Auctions involve bidders making offers, and auctioneers generally accept those offers if they are higher in amount than the prior bid. As such, with competent parties, consideration, and offer & acceptance, we have a contract.
As we’ve held, and confirmed by my many attorneys — bid calling (live, simulcast, online) creates contingent contracts, such as bidder retraction, a higher bid, and sometimes seller withdrawal. “Sold!” firms this contract with the high bidder with none of those aforementioned contingencies.
However, if you’ve heard bids are mere offers that are acknowledged, but not accepted, then when you as an auctioneer say, “Sold!” do you have that bid to accept? If you hold this as an offer, is that offer still open for acceptance?
Indeed a bidder may retract his bid before “the hammer falls” per state law. Yet, if this bid is just an offer, and 15 seconds after that offer is tendered, the auctioneer says “Sold!” is the offer still there? Is the offer somehow nonrevocable?
Here’s our latest treatise on bid-calling contracts: https://mikebrandlyauctioneer.wordpress.com/2023/03/28/yes-auction-bid-calling-or-online-creates-contracts/. Here’s our latest treatise on non-revocable offers: https://mikebrandlyauctioneer.wordpress.com/2022/10/31/whats-the-bidders-consideration/.
How long are offers open for “acceptance?” We explored this question noting that unless otherwise agreed, they are open for a “reasonable time.” Yet, how long did the bidder intend to extend this offer? Typically only a second or so: https://mikebrandlyauctioneer.wordpress.com/2015/05/27/how-long-is-a-bid-a-bid/.
So I have good news for auctioneers … your live bid calling (and/or online) clearly creates contracts. Therefore, the high bidder would have to expressly retract his bid for that bid to not exist, rather than simply claim that his or her offer had expired.
Relatedly, this isn’t a Uniform Commercial Code issue, but rather a simple contract law concept — with an offer (terms, intent to contract,) acceptance, competent parties, and consideration — there’s a contract. It would be unnecessarily risky to claim bids are anything else, and they aren’t.
Should bidders be able to retract their bids? They can, and they should be able to as that’s reasonable given the auctioneer can accept a higher bid … https://mikebrandlyauctioneer.wordpress.com/2021/09/10/we-shouldnt-let-bidders-retract-their-bid/.
Finally, with contracts being formed in this regard, maybe we don’t need a review process where bid calling becomes a real mess by considering early, late, missed, tied, and any other bid that is possibly made at any other time within minutes, hours, days, or even weeks before the auction commences or after it’s over? https://mikebrandlyauctioneer.wordpress.com/2023/08/10/live-auction-and-a-review-process/.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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