Chapter IX - Of Bailment
Section 164
Section 164: Bailor’s lack of entitlement
A bailor is responsible for loss caused to the bailee by lacking entitlement to bail the goods, receive them back or direct their disposal.
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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
The bailor is responsible to the bailee for any loss which the bailee may sustain by reason that the bailor was not entitled to make the bailment, or to receive back the goods, or to give directions respecting them.
Rule and business relevance
The provision addresses three distinct entitlement problems. The bailee must connect the loss to the relevant lack of entitlement.
Limits and related provisions
Do not confuse physical possession with legal authority. Title disputes and third-party court applications may also engage sections 166–167.
Hypothetical business example
Hypothetical example: A person without authority instructs a warehouse to dispose of another’s goods, causing loss to the warehouse. The entitlement defect and resulting loss require examination.
Practical decision flow
Verify the bailor’s authority for the relevant act.
Identify which entitlement was absent.
Document the bailee’s resulting loss.
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
- Verify the bailor’s authority for the relevant act.
- Identify which entitlement was absent.
- Document the bailee’s resulting loss.
Avoid
- Do not confuse physical possession with legal authority. Title disputes and third-party court applications may also engage sections 166–167.
Glossary
- Entitlement
- The legal right to make the bailment, receive goods or direct them.
- Consequential loss
- Here, the loss sustained by reason of that missing entitlement.
Frequently asked questions
Is only initial bailment authority relevant?
No. Entitlement to receive back goods and give directions also matters.
Does the bailee need to show loss?
Yes. The section concerns loss sustained for the stated reason.
Should competing ownership claims be ignored?
No. They may require the separate procedures and protections in the surrounding provisions.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026