Bidders can also participate in an auction by phone or internet. ![]() Usually, bidders physically participate in an auction. In some auctions, the identities and actions of participants may not be disclosed to others. The rules for determining winning bidders may also differ in different auctions. The person so engaged is known as auctioneer. Similar to an ordinary sale, in an auction, the sale can be performed either by the seller himself or through an agent engaged by him/her. The bidders compete among themselves by offering competitive prices and the highest bid will normally be accepted by the seller. Initially, the seller often places a minimum price for his/her property. Among various bidders, the one who offers the highest price or bid will normally be the successful purchaser. The difference is that in an auction there will be several prospective buyers called bidders. In bargaining, sale was conducted through negotiation but lacked the element of open and public competition among buyers.Īs is the case for an ordinary sale, an auction also has a seller and a buyer. Before auctions came into existence, bargaining was the common practice. ![]() In an auction, the final sale is usually the result of competition between bidders though a single bidder can still purchase if no other bids are received. Thus, an auction can be defined as “the public sale of a property to the highest bidder.” See Pitchfork Ranch Co. An auction has a seller and a varying number of prospective buyers. In an auction, property is publicly put up for sale. This article shall provide the basic law applicable to auctions.Īn auction is a form of sale. The law of auctions is extensive and such issues as to when is a binding contract to buy made, what warranties apply, what licenses are required, are matters that persons utilizing this method of buying and selling should know. In short, auctions are a business tool much in use but quite often little understood by the participants. In hot real estate markets, the seller of property often arranges an auction so that the various potential buyers can vie for the real property in question. Auctions can occur in a crowded room, on the steps of a court house, in the court room, on the internet (what is Craig’s List but an on line auction house?) or by telephone. ![]() They are a common method used to raise money for foundations and churches and a typical way for the average probate estate to sell its real property or a trustee in bankruptcy to liquidate a business. In reality, auctions are a relatively common way to buy and sell a huge variety of assets ranging from art work to real property, from rights to air waves to household furniture. Good movie material but seldom what occurs in the real world. Equally common in the world of movies, tense bidding back and forth occurs as wealthy and desperate characters seek to outmaneuver each other as the audience in the auction house look on and gasps in suspense. All of us are familiar with the movie version of auctions in which precious works of art are bid upon in elegant rooms, bids of millions of dollars made with the slight raise of a hand.
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