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CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930

At an auction conducted by Mehta Auctioneers in Pune, a bidder named Ravi offers ₹50,000 for a lot of antique brass lamps. Before the auctioneer lets the hammer fall, Ravi changes his mind and withdraws his bid. Under the Sale of Goods Act, 1930, what is the legal position?

Ravi may retract his bid. Under Section 64(2), an auction sale is complete only when the auctioneer announces completion by the fall of the hammer or another customary manner, and until then any bidder may withdraw his bid without needing consent or paying compensation.

  1. ARavi cannot withdraw because every bid is a binding contract once made
  2. BRavi may retract his bid because the sale is not complete until the auctioneer announces completionCorrect
  3. CRavi may withdraw only if the seller consents to the withdrawal
  4. DRavi may withdraw only if he pays compensation to the auctioneer

Explanation

Under Section 64(2), the sale is complete when the auctioneer announces its completion by the fall of the hammer or in another customary manner. Until that announcement, any bidder may retract his bid. So Ravi's withdrawal before the hammer falls is valid, and no consent or compensation is required.

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