2 minute read

Bailment

Categories, Elements, Rights And LiabilitiesTermination



The temporary placement of control over, or possession of PERSONAL PROPERTY by one person, the bailor, into the hands of another, the bailee, for a designated purpose upon which the parties have agreed.



The term bailment is derived from the French bailor, "to deliver." It is generally considered to be a contractual relationship since the bailor and bailee, either expressly or impliedly, bind themselves to act according to particular terms. The bailee receives only control or possession of the property while the bailor retains the ownership interests in it. During the specific period a bailment exists, the bailee's interest in the property is superior to that of all others, including the bailor, unless the bailee violates some term of the agreement. Once the purpose for which the property has been delivered has been accomplished, the property will be returned to the bailor or otherwise disposed of pursuant to the bailor's directions.

A bailment is not the same as a sale, which is an intentional transfer of ownership of personal property in exchange for something of value. A bailment involves only a transfer of possession or custody, not of ownership. A rental or lease of personal property might be a bailment, depending upon the agreement of the parties. A bailment is created when a parking garage attendant, the bailee, is given the keys to a motor vehicle by its owner, the bailor. The owner, in addition to renting the space, has transferred possession and control of the vehicle by relinquishing its keys to the attendant. If the keys were not made available and the vehicle was locked, the arrangement would be strictly a rental or lease, since there was no transfer of possession.

A gratuitous loan and the delivery of property for repair or safekeeping are also typical situations in which a bailment is created.

Termination

A bailment is ended when its purpose has been achieved, when the parties agree that it is terminated, or when the bailed property is destroyed. A bailment created for an indefinite period is terminable at will by either party, as long as the other party receives due notice of the intended termination. Once a bailment ends, the bailee must return the property to the bailor or possibly be liable for conversion.

FURTHER READINGS

Cross, Frank B., and Roger Leroy Miller. 1998. West's Legal Environment of Business: Test Cases, Ethical Regulatory, and International Issues. St. Paul, Minn.: West.

Hall, Kermit L. 1991. A History of American Legal Culture: Cases and Materials. New York: Oxford Univ. Press.

CROSS-REFERENCES

Bad Faith; Conversion; Damages; Negligence.

Additional topics

Law Library - American Law and Legal InformationFree Legal Encyclopedia: Autopsy to Bill of Lading