Bailment Under The Indian Contract Act, 1872 In The Digital Economy: An Analogical Analysis Of Digital Assets As ‘Goods’

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Javeed A, LL.B. (Hons.), PES University

ABSTRACT

The significant evolution of technology has rapidly transformed every aspect of the world, including commerce, property, and contractual relationships. With the rise of the digital economy, intangible assets such as cryptocurrencies, non-fungible tokens (NFTs) and data have emerged as valuable economic resources that are routinely entrusted to third-party service providers in a manner functionally akin to traditional bailment. Yet the concept of bailment under Chapter IX of the Indian Contract Act, 1872 has continued to govern and is confined to tangible movable goods creating a tension with the rise of digital assets. This paper undertakes an analogical analysis of bailment to examine whether digital assets can be accommodated within the framework of the Indian Contract Act, 1872.

This paper argues that although digital assets do not fall within the traditional definition of the goods, whether ‘control’ over the digital assets may function as a substitute for physical possession thereby enabling digital custodians to be treated as bailees. The study examines whether the principles of delivery and return under the Indian Contract Act, 1872 can be interpreted in such a manner that accommodates the digital transfers and the custodial relationships.

Keywords: Bailment, Digital Assets, Goods, Delivery, Intangible Property, Tangible Property, Digital Economy, Possession, Control, Cryptocurrency.

613. BAILMENT UNDER THE INDIAN CONTRACT ACT, 1872 IN THE DIGITAL ECONOMY- AN ANALOGICAL AN

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