An auction sale is a public sale. It is a method and selling an asset to a person in competition in the presence of public bidders. The person offering the highest bid (highest amount of money) is given the property thus auctioned. It is a public sale in which different willing buyers participate. The goods are sold to all members of the public at large who are assembled in one place for the auction. Generally, the Sale is done by giving a public notice in the press.
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 goods are finally sold to the highest bidder, i.e., the one who has quoted the highest price. 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.
- Goods Sold in Lots – In an auction sale, there can be many goods up for sale of many kinds.
- Completion of Sale – The sale is complete when the auctioneer says it is complete.
- 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.
- 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.
- 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.