Question

If bailee uses the goods in an unauthorized manner or for unauthorized purpose, the bailor can ____.
(i) Terminate the bailment
(ii) Claim damages for any loss
Select correct answer from the options given below -

• A. (ii) but not (i)
• B. (i) but not (ii)
• C. Both (i) and (ii)
• D. Neither (i) nor (ii)

Answer 1

Answer: (C)

Both (i) and (ii)

According to Section 153, Indian Contract Law, 1872, "Termination of bailment by bailee’s act inconsistent with conditions.—A contract of bailment is voidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment" and Section 154, Indian Contract Act, 1872, "Liability of bailee making unauthorised use of goods bailed.—If the bailee makes any use of the goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them.", the bailor can terminate the bailment as well as claim damages for the loss if bailee uses the goods in an unauthorized manner or purpose.