Auction Contracts

Question 1

Goods auctioned in lots

Answer 1

If goods in an auction sale are offered in lots, each lot represents a separate sale

Question 2

Completion of a sale

Answer 2

An action sale is complete when the auctioneer announces its end, such as by the fall of the auctioneer’s hammer or in any other customary way.

When a bid is made contemporaneously with the falling of the hammer, the auctioneer may, at her discretion, treat the bid as continuing the bidding process or declare the sale complete at the fall of the hammer

Question 3

Reserve Auction

Answer 3

The auctioneer may withdraw the goods at any time before she announces completion of the sale.

An auction is with reserve unless specifically announced as a no-reserve auction

Question 4

No-reserve Auction

Answer 4

After the auctioneer calls for bids on the goods, the goods cannot be withdrawn unless no bid is received within a reasonable time

Question 5

T/F: In reserve/no-reserve, a bidder may retract her bid until the auctioneer announces the completion of the sale.

Answer 5

True

Question 6

Does a bidder’s retraction revive earlier bids?

Answer 6

No.

Question 7

When the seller bids:

Answer 7

When an auctioneer knowingly accepts a bid by the seller or on her behalf, or procures such a bid to drive up the price of the goods, the winning bidder may avoid the sale or, at her option, take the goods at the price of the last good-faith bid prior to the end of the auction.

Two exceptions:

1. a seller may bid at a forced sale
2. a seller may bid if she specifically gives notice that she reserves the right to bid