What is a Bailment?
Bailments are describes a legal relationship in common law where physical possession of personal property, is transferred from one person (the 'bailor') to another person (the 'bailee') who subsequently has possession of the property. It arises when a person gives property to someone else for safekeeping, and is a cause of action independent of contract or tort. A bailment is created when, coupled with the intent to possess certain property, the bailee accepts the actual physical possession and control of the property. The elements of bailments include a consideration, delivery, and acceptance. The bailee's duty to take care of the property varies depending on the type of bailment that is created. If the bailment is for the sole benefit of the bailee and the bailor, the balilee must use ordinary care is liable for damage caused by his negligence. A gratuitous bailment or a bailment of the sole benefit of the bailor only imposes a duty of slight care and results inability for gross negligence of the part of the bailee. The bailee is held to strict liability of his failure to redeliver the property.
Elements
As mentioned above the three elements that are generally necessary for the existence of a bailment are: delivery, acceptance, and consideration. Delivery is described as the actual possession of or control over property must be delivered to a bailee in order to create a bailment. The delivery of actual possession of an item allows the bailee to accomplish his or her duties toward the property without the interference of others. Control over property is not necessarily the same as physical custody of it but, rather, is a type of constructive delivery. Acceptance is a requisite to the creation of a bailment is the express or implied acceptance of possession of or control over the property by the bailee. A person cannot unwittingly become a bailee. Because a bailment is a contract, knowledge and acceptance of its terms are essential to its enforcement. Consideration is the exchange of something of value, must be present for a bailment to exist. Unlike the consideration required for most contracts, as long as one party gives up something of value, such action is regarded as good consideration. It is sufficient that the bailor suffer loss of use of the property by relinquishing its control to the bailee; the bailor has given up something of value—the immediate right to control the property.
Types of Bailments
They are several different types of bailments. The main types of bailments include, gratuitous bailmen, bailment for reward, bailment of use, bailment of safe custody, bailment for mutual benefit, bailment for pledge, and bailment for finding lost goods. Generally they are broken down into three categories for the benefit of the bailor and bailee, for the sole benefit of the bailor, or for the sole benefit of the bailee. A bailment for the mutual benefit of the parties is created when there is an exchange of performances between the parties. A bailment for the repair of an item is a bailment for mutual benefit when the bailee receives a fee in exchange for his or her work. A bailor receives the sole benefit from a bailment when a bailee acts gratuitously—for example, if a restaurant, a bailee, provides an attended coatroom free of charge to its customers, the bailors. By virtue of the terms of the bailment, the bailee agrees to act without any expectation of compensation. A bailment is created for the sole benefit of the bailee when both parties agree the property temporarily in the bailee's custody is to be used to his or her own advantage without giving anything to the bailor in return. The loan of a book from a library is a bailment for the sole benefit of the bailee.
Rights and Liabilities
The bailment contract embodying general principles of the law of bailments governs the rights and duties of the bailor and bailee. The duty of care that must be exercised by a bailee varies, depending on the type of bailment. In a bailment for mutual benefit, the bailee must take reasonable care of the bailed property. A bailee who fails to do so may be held liable for any damages incurred from his or her negligence. When a bailor receives the sole benefit from the bailment, the bailee has a lesser duty to care for the property and is financially responsible only if he or she has been grossly negligent or has acted in bad faith in taking care of the property. In contrast, a bailee for whose sole benefit property has been bailed must exercise extraordinary care for the property. The bailee can use the property only in the manner authorized by the terms of the bailment. The bailee is liable for all injuries to the property from failure to properly care for or use it. Once the purpose of the bailment has been completed, the bailee usually must return the property to the bailor, or account for it, depending upon the terms of the contract.
Termination of Bailments
A bailment is ended when its purpose has been achieved, when the parties agree that it is terminated, or when the bailed property is destroyed. A bailment created for an indefinite period is terminable at will by either party, as long as the other party receives due notice of the intended termination. Once a bailment ends, the bailee must return the property to the bailor or possibly be liable for conversion.
