What is ‘Bailment’

The contractual transfer of possession of assets or property for a specific objective. In bailment, the deliverer of the asset is the bailor, and the receiver is the bailee. In a bailment transaction, ownership is never transfered, and the bailor is generally not entitled to use the property while it’s in possession of the bailee. In these ways, bailment differs from gifting and leasing.

Explaining ‘Bailment’

Bailment is a legal relationship between two parties, whereby the owner retains full rights to the assets or property but the possesses the property. For example, when a bank holds a borrower’s asset as collateral for a secured loan, this is a form of bailment. In this case, the bank is the bailee and the borrower is the bailor.

Further Reading

  • Bailment Ailment: An Analysis of the Legal Status of Ordinary Demand Deposits in the Shadow of the Financial Crisis of 2008 – [PDF]
  • Comparative Research on Legal Duty of Trust Bailee [J] – [PDF]
  • The role of fractional-reserve banking and financial intermediation in the money supply process: Keynes and the Austrians – [PDF]
  • The Economic Structure of Roman Property Law – [PDF]
  • The complete mitochondrial genome of the horned lizard – [PDF]
  • Credit creation or financial intermediation?: Fractional-reserve banking in a growing economy – [PDF]
  • The monetary fifth column: the eurodollar threat to financial stability and economic sovereignty – [PDF]