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A customer pays a weekly charge to use a concrete mixer and must return it at the end of the week. How is this transaction classified under the Indian Contract Act, 1872?

Question and options

A customer pays a weekly charge to use a concrete mixer and must return it at the end of the week. How is this transaction classified under the Indian Contract Act, 1872?

  1. Sale on approval

  2. Pledge

  3. Bailment for hire

  4. Gratuitous bailment

Answer and explanation

Correct answer: C - Bailment for hire

Delivery of goods for a purpose, to be returned when the purpose is accomplished, is a bailment under section 148 of the Indian Contract Act, 1872, and where the bailee pays for the use it is a bailment for hire (a bailment for reward); section 150 then makes the bailor answerable for faults in the goods whether or not he knew of them. It is not gratuitous, because a charge is paid, and not a pledge, because the goods are not delivered as security for a debt.

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