Then Damn Auction Cases i Always Forget

Question 1

The plaintiff held that the defendant had bought his property at auction by making the highest bid for it. The defendant maintained that he had withdrawn his bid before the hammer fell. It was held that the defendant succeeded. The placing of a bid at auction is the making of an offer, and the fall of the auctioneer’s hammer is the acceptance. Like any other offer, a bid at auction can be withdrawn before acceptance. This analysis is now statutorily codified by s 57 (2) of the Sale of Goods Act 1979.

Answer 1

Payne v Cave

Question 2

At an auction in Birmingham three horses were advertised as for sale “without reserve”. The plaintiff bid 60 guineas for one of the horses, but its current owner, who was present at the sale, promptly bid 61 guineas. The plaintiff refused to make any further bid. The horse was therefore “sold” to its owner (a legal impossibility). The plaintiff claimed that the horse was his since he had been the highest bona fide bidder. Held that since the sale had been advertised as being “without reserve”, the highest bidder was able to sue the auctioneer on a contract to that effect formed by the advertisement and the highest bid.

Answer 2

Warlow v Harrison

Question 3

The plaintiff, a London commission broker, attended an auction in Bury St Edmunds with a commission to bid for office furniture which had been advertised as for sale. The furniture was withdrawn from the auction. The plaintiff brought an action for breach of contract claiming his expenses in attending the auction. The court held that no such contract had come into existence.

Answer 3

Harris v Nickerson

Question 4

Two machines, obtainable from their manufacturer at a price of £14,521, were put up for sale at auction without reserve by Customs and Excise. The auctioneer attempted but failed to obtain bids of £5000 and £3000 for them. The claimant then bid £200 for each machine, but the auctioneer refused to accept these bids and withdrew the machines from the sale. The claimant sued the auctioneer for breach of contract, arguing that the holding of an auction without reserve amounts to an offer to sell to the highest bidder which he had accepted by making his bids. The Court of Appeal, applying the obiter dictum in Warlow v Harrison, held that this was correct. The claimant was entitled to damages of £27,600 for breach of that unilateral contract.

Answer 4

Barry v Davies