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Bailment: Definition, Example and Related Terms

What is a Bailment ?

Bailment is a legal term that describes a situation where you give your stuff to someone else to take care of it, but it's still yours. Like when you take your bike to the repair shop, or when a business stores products in a warehouse. In these examples, the bike and the products are in 'bailment'. It's like saying, 'Here, hold this for me, but remember it's still mine'. In bailment, the person who is taking care of the stuff (the 'bailee') has to take reasonable care of it. If they don't, they might have to pay for any damage or loss. But if the bailee uses the stuff in a way that they're not supposed to, they could be in even more trouble.

There are many types of bailment in business, like when goods are shipped, stored, or used for display. But no matter what, the rule is the same: the stuff still belongs to the original owner (the 'bailor'), and the bailee has to take good care of it. Bailment is an important concept in business because it helps protect people's property and makes sure everyone knows their responsibilities.


  • Scenario Description
    Penny's Clothing Store sends clothes to a fashion show. In this example, Penny's Clothing Store is the bailor and the fashion show organizers are the bailee. The clothes are in bailment. The fashion show organizers have to take good care of the clothes - they can't lose them or let them get damaged. If they do, they could have to pay Penny's Clothing Store for the loss.
    TechCo sends a batch of computers to a repair shop. Here, TechCo is the bailor and the repair shop is the bailee. The computers are in bailment. The repair shop has to take reasonable care of the computers while they are in their possession. If they fail to do so, they could be held responsible for any damage or loss.