X transfers possession or custody of the farmland to his son, S. S shall pay rent or a lease fee in return. S only receives custody and control of the property, but X still owns it. X is thus responsible for paying the property taxes and is liable for what happens on the land. This kind of contract or arrangement is called:

The correct answer is: B. Bailment

A bailment is a legal relationship in which one party (the bailor) transfers the possession of property to another party (the bailee) for a specific purpose. The bailor retains ownership of the property, but the bailee has temporary custody and control of it. The bailment ends when the purpose for which the property was transferred is completed or when the bailor or bailee terminates the agreement.

In the case described in

the question, X is the bailor and S is the bailee. X has transferred possession of the farmland to S for the purpose of S paying rent or a lease fee in return. S only receives custody and control of the property, but X still owns it. X is thus responsible for paying the property taxes and is liable for what happens on the land. This is a bailment because all of the elements of a bailment are present:

• There is a transfer of possession of property from the bailor to the bailee.
• The bailor retains ownership of the property.
• The bailee has temporary custody and control of the property.
• The bailment ends when the purpose for which the property was transferred is completed or when the bailor or bailee terminates the agreement.

The other options are not correct because they do not describe the relationship between X and S.

• A guarantee is a promise by one party (the guarantor) to pay a debt or perform an obligation if the other party (the principal) fails to do so. In the case described in the question, there is no guarantee because X is not promising to pay S’s debts or perform S’s obligations.
• A pledge is a security interest in personal property that is given as collateral for a debt. In the case described in the question, there is no pledge because X is not giving S a security interest in the farmland.
• A set-off is a legal right that allows a party to offset a debt that it owes to another party against a debt that the other party owes to it. In the case described in the question, there is no set-off because X does not owe S a debt.