Short notes on the Termination of Bailment

Law relating to termination of bailment is discussed in Sees. 153 and 162. However, these sections are not exhaustive. Hence ordinary rules regarding discharge or termination of contracts will also apply in the following cases:

1. When the period or purpose is over:

In case the bailment is for a specific period or purpose, it is terminated on the expiry of that period or on the completion of the purpose.

2. When the bailee makes unauthorized use of the goods:

In case the bailee makes unauthorized use of the goods bailed, the bailment is voidable at the option of the bailor.

3. When the subject-matter is destroyed or becomes illegal:

In case the subject-matter is destroyed or becomes illegal, the bailment is terminated.

4. At the will of the bailor:

Where the bailment is gratuitous, it can be terminated merely at the sweet will of the bailor. However, the termination should not cause loss to the bailee in excess of the benefit derived by him. In case the loss exceeds the benefit derived by the bailee, the bailor must compensate the bailee for such a loss (Sec. 159).

5. When the bailor or bailee dies:

A gratuitous bailment is terminated by the death of the bailor or bailee.

Pledge :

A pledge is a special type of bailment for the mutual benefit of bailor and bailee.

According to Sec. 172, the bailment of goods as security for payment of a debt or performance of a promise is called ‘pledge’. The bailor is called the ‘pawnor’ or ‘pledger’. The bailee is called the ‘pawnee’ or ‘pledgee’.

Example:

A borrows 200 rupees by depositing his watch with B as a security for repayment of the debt.