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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

At an auction conducted under the Sale of Goods Act, 1930, a bidder wishes to withdraw his bid before the auctioneer has brought down the hammer. What is the legal position?

A bidder may withdraw his bid at any time before the auctioneer announces completion of the sale by the fall of the hammer or another customary manner. A bid is merely an offer, and the sale is complete only on that announcement.

  1. AHe may retract his bid until the auctioneer announces completion of the sale by the fall of the hammer or other customary mannerCorrect
  2. BHe cannot retract because a bid is an acceptance that forms a binding contract immediately
  3. CHe may retract only with the written consent of the seller
  4. DHe may retract only if the bid was the highest bid made so far

Explanation

Under Section 64(2), the sale is complete only when the auctioneer announces completion by the fall of the hammer or in other customary manner. Until then any bidder may retract his bid. The option calling a bid a binding acceptance is wrong because a bid is only an offer.

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