Mgt611 Assignment No. 2 solution
Thursday, June 16, 2011 Posted In MGT Edit ThisAbstract:
There are laws relating to transfer of possession of goods one is “Bailment”, it is a technical term of the Law, it involves change of possession and other is “Pledge”, it is the bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. Both these concepts are similar but not identical at the same time. Please Differentiate between the Law of Bailment and Pledge?
There are laws relating to transfer of possession of goods one is “Bailment”, it is a technical term of the Law, it involves change of possession and other is “Pledge”, it is the bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. Both these concepts are similar but not identical at the same time. Please Differentiate between the Law of Bailment and Pledge?
Case Study
Scenario.01
Husnain Car leasing Services delivered an automobile to Baqir Auto Repair Ltd. for repairs, and Baqir Auto Repair, by way of a sub-bailment, placed the car with Mustafa Engineering Services to have some specific work done on the automobile. If Mustafa Engineering Services negligently damaged the automobile while it was in its possession.
Husnain Car leasing Services delivered an automobile to Baqir Auto Repair Ltd. for repairs, and Baqir Auto Repair, by way of a sub-bailment, placed the car with Mustafa Engineering Services to have some specific work done on the automobile. If Mustafa Engineering Services negligently damaged the automobile while it was in its possession.
Who will be liable to whom? and How? Explain Briefly.
Scenario.02
Ali has a PKR.300,000 National Savings Scheme Bond and wishes to borrow PKR.180,000 from his bank to purchase a 800 CC Mehran Car.
Ali has a PKR.300,000 National Savings Scheme Bond and wishes to borrow PKR.180,000 from his bank to purchase a 800 CC Mehran Car.
Is this a case of Bailment or Pledge?
Can Ali take his bond to the bank and use it as security for the loan?
If yes what can bank do in case of non-repayment?
The Requirement:
If yes what can bank do in case of non-repayment?
The Requirement:
Keeping in view the above case and the abstract, you are required to write down the potentially correct answers of both Bailment & Pledge case studies given above
Sloution:
Bailment
The act of delivering goods for a special purpose is termed as bailment. 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. The goods that are transferred in this manner shall be returned to the owner upon completion of the purpose of the contract. The point to be remembered in this kind of transaction is that ownership of the goods does not get changed. In bailment, only goods are involved, and all movable items apart from property and money come under bailment. Thus it is clear that when you keep money in a bank account, it does not come under bailment.
Pledge
But, if a person keeps his gold or other valuable items in a bank locker or with a money lender in exchange for a loan, he is making a pledge to the money lender or the bank that he will return the money and get back his valuables. This is deemed as a kind of bailment and all conditions that are applicable on a bailment apply in such a case also. Bailment for security can be termed as a pledge. You are keeping your valuables with the money lender as a security against the loan and also making a pledge to pay back the money. To your pledge, the money lender agrees to keep the valuables as a security. In this special type of bailment where goods act as a security for payment of loan is called a pledge.
