Right of lien Special Contracts

Where the bailee has, in accordance with the purpose of the bailment, rendered any service involv-
ing the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a contract
to the contrary, a right to retain such goods until he receives due remuneration for the services he Notes
has rendered in respect of them [Section 170]. Examples to this effect are presented in Box 6.9.

Box 6.9 Right of Lien; When Bailee Can Retain Goods

Example 1
A delivers a rough diamond to B, a jeweller, to be cut and polished, which is accordingly done. B is
entitled to retain the stone till he is paid for the services he has rendered.
Example 2
A gives a piece of cloth to B, a tailor, to make into a coat. B promises A to deliver the coat as soon as
it is finished, and to give a three months’ credit to A for the price. B is entitled to retain the coat until
he is paid the stitching charges [Appended to Section 170].

Bankers, factors (merchants buying and selling on commission basis), wharfi ngers (ship
loaders), attorneys of a High Court, and policy-brokers may, in the absence of a contract to the
contrary, retain as a security for general balance of account, any goods bailed to them, but no
other persons have a right to retain as a security for such balance, goods bailed to them, unless
there is an express contract to the effect [Section 171].
Right to sell the goods If the bailor fails to take delivery of the goods and to pay the bailee’s
charges, the bailee has a right to sell the goods after giving a notice to the bailor of his intention.
After the sale, the bailee must account to the bailor for the proceeds of sale less the costs of sale
and the amount owed to the bailee in respect of the goods [Section 169].
Right to return the goods to any of the joint-bailors If several joint owners of goods bail them,
the bailee may deliver them back to, or according to the directions of, one joint-owner without the
consent of all in the absence of any agreement to the contrary [Section 165].
Right to deliver goods to the bailor without title If the bailor has no title to the goods, and the
bailee, in good faith, delivers them back to, or according to the directions of, the bailor, the bailee is
not responsible to the owner of the goods in respect of such delivery [Section 166].
From the foregone discussion it is clear that the duties of the bailor are the rights of bailee,
and the rights of bailor are the duties of bailee. This is simply because bailor and bailee sit in
reciprocal relationship to each other.

Termination of Bailment
The following circumstances render a contract of bailment terminated.
Unauthorised use of goods bailed A bailor may terminate the bailment where the bailee does
any act with regard to goods bailed, inconsistent with the conditions of bailment [Section 153].
Simply put, it means that a bailor can terminate a bailment before its term runs out, in case he finds
the bailee’s conduct, with respect to the bailed goods, contrary to the agreed terms. In such a case,
a bailment can be terminated even before the expiry of the term of the bailment.
Expiry of term of bailment A contract of bailment automatically comes to an end upon the expiry
of the period for which the goods were bailed.
A gratuitous bailment may, however, be terminated at any time, even before the agreed time,
except where the termination before the fixed period causes loss to the bailee exceeding the
benefit actually derived by him from the bailment. In that case the bailor must compensate him
[Section 159]. Self-Learning
Material 101