The term bailment is used in case of a contractual transfer of assets between two parties – a bailor and a bailee. Under this contract, only physical possession of the property is transferred and not the ownership. A bailment contract can be beneficial to either the bailor only or only the bailee, or both.

The essentials of a bailment contract include

1.Transfer of personal property by the bailor to the bailee.
2. Acceptance of possession of said property by the bailee
3. Fulfillment of terms of bailment contract
4. Payment of consideration under the bailment contract, if any.
5. Return of said property by the bailee back to the bailor.

Forms of Bailment

A bailment contract can be either in the form of a gratuitous contract (where no consideration is involved) or a non-gratuitous contract (where a certain consideration is transferred by the bailee to the bailor).

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