David likes going to auctions. He collects virtually anything Boston Red Sox related … baseball cards, pennants, caps, bats, and anything signed by any former or current player.
Fortunate for David, an auction in New York notes a complete liquidation of a longtime Boston Red Sox collector taking place Saturday. David is available Saturday and plans to attend.
David arrives to the auction and secures a bid number. He surveys the inventory of over 500 Boston Red Sox items, many dating back to the early 1900’s.
The auctioneer announces to the crowd that the auction is about to begin. David finds a seat near the front row, and opens his auction catalog.
After 15 items, Item #16 is of interest to David. It is a game-worn glove from the 1921 season. He is willing to pay up to $1,000 if necessary to buy this glove.
The bidding begins and there is an opening bid of $200. David bids $225 and the other bidder bids $250. David bids $275 and the bidding continues between David and this other bidder until the bid reaches $725.
At this point, the auctioneer looks right at David and says, “I want $750 …” David assumes the auctioneer is looking at someone else, since he is currently the high bidder at $725.
The auctioneer repeats that he wants $750 and indicates to David that he is “out.” David tells the auctioneer he is the high bidder at $725. The auctioneer maintains that David is not the high bidder and asks him to bid $750.
David — now unsure if he is the high bidder or not — bids the $750 and there are no further bids. David wins the glove for $750.
Later in the auction, another bidder approaches David and says, “I was the other bidder on your glove … you were “on” at $725, so you shouldn’t have been required to bid $750.
After the auction is over, David approaches the auctioneer. “Say, I bought Lot #16 — the 1921 glove. I was the high bidder at $725 but you took my bid at $750. It seems to me I should have to only pay $725?”
The auctioneer thinks a minute, and says, “Well, even if you were on at $725, if you bid $750, then you bid $750. There’s nothing I can do about it now.”
David replies, “But if I was on at $725, and then bid again at $750 … that’s me bidding against myself. You’re saying that I can bid against myself?”
And so that’s our question today. Can the high bidder bid against himself?
Bid calling constitutes a series of oral contracts. Those contracts are formed by bidders making offers and the auctioneer accepting those offers on behalf of the seller) with two or three contingencies, depending upon the type of auction.
One such contingency is, “a higher bid.” regardless of the type of auction. In other words, the contract between the seller and David at $725 can be upset by a higher bid. But, can that higher bid be from David?
Considerable legal precedence in the United States suggests that the higher bid contingency has to be from someone else other than the current high bidder, unless there is a withdrawal of the current bid and a new offer of the higher bid.
As such, David can’t bid against himself unless he does so knowingly, and withdraws his $725 bid (retracts) and then bids $750. Otherwise, the contract is firm unless the seller withdraws the property [in a with reserve auction] or the auctioneer receives a higher bid from someone else.
Would a high bidder ever desire to do this?
It’s conceivable that David has only $750 to spend, and is the high bidder at $725. He knows that if someone else bids $750, then he will have to bid $775 (or some amount in excess of $750) and so he might want to raise his own bid to $750 … so he doesn’t lose out to another $750 bidder.
Or there might be some other reason a bidder might want to raise his own bid, such as some external factor as ensuring a certain sale price.
Nevertheless, it is highly unusual for a bidder to knowingly bid against himself. And knowingly is the key issue.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
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