helps recall the bailee’s primary obligations and rights quickly during exams.
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