GlossaryEN1 min readUpdated: Jun 26, 2026

Bailment liability

Bailment allows goods to pass temporarily into another party's custody without any transfer of ownership.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://en.wikipedia.org/wiki/Bailment

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Logistics Concept

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Definition & Explanation

Bailment allows goods to pass temporarily into another party's custody without any transfer of ownership. The bailee assumes responsibility for the safe keeping and return of those goods; failure to do so gives rise to liability for loss or damage. The applicable standard of care depends on the nature of the arrangement: gratuitous bailment – where the bailee receives no payment – historically attracts a nuanced duty of care, while bailment for reward holds the bailee to the standard of a competent professional in that trade. Freight forwarders, warehouse operators, and terminal handlers act as bailees routinely, which makes contractual limitation of liability – through standard trading conditions or warehouse receipts – a practical necessity rather than a formality. Civil law jurisdictions address equivalent situations through deposit or custody contracts rather than the common law concept of bailment.

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Bailment liability

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