1.- What Is A Commodatum Contract?
The bailment is a contract by which one person, called the bailor, agrees to cede to another, called the bailee, the use and enjoyment of a non-fungible thing for a certain period of time, without the bailee having to pay for it. This type of contract is regulated in the Civil Code and is widely used in various situations.
Article 1740 of the Civil Code states.
“By the contract of loan, one of the parties gives to the other one, or some non-fungible thing, to use it for a certain time and to return it, in which case it is called bailment, or money or other fungible thing, on condition that another one returns as much of the same kind and quality, in which case it simply retains the name of loan.
The bailment is essentially free.
The simple loan can be free or with an agreement to pay interest”.
2.- Examples Of Bailment
The bailment is a useful tool both in the private and in the business sphere.
For example, a family can use a bailment to lend a car to a relative for a certain period of time, thus avoiding additional rental costs. In the business world, a company can use a bailment agreement to temporarily lend machinery or equipment to another company for a specific project, thereby saving on acquisition costs.
Examples of bailment have been established by our courts:
The transfer of collection items for exhibitions (paintings, statues, jewellery, banknotes, stamps, bottles of wine, ammunition of various periods and calibres, etc.). ) lent to an institution to be exhibited together, for a fixed period of time (the duration of the exhibition), objects of a fungible nature, created for an ordinary use, but which in this case are not lent for that purpose, but for a “loan for use”: the purpose is not consumption, but exhibition, and the object lent must be returned exactly the same, and not another similar one.
Another advantage of borrowing is that it can be an option for those who wish to test the use of a particular item before making a final purchase. For example, an artist can borrow professional photographic equipment to test its usefulness and quality before deciding whether to invest in its purchase.
In the field of real estate, the bailment can apply to real property, for example, the transfer of a property for the celebration of an event such as a wedding, allowing the neighbour to use part of the land to store tools, or allowing the sellers to live in a house for a certain period after it has been sold.
3.- Characteristics Of The Bailment
a) It is free of charge
One of the main characteristics of the bailment is that it is a gratuitous contract, i.e. the bailee pays no consideration for the use of the thing. This distinguishes it from other types of contract, such as a lease, where a rent is payable.
b) Transfer of use
It is the use of the thing that is transferred, not its ownership.
Article 1741 of the Civil Code:
“The bailee retains the ownership of the thing loaned. The bailee acquires the use of it, but not the fruits; if there is any remuneration to be paid by the one who acquires the use, the agreement ceases to be a bailment“.
c) Duty of preservation
Likewise, the deposit implies that the bailee shall use the thing appropriately, taking care to preserve its integrity, and shall return it in the same condition in which it was received, except for normal wear and tear due to regular use.
d) It is temporary
It is a contract with a fixed duration.
If the duration is not fixed, the goods must be returned as soon as they are claimed.
Article 1750 of the Civil Code:
“If neither the duration of the gratuitous bailment nor the use to which the thing loaned is to be put is specified, and this is not determined by the custom of the country, the bailee may claim it at will.
In case of doubt, the burden of proof is on the bailee“.
e) Trust between the parties
It is a contract based on mutual trust and on the respect of the obligations established in the agreement, in order to guarantee the correct use and return of the loaned object.
4.- Difference With Uncertainty
Our courts have established the difference between pawnbroking and insecurity.
According to our jurisprudence, precariousness is “a factual situation that implies the free use of another’s property, the legal ownership of which does not correspond to us, although we are in possession of it, and therefore the lack of the right that justifies the enjoyment of the possession, either because it has never been possessed, or because it has been lost, or also because it grants us a situation of preference in relation to a possessor of a worse right”.
And for his differentiation between the two legal figures: “Each specific case must be analysed, since it is necessary to decide whether or not there has been a contract between the parties, in particular a gratuitous bailment contract, characterised by the free transfer of the thing for a specific time or for a specific use. If there is a contract of bailment free of charge, the conflicts that may arise in relation to the use of the thing must be resolved in accordance with the rules governing this type of transaction. However, and in the event that it is not accredited, it must be concluded that the legal situation analysed is characteristic of a figure of precariousness”.
“The bailment, even in the family sphere, requires a contract; in the absence of a contract, it is a precarious situation”.
In conclusion, the bailment is a contract that offers flexibility and advantages for both individuals and companies. It allows the temporary use of an object without the need for payment, thus encouraging cooperation and the exchange of goods. However, it is important that the parties involved in a commodatum contract make sure that the conditions and responsibilities of each party are clearly defined in order to avoid misunderstandings or conflicts in the future.
If you have any questions about commodato or precario, please contact us.
