The owner of the property has the right to control the sale until its conclusion.  The legal definition of an auction is a public sale of property to the highest bidder[i].  The underlying purpose of an auction sale is to obtain the best financial returns for the owner of the property and to allow free and fair competition among bidders.  Therefore, any agreement restricting the opportunity to freely bid is against public policy and is void[ii].

An 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.  Hence, the manner of conducting the sale completely lies within the auctioneer’s discretion.  It is optional with the owner to give advertisement before the sale but it is only a declaration of intention to hold an auction at which bids will be received.  The terms and conditions of sale must be included in an advertisement of the auction.

However, the auctioneer can modify the terms of sale advertised in a catalog at any time during the sale, if announced publicly and the bidders present are cognizant of it.  Sale of chattels must be made by public auction and those who attend the sale must be given an opportunity to examine and inspect the chattels.  Public auction of chattels is not possible if the thing to be sold is bulk[iii].  The auctioneer can mention about terms and conditions of sale and it will be considered as binding upon the purchaser even though s/he was absent or failed to understand the announcement[iv].  The conditions announced at auction are binding on the bidder.  Under the Uniform Commercial Code, goods are put up in lots and each lot is the subject of a separate sale.

A sale at auction must have an express or implied assent by both seller and buyer[v].  It involves an offer, acceptance and a passing of title.  Even acceptance of the goods by the buyer will not discharge the seller from liability for breach of any promise or warranty in the contract to sell in the absence of express or implied agreement of the parties[vi].  Generally, any person is qualified to become a bidder.  Acceptance of a bid is denoted by the fall of a hammer, or by any other audible or visible means signifying to a bidder that the bidder is entitled to property on paying the amount of a bid according to the terms of a sale[vii].  If one person bids for another at an auction sale without disclosing his/her identity until the auctioneer’s hammer falls, either may be held liable for the purchase price[viii]. 

In Marten v. Staab, 4 Neb. App. 19 (Neb. Ct. App. 1995), the court observed that an auction is a public sale of property to the highest bidder by one licensed and authorized to do so and the goal is to obtain the best financial return for the seller by free and fair competition among bidders.  There are essentially two kinds of auctions, with reserve and those without reserve.

In an auction with reserve, the auctioneer can withdraw the items for auction at any time until s/he announces completion of the sale.  And if auction sale is without reserve, the goods must be sold to the highest bidder.  When an auction is with reserve, the auctioneer seeks offers from bidders.  The auctioneer can accept the bid, reject the bid, or withdraw the article from sale until acceptance of a bid[ix].  However, seller of property or the auctioneer can withdraw the property from sale at any time before the acceptance of a bid as  no valid contract exists between the parties until it is accepted[x]. 

[i] Pitchfork Ranch Co. v. Bar TL, 615 P.2d 541 (Wyo. 1980)

[ii] Love v. Basque Cartel, 873 F. Supp. 563 (D. Wyo. 1995)

[iii] Manhattan Taxi Service Corp. v. Checker Cab Mfg. Corp., 253 N.Y. 455 (N.Y. 1930)

[iv] Young v. Hefton, 38 Kan. App. 2d 846 (Kan. Ct. App. 2007), see also Coleman v. Duncan, 540 S.W.2d 935 (Mo. Ct. App. 1976)

[v] Lawrence Paper Co. v. Rosen & Co., 939 F.2d 376 (6th Cir. Ohio 1991)

[vi] Hoopes Bros. & Thomas Co. v. McMenamin, 1923 Pa. Dist. & Cnty. Dec. LEXIS 149 (Pa. C.P. 1923)

[vii] Pitchfork Ranch Co. v. Bar TL, 615 P.2d 541 (Wyo. 1980)

[viii] Breitbach v. Christenson, 541 N.W.2d 840 (Iowa 1995)

[ix] Pitchfork Ranch Co. v. Bar TL, 615 P.2d 541 (Wyo. 1980)

[x] Love v. Basque Cartel, 873 F. Supp. 563 (D. Wyo. 1995)