Property
9. Bailment
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 12 Jul 2015
- A bailment is established when a person holding rights to personal property (the bailor) delivers the personal property to another individual (the bailee) for a particular purpose.
- Personal property is usually transferred under an agreement that gives rise to a duty of care. The agreement is not necessarily a written contract and can be oral.
- Upon completion of the purpose the bailee is obliged to return the bailed property back to the bailor or dispose of it as instructed by the bailor.
- In this way the bailor does not own the property outright. They merely have possession of the property and must return the goods when requested.
- If the bailee is not obliged to return the goods at the end of the period of the agreement a bailment will generally not be established.
- Examples of bailment include:
- deposit of goods for safekeeping for example having a locker with a bank;
- giving your laptop for repair;
- borrowing a rental car;
- giving your coat for hanging at a restaurant;
- lending your phone to your friend; or
- giving your clothes for dry cleaning.
- A bailment is terminated when:
- the term of bailment expires;
- by demand of a bailor;
- by wrongful act of the bailee such as intentional damage to goods;
- return of goods to the bailor;
- transfer of ownership; or
- if the goods are lost, destroyed or changed.
- For a relationship of bailment to exist the bailee must acquire possession or control of the goods. If the bailee sub-bails the goods to another person without knowledge of the bailor they would be liable to the bailor if the goods are lost or damaged. If sub-bailment takes place with the bailor’s authority then only the sub-bailee will be liable if the goods are damaged or lost.
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