As we’ve discussed with auctioneers all over the country, auctioneers invite bids (offers) and bidders make bids (offers.)
If a bidder affirmatively responded to this proposal by raising her bid card (#34,) that would constitute an offer of $500,000 — to which the auctioneer would likely accept.
Our question today involves how long this bid (offer) remains if the auctioneer doesn’t immediately accept.
If our bidder #34 here raises her bid card, and the auctioneer doesn’t see her … or maybe even chooses not to see her, what are the implications?
As bids at auction conform to general contract law in the Unites States (we wrote about that here: https://mikebrandlyauctioneer.wordpress.com/2014/08/11/bid-calling-is-just-numbers/,) we look to those same principles to determine how long offers remain in effect.
Generally, offers remain until:
- Accepted
- Rejected
- Withdrawn
- Expired
It would seem reasonable that as long as her bid card was in the air, her offer of the amount suggested just prior would be open for acceptance.
However, bidders don’t always bid by holding their bid card up in the air for a sustained period of time.
Otherwise, bidders bid by exclaiming, raising a bid card and then quickly lowering it, winking, nodding, waving, etc.
So, let’s say in our aforementioned example, she raised her bid card and then quickly lowered it — how long is her bid of $500,000 a bid for $500,000?
Which brings us to another somewhat obscure principle of contract law.
Offers (if not accepted, rejected nor withdrawn) remain open until the time specified in the offer; if no time limit is denoted, the default time is a “reasonable time.”
A reasonable time is determined according to what a reasonable person would consider sufficient time to accept the offer.
At auction once our bidder #34 raised her bid card, possibly only a second or less would be all the time necessary to accept her offer.
And, if that’s the reasonable standard, any more time than that would constitute expiration.
In other words, if an auctioneer did not immediately accept her offer of $500,000 when her bid card was raised, accepting this same bid would not be an option if she put her bid card back down, or otherwise, if she exclaimed, winked, nodded or waved, that offer would expire in a matter of about a second.
This seems to suggest that if an auctioneer didn’t see this up-and-down bid card, or the wink, nod nor wave … the offer would expire and not be open for acceptance subsequent.
We would conclude that essentially bids are only bids while they are actually being expressed, and only very briefly thereafter.
However, the courts have held that different than non-auction contract formation, if the auctioneer did see her raised bid card (or otherwise was in receipt) and did not immediately accept that would constitute rejection rather than expiration; contract law otherwise provides that just being in receipt of an offer and not responding does not constitute rejection in itself.
And, there’s a big difference between expiration and rejection.
We discussed rejecting offers here: https://mikebrandlyauctioneer.wordpress.com/2013/08/28/can-an-auctioneer-reject-an-offer/ and while there are many instances where offers can indeed be rejected, there are times they cannot.
One such instance where a bid cannot be rejected is in a without reserve (absolute) auction where a bid is made in excess of the current bid.
If an auctioneer was noticed of a higher bid in an absolute auction, he would have no choice but to accept it.
How long is a bid a bid? As long as that bid card is in the air, or probably only a second or so after such is tendered by exclamation, a wink, nod or wave.
Daxdi, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years.
His company’s auctions are located at: Daxdi, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction.
He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.
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