Reviewed by Sep 30, 2020| Updated on
Bailment represents a legal relationship wherein the physical possession of a chattel or personal property is transferred from one individual to another individual who will subsequently get the property’s possession but not the entire ownership.
Bailment surfaces when a property is given to an individual for security purposes; it is a law-bound course of action which is independent of contract/tort. For creating a bailment, a bailee needs to have an intent to possess and actually possess the bailable chattel physically.
Within a bailment, generally, a bailor is not eligible to utilise a property when it is in a bailee's possession. This differentiates a bailment from leasing, wherein the ownership remains with the lessor; however, the lessee is permitted to utilise the property. An apartment which is leased is another example wherein a tenant possesses and utilises his or her apartment, however, does not own it.
A bailor can nominate a bailee for supervising an investment portfolio till the bailor intends to be back on handling the responsibilities of managing a portfolio. Other types of bailment are—holding collateral versus a secured loan, self-storage, warehousing, and shipping of commodities.
Types of Bailments:
There are three different types of bailments, a bailment which benefits both the bailee as well as the bailor, a bailment which benefits only the bailor, and a bailment which benefits only the bailee.
A bailment can be ended during the following scenarios: