Bailment MCQ Quiz - Objective Question with Answer for Bailment - Download Free PDF

The correct answer is 'OPTION 1.'

Key Points

• Section 149 of the Indian Contract Act, 1872:
  • Section 149 of the Indian Contract Act, 1872, deals with the manner in which delivery to a bailee is to be made.
  • According to this section, the delivery of goods to the bailee can be either actual or constructive.
  • The delivery may involve giving the physical possession of goods or any action that effectively transfers control over the goods to the bailee, such as handing over the keys to a warehouse where the goods are stored.
  • This section ensures that the bailee acknowledges the receipt and is aware of the goods delivered under bailment.

Additional Information

• Section 135:
  • Section 135 deals with agreements in restraint of trade and does not pertain to the delivery to bailee.
  • It focuses on the enforceability of agreements that restrict a person's freedom to trade or conduct business.
• Section 145:
  • Section 145 refers to the rights of surety and does not relate to the delivery to bailee.
  • This section outlines the surety's right to indemnity from the principal debtor when the surety has paid the debt or fulfilled the obligation.
• Section 140:
  • Section 140 deals with the rights of the surety on payment or performance, which is unrelated to the delivery to bailee.
  • This section explains the surety's right to step into the shoes of the creditor and claim the benefits of all securities held by the creditor against the principal debtor.

The correct answer is Option 1.

Key Points Section 178A of the Indian Contract Act:

•  Pledge by person in possession under voidable contract.—
• When the pawnor has obtained possession of the goods pledged by him under a contract voidable under section 19 or section 19A,
• but the contract has not been rescinded at the time of the pledge, the pawnee acquires a good title to the goods, provided he acts in good faith and without notice of the pawnor’s defect of title.

The correct answer is the death either of the bailor or of the bailee

Key Points

• A gratuitous bailment is defined under the Indian Contract Act, 1872 as a bailment without any consideration (i.e., free of cost).
• Termination of Gratuitous Bailment (Section 162 of the Indian Contract Act, 1872):
  • Section 162 of the Act clearly states: "A gratuitous bailment is terminated by the death of either the bailor or the bailee."
• Why does a Gratuitous Bailment end on the death of either party?
  •    Gratuitous bailments are based on trust and personal confidence.
  • Since there is no consideration, neither party is legally bound to continue the bailment after the other’s death.
  • If the bailor dies, the bailee cannot be expected to continue the arrangement without the bailor’s instructions.
  • If the bailee dies, the bailee's heirs are not bound to continue holding the goods since it was a personal obligation.

The correct answer is Option 2

Key Points Section 172 of the Indian Contract Act:
“Pledge”“pawnor”,and “pawnee” defined.—
The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. The bailor is in this case called the “pawnor”. The bailee is called the “pawnee”

The correct answer is option 4.Key Points

• Section 159 of Indian Contract Act 1872 deals with Restoration of goods lent gratuitously.
• The lender of a thing for use may at any time require its return, if the loan was gratuitous, even though he lent it for a specified time or purpose.
• But if, on the faith of such loan made for a specified time or purpose, the borrower has acted in such a manner that the return of the thing lent before the time agreed upon would cause him loss exceeding the benefit actually derived by him from the loan, the lender must, if he compels the return, indemnify the borrower for the amount in which the loss so occasioned exceeds the benefit so derived.

The correct answer is Hiring of bank locker is a contract of Bailment

Key PointsContract of Bailment -

• The Indian Contract Act, 1872's section 148 defines bailment as the conveyance of commodities from one person to another for a certain purpose.
• When that goal is achieved, the recipient of the items returns them or otherwise disposes of them in accordance with the instructions of the sender.
• The bailor is the person who delivers the goods. The recipient of such items is referred to as the bailee.
• A contract of bailment only results in a change of possession, not ownership.
• Hiring of bank locker is a contract of Bailment - A bailment is made when you place money, jewels, etc. in a bank locker

Mistake Points

As per the official answer key by UGC, the answer is "Hiring of bank locker is a contract of Bailment"

However, according to the judgement of Atul Mehra v. Bank of Maharastra case,

• The court, in this case, held that exclusive possession of the goods is sine qua non for bailment.
• Therefore, mere hiring of a locker would not be sufficient to constitute a contract of bailment as provided under Section 148 of the Indian Contract Act, 1872
• And it was also added that the question of reasonable care and quantum of damages would arise only after it has been shown that actual exclusive possession of the property was given by the bailee to the bailor, i.e. the bank.

The correct answer is Option 2

Key Points Section 159 of Indian Contract act  states that the lender of a thing for use may require its return at any time if the loan was gratuitous, irrespective of any specified time or purpose. However, if the borrower has acted in a way that would cause a loss exceeding the benefit derived from the loan, the lender must indemnify the borrower.

The correct answer is option 3.Key Points

• Section 150 of Indian Contract Act 1872 deals with Bailor’s duty to disclose faults in goods bailed.
• The bailor is bound to disclose to the bailee faults in the goods bailed, of which the bailor is aware, and which materially interfere with the use of them, or expose the bailee to extraordinary risks; and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults.
• If the goods are bailed for hire, the bailor is responsible for such damage, whether he was or was not aware of the existence of such faults in the goods bailed.

The correct answer is Option 2

Key Points As per Section 160 The bailee is obligated, without any request, to promptly return or deliver the goods according to the bailor's instructions as soon as the agreed-upon time for the bailment has concluded or the intended purpose for which the goods were bailed has been fulfilled.

The correct answer is ​Bailment

Key PointsSection 148.   "Bailment", "bailor" and "bailee" defined
A "bailment" is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them.

• The person delivering the goods is called the "bailor".
• The person to whom they are delivered is called, the "bailee".

Explanation.—If a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment

The correct answer is option 3Key Points

• Section 148 of Indian Contract Act 1872 deals with “Bailment” “bailor” and “bailee” defined.
• A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called, the “bailee”.
• Section 71 of Indian Contract Act 1872 deals with Responsibility of finder of goods.
• A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.

Additional Information

•  Section 168 of Indian Contract Act 1872 deals with Right of finder of goods, may sue for specific reward offered.
• The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred by him to preserve the goods and to find out the owner; but he may retain the goods against the owner until he receives such compensation; and, where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward, and may retain the goods until he receives it.

The correct answer is Option 3

Key PointsAs per section 153 contract of bailment can be terminated at the discretion of the bailor if the bailee engages in any action concerning the entrusted goods that contradicts the agreed-upon conditions of the bailment.
Illustration

• A lets to B, for hire, a horse for his own riding. B drives the horse in his carriage. This is, at the ‘option of A, a termination

The correct answer is Section 170.

Key Points

• Section 170 of the Indian Contract Act, 1872, provides for the Bailee’s particular lien.
• It states that —Where the bailee has, in accordance with the purpose of the bailment, rendered any service involving the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a contract to the contrary, a right to retain such goods until he receives due remuneration for the services he has rendered in respect of them. 

The correct answer is option 1.Key Points

• Section 148 of Indian Contract Act 1872 deals with “Bailment” 'bailor' and 'bailee' defined.
• A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them.
• The person delivering the goods is called the “bailor”.
• The person to whom they are delivered is called, the “bailee”.
• Explanation.—If a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment.

The correct answer is Bailor 

Key Points Section 158 specifies that if the conditions of the bailment involve keeping, carrying, or doing work on the goods by the bailee without receiving any remuneration, the bailor is obligated to repay the necessary expenses incurred by the bailee for the purpose of the bailment.