Mark Pawlowski takes a close look at the various contractual relationships arising on a sale by auction
In terms of a typical auction sale, four basic contracts underpin the auction process. First, there is a contract between bidders inter se, what can be termed as the ‘taking part contract’. Secondly, there is a contract between the auction house and each individual bidder. Thirdly, there is the sale contract itself which exists between the bidder whose bid is accepted and the seller. Fourthly, there is the potential for a separate (or collateral) contract to exist between auctioneer and highest bidder where the auction involves the sale of a lot without reserve.
Taking part contract
When a bidder attends an auction and acquires an auction catalogue containing the auction’s standard condition...
“the Court of Appeal held that the highest bidder supplies the necessary consideration by performing the act of making the highest bid.”
