Bidding, Withdrawal, and Sale Procedures
What this domain tests
This domain tests bidding mechanics and the legal effect of the fall of the hammer: reserve versus absolute sales, bid retraction, seller bidding, withdrawal, and disputes over the high bid.
Core rules
- Louisiana's UCC auction rule, La. R.S. 10:2-328, supplies the default. An auction is with reserve unless the goods are explicitly put up without reserve.
- With reserve, the seller or auctioneer may withdraw the goods at any time before the auctioneer announces completion of the sale.
- Without reserve, once the auctioneer calls for bids on a lot, the lot cannot be withdrawn unless no bid is made within a reasonable time. The seller may not bid unless the right is expressly disclosed.
- A bidder may retract a bid until the auctioneer announces completion, but retraction does not revive an earlier bid.
- A sale is complete when the auctioneer announces completion by fall of the hammer or other customary manner. The auctioneer may reopen bidding if a bid is made while the hammer is falling, but must do so openly.
- Shill bidding, bid rigging, and collusive bidding are prohibited and can void the sale and support discipline.
Worked example
A lot is advertised 'absolute' with no reserve. The auctioneer calls for bids and receives $500. The seller whispers, 'Pull it; I wanted $2,000.' Because the sale is without reserve and a bid has been made within a reasonable time, the lot cannot be withdrawn. The auctioneer should continue and sell to the highest bidder; pulling the lot exposes the seller and auctioneer to liability and undermines the absolute-auction representation.
Traps
Treating 'absolute' as meaning only 'no starting bid'; forgetting that the default is with reserve; letting the seller bid undisclosed; and closing the sale before resolving a timely bid.