Write a short note on Auction Sale.
An auction sale is a public sale where the intended buyers assemble at a place and, offer the price they are willing to pay for the goods and it is sold to the highest bidder. The offer of the price is called a ‘bid’ and the person making the bid is the ‘bidder’. The person appointed by the owner to sell the goods by auction, on his behalf, is called ‘auctioneer‘. In short, in an auction sale, the auctioneer invites bids from prospective purchasers and sell the goods to the highest bidder.
Legal rules regarding auction sale. Section 64 lays down the following rules regarding auction sales:
- Where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of a separate contract of sale.
- The sale is complete when the auctioneer announces its completion by the fall of hammer or in any other customary manner, say, by saying words like “one, two, three” and until such announcement is made any bidder may retract his bid.
- A right to bid may be reserved expressly by or on behalf of the seller, and, where such right is expressly so reserved, but not otherwise, the seller or any one person on his behalf may, bid at the auction.
- Unless a right to bid is expressly reserved by or on behalf of the seller, the seller cannot bid at the auction or employ any person to
bid on his behalf. It shall not be lawful for the auctioneer also to knowingly take any bid from the seller or any such person. Any sale contravening this rule may be treated as fraudulent by the buyer.
- The sale may be notified to the subject to a reserve or upset price.
- If the seller uses the pretended bidding to raise the price, the sale is voidable at the option of the buyer.
- The auctioneer cannot sell goods on credit or accept payment by means of a bill of exchange. Moreover, he cannot be compeller to accept a cheque for the purchase price.