bailment

When possession of goods passes to a person who is not their owner, the person to whom possession passes assumes certain legal responsibilities for the goods. The owner of the goods becomes entitled to remedies in respect to the goods as a result of this transfer of possession in the law of bailment.  The person assuming possession of the goods has remedies against third parties, such as trespass and conversion.  A bailment requires the bailee to take reasonable care of the goods in the circumstances.

The passage of possession between the owner (the 'bailor') does not create a contract with the person receiving possession (the 'bailee'). Possession of the goods may pass pursuant to a contract. Usually, unless bailment is expressly excluded in the terms of the contract (such as a hire purchase agreement and  warehousing), the bailee will receive the goods with concurrent liability under the contract and in bailment.

Accordingly, there is no requirement for a contract to exist, the passage of possession may be entirely gratuitous, and liability in bailment may continue despite termination of a contract.  Moreover, the consent of the owner of the goods is not required at law for obligations in bailment to arise.

Bailment remains of significant use in the modern context, mainly due to the reversed onus of proof for liability. That is to say, that it is for the bailee to show that they have discharged their duties to the bailor, rather than the bailor being required to show that the bailee has failed in his duties.  Bailment carries strict liability.

A bailee:

1. must return the goods on the demand of the bailor in a bailment at will. A failure to do so may give rise to a claim in conversion. It is no defence to say that the bailee has lost the goods, other than where the loss was an accident.
2. is liable for damage to the goods while they are in his possession, unless he can show that the damage was not due to his own act or omission;
3. may have recourse pursuant to the Tort (Interference with Goods) Act 1977 against those interfering with his own possession.

Usage: The lease of the goods also satisfied the requirements of a bailment of the goods.

Related Words: bailee; bailor; chose in possession; mortgage; lien; contract.