Dec 16, 2013

Absolute vs. Reserve Auctions: Is it Legal to Retract a Bid?

OK, auction buffs, its pop quiz time!

Here’s the scenario: You’re at an auction, and the lot being offered is a Conoco sign. There are four primary bidders. Bidder A drops out at $200; Bidder B drops out at $300, and Bidders C and D drive the bidding up to $600. Bidder C then bids $650, but gets a sharp elbow in the ribs from his wife. Bidder C then frantically waves his arms saying “I’m out, I withdraw my bid.” The auctioneer should:

A. Refuse to release Bidder C from his bid because a bid is legally binding.

B. Release Bidder C from his bid and pick up the bidding with the next higher bid, Bidder D’s bid for $600.

C. Start the bidding over from zero.

The correct answer is C: Start the bidding over from zero. The reason for this is found in the Uniform Commercial Code. Read More

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