bailment

Bailment is a legal relationship in which the owner of a good (the bailor) temporarily transfers physical possession of the item to another person (the bailee) for a specified purpose, with the expectation that the item will be returned or disposed of as directed. Ownership remains with the bailor, while the bailee holds custody and control for the duration of the bailment.

A bailment arises when possession is delivered for a purpose, and is created by express agreement or by implication from the actions of the parties. The essential elements typically include delivery of possession, an intention to return the item, and a designated purpose for the possession.

Bailments are commonly categorized into three main types: bailment for the sole benefit of the bailor (for example, keeping property safe), bailment for the sole benefit of the bailee (for example, lending a tool for use), and bailment for the mutual benefit of both parties (for example, storage or repair services for a fee). Some legal systems recognize additional or nuanced categories, but these three cover most situations.

Duties and standards of care depend on the type of bailment. The bailee must take reasonable care of the property and return it as agreed or as law requires. The standard of care is typically highest in mutual-benefit bailments and may be lighter in sole-benefit bailments. The bailee may be liable for loss or damage caused by negligence or improper handling, subject to contract terms and applicable law.

Termination occurs when the purpose is fulfilled, the item is returned, or the bailment is otherwise ended by agreement or law. Common examples include safekeeping, storage, repair, transportation, and loan of equipment.