A bailee is someone who possesses property which belongs to someone else. A simple example might be a coat check. The coat check has the right of possession, but the coats still belong to their respective owners, and will be collected in the future. Bailee/bailor relationships can occur in many different settings, and may be express or implied, depending on the nature of the situation.
The bailee retains the temporary right to possession of someone else's property, usually as part of an agreement of understanding. For example, when someone drops a car off with the mechanic, the mechanic becomes a bailee, with the car owner understanding that in order for repairs to be done, the mechanic needs to take possession of the car. Likewise, a retail store which asks people to leave bags at the counter becomes a bailee.
The bailee does not get the right to use the property, only to hold it. This is why it is not legal, for example, for a mechanic to take a customer's car on a joyride. Additionally, the bailor who owns the property can generally demand its return at any time, although in some agreements, failure to fulfill a deal can allow the bailee to retain the property. For example, a bank can hold on to assets it is holding as a bailee if a customer has not paid a loan.
Bailees also have some responsibilities, which can vary, depending on the situation. In some express contracts, these responsibilities are clearly delineated. In the example of leaving the car at a mechanic, for instance, the mechanic takes responsibility for the car, but does not accept liability for personal property in the car. This, if the car is damaged, the mechanic pays for it, but if the customer's CD collection is missing when the car is returned, this is not the responsibility of the mechanic.
In some cases, property left with a bailee for a set period of time is considered abandoned, and the bailee is allowed to dispose of it as desired. This is designed to prevent bailees from being indefinitely stuck with property which belongs to someone else. Some types of property, such as financial accounts, may revert to the government, which can hold them for an additional period of time before disposing of them. In other cases, bailees are free to use or dispose of the property as they see fit, as for example when a coat check donates uncollected coats to charity after holding them for several months.
