Chapter IX - Of Bailment
Section 158
Section 158: Necessary expenses in unpaid bailment
An unpaid bailee is entitled to repayment of necessary expenses for the agreed bailment purpose.
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This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.
Rule and business relevance
The conditions must involve keeping, carrying or working on goods for the bailor without remuneration to the bailee. Necessary expenses for that purpose are repayable.
Limits and related provisions
This is not an unrestricted right to charge a fee or recover unnecessary spending. Distinguish expenses from remuneration.
Hypothetical business example
Hypothetical example: A business stores another’s goods without a storage fee but incurs necessary preservation costs. It keeps receipts to seek repayment under the agreed purpose.
Practical decision flow
Confirm no remuneration is payable.
Link each expense to the bailment purpose.
Separate necessary expenses from discretionary costs or a service fee.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Confirm no remuneration is payable.
- Link each expense to the bailment purpose.
- Separate necessary expenses from discretionary costs or a service fee.
Avoid
- This is not an unrestricted right to charge a fee or recover unnecessary spending. Distinguish expenses from remuneration.
Glossary
- Remuneration
- Payment for the bailee’s service, distinct from expense repayment.
- Necessary expense
- An expense incurred for the purpose contemplated by the bailment.
Frequently asked questions
Does this section create a general service fee?
No. It concerns necessary expense repayment where no remuneration is due.
Which activities are mentioned?
Keeping, carrying or doing work on the goods.
What records help?
Receipts and evidence connecting the expense to the bailment purpose.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026