The defendant had made the highest bid in an auction. The defendant had withdrawn his offer before the auctioneer had knocked his hammer. The plaintiff’s counsel opened the case with as: the goods were put up in one lot at an auction. There were several bidders of which the defendant was the last bidder. The defendant had bid 401. The auctioneer had dwelt on the bidding. As the auctioneer dwelt the defendant said, “Why do you dwell? You will get no more. The defendant said he was informed the worm weighed at least 1300 cwt and was worth more than 401. The defendant asked him if he could warrant it to weigh so much, and receiving a answer in the negative he then declared that he would not take it, and refused to pay for it. It was re-sold on the subsequent day’s sale for 301 to the defendant. Against which the action was brought for the difference.
ISSUES OF THE CASE
The issues in the case PAYNE against CAVE Saturday, May 2nd, 1789 are: 1.The highest bidder (the defendant) withdrew his offer before the hammer was knocked.
The hammer is put down to assure that the bidder’s bid is accepted and there are no more bids to come in. The time given between the bid being made and the hammer knocked is for other bidder’s to bid higher or the highest bidder to withdraw his offer. When a bidder bids an amount he is giving an offer and the offer is accepted when the auctioneer knocks his hammer. An offer can be withdrawn before it has been accepted.
2.Walton set aside the nonsuit, on the ground that the bidder was bound by the conditions of the sale to abide by his bidding, and could not retract.
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The defendant when he started bidding he is to abide by the rules of the auction that is that the highest bidder will be the buyer of the property. He withdrew his bid because of a negative reply from the auctioneer. But he should have paid the amount he had bid. PRINCIPLES OF THE CASE
An auction is a public sale of property where willing buyers bid prices at which they are ready to buy the property. The basic rule of an auction is the highest bidder is the buyer. A contract of sale is formed in an auction by means of competitive bids, submitted and confirmed according to the pre-established terms and conditions that govern the auction sale. The act that presides over auction sales is “Sale of Goods Act 1979” section 57 where it says: Auction Sales
1.Where goods are put up for sale by auction in lots, each lot is prima facie deemed to be the subject of a separate contract of sale.
2.A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid.
3.A sale by auction may be notified to be subject to a reserve or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller.
4.Where a sale by auction is not notified to be subject to a right to bid by or on behalf of the seller, it is not lawful for the seller to bid himself or to employ any person to bid at the sale, or for the auctioneer knowingly
to take any bid from the seller or any such person.
5.A sale contravening subsection (4) above may be treated as fraudulent by the buyer.
6.Where, in respect of a sale by auction, a right to bid is expressly reserved (but not otherwise) the seller or any one person on his behalf may bid at the auction.
As we can see the law states according to the second point the auctioneer confirms the sale with the knocking of the hammer or else the bidder has the right to withdraw the bid. This law was setup in 1979 in reference to the case stated above.
HELD
The court thought the nonsuit very proper. The auctioneer is the agent of the vendor, and the assent of both parties is necessary to make the contract binding; that is signified on the part of the seller by knocking down the hammer, which was not done here till the defendant had retracted. Every bidding is nothing more than an offer on one side, which is not binding on either side till it, is assented to. But according to what is now contended for, one party would be bound by the offer, and the other not, which can never be allowed. Rule refused.
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COMMENTS
The decision given in the case “PAYNE against CAVE. Saturday, May 2nd, 1789” is according to us a correct decision. The decision that an offer was made but the acceptance was not shown is an accurate decision. The defendant had the right to retract his offer if he is not willing to buy at that price.
ISLAMIC PRESPECTIVE
If we look at the case form an Islamic perspective we can look at the case from different views. The case can be seen from: 1.The perspective of the plaintiff.
When an offer is made by the defendant, he should not retract the offer. As he knows that the bidding means he willing to buy at that price he should keep his word and pay the price he bid for. In Islam a person should not say anything which he will not be able to keep his word against. Whatever man says he should do so.
2.The perspective of the defendant.
The defendant should have the right to withdraw his bid is he is not happy with the price he bid or the environment. He withdrew is bid not because he could not pay the amount he withdrew his bid because of the negative answer from the auctioneer. He did not like the way the auctioneer had replied as we can imply from the case.
The decision given by the court is right if we look at it from an Islamic perspective. The defendant has every right to withdraw the bid if he if it not accepted. If a person offers something and the other does not accept it, till the acceptance the offer can be withdrawn.
