Thursday, May 17, 2012

Duties and Rights of Bailor

Duties of bailor
1.                  To disclose known faults about the goods – in case of default, bailor is responsible for any damage suffered by bailee directly from such faults.
Ø                  In case of goods bailed for consideration, bailor is responsible even for faults unknown to him.
Read V. Dean – A hires motor launch from B for holiday on river Thames – launch caught fire – fire fighting equipment out of order – A unable to extinguish fire – A got injured and suffered loss – Held, B was liable.

Ø                  In gratuitous bailment, bailor responsible only for the known faults which are not disclosed.

2.                  To bear extraordinary expenses of bailment – bailee only bound to pay reasonable and ordinary expenses of bailment.
Example : A lends his horse to B, his friend, for two days – feeding charges to be paid by B – but if horse meets with an accident, A will have to repay the medical expenses incurred by B.

Ø                  In case of gratuitous bailment, the bailor has to pay all necessary expenses.
Example :  A goes out on holiday - leaves his dog with B – B incurred expenses on feeding the dog – A liable to repay B the necessary expenses incurred by him.

3.                  To indemnify bailee for loss in case of premature termination of gratuitous bailment – if loss accruing to bailee exceeds the benefit derived by him out of bailment, the bailor has to indemnify him.
Example : A lends his old discarded bicycle to B gratuitously for 3 months – B incurs Rs.100 on its repairs – A asks for return of bicycle after one month – A liable to compensate B for expenses incurred by him in excess of benefit derived by him.

4.                  To receive back the goods – if bailor refuses to receive back goods, bailee is entitled to receive compensation from bailor for necessary expenses of custody. 

5.                  To indemnify bailee – in case bailor has defective title to goods and not entitled to make bailment or receive back the goods or give directions in relation to them and bailee suffers some loss as consequence – bailor liable to indemnify the bailee.

Rights of bailor
1.                  Enforcement of rights – bailor can enforce by suit all the liabilities and duties of bailee, as his rights.
2.                  Avoidance of contract – in case of any act by bailee inconsistent with the terms of bailment, bailor can terminate the bailment.
3.                  Return of goods lent gratuitously – bailor can demand return at any time even though bailment for specified time or purpose – however, in case bailee suffers some loss exceeding the benefit derived by him, bailor has to indemnify the bailee.
4.                  Compensation from a wrong-doer – if any third person deprives bailee use or possession of goods bailed or does them any injury, bailor (also the bailee) entitled to bring a suit against such third person for such deprivation or injury.

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