Special Contracts: Indemnity; Guarantee; Bailment and pledge; Agency.

DUTIES OF A BAILOR

• Duty to disclose defects [Section 151]

In case of gratuitous bailment:

The bailor must disclose all the defects in the goods-

1. Which are known to him,and
2. Which materially interfere with the use of them or expose the bailee to extraordinary risks.

In case of non gratuitous bailment

If the bailee suffers any loss due to any defect in the goods,the bailor is liable to bailee for such loss whether he knows those defects or not.

• Duty to bear expenses [Section 158]

In case of gratuitous bailment

The bailor must repay to the bailee all the necessary expenses which the bailee has already incurred for the purpose of bailment.

In case of non gratuitous bailment

The bailor must repay to the bailee all the extraordinary expenses which the bailee has incurred for the purpose of bailment.

• Duty to indemnity the bailee in case of premature termination of gratuitous bailment [Section 159]

A gratuitous bailment may be terminated by the bailor at anytime even though the bailment was for a specified time or purpose.The bailor must indemnify the bailee in case the loss arising due to premature termination of the bail,ment exceeds the benefits actually derived by the bailee.

• Duty to indemnity the bailee against the defective title of bailor [Section 164]

The bailor is responsible to the bailee for any loss which the bailee may suffer because of the defective title of the bailor.

• Duty to receive back the goods [Section 164]

The bailor must receive  back the goods when the bailee,in accordance with the terms of bailment,returns the goods to him.If the bailor refuses to receive back the goods,he must repay to the bailee all the expenses which the bailee has incurred for the safe custody of goods.

• Duty to bear the risk of loss [Section 152]

The  bailor must bear the risk of loss of goods provided the bailee has taken all responsible steps to protect the goods from loss.

 DUTIES OF A BAILEE

• Duty to take care of the goods bailed [Section 151&152]

The bailee is bound to take as much care of the goods bailed to him as  a man of ordinary prudence would,under similar circumstances take of his own goods of the same bulk,quality and value as the goods bailed.

•  Duty not to make any unauthrosed use of goods [Section 154]

The bailee must use the goods bailed according to the conditions of the bailment.If he does not use the goods bailed according to the conditions of the bailment,he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them.

• Duty not to mix bailor‘s goods with his own goods [Section 155 to 157]

i. In case of mixture with bailor’s consent[Section 155]

The bailor and the bailee shall have an interest in proportion to their reppective shares in the mixture thus produced.

ii. In case of mixture without bailor’s consent when the goods can be separated[Section 156]

iii. In case of mixture without bailor’s consent when the goods cannot be separated[Section 157]

• Duty to return the goods [Section 160 & 161]

The bailee must return or deliver the goods according to the bailor’s directions without demand,after the accomplishmenmt of purpose or after the expiry of period of bailment.

• Duty to return accretion to the goods [Section 163]

In the absence of,any contract to the contrary,the bailee is bound to deliver to the bailor,or according to his directions,any increase or profit which may have accrued from the goods bailed.

• Duty not to set up any adverse title

The bailee must not do any act which is inconsistent with the title of the bailor.