Rules Governing Auction Sales
The regulations governing auction sales are explicitly outlined in the Sale of Goods Act, with Section 64 addressing the specific rules applicable to auction sales. Let’s delve into the key aspects:
1. Seller’s Right to Bid: The seller has the option to reserve the right to bid, but it must be expressly communicated. When this right is reserved, the seller or a designated representative is permitted to participate in the bidding process. However, without explicit notification, neither the seller nor any representative can lawfully bid.
2. Completion of Sale: The finalization of an auction sale is determined by the auctioneer’s announcement. Whether signaled by the falling of the hammer or any customary action, the sale is deemed complete upon the auctioneer’s declaration. Until this point, prospective buyers retain the liberty to place additional bids.
3. Goods Sold in Lots: In an auction sale, where various goods of different kinds are presented, the concept of lots comes into play. If specific goods are offered for sale as a lot, each such lot is treated as a distinct subject governed by an independent contract of sale. This implies that each lot constitutes a separate contractual agreement, facilitating clarity in the transaction.
4. Sale Not Notified: If the seller has not provided prior notice of the right to bid, any attempt to do so during the auction is prohibited. The auctioneer is likewise restricted from accepting bids from the seller or their representatives under such circumstances. Violation of this rule is considered fraudulent by the buyer.
5. Reserve Price: Auction sales may be subject to a reserve price or an upset price, indicating the minimum acceptable price for the goods. The auctioneer is bound not to sell the goods below this reserve price, ensuring a baseline value for the items on auction.
6. No Credit Transactions: The auctioneer is restricted from conducting credit transactions for the sale of goods. Acceptance of bills of exchange is also prohibited unless expressly agreed upon by the seller, emphasizing the necessity of adhering to specified payment terms.
7. Pretend Bidding: Instances where the seller or their representative engages in pretend bidding to artificially inflate the price of goods render the sale voidable at the buyer’s discretion. This provides the buyer with the choice to either uphold the contract or declare it void.
Buyer’s Rights Against Seller and Auction Sale
The Sale of Goods Act, 1930 plays a crucial role in safeguarding buyer rights in transactions and governing auction sales. Within its provisions, the act outlines the rights of buyers in situations of seller default and the corresponding remedies available. It meticulously addresses various aspects of auction sales, encompassing the completion of sales, withdrawal of goods, and distinguishing between auctions with and without reserve. The act grants buyers entitlements related to contract enforcement and performance while simultaneously affording sellers the right to demand payment or alternative performance and to retain control over the goods under specific circumstances. It also delineates guidelines for the examination of goods before contract conclusion and addresses implications concerning second-hand goods sold at auction. In addition, the act provides insights into the intricacies of sales by auction, covering bid retractions, conduct in auctions without reserve, and the overall conduct of such sales.
Geeky Takeaways:
- Scope and Applicability: The act governs transactions in the sale of goods in India and applies to both consumer and commercial contracts.
- Implied Conditions and Warranties: The act implies certain standard conditions and warranties in contracts of sale.
- Performance of Contract: It provides rules regarding delivery, payment, inspection, acceptance, and transfer of ownership.
- Remedies for Breach: Remedies available to parties in case of breach by the other party are covered, such as damages and return of goods.
Table of Content
- What are Buyer’s Rights against Seller?
- Key Elements under Buyer’s Rights against Seller
- Buyer’s Rights Against Seller
- Auction Sale
- Rules Governing Auction Sales
- Conclusion
- Buyer’s Rights Against Seller- FAQs