Business, Legal & Accounting Glossary
An arrangement whereby goods are transferred from one person (the bailor) to another (the bailee), but with no transfer of title. A bailment is created when, for example, one leaves his car at a garage for repairs. Note that such an arrangement may give rise to a repairer’s lien if the owner of the car fails to pay the garage for the agreed-upon repairs.
n. 1) the act of placing property in the custody and control of another, usually by agreement in which the holder (bailee) is responsible for the safekeeping and return of the property. Examples: bonds left with the bank, autos parked in a garage, animals lodged with a kennel, or a storage facility (as long as the goods can be moved and are under the control of the custodian). While most are “bailments for hire” in which the custodian (bailee) is paid, there is also “constructive bailment” when the circumstances create an obligation upon the custodian to protect the goods, and “gratuitous bailment” in which there is no payment, but the bailee is still responsible, such as when a finder of a lost diamond ring places it with a custodian pending finding the owner. 2) the goods themselves which are held by a bailee. Thus, the “bailor” (owner) leaves the “bailment” (goods) with the “bailee” (custodian), and the entire transaction is a “bailment.
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This glossary post was last updated: 22nd November, 2021 | 21 Views.