Classification of Bailments | Law of Contracts - CLAT PG PDF Download

Classification of Bailment

Bailment can be classified based on the presence or absence of a reward into two categories: gratuitous and non-gratuitous bailment.

 1) Gratuitous Bailment 

• When a bailment is made without any consideration for the benefit of either the bailor or the bailee, it is called gratuitous bailment.
• In simple terms, gratuitous bailment occurs when there is no consideration involved in the contract of bailment.
• For example, if you lend your bicycle to a friend for a ride or borrow books from him to read without any exchange of money or consideration, it is a case of gratuitous bailment.
• In such situations, neither you nor your friend is entitled to any remuneration. No hire charges are paid by the bailee, and no custody charges are paid by the bailor.

 2) Non-Gratuitous Bailment 

• Non-gratuitous bailment, also known as bailment for reward, is a type of bailment that benefits both the bailor and the bailee.
• When there is some consideration passing between the bailor and the bailee in a contract of bailment, it is referred to as non-gratuitous bailment.
• For instance, if your friend hires a bicycle from a cycle shop or you borrow a book from a bookstore on hire, these scenarios represent non-gratuitous bailment.
• In such cases, hire charges are paid by the bailee, or custody charges are paid by the bailor.

 On the Basis of Benefit 

On the basis of the benefits accruing to the parties, the contract of bailment may be divided into the following types:

 Bailment for the Exclusive Benefit of the Bailor 

• In this scenario, the bailor entrusts their goods to the bailee for safekeeping without expecting any reward or benefit in return. This type of bailment is solely for the advantage of the bailor.
• For instance, if you go out of town and leave your valuable items with a neighbor for safekeeping, you, as the bailor, are the only party benefiting from this arrangement.

 Bailment for the Exclusive Benefit of the Bailee 

• In this case, the bailor provides their goods to the bailee without expecting any benefit for themselves. The bailment is entirely for the advantage of the bailee.
• For example, if you lend your books to a friend free of charge so they can study for exams, your friend, as the bailee, is the sole beneficiary of this arrangement.

 Bailment for the Mutual Benefit of Bailor and Bailee 

• In this type of bailment, goods are delivered for consideration, and both the bailor and bailee derive benefits from the arrangement.
• For instance, if you take your shirt to a tailor for stitching, both parties benefit from the contract: you receive a stitched shirt, and the tailor earns stitching fees.