Right and liabilities of finder of goods

Introduction

According to the Section 71 of the Indian Contract Act, 1872, deals with the finder of goods. A finder of goods means ‘a person who finds goods’ that belongs to another and place them into his custody. The finder of the goods holds the same position as that of bailee and he is required to take care of goods in the same manner as is expected out of bailee under Section 151 of the Indian Contract Act, 1872. He is also responsible for all the duties of bailee such as duty to return the goods after the true owner is found.

For instance: Raju find a mobile phone belonging to Gopal in the metro station. Raju picked the phone. Here, Raju is the finder of the goods.

What is finder of the goods in layman language?

Finder of goods is a part of quasi-contract or certain relation resembling to those created by a contract. A person who finds goods belonging to another and takes them into his custody is subject to the same responsibility as that of a bailee does.

What is Quasi-Contract?

A quasi contract is a retroactive arrangement between two parties who have no previous obligations to one another. The contract aims to prevent one party from unfairly benefiting from the situation at the other party's expense.

For instance: Oscar and Oliver enter a contract under which Oscar agrees to deliver a basket of fruits at Oliver's residence and Oliver promises to pay Rs 1,500 after consuming all the fruits. However, Oscar erroneously delivers a basket of fruits at John's residence instead of Oliver's.

What is Bailment, bailee and Bailor in ICA?

A "bailment" is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them.

The person delivering the goods is called the "bailor". The person to whom they are delivered is called the "bailee".

Explanation: If a person already in possession of the goods of another contract to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment.

Rights and duties of the finder of goods

Rights of finder of goods- the rights of the finder of goods are mentioned under Section 168 and Section 169 of the Indian Contract Act, 1872.

Right of lien:

Section 168 of the Indian Contract Act, 1872, deals with the right of lien which the finder of goods has. It says the finder of the goods has no rights to sue the owner for the trouble and expenses which are borne by him for the maintenance and preventions of the goods.

May sue for specific reward:

According to Section 168 of the Indian Contract Act, 1872, the finder of the goods cannot sue the owner of the goods for the trouble and expenses incurred by him preserving those goods.

When finder of thing commonly on sale may sell it:

Section of the Indian Contract Act, 1872 says that where a thing which is commonly the subject of sale is lost and the owner of the goods cannot be found or if he refuses to pay the compensation or lawful charges of such goods to the finder then the finder has the power to sell it where:

The thing is of perishable nature or will lose the greater part of its value

Where the lawful charge of the finder in respect of the thing found amount to two thirds of its original value.

Duty of finder of goods

The duties of finder of goods are similar to that bailee. The following are the duties of finder of goods:

Duty to take reasonable care:

According to Section 151 of the Indian Contract Act, 1872, says that the goods has the duty to take care of the goods in the manner he would taken care of the goods if they belonged to him.

Duty not to make unauthorised use:

According to Section 154 of Indian Contract Act,1872, says that the bailor should not use the goods in an unauthorised manner. If he makes the well unauthorised use of the goods the he’ll be liable for the same and has to provide compensation to the owner or the bailor for such unauthorised use.

Duty not to mix:

The finder of the goods has the duty not to mix his goods with that of the owner of the goods. According to Section 155 of the Act, if the goods of the owner are mixed with that of the acquire with the consent of the owner then in such a case both the bailor and bailee will have the proportional share in those goods.

Section 156 of the Act, states that if the property which is mixed by the acquirer is of such a nature that they can be separated from the owner goods, then the cost of separation of such goods will be incurred by the finder only. Section 157 of the Act, says that if the property which is mixed by the acquirer with those of owner goods cannot be separated then it is the duty of the acquirer to compensate got the loss incurred to the owner of the goods.

Duty to return the goods:

The finder of the goods has the duty to return the property possessed by him to its true owner as per Section 160 of the Act.

Duty to return the increase:

According to Section 163 of Indian Contract Act, 1872, says that if any profit is earned by the finder of the goods on the property that belonged to the owner, then it is the duty of the acquirer to return such profit to the owner of the goods.

Liability for non-gratuitous act (S.70)

Section 70 creates liability to pay for the benefit of an act which does not intend to do gratuitously, where a person does something for another person non intending to do so gratuitously and such person is entitled to enjoy benefits from it and then such a person who has been used by these thing has to compensate or restore or deliver such thing.

Nature of lien that the finder has over the goods

The finder of the goods has the power to retain the goods if the lawful charges for the maintenance are not given to the acquirer by the owner.

Case law

In K. Sardambal v. Jagannathan and Brothers, 22^nd October, 1972, the Court held that the finder of the goods only has the right to retain the goods until payment and does not carry with it a right of sale to secure the amount. He is also entitled to exercise the right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

Conclusion

The finder of the goods is a part of the Quasi-Contract. The finder of the goods has the rights, duties to perform and liabilities which has been stated under Section of the Indian Contract Act, 1872.

Written By: Akshat Singh