What Are the Duties of a Bailor and Bailee?

When a bailee takes possession of goods or property owned by a bailor, the bailee has the duly of taking care of the goods and not using them for unauthorized purposes. The bailor has the duty of disclosing any faults in the goods and indemnify the bailee.

When there is a contractual agreement between a bailor and a bailee, goods that belong to the bailor are entrusted into the care of the bailee. During the time when the bailee is in possession of the goods, the bailor is still the rightful owner. The bailee is not usually entitled to use the property or goods. A bailee may also serve as an overseer of an investment portfolio for a certain period of time, or he may be appointed to manage property in the absence of the owner. The bailee's job is to ensure the assets he is overseeing are kept safe until the bailor can resume possession.

The duties of a bailee include taking reasonable care of the goods, not using them for unauthorized purposes, not setting up adverse title, returning the goods after fulfilment of intended purpose and not mixing up those goods with the bailee's own personal goods. The duties of a bailor are compensating the bailee if the goods delivered have defective titles, disclosing any faults of the goods, contributing to incurred expense of the bailee and taking back possession of the goods.