Definition of Bailment:
An act of delivering goods to a bailee for a particular purpose, without transfer of ownership.
In finance, Bailment applies to the legitimate transfer of securities, such as shares of stock, from one owner to another for the purpose of short selling. Here the short seller borrows shares on margin in order to sell them - however, the short seller does not own those borrowed shares.
Transfer of personal property by one party (the bailor) in the possession, but not ownership, of another party (the bailee) for a particular purpose. Such transfer is made under an express or implied contract (called bailment contract or contract of bailment) that the property will be redelivered to the bailor on completion of that purpose, provided the bailee has no lien on the goods (such as for non-payment of its charges). The bailee is under an obligation to take reasonable care of the property placed under its possession. Bailment contracts are a common occurrence in everyday life: giving clothes to a launderer, leaving car with an auto mechanic, handing over cash or other valuable to a bank, etc.
Bailment, in common law, describes the contractual transfer of assets or property from a bailor, who temporarily relinquishes possession but not ownership, to a bailee. Bailment describes a legal relationship where physical possession of personal property, or a chattel, is transferred from one person to another person who subsequently has possession of the property but not total ownership.
How to use Bailment in a sentence?
- I informed him that the bailment process would be over soon and we could all go on with our lives in a constructive fashion.
- You may need to give something to another party and using bailment can make it a more official transaction between the two.
- The bailment was taking place and the property in question did change hands a few times in recent business history.
- A contract of hire is a species of bailment.
- Bailment, in common law, describes the contractual transfer of assets or property from a bailor, who temporarily relinquishes possession but not ownership, to a bailee. .
- To create a bailment, the bailee must both intend to possess, and actually physically possess, the bailable chattel.
- In finance, short-sellers borrow shares to sell using a bailment mechanism.
Meaning of Bailment & Bailment Definition