Auction sale is defined in section 64 of the Sale of Goods Act 1930. In the case of sale by auction the following rules are framed as per law:
1. Where goods are put up for sale in lots each lot is prima facie deemed to be the subject of the separate contract of sale.

2. The sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner and until such announcement is made any bidder may retract his bid.
3. A right to bid may be reserved expressly by or on behalf of the seller and where such right is expressly so reserved not otherwise the seller or any one person on his behalf may subject to the provisions herein after contained bid at the auction.
4. Where the sale is not notified to be 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 for 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 subject to a reserved or upset price.
6. If the seller makes use of pretended bidding to raise the prices the sale is voidable at the option of the buyer.