Bailment: Defining Temporary Possession of Property

Transferring property from one person to another is a common process, whether sold, donated or gifted. In legal terms, the transfer of property from one entity to another can involve the process known as "bailment". Bailment is the term used to describe the result when property is delivered from one person and then accepted by another person. Unlike ownership, bailment, however, involves temporary custody of the item by the bailee, or the person who accepts it.

If you are considering the placement of property into the temporary custody of another individual, it is important to understand what impact the legal ramifications of bailment may have. While you may place the property into the temporary custody of another individual, you are still considered to have ownership and carry liability for the property as the "bailor".

Bailment transfers occur everyday. A common example is the placement of a vehicle into an automotive repair shop. When you essentially transfer temporary custody of your vehicle to the automotive repair shop, the repair shop does not own the vehicle. Instead, they are assuming temporary custody while repairs are made and are, therefore, considered the bailee. Since you will be paying the auto repairman for his services, this could be a "mutual benefit bailment" because both parties are benefiting from the bailment process.

When only one party benefits from the bailment, such as the transfer of your property for supervision with any consideration or compensation for the transfer, this is known as a general bailment. Without regard to the type of bailment you are engaging in, if your property is temporarily transferred to the custody of another individual, it is important tot obtain the terms of that custody and to outline what is expected of both parties in a written contract agreement.

When creating a contract for a bailment, there are considerations that must be made in terms of what the state and federal guidelines may be. Statutory and federal guidelines will always supersede that of the language within your contract, especially when dispute arises out of the bailment process. Oftentimes, when property is damaged while in the possession of the bailee, there may be negligence pursued and recovery of damaged attained by the bailor, but generally only when a bailment is established through written contract.

Transferring any type of personal property to the possession of another individual requires consideration for the legal ramifications. When the transfer is for temporary custody, it is important to understand what the expectations are of both parties and whether or not that bailment is a general bailment or a mutual benefit bailment.