Dawami, Jhonna Gwin B.

Magaway, Anne Therese D.

Obeidat, Nurhuda Rj H.
Sotto, Pia C.
Tan, Rafaella Daye T.
Law114 A
March 1, 2016
Bailments

I. DEFINITION OF BAILMENTS

Bailment is the delivery of the property of one person to another in trust for a specific
purpose, with a contract, express or implied, that the trust shall be faithfully executed
and the property returned or duly accounted for when the special purpose is
accomplished or kept until the bailor reclaims it. The bailee is responsible for
safekeeping and return of the property.

II. CREATION OF BAILMENT

Bailment, generally, may be said to be a contractual relation. To be legally

enforceable, it must contain the essential elements of a valid contract. Also, it may
be created by operation of law.

III. PARTIES TO A BAILMENT

A. Bailor He is the owner or the giver of the property. The party who delivers
the possession or custody of the thing bailed.
B. Bailee He is the holder or the recipient of the property. The party who
receives the possession and custody of the thing thus delivered.

IV. TYPES OF BAILMENTS

A. Constructive Bailment occurs when circumstances create an obligation
for the bailee to protect the goods. This type of bailment is implied by law.
a. For the sole benefit of the bailor Gratuitous deposit and mandatum
b. For the sole benefit of the bailee Commodatum and simple
loan/mutuum.
 c. For the benefit of both parties Deposit for a compensation,
involuntary deposit, pledge, bailments for hire.

B. Bailment for hire It arises when goods are left with the bailee for some
use or service by him and is always for some compensation.
a. Hire of things (Locatio Rei) Where goods are delivered for the
temporary use of the hirer.
b. Hire of service (Locatio Operis Faciendi) Where goods are
delivered for some work or labor upon it by the bailee.
c. Hire for carriage of goods (Locatio Operis Mercium
Vehemdarum) Where goods are delivered either to a common
carrier or to a private person for the person of being carried from
place to place.
d. Hire of custody (Locatio Custodae) Where goods are
delivered for storage.

C. Gratuitous Bailment This type of bailment requires no payment but the

bailee may still liable. It occurs when someone finds a lost property and
protects it himself or places it in custody of another, such as the police,
until the lawful owner can be located.

V. VOLUNTARY vs INVOLUNTARY
A. Voluntary bailment - another person accepts responsibility for the items.
B. Involuntary bailment - someone ends up with the goods without ever
intending to do so.

VI. HOW LONG ARE THE GOODS SUPPOSED TO BE HELD?

The term may be indefinite or fixed. A person who deposits their items for a
set amount of time and then doesn't come back for them may give up their
rights to the property. In this situation, it may be considered abandoned
 property. But if there was never an agreement on how long the property was
to stay, there is no abandonment unless the owner is given notice.

VII. WHEN CAN THE BAILEE BE HELD LIABLE?

A. Tort
B. Breach of Damages
C. Lack of Reasonable Care

VIII. TERMINATION OF BAILMENT

The contract of bailment can be discharged in the following ways:

A. On the expiry of the period - When the bailment of good is made for a
specific period and that period expires then the bailment also comes to an
end.
B. On the completion of the task or the achievement of the objective - When
bailment of goods is made for a particular purpose and that purpose gets
accomplished then the bailment comes to an end.
C. Inconsistent uses of goods by the bailee - When bailment is made and the
bailee does an act which is inconsistent with the terms of contract then the
bailor can terminate the contract.
D. Destruction of the subject matter - When the subject matter of the contract
gets destroyed or becomes incapable of being used for the purpose of
bailment then the bailment ends
E. Gratuitous Bailment - It can be terminated anytime subject to conditions
laid down in section 159
F. Death of the bailor/bailee - In case any of the parties to the contract of
bailment expires the contract terminates.

IX. REMEDIES
A. For the value of services rendered:
 For contractual bailees regular contract remedies apply (usually for non-
payment)
Can sue for damages
Usually cannot obtain rescission
Can sue for Quantum Meruit in situations where there has been
part performance
B. For liens
Gives the right to the bailee to retain possession of the goods
Payment must come due while the goods are still in the possession
of the bailee
Common Law right for bailees are:
a. Repairers of goods
b. Innkeepers
c. Common Carriers
d. Bankers or Lawyers
C. Right of Sale
Only available by statute or by contract (not a Common Law right)
Provides the bailee the right to sell the goods in their possession to
cover goods. Must follow a prescribed formula to sell:
a. Provide a specified period of time to bailor to come up with
funds
b. Advance notice of the bailees intention to sell the goods must
be provided to the bailor
c. Sale must be advertised
d. Sale must be made by public auction