case study bailor and bailee
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Bailor and Bailee Relationship:
In banker customer relationship, bailment is also important types of relations. It may arise in the following situations:
Availing safe custody services (lockers)
Pledge of stocks as security for availing credit from bank. In these cases---
Customer--- Bailor & Bank---- Bailee
Bailment
The definition of bailment as contained in section 148 is given here under:
A “bailment” is 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 directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called the “bailee”
Explanation.---If a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor, of such goods although they may not have been delivered by way of bailment.
Essentials of Bailment:
Contract--there is an underlying contract between the bailor and bailee, there may be an explicit contract or it may be an implied contract.
Specific purpose--the bailment of goods is always for some specific purpose.
Delivery of goods--there must be delivery of movable goods in a contract of bailment.
No change of ownership--in a contract of bailment, only the possession of goods is transferred from bailor to the bailee, whereas the bailor has all ownership rights over the goods delivered.
Return of the goods delivered on accomplishment of purpose--when the purpose for which the goods are delivered is completed, the goods must be returned in the original form or modified form as per instructions of the bailor.
For the benefit of the bailor-- Mr. Yasir, while going out of city handed over some precious household articles to Mr. Usman for safe custody, without any obligation to pay any fee/ charges. It is a bailment for the benefit of the bailor.
For the benefit of the bailee—Mr. Umer handed over his car to Mr. Ahsan, as he was in need of conveyance for few days. Mr. Umer handed over this car without any obligation on the part of Mr. Ahsan to pay any rent/ charges for the use of this car. This bailment is exclusively for the benefit of the Mr. Ahsan, the bailee.
For the benefit of bailor and bailee—Mr. Ahmad availed locker facilities from M/S XYZ bank ltd. Under the terms and conditions of the contract Mr. Ahmad was required to pay Rs.1000/ annual fee on account of availing this facility. This contract is for the benefit of both parties, the bailor and the bailee.
Explanation:
Scope of bailment and its essentials are explained in detail in the following paragraphs.
Nature of the transaction.---"Bailment" is a technical term of the Common Law. It involves change of possession. One who has custody without possession, like a servant, or a guest using his host's goods, is not a bailee. The constructive delivery will create the relation of bailor and bailee as well as actual delivery. The bailee's duty to deal with the goods according to the bailor's orders is incidental to the contract of bailment, and arises on the delivery of the goods, although those orders may have already been given and accepted in such a manner as to constitute a prior special contract. As a matter of pleading this is no longer material in this country, but it might still be material with regard to the period of limitation. Ailment is necessarily dealt with by the Contract Act only so far as it is a kind of contract. It is not to be assumed that without an enforceable contract there cannot in any case be a bailment. The words. "Otherwise disposed of" in the present section express the common law as now understood. "It seems clear that a bailee is not the less a bailee because he is clothed with authority to sell the thing which is bailed to him," e.g., a factor for sale. On the whole a bailment may be described as a delivery on condition, to which the law usually attaches an obligation to redeliver the goods, or otherwise deal with them as directed, when the condition is satisfied; but there may be, in particular cases, a bailment without an enforceable obligation
In banker customer relationship, bailment is also important types of relations. It may arise in the following situations:
Availing safe custody services (lockers)
Pledge of stocks as security for availing credit from bank. In these cases---
Customer--- Bailor & Bank---- Bailee
Bailment
The definition of bailment as contained in section 148 is given here under:
A “bailment” is 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 directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called the “bailee”
Explanation.---If a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor, of such goods although they may not have been delivered by way of bailment.
Essentials of Bailment:
Contract--there is an underlying contract between the bailor and bailee, there may be an explicit contract or it may be an implied contract.
Specific purpose--the bailment of goods is always for some specific purpose.
Delivery of goods--there must be delivery of movable goods in a contract of bailment.
No change of ownership--in a contract of bailment, only the possession of goods is transferred from bailor to the bailee, whereas the bailor has all ownership rights over the goods delivered.
Return of the goods delivered on accomplishment of purpose--when the purpose for which the goods are delivered is completed, the goods must be returned in the original form or modified form as per instructions of the bailor.
For the benefit of the bailor-- Mr. Yasir, while going out of city handed over some precious household articles to Mr. Usman for safe custody, without any obligation to pay any fee/ charges. It is a bailment for the benefit of the bailor.
For the benefit of the bailee—Mr. Umer handed over his car to Mr. Ahsan, as he was in need of conveyance for few days. Mr. Umer handed over this car without any obligation on the part of Mr. Ahsan to pay any rent/ charges for the use of this car. This bailment is exclusively for the benefit of the Mr. Ahsan, the bailee.
For the benefit of bailor and bailee—Mr. Ahmad availed locker facilities from M/S XYZ bank ltd. Under the terms and conditions of the contract Mr. Ahmad was required to pay Rs.1000/ annual fee on account of availing this facility. This contract is for the benefit of both parties, the bailor and the bailee.
Explanation:
Scope of bailment and its essentials are explained in detail in the following paragraphs.
Nature of the transaction.---"Bailment" is a technical term of the Common Law. It involves change of possession. One who has custody without possession, like a servant, or a guest using his host's goods, is not a bailee. The constructive delivery will create the relation of bailor and bailee as well as actual delivery. The bailee's duty to deal with the goods according to the bailor's orders is incidental to the contract of bailment, and arises on the delivery of the goods, although those orders may have already been given and accepted in such a manner as to constitute a prior special contract. As a matter of pleading this is no longer material in this country, but it might still be material with regard to the period of limitation. Ailment is necessarily dealt with by the Contract Act only so far as it is a kind of contract. It is not to be assumed that without an enforceable contract there cannot in any case be a bailment. The words. "Otherwise disposed of" in the present section express the common law as now understood. "It seems clear that a bailee is not the less a bailee because he is clothed with authority to sell the thing which is bailed to him," e.g., a factor for sale. On the whole a bailment may be described as a delivery on condition, to which the law usually attaches an obligation to redeliver the goods, or otherwise deal with them as directed, when the condition is satisfied; but there may be, in particular cases, a bailment without an enforceable obligation
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