Section 164 of Indian Contract Act, 1872 - Bailor's Responsibility to Bailee
Section 164 deals with the bailor's responsibility where the bailee suffers loss because the bailor lacked the legal entitlement to create the bailment, receive the goods back, or give directions concerning them.
Text of Section 164
The bailor is responsible to the bailee for any loss which the bailee may sustain by reason that the bailor was not entitled to make the bailment, or to receive back the goods or to give directions, respecting them.
Meaning of Section 164
The provision protects a bailee against loss arising from a defect in the bailor's authority. A person who places goods in another person's possession as a bailment should have the legal entitlement to do so and should also be entitled to demand their return or issue directions about them.
If the bailee suffers a loss because that entitlement was absent, Section 164 places responsibility for that loss on the bailor. The section therefore addresses the bailor's authority in relation to the goods, rather than the bailee's standard of care while keeping them.
What is bailment?
For the statutory definition of bailment, bailor and bailee, see Section 148 of the Indian Contract Act, 1872. In general, bailment involves delivery of goods by one person to another for a purpose, upon a contract that the goods will be returned or otherwise dealt with according to the directions of the person delivering them when that purpose is accomplished.
When can responsibility arise under Section 164?
- The bailor was not entitled to make the bailment.
- The bailor was not entitled to receive the goods back.
- The bailor was not entitled to give directions concerning the goods.
- The bailee sustained a loss because of one of those circumstances.
Practical effect
The section can become relevant where a third person's rights or title conflict with the bailor's purported authority and the bailee consequently suffers loss. The statutory language requires a connection between the bailor's lack of entitlement and the loss sustained by the bailee.
Official statutory source
The text of the Indian Contract Act, 1872 can be checked on the Government of India's India Code portal. For legal proceedings or professional use, verify the current statutory text and applicable amendments from the official source.
Official India Code - Indian Contract Act, 1872
This page is intended as a general legal information resource and should be read with the statutory text and applicable judicial decisions.