"SALES BY AUCTION"

PRESENTED BY:
BIRRA MAZHAR.
ROLLNO:15
PRESENTED TO:
SIR NAVEED MUSHTAQ.
AUCTION SALE:

 DEFINATION:
A sale by auction is a public sale where the
goods are offered to be sold to the buyers
who offers the highest price for the goods
or who make the highest bid.
 The person inviting the bid is called
auctioneer who act as an agent of the seller.
 We read the rules for auction sale under
the Sale of Goods Act, 1930.
FEATURE OF AUCTION SALE:
 An auction sale is a public sale. The goods are sold to all members of the
public at large who are assembled in one place for the auction. Such
interested buyers are the bidders.
 The price they are offering for the goods is the bid. And the goods will be
sold to the bidder with the highest bid.
 The person carrying out the auction sale is the auctioneer. He is the
agent of the seller. So all the rules of the Law of Agency apply to him.
 But if an auctioneer wishes to sell his own property as the principal he
can do so. And he need not disclose this fact, it is not a requirement
under the law.
Process of Auction Sale
1. The process of auction sale starts with sending an invitation to the
parties for auction. For this purpose, circulation of an advertisement and
catalogue of the goods under auction along with the terms of sale takes
place.
2. In this process, the bidders act as competitors and thus they place
competing bids. In essence, each subsequent bid is higher in price than
the last one.
3. When the auctioning begins, the auctioneer starts with the lowest
deal price. He does so to gather the attention of most of the bidders.
The interested buyers offer bids one after another and seek to outbid
each other. And so, with each next bid, the price keeps on increasing
until it reaches a point where no other bidder offers a higher price than
the last one.
4. Therefore, the item goes to the highest bidder present at the time.
5. An auction sale is complete when the auctioneer signals it by the Fall of
a Hammer or any other customary way. And with the Fall of Hammer,
the property in goods passes to the highest bidder. And so, until the fall
of the hammer, the bidder can revoke his offer, if he wants to.
6. As soon as the vendor accepts the highest bid offered, the auction
comes to end. Thereafter, the buyer has to pay the agreed price and
take possession.
7. After that, the auctioneer can ask for payment of the sale money via
cash. The buyer cannot compel the auctioneer to accept payment of
money by way of a bill of exchange or cheque .
Rules of an Auction Sale
 1] Goods Sold in Lots
 In an auction sale, there can be many goods up for sale of many kinds. If
some particular goods are put up for sale in a lot, then each such lot will
be considered a separate subject of a separate contract of sale.
 2] Completion of Sale
 The sale is complete when the auctioneer says it is complete. This can
be done by actions also – like the falling of the hammer, or any such
customary action. Till the auctioneer does not announce the completion of
the sale the prospective buyers can keep bidding.
 3] Seller may Reserve Right to Bid
 The seller may reserve his right to bid. To do so he must expressly reserve
such right to bid. In this case, the seller on any person on his behalf can
bid at the auction.
 4] Sale Not Notified
If the seller has not notified of his right to bid he
May not do so under any circumstances. Then
neither the seller nor any person on his behalf can
bid at the auction. If done then it will be unlawful.
 5] Reserve Price
An auction sale may be subject to a reserve price
or an upset price. This means the auctioneer will
not sell the goods for any price below the said
reserve price.
 6] Pretend Bidding
But if the seller or any other person appointed by him
employs pretend bidding to raise the price of the goods,
the sale is voidable at the option of the buyer. That
means the buyer can choose to honor the contract or he
can choose to void it.
 7] No Credit
The auctioneer cannot sell the goods on credit as per his
wishes. He cannot accept a bill of exchange either unless
the seller is expressly fine with it.
SOME CASE LAWS:
 BOMBAY SALT AND CHEMICAL V. JOHNSON & ORS.
 In this case, it was held that the highest bidder can claim his rights over
the property in the auction sale only when the auction sale is accepted by
the seller and has been approved by the seller and also the sale deed is
executed in his favour. Until then the highest bidder has no rights over
the property.
 BARRY V. DAVIS
 In this case, it was stated that if there exists no reserve price for the
property that has to be sold or to be put in the auction then the property
should be sold to the genuine highest bidder. There are also certain
exceptions to this such as unlawful selling of goods, seller not authorised
to sell, the buyer has no right to buy or the buyer does not have enough
money to buy the property.
THANKYOU.