1. 1
Bailment and Pledge

2. 2
Bailment
• Means ‘To Deliver’.
• Derived from French word ‘ Baillier’.
• Two Parties
– Bailor.
– Bailee.

3. 3
Definition
• A Bailment is A delivery of Goods by one
person to another for some purpose,
• Upon the Contract they Shall Returned ,
• When the Purpose is Accomplished, be
returned as per Directions of. SEC-148.

4. 4
Illustrations
• A delivers Piece of Cloth to B make a Suit.
There is a Contract of Bailment.
• The Person Delivering the Goods is called
the Bailor.
• The Person to whom they are Delivered is
Called the Baillee.

5. 5
Essentials Features
• Contract.
• Specific Purpose.
• Delivery of Goods
• No Change of Ownership.
• Return of Same Goods.

6. 6
Contract
• Bailment based on Contract.
• Delivery of Goods should be made for
some Purpose
• Purpose Completed Returned the Goods
• Delivery without Contract no Bailment.

7. 7
Specific Purpose
• The Bailment must be made for some
specific purpose ,
• Shall returned the goods as per terms and
Conditions.

8. 8
Delivery of Goods
• Delivery of Movable Goods from one
person to another.
• Not Custody.

9. 9
No Change of Ownership.
• Possession Passes from the Owner
• Not Ownership.

10. 10
Return of Same Goods
• When Purpose is Accomplished ,
• The Goods must be Returned
• In Original form or
• As per directions of Bailor.

11. Kinds of Bailment
• Benefit
– For Bailor
– For Bailee
– For Bailor and Bailee
• Reward
– With reward
– Without reward
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12. 12
Duties of Bailor
• To Disclose Faults.
• To pay necessary expenses
• To Pay Extra-ordinary Expenses
• Indemnify (‫)ہرجانہ‬ for Demanding Back
• Indemnify for Defective Title
• Receive back Goods

13. 13
Duties of Baillee
• Duty to Take Reasonable Care,
• Duty not to Make Unauthorized Use.
• Duty not to Mix the Good.
• Duty to Return Goods and Increase.

14. Rights of Bailor
• Claim damages
• Demand return
• Claim increase
• Terminate bailment
• Right to Sue
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15. Termination of Bailment
• Expiry of time
• Accomplishment of purpose
• Unauthorized use
• On Death
• Termination by bailor
• Destruction of subject matter
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16. 16
FINDER OF Lost Goods
• A Person who finds goods belonging to
another and takes them into his Custody
is subject to the same responsibility as a
baillee.

17. 17
Duties of Finder
• Duty to Find out the Owner.
• Duty to Take Reasonable Care
• Duty not to use the goods.
• Duty not to mix the goods.

18. Rights of Finder
• Right to retain
• To lien
• To sue third person
• To sue for reward
• When fail to find owner, finder can sell
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19. 19
Pledge (‫ضمانت‬ ‫)مال‬ / Pawn
(‫)رہن‬
• A Borrows Rs.1000 from B and Keeps his
watch as a Security for the Payment of the
Debt.
The Bailment of Watch is Called a Pledge.

20. 20
Definition
• The Bailment of Goods as Security for
Payment of a Debt or performance of a
promise is Called the Pledge. (SEC-172)
• The Bailor in this case called the Pawnor,
The Baillee is Called Pawnee.
• A Pledge is a Special kind of Bailment.

21. 21
• In Pledge the Goods are deposited as
security to get a loan.
• If there is no transfer of possession of
goods , there is no pledge.

22. 22
Essentials
1. Movable Property
2. Limited Interest
3. Transfer of Possession
4. No Transfer of Ownership
5. Not Mere Custody

23. Rights of Pledgee
• Right to retain
• To retain for other debts
• Claim extra-ordinary expenses
• Right to sue to sell
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24. 24
DIFFERENCE BETWEEN PLEDGE AND
BAILMENT
• PURPOSE
Delivery of Goods
– SECURITY FOR A LOAN
– Repairs and Safe Custody.
• RIGHTS
– Sale the Pledge Goods
– No right of Sale, Retain the Goods

25. 25
• USE OF GOODS
– No right of Using the Goods Pledge
– There is no such Restriction depends upon
the nature of Transactions.
• RETURN OF GOODS
– Not bound to Return the Goods Delivered
– Without Reward the Baillee is bound to return
the Goods on Demand by the Bailor

26. 26
Lien (‫حق‬ ‫)قانونی‬
• Lien means the Right to retain Possession
of the Property or Goods Belonging to
another until the some debt or claim are
paid.
• A delivers rough diamond to B, a jeweler ,
for cutting and polishing. B can retain the
stone till he is paid for the Services.

27. Pledge by Non-Owners
Only limited to following:
• Mercantile agent
• Possession under voidable contract
• Pledgor with limited interest
• Seller in possession after sale
• Buyer in possession before sale
• Pledge by co-owners
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