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We’ve sold an immense amount of property at auction — absolute to the highest bidder. In other words, those sellers (clients) had the “genuine intent to transfer to the highest bidder regardless of price.”

Then, is it proper to suggest an opening bid? It is proper to do so. For example, “The [absolute] auction is on, and I’d like $250,000 for this property …” If someone bids $250,000, great. If nobody bids $250,000, auctioneers can ask less, for instance, “How about $100,000?”

Auctioneer bid calling (and online bid management) involves a series of contracts. We’ve written about such including here:

These bid-calling contracts involve the auctioneer “inviting offers” from the bidders and the bidders making offers. Therefore, the asking (suggestion) is not a minimum bid but an invitation to bid a certain amount.

However, if this suggestion is fixed, as in no lower amount will be suggested nor accepted, then the auction must be with reserve, and necessarily not without reserve. So, is your auction without reserve (absolute?)

In other words, has your auction been represented (explicitly) as absolute? We’ve suggested any expressions that “clearly, directly, plainly, obviously or straightforwardly” indicate the auction is without reserve likely make it without reserve:

Especially in the online auction environment, minimum bids should not be disguised as “suggestions.” If the suggestion is the least the platform will accept, then that’s a with reserve auction.

Well, it’s a $10 million dollar property and we have a suggested opening of $50,000 … ” so that’s absolute. Anyone who hopes to buy a $10 million dollar property would obviously bid $50,000.

Incorrect. A $50,000 suggestion is fine, but a $50,000 minimum bid is certainly material and as such the property isn’t going to be sold to the highest bidder regardless of price ($25,000? $10,000? $1,000?)

In fact, even a fixed qualifying deposit would indicate the auction must be with reserve, as this is the minimum [bid] amount needed to participate. https://mikebrandlyauctioneer.wordpress.com/2015/07/20/an-absolute-auction-with-a-minimum-qualifying-deposit/.

It’s worth considering that contemporary thinking notes that no matter the auction type, auctioneers invite offers and bidders make offers; contract construction is slightly different in an absolute auction, with an initial collateral contract: https://mikebrandlyauctioneer.wordpress.com/2017/01/02/15-things-a-bid-calling-law-primer/.

Finally, if you’re changing the basics of bid-calling contract construction (for instance, making offers irrevocable) then this likely requires another supplemental contract to supplement — with essentials including consideration: https://mikebrandlyauctioneer.wordpress.com/2022/10/31/whats-the-bidders-consideration/.

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, Brandly Real Estate & Auction, 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 has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.