Difference between Bailment and Pledge

➥ Bailment is the act of delivering goods for a special purpose.

➥ The person who is delivering the goods is called a bailor while the person who receives the goods is referred top as a bailee in the contract.

➥ Pledge or pawn is a special type of bailment where you promise to pay the money a money lender gives in exchange for your valuable goods that act as a security.

Bailment Vs Pledge

Bailment	Pledge
When the goods are temporarily handed over from one person to another person for a specific purpose, it is known as bailment.	When the goods are delivered to act as security against the debt owed by one person to another person, it is known as the pledge.
It is defined in Section 148 of the Indian Contract Act, 1872.	It is defined in Section 172 of the Indian Contract Act, 1872.
The parties involved in bailment are bailor (person who delivers the goods) and Bailee (person to whom the goods are delivered).	The parties involved in Pledge are Pawnor (person who delivers the goods) and Pawnee(person to whom the goods are delivered).
Bailment is either profit oriented or non-profit oriented.	Pledge is always profit oriented.
In bailment, bailee has right to use the goods for temporary period if mentioned in the contract.	In Pledge, the pledgee has no right to use the goods.
In bailment, bailee has right to claim damage or loss , if any ,but cannot sell the goods.	In Pledge, pledgee has right to sell the goods in case of pledger default .
In bailment, the possession of goods is transferred, but ownership remains with the bailor.	In pledge, both possession and ownership are temporarily transferred to the pledgee as security for a debt.

References

S, S. (2019, December 13). Pledge. Business Jargons. https://businessjargons.com/pledge.html

CA Foundation: Business Law- bailment. (2022, June 29). Unacademy. https://unacademy.com/content/ca-foundation/study-material/business-laws/bailment/

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I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.

I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,