We as auctioneers shouldn’t let bidders retract a bid once made? In other words, the highest bid (and bidder) as all other bids don’t exist at that point? Maybe we should also prohibit the auctioneer from accepting any higher bids?
Auctions are based on contracts. As such, bidders make legal offers and once accepted by the auctioneer, they are contingent upon seller withdraw (if a “with reserve” auction,) a higher bid or bidder retraction. We wrote about these contracts here: https://mikebrandlyauctioneer.wordpress.com/2014/08/11/bid-calling-is-just-numbers/.
However, once “Sold!” the right to take a higher bid nor the right to retract a bid exists – unless a bid comes in “while the hammer is falling …” per the UCC § 2-328. We’ve argued it’s much better to not reopen the bid after, “Sold!” but some argue confusion, capriciousness and lack of integrity (finality) have value.
There is also the “Kentucky mess” which allows the reopening of a “tie bid” with no real solution to resolve unless you believe there was actually no tie to begin with: https://mikebrandlyauctioneer.wordpress.com/2020/04/01/the-kentucky-tie-bid-mess/.
The National Auctioneers Association recently published a worthy article about [online] bidder retraction and it can be read here: https://howauctionswork.com/2021/08/30/retract-a-bid-at-an-online-auction/. Bidders sometimes type (express) the wrong bid, bid on the wrong item or make other honest mistake, and bidder retraction is proper for such circumstances.
Otherwise, most all bidders bid with the “genuine intent to purchase” and as such aren’t likely to retract their [high] bid because they are bidding to buy the subject property. Too, there is the worthy argument of contract symmetry which we wrote about here: https://mikebrandlyauctioneer.wordpress.com/2018/11/10/auctions-and-contract-symmetry/.
Some auctioneers continue to endeavor to make auctions as unpleasant for the public as possible. As such, fewer bidders participate and sellers are injured accordingly. It’s important to, rather, see the forest for the trees as we wrote about here: https://mikebrandlyauctioneer.wordpress.com/2020/07/10/forests-trees-and-policies/.
Bidders regularly retracting their high bids because they aren’t bidding with the genuine intent to purchase can be banned from future auctions, especially online. Sellers deserve bidders bidding with the genuine intent to purchase as these bidders tend to pay and take possession.
In any auction, it’s clear once a bidder retracts his high bid, no other bids exist (they are not revived.) As such, online auctions are presented with unique issues which we discussed here: https://mikebrandlyauctioneer.wordpress.com/2021/05/10/online-bidder-retraction-mechanics/.
Lastly, if a high bidder wishes to retract his bid and it’s prohibited by the auctioneer, what’s to keep that bidder/buyer from refusing to pay and refusing to take possession? Retraction is clearly a far better choice than nonperformance, and that’s the only two choices you as an auctioneer have in this regard.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.