Sections 149 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 149 says how delivery of goods to a bailee is made. Section 150 puts a duty on the bailor to disclose faults in the goods that he knows of, and makes him responsible for damage that arises directly from such faults. Where the goods are bailed for hire, the bailor is responsible whether or not he knew of the faults. If you lend or hire out goods and want the terms recorded, our service agreement drafting can help.
Delivery to the bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee, or of any person authorised to hold them on his behalf (s.149). The bailor must disclose faults he is aware of which materially interfere with the use of the goods or expose the bailee to extraordinary risks; if he does not, he is responsible for damage arising to the bailee directly from such faults. If the goods are bailed for hire, the bailor is responsible whether or not he was aware of the faults (s.150).
Section 149: how delivery is made
The text: "The delivery to the bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorized to hold them on his behalf."
The test is the effect: the goods end up in the possession of the intended bailee, or of someone authorised to hold them for him. The section does not require a particular ceremony, form or document. Bailment itself is defined in section 148.
Section 150: disclosure of faults
The text, first paragraph: "The bailor is bound to disclose to the bailee faults in the goods bailed, of which the bailor is aware, and which materially interfere with the use of them, or expose the bailee to extraordinary risks; and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults."
Second paragraph: "If the goods are bailed for hire, the bailor is responsible for such damage, whether he was or was not aware of the existence of such faults in the goods bailed."
| Condition | First paragraph (any bailment) | Second paragraph (bailment for hire) |
|---|---|---|
| Bailor's knowledge | Bailor must be "aware" of the fault | Not required |
| Kind of fault | Materially interferes with use, or exposes the bailee to extraordinary risks | Same faults |
| Duty | Disclose to the bailee | Responsible for damage |
| Responsibility for | Damage "arising to the bailee directly from such faults" | Such damage |
Limb by limb for the first paragraph
- "Faults ... of which the bailor is aware": the duty is tied to knowledge.
- "Materially interfere with the use of them, or expose the bailee to extraordinary risks": not every flaw, only these.
- "Damage arising to the bailee directly from such faults": the damage must flow directly from the fault. The text does not extend to remote loss.
The second paragraph
Where the goods are bailed for hire, the bailor's responsibility for such damage does not depend on whether he knew. The text sets knowledge aside in that case.
The Act's illustrations to section 150
- Illustration (a). A lends a horse, which he knows to be vicious, to B. He does not disclose that the horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for the damage sustained.
- Illustration (b). A hires a carriage of B. The carriage is unsafe, though B is not aware of it, and A is injured. B is responsible to A for the injury.
In (a) the bailor knew and did not disclose; the loan was a gratuitous one. In (b) the carriage was bailed for hire, so B's lack of awareness made no difference. (In the Act's illustration (b) the hirer is called A and the owner B.)
A modern example of our own
Waseem lends his van to a friend, Xena, for a weekend. He knows the brakes are unreliable and says nothing. Xena is injured when the brakes fail. Under the first paragraph of section 150, Waseem is responsible for the damage arising directly from the fault, because he knew of it and did not disclose it, and the fault exposed Xena to extraordinary risk.
A hire example: Yash Rentals hires out a generator to a caterer, Zubin. The generator has a wiring defect that Yash Rentals did not know about, and it damages Zubin's equipment. Because the generator was bailed for hire, the second paragraph makes Yash Rentals responsible for such damage whether or not it knew of the fault.
What can the parties change?
Neither section says "in the absence of any contract to the contrary". The text is silent on whether the bailor and bailee can agree to different terms on disclosure, and a clause that tries to restrict responsibility for faults should be read with care and advice.
What the sections do not say
- Section 149 does not list the acts that count as delivery.
- Section 150 does not define "extraordinary risks" or "materially interfere".
- Section 150 does not describe the bailee's own duty to inspect.
- Section 150 does not say what disclosure must look like; it should simply reach the bailee.
Practical points
- Bailors: before handing over goods, check them for faults and record any known fault in writing in the delivery note.
- Hirers and renters: note that the bailor's responsibility for hired goods does not depend on his knowledge; inspect and report defects on delivery anyway.
- Keep proof of how and when delivery was made, for section 149 purposes.
- The bailee's standard of care after delivery is in section 151.
Need help recording what you hand over?
Lending or hiring out goods carries duties about faults, and the position differs where there is hire. Our service agreement team can draft terms for delivery, condition on handover and responsibility for defects. Bring a description of the goods and how they will be used.
Key takeaways
- Delivery to a bailee is made by anything that puts the goods in the possession of the bailee or his authorised person (s.149).
- A bailor must disclose faults he knows of that materially interfere with use or expose the bailee to extraordinary risks (s.150).
- If he does not, he is responsible for damage arising directly from those faults.
- Where goods are bailed for hire, he is responsible whether or not he knew (s.150, second paragraph).
Read next
- Section 148: bailment, bailor and bailee defined
- Section 151: care to be taken by bailee
- Bailment and Pledge: sections 148–181 overview
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.