Definition of bailment
bailment (plural bailments)
- (obsolete) Bail.
- (law) The handing over of control over, or possession of, personal property by one person, the bailor, to another, the bailee, for a specific purpose upon which the parties have agreed.
- Alphagram: abeilmnt
Bailment describes a legal relationship in common law where physical possession of personal property (chattels) is transferred from one person (the 'bailor') to another person (the 'bailee') who subsequently holds possession of the property.
Bailment is distinguished from a contract of sale or a gift of property, as it only involves the transfer of possession and not its ownership. In order to create a bailment, the bailee must both intend to possess, and actually physically possess, the bailable chattel. Bailment is a typical common law concept and it is non-existent in civil law.
In addition, unlike a lease or rental, where ownership remains with the leasor but the lessee is allowed to use the property, the bailee is generally not entitled to the use of the property while it is in his possession. Moreover, unlike a security agreement or pawn at a pawnbroker, where the secured party is entitled to the possession and use of the property only on default of payment, a bailor can demand the return of the property at any reasonable time, without prior notice. A common example of bailment is leaving your car with a valet. Leaving your car in a parking garage is typically a license, as the car park's intent to possess your car cannot be shown. However, it arises in many other situations, including terminated leases of property, warehousing (including store-it-yourself) or in carriage of goods.
No matter how a bailment arises, the bailee has both a duty of care and duty to re-deliver the bailment. The bailee is expected to take (as a minimum) reasonable precautions to safeguard the property, although this standard sometimes varies depending upon who benefits from the bailment. In most of the United States, for example, if the bailment is to the primary benefit of the bailor, the bailee must be found grossly negligent in order to be liable for damage done to the bailment, while if the bailee primarily benefits, such as if you borrow your neighbor's rake to clean your lawn, the bailee is liable for any damages arising from slight neligence. If both bailor and bailee are found to benefit from the relationship, such as leaving your clothes at the dry cleaners, then the bailee is only held to a standard of ordinary care. Bailees are typically strictly liable for any mis-delivery of a bailment, although, in the case of involuntary bailments (see below), the bailee is only held to a standard of due care regarding re-delivery. Moreover, a bailee may be liable in conversion if the property is not returned upon the request of the bailor, or if the property is used without permission of the bailor.
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