Bailment vs. Pledge: What's the Difference?
Edited by Harlon Moss || By Janet White || Published on November 12, 2023
Bailment: temporary possession of property for a purpose; Pledge: goods as security for a debt.
Key Differences
Bailment involves a change of possession of personal property from the bailor to the bailee, who is obligated to return the property after the purpose is fulfilled. Conversely, in a Pledge, property is delivered as collateral for a loan or obligation, often not returned until the debt is paid.
The key characteristic of Bailment is that it's a lawful transaction wherein the actual ownership of the item doesn't change, only the possession does, for a specific purpose like safekeeping or repair. A Pledge, however, is specifically used as a security for a debt or performance of a promise, where the possession changes but ownership remains with the pledgor until the obligation is settled.
For a Bailment to be valid, the bailee must knowingly accept the item, but they don’t have rights of ownership. In a Pledge scenario, the pledgee gains the right to sell the pledged property if the pledgor defaults on their obligation.
Liability in Bailment is based on the agreed terms; the bailee is generally responsible for the item's care but not for uncontrollable losses. In contrast, in a Pledge, the pledgee holds the asset and has the right, in cases of default, to take ownership or sell the item to settle the debt.
While both Bailment and Pledge involve the transfer of possession, they serve different functions. Bailment is for a specific purpose like storage or transport, while a Pledge is explicitly tied to a financial agreement or debt security.
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Comparison Chart
Purpose
Temporary possession for a task
Collateral for a loan
Ownership
Remains with bailor
Remains with pledgor until default
Rights of possessor
Use as per agreement
Can sell on default
Duration
Until task completion
Until debt repayment
Liability
Bailee’s care; terms vary
Pledgee’s right to sell or own
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Bailment and Pledge Definitions
Bailment
A legal relationship in personal property possession.
Bailment was established when she loaned her dress.
Pledge
Assurance of payment or performance.
The Pledge was accepted, securing the contract.
Bailment
Temporary handing over of property for a purpose.
He left his car in Bailment while traveling.
Pledge
A tangible guarantee for an obligation.
Her Pledge ensured she received the necessary funds.
Bailment
Transfer of possession, not ownership, for a task.
They agreed to a Bailment for the artwork's exhibition.
Pledge
Collateral that can be forfeited on default.
His Pledge was at risk when he missed two payments.
Bailment
A contractual holding of goods without ownership.
During the repair, the watch was in a state of Bailment.
Pledge
A solemn binding promise to do, give, or refrain from doing something
Signed a pledge never to reveal the secret.
A pledge of money to a charity.
Bailment
Possession shift with an obligation to return.
The expensive equipment was under Bailment for the event.
Pledge
Something given or held as security to guarantee payment of a debt or fulfillment of an obligation.
Bailment
The act of delivering goods or personal property to another in trust.
Pledge
The condition of something thus given or held
Put an article in pledge.
Bailment
(obsolete) Bail.
Pledge
Delivery of goods or personal property as security for a debt or obligation
A loan requiring a pledge of property.
Bailment
(legal) The handing over of control over, or possession of, personal property by one person, the bailor, to another, the bailee, for a specific purpose upon which the parties have agreed.
Pledge
The contract or transaction stipulating or involving such delivery.
Bailment
The action of bailing a person accused.
Bailment . . . is the saving or delivery of a man out of prison before he hath satisfied the law.
Pledge
A token or sign
"fair pledges of a fruitful tree" (Robert Herrick).
Bailment
A delivery of goods or money by one person to another in trust, for some special purpose, upon a contract, expressed or implied, that the trust shall be faithfully executed.
Pledge
A person who has been accepted for membership in a fraternity or similar organization and has promised to join but has not yet been initiated.
Bailment
The delivery of personal property in trust by the bailor to the bailee
Pledge
A vow to abstain from alcoholic liquor
Ex-drinkers who have taken the pledge.
Pledge
(Archaic) The act of drinking in honor of someone; a toast.
Pledge
To offer or guarantee by a solemn binding promise
Pledge loyalty to a nation.
Pledge that the duties of the office will be fulfilled.
Pledge
To bind or secure by a pledge or promise
Pledged themselves to the cause.
Pledge
To deposit as security; pawn.
Pledge
To promise to join (a fraternity or similar organization).
Pledge
To accept as a prospective member of such an organization.
Pledge
(Archaic) To drink a toast to.
Pledge
To make a solemn binding promise; swear.
Pledge
(Archaic) To drink a toast.
Pledge
To make a solemn promise (to do something).
Pledge allegiance to the flag
Pledge
To deposit something as a security; to pawn.
Pledge
(transitive) To give assurance of friendship by the act of drinking; to drink to one's health.
Pledge
A solemn promise to do something.
Pledge
A promise to abstain from drinking alcohol.
Pledge
An asset or person temporarily handed over to guarantee the fulfilment of something promised, under threat of permanent loss of the thing handed over; surety, security, hostage.
Pledge
(law) A bailment of personal property to secure payment of a debt without transfer of title.
Pledge
The personal property so pledged, to be kept until the debt is paid.
Pledge
(college slang) A person who has taken a pledge of allegiance to a college fraternity, but is not yet formally approved.
Pledge
A drinking toast.
Pledge
The transfer of possession of personal property from a debtor to a creditor as security for a debt or engagement; also, the contract created between the debtor and creditor by a thing being so delivered or deposited, forming a species of bailment; also, that which is so delivered or deposited; something put in pawn.
Pledge
A person who undertook, or became responsible, for another; a bail; a surety; a hostage.
Pledge
A hypothecation without transfer of possession.
Pledge
Anything given or considered as a security for the performance of an act; a guarantee; as, mutual interest is the best pledge for the performance of treaties.
Pledge
A promise or agreement by which one binds one's self to do, or to refrain from doing, something; especially, a solemn promise in writing to refrain from using intoxicating liquors or the like; as, to sign the pledge; the mayor had made no pledges.
Pledge
A sentiment to which assent is given by drinking one's health; a toast; a health.
Pledge
To deposit, as a chattel, in pledge or pawn; to leave in possession of another as security; as, to pledge one's watch.
Pledge
To give or pass as a security; to guarantee; to engage; to plight; as, to pledge one's word and honor.
We mutually pledge to each other our lives, our fortunes, and our sacred honor.
Pledge
To secure performance of, as by a pledge.
To pledge my vow, I give my hand.
Pledge
To bind or engage by promise or declaration; to engage solemnly; as, to pledge one's self.
Pledge
To invite another to drink, by drinking of the cup first, and then handing it to him, as a pledge of good will; hence, to drink the health of; to toast.
Pledge me, my friend, and drink till thou be'st wise.
Pledge
A deposit of personal property as security for a debt;
His saxophone was in pledge
Pledge
Someone accepted for membership but not yet fully admitted to the group
Pledge
A drink in honor of or to the health of a person or event
Pledge
A binding commitment to do or give or refrain from something;
An assurance of help when needed
Signed a pledge never to reveal the secret
Pledge
Promise solemnly and formally;
I pledge that will honor my wife
Pledge
Pay (an amount of money) as a contribution to a charity or service, especially at regular intervals;
I pledged $10 a month to my favorite radio station
Pledge
Propose a toast to;
Let us toast the birthday girl!
Let's drink to the New Year
Pledge
Give as a guarantee;
I pledge my honor
Pledge
Bind or secure by a pledge;
I was pledged to silence
Pledge
Property as collateral for a loan.
He offered his jewelry as a Pledge for the loan.
Pledge
Goods promised against a debt.
They required a Pledge before considering his application.
FAQs
Is a Pledge always related to debt?
Typically, yes, as security.
Can anyone enter into a Bailment?
Yes, if both parties agree and it's lawful.
What happens if an item in Bailment is damaged?
Liability depends on the agreement terms.
Can the pledgee sell the Pledged item?
Yes, if the pledgor defaults.
Does Bailment require a contract?
Not always, but it’s advisable.
Can services be a Bailment?
Yes, like car repair or dry cleaning.
Can you end a Bailment early?
Depending on the terms, typically yes.
Can cash be a Pledge?
Yes, it’s often used.
Are there risks in entering a Bailment?
Yes, like potential damage or loss.
Can Bailment be unintentional?
No, it requires deliberate action.
What’s the minimum value for a Pledge?
No minimum, but must be agreed upon.
Is consent needed for Bailment?
Yes, the bailee must agree.
What can be used as a Pledge?
Any valuable asset agreed by both parties.
Do I need a lawyer for a Bailment?
Not required, but can be prudent.
How is a Pledge released?
By fulfilling the associated obligation.
Who holds ownership in a Pledge?
The pledgor, until default.
Is a Pledge legally binding?
Yes, it’s a legal promise.
Can a Pledge be withdrawn?
Only if the related obligation is settled.
What’s the difference between lending and Bailment?
Bailment involves specific tasks or care.
Does a Pledge affect credit score?
Not directly, but defaulting might.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
