Bailee

From Supply Chain Management Encyclopedia

Revision as of 17:30, 22 September 2012

Russian: Хранитель груза

Definitions

A person or party to whom goods are delivered for a purpose, such as further transportation, custody or repair, without transfer of ownership.In the ordinary bailment, the relationship is arms-length. The bailee is a receiving party of a bailment contract, where the other party is presented by a bailor. The bailment is a delivery of goods or personal property by one person (the bailor) to another (the bailee) on an express or implied contract and for a particular purpose related to the goods while in possession of the bayee, who has a duty to redeliver them to the bailor or otherwise dispose of them in accordance with the bailor’s instructions once the purpose has been accomplished. A bailment arises, for example, when a seller delivers goods to a shipping company with instructions to transport them to a buyer at a certain destination. ^[1]

The bailor has no control over the bailee or the handling of the bailed property. The bailee is an independent party not subservient to the bailor. The bailee is not a fiduciary and owes neither loyalty nor obedience to the bailor. It is in business for itself dealing with a customer and in many cases has interests antagonistic to those of the bailor. The parties do not contemplate that the bailee has power to bind the bailor. In brief, the bailee is a fully independent contractor; it is not an agent.^[2]

Bailment is the process of placing personal property or goods in the temporary custody or control of another. The custodian or holder of the property, who's responsible for the safe keeping and return of the property, is know as the bailee. The person who delivers or transfers the property to the bailee is known as the bailor. For a bailment to be valid, the bailee must have actual physical control of the property with the intent to possess it. The bailee is generally not entitled to the use of the property while it's in his possession. A bailor can demand to have the property returned to him at any time^[3].

Types of Bailment

• Service agreement bailment. Bailment is usually done by agreement as a paid service, which gives the property custodian are sponsibility and obligation to protect the goods. Common examples of service agreement bailments are vehicles parked in a monitored parking garage, securities or bonds left with a bank, animals lodged at kennels and goods left at a storage facility under the control of the bailee. In addition to service agreement bailments where the bailee is paid for caring for the property, a bailment can also be involuntary.

• Constructive bailment. A constructive bailment occurs when circumstances create an obligation for the bailee to protect the goods. With a constructive bailment, the bailment is implied by law. In the case of a tenant, roommate, or boyfriend or girlfriend abandoning property, an involuntary bailment might be created. Depending on the laws of the jurisdiction, the landlord or remaining tenants may have a duty to care for the property and return it to the abandoning tenant.

• Gratuitous bailment. A bailment may also be a gratuitous bailment for which there's no payment. A gratuitous bailment occurs when someone finds lost property and protects it himself or places it in the custody of another, such as the police, until the lawful owner can be located.

References

1. ↑ Hinkelman, E.G. Dictionary Of International Trade: Handbook Of The Global Trade Community. World Trade Press, Novato, CA, 2005.
2. ↑ The concept of bailment generally - http://www.lawteacher.net/criminal-law/essays/the-concept-of-bailment-generally.php -= accessed 05/13/2012
3. ↑ Bailment - http://www.scribd.com/doc/49240687/Bailment