The Sale of Goods Act, 1930 has provisions for auction sales of goods. An auction sale is a public sale where goods are sold to the highest bidder.
The Sale of Goods Act, 1930 provides for the rights and obligations of both the buyer and the seller in an auction sale. The auctioneer acts as an agent of the seller, and the seller is deemed to be an unpaid seller until payment is made in full by the buyer. The buyer has limited rights to reject the goods or examine them, and the seller has a lien on the goods until the purchase price is paid in full. If either party fails to fulfill their obligations, the other party has the right to claim damages or resell the goods.
Provisions related to auction sales under the Act:
- Sale by auction is complete when the auctioneer announces its completion by the fall of the hammer or in any other customary manner.
- A sale by auction is subject to any reserve price fixed by the seller, and unless a bid is made equal to or exceeding the reserve price, the seller is not bound to sell the goods.
- The auctioneer is an agent of the seller, and not of the buyer, and has certain duties towards both parties.
- The seller is deemed to be an unpaid seller until payment is made in full by the buyer.
- The buyer has no right to reject the goods on the ground of their being different from the description given, unless the sale is subject to a condition that the goods are to correspond with the description.
- The buyer’s right of examining the goods is limited to such examination as is necessary to ascertain their quality and condition.
- The seller has a lien on the goods until the purchase price is paid in full, and the seller can exercise this lien in the same way as any other unpaid seller.
- If the goods are sold in lots, each lot is treated as a separate contract of sale.
- If the seller fails to deliver the goods or delivers them in a damaged condition, the buyer can claim damages for any loss suffered.
- If the buyer fails to pay the purchase price, the seller can resell the goods and claim damages for any loss suffered.