Bailment vs. Pledge

Difference Between Bailment and Pledge Bailment and pledge ate the words used in court of law by the…

Difference Between Bailment and Pledge

Bailment and pledge ate the words used in court of law by the lawyers. They are used in connection with a contract. Both of them are types of contracts. Those who do not know the meanings of these two terms can wrongly use them. They are confusing for them. Let us discuss them one by one to know the difference between them.


Bailment is the act of delivering goods for special purpose. Bailer is the person who delivers the goods. The person who receives the goods is a bailed. The goods are transferred and it returns to the owner as per the contract. The ownership of the goods does not change. Property and all movable goods are involved in the bailment. It means that the money kept in the bank is not covered under the bailment.


When a person takes a loan from a bank, he deposits gold or other valuable items in the bank locker. This is a pledge. This is a type of security. When the entire loan amount is retuned by the borrower, his valuables are returned to him by the lender or the bank. It is like a bailment. All the rules applied to bailment are also applied to the pledge also. Thus bailment as a security is called pledge. The valuables are kept by the bank as a security for the loan. It is special type of bailment in which goods and valuables are kept as a security. It is called a pledge.

Thus we see that bailment refers to the transfer of goods. Such goods have to be returned to the real owner after a purpose has been completed. On the other hand pledge is a special type of bailment in which a borrower of the loan keeps his valuable as a security with the bank.



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