The document discusses the key aspects and rules relating to auction sales: 1. Goods are typically sold in lots with each lot representing a separate contract. 2. The sale is complete when the auctioneer announces it, until then bidders can retract bids. The auctioneer can also reject unusually low bids. 3. Sellers can reserve the right to bid but otherwise are not allowed to bid themselves or employ others to bid on their behalf.

2. In an auction sale, the auctioneer invites bids from prospective
purchasers and sells the goods to the highest bidder. Section 64
lays down the following rules relating to an auction sale-
1. Where goods are put up for sale in lots, each lot is prima facie
deemed to be a subject of a separate contract of sale;

3. 2. The sale is complete when the auctioneer announces its
completion by the fall of the hammer or in any other customary
manner, and, until such announcement is made, any bidder may
retract his bid. On the other hand, the auctioneer is also not
bound to accept the highest bid if he feels that it is much below
his expectation.
3. A right to bid may be reserved expressly by or on behalf of
the seller, and where such right is expressly so reserved, but not
otherwise, the seller or any person on his behalf may, subject to
the provisions hereinafter contained, bid at the auction;

4. 4. Where the sale is not notified to be the subject to a right to bid
on behalf of the seller, it shall not be lawful for the seller to bid
himself or to employ any person to bid at such sale, or for the
auctioneer knowingly to take any bid from the seller or any such
person; and any sale contravening this rule may be treated as
fraudulent by the buyer.
5. The sale may be notified to be the subject to a reserved or
upset price. It is a price below which the auctioneer will not sell,
and if he by mistake knocks down the lot for less than the reserved
price, no valid contract comes into existence and he can refuse to
deliver the goods to the highest bidder. Where the sale is ‘without
reserve’ the goods must be sold to the highest bidder, irrespective
of the bid amount. But it is only a usage or custom of the trade
because otherwise the auctioneer is free to accept or reject any
offer or bid made to him.

5. 6. The seller makes use of pretended bidding to raise the price,
the sale is voidable at the option of the buyer.
7. The auctioneer cannot sell goods on credit or accept
payment by means of a bill of exchange. Also, he cannot be
compelled to accept a cheque for the purchase price.

6. An Act to define and regulate the rights and duties of parties to
hire purchase agreements for matters connected therewith or
incidental thereto.
• CONTRACT OF GUARANTEE- Contract whereby a person
guarantees the performance of all or any of the hirer’s
obligations under the hire-purchase agreement.
• HIRE- The sum payable periodically by the hirer under a hire-
purchase agreement.

7. • HIRER- the person who obtains or has obtained possession of
goods from an owner under a hire-purchase agreement, and
includes a person to whom the hirer’s rights or liabilities
under the agreement have passed by assignment or by
operation of law.
• OWNER- the person who lets or has let, delivers or has
delivered possession of goods, to a hirer under a hire-
purchase agreement and incises a person to whom the
owner’s property in the goods or any of the owner’s rights or
liabilities under the agreement has passed by assignment or
by operation of law.

8. • The Dealer contracts with finance co. for financing his hire-
purchase deals
• The customer selects the goods for HP, and dealer arranges
for the complete set of documents.
• The Dealer sends documents to finance co. with respect to
purchase the goods, accept the HP transaction.
• The finance co. signs the agreement and sends copy along
with EMI details to dealer
• Down payment by customer on completion of proposal form.
• Dealer delivers the goods to the customer, property passes
on to the finance co.
• Hirer pays EMIs, and on last payment, the ownership passes
on to him, with loan completion certificate by the finance
co.
Procedure of Hire-Purchase

9. A company had agreed to offer a bus on a hire purchase
agreement on condition that Rs. 1140 were to be paid by the
hirer on delivery and 11 monthly installments were to be paid
thereafter, each of Rs. 226 and the owners were to be entitled
to terminate the contract on default occurring if hirer for any
month was in arrears. A suit was brought by the owners for
possession of the bus on the happening of the said condition.
Lord coutts-trotter,c.j. held that though there was no such
explicit condition, the amount Rs. 1140/- being construed
either as the installment of the hire money or as the premium
taken by the owner for granting lease and in either case money
received was not to be refunded. The money was not to be
regarded as advance of rent.
In Auto Supply Company vs. Raghunatha
Chetty

10. Hire purchase agreement means an agreement under which goods
are let on hire and under which the hirer has an option to
purchase them in accordance with the terms of the agreement and
incudes an agreement under which-
• Possession of goods is delivered by the owner thereof to a
person on condition that such person pays the agreed amount
in periodical installments, and

11. • The property in the goods is to pass to such person on the
payment of the last of such installments, and
• Such person has a right to terminate the agreement at
anytime before the property so passes.
Every hire-purchase agreement shall be-
(a) In writing, and
(b) Signed by all the parties thereto.
A hire-purchase agreement shall be void if in respect thereof
any of the requirements specified in sub-section (1) has not
been compiled.
Where there is a contract of guarantee, the hire-purchase shall
be signed by the surety also, and if the hire-purchase
agreement is not so signed, the hire-purchase agreement shall
be voidable at the option of the owner.

12. A sells a refrigerator to B with a stipulation that B shall pay A
fixed sum every month by way of installments till the full price
of the refrigerator is paid.
Now B pays the full amount to A by way of installments, he
doesn’t become the owner of the refrigerator. He can
discontinue payment of further installments.
In such case, A takes back the refrigerator has no right to
recover installments already paid by him to A because the
amount paid by him is adjusted towards the hire charges of
refrigerator. This is called a hire-purchase agreement.
Illustration

13. • .
Every hire purchase agreement shall state-
• The hire-purchase price of the goods to which the agreement
relates;
• The cash price of the goods, that is to say, the price at which
the goods may be purchased by the hirer for cash;
• The date on which the agreement shall be deemed to have
commenced;

14. • The number of installments by which the hire-purchase price
is to be paid, the amount of each of those installments, and
the date, upon which it is payable, and the person to whom
and the place where it is payable; and
• The goods to which the agreement relates, in a manner
sufficient to identify them.

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