Simply put, bidders offer an amount to the auctioneer and the auctioneer then accepts the offer if it exceeds the prior bid amount.
Bids made by bidders are typically communicated to the auctioneer by oral communication or by signals such as hand motions, winking or nodding.
An actual amount may be offered (such as, “I’ll bid $500!”) or the bidder may agree to the amount the auctioneer has suggested [invited to be offered] (such as, if the auctioneer said, “I’d like $500”) and a bidder nodded affirmatively.
Our question here is, “How long does an auctioneer have to accept a bid?”
In standard practice, bids are accepted immediately after recognition. In other words, once the auctioneer hears a bidder’s offer of $500 (or sees an affirmation,) he would immediately communicate to his crowd that he has $500 and wants a higher bid.
Could an auctioneer wait one second, two seconds, or even more time before accepting this $500 bid?
There are no laws or regulations which even suggest any time-frame in which bids must be accepted. The only real downside to waiting any time at all is that the bidder may retract his offer before it is accepted. However, this is largely immaterial as the high bidder (per the UCC 2-328) may retract his offer anytime up until the auctioneer announces, “Sold!”
We ask this question in this regard: Could an auctioneer receive a bid, but not accept it right away? For whatever reason, could an auctioneer hear a higher bid — but not accept it immediately?
Maybe the offer is only a trifling amount, or a trifling amount in excess of a prior bid? Maybe the offer is some odd amount, which may disrupt the otherwise uniform bidding increments?
Possibly the type of auction matters? There are two types of auctions. With reserve and without reserve. In a with reserve auction, any bid may be refused. However, in a without reserve auction, it is widely held that no higher bid may be refused.
Yet, we’re not talking about refusing a bid — just not accepting it right away. There is certainly a difference between not accepting a bid and refusing a bid.
In standard contract formation, an offer is made by the offeror and communicated to the offeree. The offeree then may do one of two things: accept or reject the offer. The time frame in which these two choices remain are set by the offeror — such as, “I’m offering you $500 and my offer is open until Tuesday at 5:00 p.m.”
At auction, offers are made by bidders typically with no certain time frame regarding acceptance. Is an auction offer intrinsically only open for immediate acceptance? I think rather these [higher] offers are typically accepted immediately, but that immediate acceptance is not necessarily part of the offeror’s offer.
Offerors could conceivably make an offer such as, “I’ll give you $500, open for acceptance for 2 seconds.” but this would be highly irregular and easily be rephrased as “I’ll give you $500,” and after 2 seconds passed without acceptance, “I withdraw my offer.”
We would make these conclusions:
- Lacking any certain time-frame set by the bidder, offers are open for acceptance until withdrawn.
- There is no implied condition of a bidder’s offer that it be accepted immediately.
- A bidder’s offer which isn’t accepted isn’t in any way deemed rejected — unless the auctioneer expressly rejects the offer.
So, how long does an auctioneer have to accept a bid? As long as the bid (offer) is open for acceptance.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.