Termination of Bailment

Termination of bailment means the bailment comes to end and the legal relationship of the parties is no longer remain. There are various circumstances under which the contract of bailment is terminated. The Nepalese Contract Act, 2056 has also laid down some legal provisions in respect of the termination of bailment. A contract of bailment terminates due to the following reasons:

i. On the expiry of specifies time period

If the bailment is for specific purpose, the bailment terminates as soon as the purpose is fulfilled.

ii. On the accomplishment of specific purpose

If the bailment for specific purpose, the bailment terminates as soon as the purpose is fulfilled.

iii. Inconsistent act with the terms

If the act of bailee inconsistent with the terms and conditions of bailment, the bailor can terminate the bailment.

iv. On the death of either party

A contract of gratuitous bailment and of personal nature may be terminated on the ground of the death of either party. But, contract of non gratuitous bailment may not be terminated, the liability falls on their legal representatives.

v. On the destruction of subject matter

If the original condition of the bailed goods does not exist or is destroyed, the contract of bailment automatically terminated, because the purpose will not be fulfilled or the performance of the contract is impossible.