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A bailee is a person who receives property from the owner, known as a bailor, and holds the property for the owner for a particular purpose such as custody or repair. Some examples of this include storage companies that hold people’s belongings, a dry cleaner holding someone’s clothing, and a mechanic holding someone’s car for repair.

The bailee does not obtain ownership rights to the property and must return the property when the contract has been fulfilled. The bailee must also practice ordinary diligence while the property is in their possession. They can be held responsible for any gross negligence that occurs. 

[Last updated in July of 2021 by the Wex Definitions Team]