Bailment and pledge case study. Contract of bailment and pledge 2022-11-02
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Bailment is a legal relationship in which one person, the bailor, entrusts personal property to another person, the bailee, for a specific purpose. The bailee has a duty to take reasonable care of the property and to return it to the bailor when the purpose of the bailment has been fulfilled. A pledge, on the other hand, is a type of bailment in which the property is delivered as security for a debt or other obligation.
One case in which bailment and pledge intersect is the lending of money by a pawnbroker. In this scenario, the borrower brings an item of personal property to the pawnbroker and the pawnbroker gives the borrower a loan in exchange for the item. The pawnbroker becomes the bailee of the item, and the borrower becomes the bailor. The borrower is required to pay back the loan plus interest within a certain timeframe, and if they fail to do so, the pawnbroker has the right to sell the item to recoup the money owed. This type of arrangement is known as a pledge, as the item has been delivered as security for the debt.
Another example of bailment and pledge is the rental of a storage unit. In this case, the person renting the storage unit, the bailor, entrusts their personal property to the storage company, the bailee, for the purpose of storing the property. The storage company has a duty to take reasonable care of the property and to return it to the bailor when the bailment is terminated. If the bailor fails to pay the rent on the storage unit, the storage company may have the right to sell the property to recoup the unpaid rent, similar to the pawnbroker in the previous example.
In both of these cases, the bailment and pledge involve the entrustment of personal property for a specific purpose. In the case of the pawnbroker, the purpose is to secure a loan, while in the case of the storage unit, the purpose is to store the property. In both cases, the bailee has a duty to take reasonable care of the property, and the bailor has an obligation to fulfill the terms of the bailment or pledge.
It is important to understand the legal principles of bailment and pledge, as they can have significant consequences for both the bailor and the bailee. If the bailee fails to fulfill their duty to take reasonable care of the property, they may be held liable for any damages or losses sustained by the bailor. Similarly, if the bailor fails to fulfill their obligation under the terms of the bailment or pledge, they may lose the property and be required to pay any outstanding debts or damages. Understanding these legal principles can help both parties to protect their rights and interests in a bailment or pledge situation.
Bailment And Pledge: Features, Duties And Rights, Types
Illustration If A gives his horse to B for two days. It is covered under Sections 148-171 of the Indian Contract Act, 1872. 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. BAILMENT Whether the bailment can arise by a contract only or the same can be inferred by implication of law and fact, has been a matter of controversy. Here, neither was done, and hence, the judgement was in the favour of the respondent bank. In case of Hypothecation, possession of the asset remains with the borrower.
Parties to the contract: Pawnor — The bailor, in this case, is the Pawnor. Rights of Bailor Right to claim Damages When the bailor transfers the possession of his goods to the bailee and if bailee fails to protect the goods of the bailor, the bailor has the right to claim damages against bailee. There are two types of bailment. B met with an accident, A is liable to compensate B for the injury he suffered. Most other democracies guarantee rights of the accused similar to those provided in the United States Constitution, allowing for similar arguments to be made in other countries. If the bailor fails to collect the goods on the expiry of the bailment period, he will be liable to pay for any losses incurred by the bailee. Failure to disclose known defects will make the bailor liable to indemnify the bailee for any loss caused to the bailee directly due to such faults.
Contract of Bailment and childhealthpolicy.vumc.org
The property pledged should be delivered to the pledgee. With the help of the Internet it is quite possible to complete a good case study yourself. The sections quoted in this chapter refer to the Indian Contract Act, 1872 unless otherwise stated. Distinction Between Bailment And Pledge A pledge is only a special kind of bailment, and the chief basis of distinction is the object of the contract. He is not entitled to deny the title of the bailor or set up an adverse title. Section 170 — 171.
Relevant case laws Lallan Prasad v. Illustration If A bails 2lts. In this situation there was a duty of care for the defendant, who is the bank, to provide to the plaintiff, who is the old man, as the defendant was in a position to see that water had come into the building and the floor was wet. Due Bail Bonds Research Paper 548 Words 3 Pages Officers provide a citation to the arrestee that has an official court date listed. As per Section 175, if any extraordinary expenses arise, the pawnor will only be liable for the same as well. In any such situation, if the bailee incurs loss due to early return of the goods, the bailor is liable for the same. Pledge where pledger has only a limited interest As per Section 179 of the Indian Contract Act, the pledge between the pawnor having limited interest and Pawnee can be valid, if during the pledge the pawnee acted in good faith and does not know about the title of the goods.
Prisoners would be loaned out to large companies for a small sum of money for about a month. In Hypothecation, the creditor has the right to sell the goods. If the goods are used for any purpose that is not authorised, the pawnee will have to compensate the pawnor against the same. A mortgage which is not any one of the mortgages mentioned above is called an anomalous mortgage. Contract of Bailment Point of difference Contract of Pledge When certain goods are transferred from one party to another for a specific purpose, it is called a contract of bailment. Thereafter, he can sellthem off to adjust the amount of his loan.
The possession was said to be transferred when the plaintiff issued a receipt for safe-keeping of the vehicle for the said night. If goods are delivered by mistake to a person, there is no Bail Bond Process 445 Words 2 Pages If someone you love is arrested, you might not know how to handle the situations. This amount includes the expenses incurred by the pawnee as well as any interest accrued on that amount. It implies that pledge is a unique kind of bailment in which the goods are pledged for one single purpose i. The court allowed the petition and as per section 151 of ICA, held the defendant liable. If separating is not possible, the pawnee will be liable for all the damages.
Bail Bond Persuasive Speech 397 Words 2 Pages Most people go through their entire lives without ever needing to have the slightest understanding as to what a bail bond is or how the bail bonds process works. Both bailment and pledge are examples of specific contracts. In this case some packages of tobacco belonging to A had been pleadged to the plaintiff bank but they were still lying in A's godown. Bailee — The person to whom the goods are delivered is called the bailee. The Court also stated that the plaintiff was not entitled to any compensation on his stance that the goods were never pledged to him.
Illustration If A and B want to enter into the contract of bailment, A should transfer his goods and provide some purpose to B, so that B can act to complete that purpose. Bailment is a specific process related with law and a professional lawyer should be aware about its all peculiarities. Even when we simply give our product to be serviced, we enter into a Contract of bailment with the other party. Here, Y is a pawnor, the bank is a Pawnee and documents are the pledged goods. Delivery to bailee may be actual or constructive: SECTION 149 explains the meaning of delivery of possession. For sole benefit of Bailor In this concept, the bailor transfer the goods to the bailee for some specific purpose which result in the benefit of bailor only i. Once the process is finished the criminal has four different options to choose from to get release from jail.