What does the term "bailment" refer to in contract law?

Bailment in contract law refers specifically to the situation where goods are delivered from one party, known as the bailor, to another party, known as the bailee, for a specific purpose. This typically involves the transfer of physical possession of the goods while retaining ownership. The key element in bailment is that the bailee has temporary possession of the property but does not have ownership rights; the bailee is obligated to return the goods once the purpose of the bailment has been fulfilled or at the end of the agreed period.

In contrast, the other options do not accurately represent the concept of bailment:

• Loaning money for a specific purpose involves a financial transaction rather than the temporary transfer of possession of goods.

• Purchasing goods with immediate payment signifies a complete transfer of ownership and lacks the temporary nature essential to bailment.

• Renting property without a lease speaks to a different contractual relationship concerning real property and does not capture the nuances of the delivery and use of goods covered under bailment.

Thus, option B correctly encapsulates the essence of bailment as it is understood in contract law.