- May 30, 2016 at 10:04 pm #318215
In a sale by auction that is stated to be ‘without reserve’, at which point is an offer made?
A) When the auctioneer presents the goods being sold
B) When a bid is made
C) When the auctioneer’s hammer falls
The answer says:
“B In a sale by auction that is stated to be ‘without reserve’, the auctioneer presenting the goods for sale is the offer and a bid represents acceptance.”
I had the answer as B but the explanation is indicating A is correct. Which is correct?May 30, 2016 at 10:20 pm #318220
I believe that B is correct and that the narrative is incorrect
“In a sale by auction that is stated to be ‘without reserve’, the auctioneer presenting the goods for sale is the offer and a bid represents acceptance.”
This cannot be correct otherwise, upon receiving the first bid, the contract is formed
Here’s a bit of interesting reading from the internet:
“The holding of a public auction will also usually be regarded as an invitation to treat. Auctions are, however, a special case generally. The rule is that the bidder is making an offer to buy and the auctioneer accepts this in whatever manner is customary, usually the fall of the hammer.
A bidder may withdraw his or her bid at any time before the fall of the hammer, but any bid in any event lapses as an offer on the making of a higher bid, so that if a higher bid is made, then withdrawn before the fall of the hammer, the auctioneer cannot then purport to accept the previous highest bid.
If an auction is without reserve then, whilst there is no contract of sale between the owner of the goods and the highest bidder (because the placing of goods in the auction is an invitation to treat), there is a collateral contract between the auctioneer and the highest bidder that the auction will be held without reserve (i.e., that the highest bid, however low, will be accepted)”
No, I firmly believe that the narrative that you have posted is incorrect
OK?June 2, 2016 at 4:30 pm #318903
The BPP text vaguely says “When an auction is stated ‘without reserve’ the auctioneer is offering the goods for sale and the bid is the acceptance.’ However, it does not explain why.
I researched it and saw this:
“Where an auction takes place with reserve, each bid is an offer which is then accepted by the auctioneer. Where the auction takes place without reserve, the auctioneer makes a unilateral offer which is accepted by the placing of the highest bid”
This is showing that the narrative was correct however your research shows it was incorrect. Which do you think is the final right answer?June 2, 2016 at 5:13 pm #318911
I find this very hard to believe 🙁
If the auctioneer is making the offer and if the bid is acceptance, how does that reconcile with a contract having been made when accepted.
How can the auctioneer’s offer still exist after the very first bid has accepted that offer
I appreciate that auctions are unusual situations in the context of contract law, but I’m finding it difficult to believe that they are SO different that the whole issue is turned on its head
But my research is sadly taking second place to both BPP and to your research
I’m having to apologise yet again for a bit of law, twice in three days. I’m not happy 🙁June 2, 2016 at 6:58 pm #318939
Ok. Thanks for the clarification.June 3, 2016 at 5:33 am #318983
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