Sections 153 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.
Sections 153 and 154 deal with a bailee who goes beyond the conditions of the bailment. Under section 153 the bailor may treat the bailment as ended if the bailee does an act inconsistent with its conditions. Under section 154 the bailee who makes an unauthorised use of the goods is liable to compensate the bailor for any damage arising to the goods from or during that use. If you have lent or hired out goods and they have been used beyond what you agreed, our legal consultation service can help you assess your options.
A contract of bailment is avoidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment (s.153). If the bailee makes any use of the goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them (s.154). Section 154 has no fault requirement in its words: the Act's illustrations involve careful riders and accidents.
Section 153: the bailor's option to end the bailment
The text: "A contract of bailment is avoidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment."
| Limb | Plain meaning |
|---|---|
| "avoidable at the option of the bailor" | The choice is the bailor's; the bailment does not end on its own |
| "if the bailee does any act with regard to the goods bailed" | An act concerning the goods |
| "inconsistent with the conditions of the bailment" | The act does not fit the terms on which the goods were delivered |
The Act's illustration to section 153. A lets to B, for hire, a horse for his own riding. B drives the horse in his carriage. This is, at the option of A, a termination of the bailment.
The horse was hired "for his own riding". Driving it in a carriage is a different use. It lets A end the bailment.
Section 154: liability for unauthorised use
The text: "If the bailee makes any use of the goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them."
Limb by limb:
- "Any use ... not according to the conditions of the bailment": the use must depart from the terms.
- "Liable to make compensation to the bailor": the bailee compensates the bailor.
- "For any damage arising to the goods from or during such use of them": damage "from" or "during" the unauthorised use.
The Act's illustrations to section 154
- Illustration (a). A lends a horse to B for his own riding only. B allows C, a member of his family, to ride the horse. C rides with care, but the horse accidentally falls and is injured. B is liable to make compensation to A for the injury done to the horse.
- Illustration (b). A hires a horse in Calcutta from B expressly to march to Benares. A rides with due care, but marches to Cuttack instead. The horse accidentally falls and is injured. A is liable to make compensation to B for the injury to the horse.
In both illustrations the rider took care and the injury was accidental. The bailee is nonetheless liable, because the use was outside the conditions. In (a) the horse was lent for B's own riding, and C's ride was unauthorised; in (b) the destination was changed.
This stands apart from section 152, under which a bailee who took the section 151 care is not responsible for loss in the absence of a special contract. Section 154 deals with use outside the conditions. See section 152.
Sections 153 and 154 side by side
| Section 153 | Section 154 | |
|---|---|---|
| What the bailee did | Any act inconsistent with the conditions | Any use not according to the conditions |
| Consequence | Bailment avoidable at bailor's option | Liability to compensate for damage from or during the use |
| Whose choice | Bailor's | Not a choice; the liability follows |
| Illustration | A lets a horse for riding; B drives it in a carriage | (a) lent for own riding, C rides; (b) hired for Benares, ridden to Cuttack |
A modern example of our own
Fatima hires a motorcycle to Girish for a day in the city, on a condition that it is to be used only within the city. Girish takes it on a hill trip and a minor fall damages it, though he rode carefully. Under section 154, a use not according to the conditions makes him liable to compensate Fatima for damage arising to the motorcycle from or during that use. Under section 153, Fatima may also treat the bailment as ended at her option.
Another: Harpreet lends a laptop to her colleague Ishaan for his own work only. Ishaan lets a friend use it, and the friend spills tea on it. The use was not according to the conditions, so section 154 makes Ishaan liable for the damage.
What can the parties change?
Neither section says "in the absence of any contract to the contrary". The conditions of the bailment are themselves set by the parties, and both sections measure the bailee's conduct against those conditions. So the parties influence the result through the conditions they write: what use is allowed, by whom, and where. The text does not say more.
What the sections do not say
- Section 153 does not say whether the bailor must give notice when exercising the option.
- Section 154 does not say how damage is to be measured or what happens if the goods are also covered by insurance.
- Neither section deals with unauthorised use that causes no damage.
Practical points
- Bailors: write the permitted use, place and users into the agreement. Illustrations (a) and (b) turn on exactly such conditions.
- Bailees: if you want someone else to use the goods or to use them differently, get the bailor's agreement first.
- If you discover an unauthorised use, decide promptly whether you will end the bailment under section 153 and say so in writing.
- Record the condition of the goods before and after.
- The general duty of care that applies even within authorised use is in section 151.
Need help when goods have been misused?
If someone to whom you lent or hired goods has used them beyond what you agreed, the next step depends on the conditions you set and the damage. Our legal consultation team can look at the agreement and the facts and explain sections 153 and 154 as they apply. Bring the hire or loan terms and photographs of the damage.
Key takeaways
- If the bailee does any act inconsistent with the conditions of the bailment, the bailor may avoid the bailment (s.153).
- A bailee who uses the goods other than according to the conditions must compensate the bailor for damage from or during that use (s.154).
- The Act's illustrations involve careful riders and accidental injury: liability still follows.
- The conditions of the bailment decide what is authorised.
Read next
- Section 152: when bailee is not liable for loss of thing bailed
- Sections 155 to 157: mixture of goods with and without bailor's consent
- 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.