Section 578: Obligations of bailee

1) The obligations of bailee shall take care of (herbichar) and protect the goods bailed to him or her in accordance with the terms and conditions specified in the contract and, with reasonable care of goods, as his or her own in the absence of such terms and conditions.

2) Except as otherwise provided for in the contract, if any goods bailed are lost, stolen, damaged, depreciated, deteriorated, or destroyed because of a disaster in spite of the reasonable care and protection pursuant to sub-section (1), the bailee shall not be liable to return such goods.

Provided that if the goods are lost, stolen, damaged, depreciated, deteriorated, or destroyed because of recklessness or mala fide intention of the bailee or of his or her failure to take care of or protect the goods according to the terms and conditions of the contract, the bailee shall be liable to return the goods or pay an amount equivalent to the price thereof to the bailor.

3) If the bailee uses the bailed goods without authorization to do so under, or in a manner contrary to the terms and conditions of, the contract, the bailee shall pay compensation to the bailor for any damage, loss, destruction, or deterioration arising to the goods from such use.

4) Except as otherwise provided for in the contract, the bailee shall not mix the bailor’s goods with his or her own goods.

Provided that if the bailee, with the consent of the bailor, mixes the goods of the bailor with his or her own goods, both parties shall have an interest, in proportion to their respective share, in the mixture thus produced and income accrued therefrom.

5) If the bailee, without consent of the bailor, mixes the goods of the bailor with his or her own goods, and the goods so mixed can be separated, the title of the property in goods shall remain in the parties respectively, but the bailee shall be bound to bear the expenses for separation and the damage, if any, arising to the bailor from the mixture.

6) If the bailee, without consent of the bailor, mixes the goods of the bailor with his or her own goods, and the goods so mixed cannot be separated pursuant to sub-section (5), the bailor shall have right in such goods.