What is bailment and pledge. What is Bailment of Pledge? 2022-11-02

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Bailment and pledge are two legal concepts that are related to the transfer of possession of property from one person to another. Both concepts involve the temporary transfer of possession, but there are some key differences between the two.

Bailment is a legal relationship in which one person, the bailee, holds possession of the property of another person, the bailor, for a specific purpose. The bailee is responsible for taking care of the property and returning it to the bailor when the purpose has been fulfilled. There are several types of bailment, including gratuitous bailment, where the bailee does not receive any compensation for taking possession of the property, and bailment for hire, where the bailee is paid for their services.

An example of bailment is when you take your car to a mechanic for repair. The mechanic becomes the bailee, responsible for taking care of your car while it is in their possession. Once the repair work is complete, the mechanic must return your car to you.

Pledge, on the other hand, is a type of bailment in which the bailee holds possession of the property as security for a debt or obligation owed by the bailor. The property that is pledged is called the "pledge," and the person holding the pledge is called the "pledgee." If the bailor fails to fulfill their obligation, the pledgee has the right to sell the pledge to recover the debt.

An example of pledge is when you borrow money from a bank and put up your car as collateral. The bank becomes the pledgee, holding possession of your car as security for the loan. If you fail to make your loan payments, the bank has the right to seize and sell your car to recover the debt.

In summary, bailment is a legal relationship in which one person holds possession of another person's property for a specific purpose, while pledge is a type of bailment in which the property is held as security for a debt or obligation. Both concepts involve the temporary transfer of possession of property, but the purpose and terms of the transfer are different.

Bailment and Pledge

what is bailment and pledge

The property pledged should be delivered to the pledgee. These provisions are not exhaustive in as much as all types of bailments have not been discussed in the Act. D is entitled to have his l00 bales returned, and B is bound to bear all the expenses incurred in the separation of the bales, and any other incidental damage. Conversely, in pledge, Pawnee has no right to use the goods. BAILMENTS BY WAY OF PLEDGE OR PAWN Definition The bailment of goods as security for payment of a debt or performance of a promise is called Pledge or Pawn. In case he wrongfully refuses to take back the goods, he should compensate the bailee for any loss due to such refusal.

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What are some examples of Bailments?

what is bailment and pledge

The prerequisite for the pledge is the delivery of the items to the Pawnee. Illustration If A gave his car to B for personal use. Use of Goods In pledge, the pawnee cannot use the goods. In this arrangement, the asset is not delivered to the lender but kept by the borrower until he defaults in payment of debt. Bailment, thus involves the transfer of possession of goods to a person, who holds the goods either for or at the direction of their owner, to whom they will be returned. Either the bailee or the bailor may file a suit against the third party in such cases. The term is also used to denote the property which constitutes the security.

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Concept of Bailment and Pledge

what is bailment and pledge

There must be a delivery of goods, which means, delivery of possession of the goods by the bailer to the bailee to fulfil the purpose of bailment. Is Bailment a tort? Pawn or pledge is a bailment of personal property as security for some debt. Purpose Bailment takes place when the bailor transfers constructive to the bailee, the main reason why bailor transfer his goods is the performance of a specific purpose. Pledge refers to the delivery of commodities as security for the payment of a debt or the fulfilment of a promise, whereas Bailment refers to the transfer of things from one person to another for a specific purpose. Liabilities of Carriers— See Book V, Ch 1. Right to interplead If a person, other than the bailor, claims the goods bailed, he may apply to the courts to stop delivery of the goods bailed and to decide the title to the goods.

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Bailment: Definition, How It Works, Types, and When It Ends

what is bailment and pledge

Therefore, such transfer of possession of goods is known as Pledge. The main provisions pertaining to bailment are covered in Chapter IX Sections 148—181 of the Indian Contract Act, 1872. Right to sell the goods The party whom goods are being delivered has no right to sell the goods. Delivery to bailee may be actual or constructive: SECTION 149 explains the meaning of delivery of possession. Here the word goods may include all the movable items, but property and money do not come under the definition of goods. Bailors have the right to end the agreement and to legal recourse, including compensatory damages, if the bailee can't produce the asset when the agreement ends. If the bailor concedes to the combining of the wares then the revenue in the combined wares should be disseminated in percentage.

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Bailment, Pledge, Hypothesis and Mortgage

what is bailment and pledge

Further, if the purpose is accomplished. It should be noted that in bailment only possession of the goods passes from one person to another. An extraordinary bailment occurs when bailees are charged with a piece of property under strict liability. If he has taken reasonable care he is no more liable Sees. It is not technically a tort, and has developed under common law case law. Example : X is a seller of motor can, having several cars in his possession.

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Bailment And Pledge: Features, Duties And Rights, Types

what is bailment and pledge

The party whom goods are being delivered as security has the right to sell the goods if the party who delivers the goods fails to pay the debt. Then B is duty bound to hand over the bailed goods along with accretion to the bailor. Conclusion We all have no idea, when we enter into these type of contract in our life especially the contract of bailment because all of us has left our car or motorcycles in the service center for repairs, it is bailment. A is entitled to get compensation and has a right to terminate the bailment contract. Who is the bailee in a contract of bailment? The bailor gets the benefit of their asset being safeguarded by the bailee in exchange for payment.

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Difference Between Bailment And Pledge

what is bailment and pledge

The Court fastened that although the Defendant was familiar with such shortcoming or not he will be accountable. C uses it as a taxi. Upon the contract the goods shall be returned or otherwise disposed of according to the directions of the person delivering the goods, when the purpose is accomplished. For example, old ornaments can be changed, into new ones. Y buys a car and leaves the car in the possession of X After the. Extraordinary expenses the Pawnee is entitled to receive from the pawnor extra­0rrlinary expenses incurred by him for the preservation of the goods pledged. This distinguishes bailment from leasing, where ownership remains with the lessor, but the lessee is allowed to use the property.


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Difference Between Bailment and Pledge

what is bailment and pledge

Bailment is distinct from leasing, where ownership remains with the lessor but the lessee is allowed to use the property. Here B has a right to claim damages from A. Protection of debtors The pledgor as a debtor has various rights given to him by statutes enacted for the protection of debtors e. The person to whom they are delivered is called the Bailee. Pledge, Hypothecation and Mortgage are different terms that are used to create a charge on the assets which is given by the borrower to the lender.

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