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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(Founder of Management Notes)
MBA,BBA.
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,
MBA,BBA.
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,
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