Question 3 (a)

Auction sale

6.25 marks

Time to write
About 12 minutes

From an older CBCS paper

Question

Question 3 (a) · 6.25 marks

Q3. Explain with examples: Auction sale,

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6.2 marks

Read from the question

  • with examplesExamples are asked for: one short example with each point.

What the paper leaves open

The paper prints no mark per question (any four of six, equal marks, 75 in all); each question is reckoned here at 18.75 marks. Marked as one question of 18.75 marks; answered here in 3 parts of 6.25 marks each (marks inferred).

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Auction sale 6.2 marks 10 min
  3. Check: every ask answered, key terms underlined 1 min

Try it first. About 12 minutes for 6.25 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Auction sale (s. 64, Sale of Goods Act, 1930). The auctioneer, acting as the seller's agent, invites competing bids from the public, and the goods go to the highest bidder: this is a sale by auction. Rules:

  1. goods put up in lots: each lot is prima facie a separate contract of sale;
  2. the sale is complete on the fall of the hammer, and until then any bidder may retract his bid;
  3. a right to bid may be reserved expressly by or for the seller;
  4. where the sale is not notified to be subject to such a right, the seller may not bid or employ anyone to bid, and a sale contravening this may be treated as fraudulent by the buyer;
  5. the sale may be subject to a reserve or upset price; and
  6. pretended bidding to raise the price makes the sale voidable at the buyer's option. Examples (our own):
  • At a used-machinery auction in Ludhiana a lathe is knocked down to Harpreet for ₹1,80,000. The sale is complete when the hammer falls (rule 2), though she is to pay a week later; until that moment she could have withdrawn her bid.
  • If the seller had planted a friend to bid the price up, and the auction was not notified as subject to the seller's right to bid, Harpreet could treat the sale as fraudulent (rule 4) or avoid it for pretended bidding (rule 6).
  • Twenty bales of cotton offered in four lots of five give four separate contracts of sale (rule 1).

Where the 6.25 marks sit

#ComponentMarks
1Auction sale6.25
Total6.25
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