When an auctioneer says, “I have $10, and I’d like $15,” he is stating that he currently has his seller in contract with a particular bidder at $10 for the item being sold, and is asking to get out of that contract with a higher bid.
If there is no higher bid, then the item is typically sold for the $10.
What legally is going on when an auctioneer is bid calling? Let’s take a look at the two types of auctions:
1. A without reserve auction:
In this type of auction, a collateral contract is formed between the seller and all the bidders, agreeing to sell the item without reserve. Then, the auctioneer asks for bids from his audience (invites the bidders to bid) and once he accepts a bid, say $10, then there is a…
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