The Bailment Agreement From A to Z

Standardized Legal Documents The Bailment Agreement From A to Z

All About the Bailment Agreement 

How much do you know about a bailment agreement? It involves an exchange of physical possession but differs from a sales, lease, and security agreement. Understanding the specifics will help you decide whether a bailment agreement is something you need.

Luckily, you won’t have to rummage through numerous websites to find the information you need.  DoNotPay is here to explain the key points of a bailment agreement and help you create various other legal documents on the way!

What Is Bailment?

Bailment is the process of transferring personal property or assets into the temporary custody of another person. The custodian of the property is referred to as the bailee, and the person transferring the property is known as the bailor. 

According to the bailment agreement, the bailee is responsible for keeping the property safe but doesn’t take ownership. The bailee is not allowed to use the property while in his or her possession. The agreement also implies that the property can be returned to the bailor at any time.

The general purpose of a bailment agreement is to define the involved parties’ mutual responsibilities, including the reason for handing over the property and the return date.

What Are the Bailor and Bailee’s Rights?

While the bailee doesn't have any ownership rights over the bailor's property, they can sometimes breach the agreement and sell or trade the bailor’s possession. If that happens, the bailor won’t be able to reclaim their property anymore. The injured party has the right to:

  1. Claim reimbursement for the sold item
  2. Sue the bailee for damages and the breach of agreement

What Types of Bailments Are There?

There are three main types of bailments, depending on the party that benefits from them. Check out the detailed description and examples in the table below:

Bailment Type


A bailment that benefits both the bailor and the baileeAn example would be parking a car in a paid parking lot. The bailor would benefit from parking the car and the bailee from the paid fee
A bailment that benefits the bailorAn example of this, otherwise known as gratuitous bailment, would be getting a complimentary valet service. The valet service (the bailee) would not benefit from parking a person’s car but would be responsible for damaging it  
A bailment that benefits the baileeThe most common example is checking out a book from a library. The librarian (bailor) would not benefit from loaning the book but would still expect the bailee to return it undamaged. In this case, the bailee would be liable for damaging the item 

How To Write a Valid Bailment Agreement

The state law accepts bailment agreements even if they are not in writing, but you should consider drafting one anyway. It will help determine the duration of the bailment and specify the consequences of violating the agreement. An enforceable bailment agreement should include the following terms:

  • Details of the parties entering the agreement, including names and full addresses
  • Purpose of the agreement
  • Date the agreement takes effect
  • Description of the bailed property
  • Property’s value at the time of the agreement
  • Terms of delivery, inspection, and return of the bailed property
  • Cost of bailment
  • Penalties for damage or loss of bailed property
  • Causes for terminating the agreement
  • Governing law
  • Signatures

DoNotPay Can Create Different Legal Documents for You

Writing contracts yourself is not always an option. Some agreements deal with sensitive matters, and you don’t want to risk making a mistake. Since hiring a lawyer is expensive and contract templates are unreliable, the safest option is to !

Our app can generate various legal documents and save time, money, and nerves in the process. We use the information you provide to create a personalized contract that meets all legal criteria. 

The documents we can currently create are the:

We have included even more perks to ensure the validity and safe transfer of your contracts. After creating your agreement, we can schedule notarization and even fax it to the receiving party for you!

How To Create Documents With DoNotPay

Creating contracts with our Standardized Legal Documents tool is simple. Here’s how it works:

  1. from any web browser
  2. Find the legal document you need
  3. Answer our chatbot’s questions
  4. Download or print your customized legal document 

Get the Rundown on Other Legal Documents!

Whatever the agreement you are about to enter is, you should know what to expect. DoNotPay has got your back! Our knowledge base contains comprehensive articles with all the necessary info. Take a look at some of the contracts you can learn about:

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