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Difference between Bailment and Pledge – Bailment Vs Pledge | Business Law

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




1.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.
2. It is defined in Section 148 of the Indian Contract Act, 1872.It is defined in Section 172 of the Indian Contract Act, 1872.
3.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).
4. Bailment is either profit oriented or non-profit oriented.Pledge is always profit oriented.
5. 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.
6.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 .


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