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An in-depth analysis of the contract of bailment and the law of bankruptcy. The definition and salient features of bailment, the duties of the bailee and bailor, and the law of bankruptcy in kenya. Topics include acts of bankruptcy, procedures in bankruptcy, and discharge of the debtor.
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BAILMENT - Is the delivery of goods from one person {bailer} to another {bailee} on the condition express or implied in the contract that goods shall be returned to the bailor as soon as the purpose for which they have bailed has been completed. If the person already in possession of the goods of another contracts to hold them as bailee, he thereby becomes the bailee and the owner becomes the tailor of such goods although they may not have been delivered by way of bailment. This is bailment by “attornement” SALIENT FEATURE OF BAILMENT Since the essence of bailment is the delivery of goods for the stated purpose and their return on the completion of that purpose, and their return on the completion of that purpose,it is only the possession that passes from the owner to the other and not the ownership.
1. Thus a loan of money is not a bailment and there is no obligation to return the obligation money, but a relationship of creditor and debtor is created. TYPES OF BAILMENT
a. DEPOSIT: This may take place when the owner deposits the goods in a cloakroom or left-luggage office for safe custody. The Bailee is not entitled to bring the goods in his use and must exercise reasonable care of them while in his custody. If the goods are delivered to a wrong person, the bailee is not protected in any circumstances.
In all cases of bailment, the bailee is bound to take as much care of the goods bailed to him as a man or ordinary prudence wound under similar circumstances take care of his own goods of the same type. Where the goods are stolen from his possession, it is his duty to report the matter to the police.
part, but he must show that he exercised reasonable care to assist in their recovery and reported the matter to the police immediately after the loss. DUTIES OF BAILOR
Definition According to Blackstone: Bankruptcy is a proceeding by which, when a debtor cannot pay his debt or discharge his liabilities or the person to whom he owes money or has incurred liabilities cannot obtain satisfaction of their claims. The courts in certain circumstances take possession of his property by an officer appointed for the purpose, and such property is realized and distributed in equal proportions among the persons to whom the debtor owes money or has incurred peaniary liabilities.
A person is insolvent or bankrupt who cannot pay his debt or discharge his liabilities on the due date. The creditors or the debtor himself may present a petition in court that a receiving order should be made. Object of Bankruptcy
Before any proceedings in bankruptcy can be taken against a person, he must have committed an act of bankruptcy. Section,3(1) of the act lists eight acts of bankruptcy.
presented by a creditor , section six set out the following conditions a. The debt owing to him is at least Ksh 1000. It’s possible for two or more creditors to join the petition. b. The debt is liquidated sum, payable either immediately or at some certain future time. c. The act of bankruptcy has been committed by the debtor d. The act of bankruptcy on which the petition is based has been committed within the past three months.
answer any question he shall be guilty of contempt of court. If the debtor does not attend his public examination , having had notice a warrant may be issued for his arrest.
An adjudication of bankruptcy may be annulled by the courts: When the debtor ought not to have been adjudicated bankrupt If the creditor accept a composition or scheme after adjudication Where the debts of the bankrupt are paid in full DISCHARGE OF DEBTOR In Kenya, section 29(1) of the act provides that a bankrupt may apply for an order of his discharge as soon as the debtors have been paid in full The court will fix a day to hear his application in the presence of his creditors but before this he must undergo a public examination. This is conducted in the open court and the debtors may be questioned by the official receiver trustee and the creditor If the court is satisfied that the bankruptcy is not fraudlent , it may grant an absolute discharge. Effect of discharge: An order discharging a bankrupt releases him from all debts provable in bankruptcy except those mentioned below: a) Any debt due to the government b) Any debt or liability incurred by means of any fraud or fraudlent breach of trust to which he was a party. Refusal of discharge In the following circumstances, the court cannot grant an absolute
f) He has caused any of his creditors to pay unnecessary expenses by frivolous or vexations defences to any action properly brought against him. g) If the bankrupt gave undue preference to one of his creditor within three months of receiving order when unable to pay his debts as they fell due. h) That within three months of the receiving order and with the prospect of bankruptcy before him, he incurred debts in order to make his assets ten shillings in pound i) There have been previous bankruptcy proceedings against or he has previously made a composition with his creditors. j) He is guilty of fraudlet breach of trust DISABILITIES OF UNDISCHARGED BANKRUPT As long as the bankrupt remains undischarged he suffers from the following disabilities He cannot acquire credit for more than two hundred shillings without disclosing his bankruptcy. He cannot acquire property free from the claims of trustee in the bankruptcy. He must not trade in a name that is not his own without disclosing that he is undischarged bankrupt. He cannot be appointed or continue to be a director of t6he company. He cannot be elected to or sit as a member of a local authority or the National Assemly.