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Some details about auctions
Mike Irvin
Jan. '09
It is
this time of year that many agricultural goods are sold
at auction. An auction is the process of buying and
selling goods by offering them up for bid, taking bids,
and then selling the item to the winning bidder. This
process is public and any person may become the
purchaser.
The
auctioneer is the seller’s agent. Once selected by the
seller, the auctioneer is to act in the seller’s
interest. As an agent of the seller, the auctioneer
must exercise ordinary care and skill in the performance
of duties undertaken. If he or she exceeds the scope of
authority, the owner will not be bound by the activity.
The
fundamental rule is that a bid at an auction constitutes
an offer to buy. A contract is formed when the
auctioneer signals acceptance by the fall of the gavel.
However, if real estate is auctioned the parties will
need to sign a written contract to finalize the
transaction.
Auctions may be held either “with reserve” or “without
reserve.” These terms relate to the seller’s right to
withdraw the goods if dissatisfied with the bids
received. “With reserve,” the seller has the right to
reject all bids if desired. Auctions are usually
presumed to be “with reserve”, unless it is expressly
announced to the contrary.
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