Under common law systems, bailment is used for describing legal relationships where the physical possession of chattel or personal property gets transferred between one individual known as the ‘bailor’, to another individual known as the ‘bailee’. The bailee has subsequent possession over the property. Bailment occurs in circumstances where an individual provides another person with property for the purpose of safekeeping, and is used as cause of action that is considered independent from tort or contract.
The act of bailment is determined by a gift of property or contract of sale, and only involves a transfer of possession, but not the ownership. For a bailment to be created, a bailee has to actually possession the physical property and intend to possess bailable chattel. Although bailment is generally a common law, it has some existence in civil law as well.
Additionally, unlike with a rental or lease, where the ownership of the property is retained by the lessor, but allows the lessee to use the property, a bailment does not typically permit the bailee to have use of the property while being in his or her possession.
An example of a bailment involves leaving a vehicle with the valet parking. When a driver parks and leaves their vehicle inside a parking garage, unattended it is commonly a license or lease of parking space, not a bailment, because the intent of the parking garage possessing your vehicle is unable to be indicated. Although, there are various situations where a bailment occurs, including warehousing (store-it-yourself included), termination property leases, and carriage of goods.
There’s three forms of bailment, they include:
- The benefit of both the bailee and bailor
- The sole benefit for the bailee
- The sole benefit for the bailor
When a bailment is created with the purpose of mutual benefit for both bailor and bailee, an exchange exists for the performances between each party. For instance, the bailment for repairs of items are being paid by the owner.
In the event a bailee obtains sole benefits form the bailment, when the bailor’s actions are gratuitous. For instance, when a book is loaned to a patron (bailee) from the local library (bailor).
In the event a bailor obtains sole benefit from the bailment, when the bailee’s actions are gratuitous. For instance, if a valuable item such as a piece of jewelry or a car is left by the owner to the trust of a friend for safekeeping while traveling abroad, with no compensation agreement for the friend.
It does not matter the method a bailment occurs, the bailee incurs the liability of the bailment, and in certain circumstances must insure the goods. Various jurisdictions will retain variations in the standards for bailments.
“Practical Law UK Signon”. uk.practicallaw.thomsonreuters.com. Retrieved 2017-09-18.