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Get Answers to all your Questions
Read the following passage and answer the question.
Bailment and Pledge are two special contracts that are often confused. Every pledge is a bailment but every bailment is not a pledge. Bailment means the delivery of goods from one person to another for a special purpose. Whereas Pledge means delivery of goods as security for the payment of debt or performance of a promise. Therefore, Bailment & Pledge are two different contracts. The pledge is a special kind of bailment.
A bailment is a special contract defined under section 148 of the Indian Contract Act, 1872. It is derived from a French word i.e. “bailer” which means “to deliver”. The etymological meaning of bailment is “handing over” or “change of possession of goods”. By bailment, we mean delivery of goods from one person to another for a special purpose on the contract that they shall reimburse the goods on the fulfillment of the purpose or dispose of them as per the direction of the bailor. The person who delivers the goods is known as the bailor. And the person to whom the goods are given is known as Bailee. And the property bailed is known as Bailed Property.
The pledge is a kind of bailment. The pledge is also known as Pawn. It is defined under section 172 of the Indian Contract Act, 1892. By pledge, we mean bailment of goods as a security for the repayment of debt or loan advanced or performance of an obligation or promise. The person who pledges the goods as security is known as Pledger or Pawnor and the person in whose favour the goods are pledged is known as Pledgee or Pawnee.
Question :
Kannan took a car from Prakrit to go on a road trip. Prakrit was aware that the brakes of the car were not working properly. But, he didn’t inform Kannan about it. Kannan met with an accident due to the failure of the brakes.
Prakrit will be liable for all the losses
Prakrit will be liable for limited losses only
Prakrit will not be held liable for the losses
Kannan is governed by caveat emptor and hence Prakrit is not responsible
Answers (1)
Bailor is responsible to inform the bailee of all the faults in the goods. If the bailor fails to do so, he is liable to the bailee for any loss caused by that fault. Therefore, Prakrit will be liable for all the losses Kannan faced in this accident.
