Auctions

The owner of the property has the right to control the sale until its conclusion. Unless conditions are imposed by the seller, the auctioneer is free to conduct the sale in any manner chosen, in order to bar fraudulent bidders and to earn the confidence of honest purchasers. The auctioneer cannot amend the printed terms and conditions of the auction, but he or she is empowered to postpone the sale, if that is the desire. The auctioneer can modify the sale terms of goods advertised in a catalog at any time during the sale, if announced publicly and all of the bidders present are cognizant of it. The auctioneer may also retain the right to resell should there be an error or a dispute concerning the sale property. The description of the property in the catalog must be unambiguous. A significant error in a description might cause the cancellation of the sale, although trivial discrepancies between the property and the description are not problematic. The seller can withdraw property until the acceptance of a bid by an auctioneer.

A bid is an offer to purchase, and no obligations are imposed upon the seller until the bid is accepted. It can be made in any manner that demonstrates the bidder's willingness to pay a particular price for the auctioned property, whether orally, in writing, or through bodily movements, such as a wave of the hand. Secret signals between the bidder and the auctioneer militate against equality in bidding and are thereby prohibited. The auctioneer accepts a bid by the fall of the hammer or by any other perceptible method that advises the bidder that the property is his or hers upon tendering the amount of the bid in accordance with the terms of the sale. An auctioneer can reject a bid on various grounds, such as when it is combined with terms or conditions other than those of the sale, or is below the minimum price acceptable to the owner.

As a general rule, any act of the auctioneer, seller, or buyer that prevents an impartial, free, and open sale or that reduces competition in the bidding is contrary to public policy. An agreement among prospective buyers not to bid has been held to void the sale to any buyer within this group. A purchase by a person who has not participated in the illegal agreement remains in effect. A puffer or shill is a person who has no intention of buying but is hired by the seller to place fictitious bids in order to raise the bidding of genuine purchasers. In general, if a purchaser at an auction can prove that a puffer was employed, he or she can void the sale. Some jurisdictions require the buyer to have been financially hurt by the puffer, but others permit an individual to void a sale even if no harm occurred. Puffing and by-bidding are synonymous.

A deposit is not a pledge but a partial payment of the purchase price, usually made payable to the auctioneer who retains it until the completion of the sale.

The property of one person should not be commingled and sold with the property of another by the auctioneer unless notice is furnished to all interested parties, or it might constitute FRAUD.

An auctioneer is not entitled to bid on property that he or she has been hired to sell, but the auctioneer can, however, bid a particular sum for a purchaser without violating any duties to the seller or even to other prospective bidders.

An auctioneer who does not have the required license but who executes a sale can be

Paul Gaugin's Pont Aven Landscape was sold in an auction held by Christie's in May 1998.
AP/WIDE WORLD PHOTOS

penalized, but the sale remains valid; an auction is void, however, when it is conducted without the owner's consent.