The word "auction" comes from the latin augēre. Augēre means "to increase" or "augment".

An auction is a method of buying and selling products or services.  At an auction goods are put up for sale and the auctioneer asks the public at the auction to bid on each item or lot.  The auctioneer's request for bids is an 'invitation to treat'.  The auctioneer is acting on behalf of the person selling the item.  Each bid that is made is an 'offer' and as the bidding progresses the lower bid lapses and is replaced by the higher bid. During bidding any bid can be withdrawn as long as it is before the auctioneer has accepted it. The auctioneer will show that the final offer has been accepted and bidding is closed by performing a particular action, most commonly by banging a hammer down. We sometimes use the term “to go under the hammer,” meaning to be sold at auction.

Items are sold assuming there is no reserve price which the seller wants to achieve.  If there is a reserve price the auctioneer must be notified of this.  English law recognises these two forms of selling at auction i.e. goods sold with a reserve price and those without a reserve price.

In McManus v Fortescue (1907) it was held that if goods are put up for sale "with a reserve price" and the auctioneer accepts a bid that is lower than the reserve price, there is no contract.

If an auction is held "without reserve", no contract of sale materialises between the owner of the property and the highest bidder if the auctioneer either refuses or otherwise fails to accept the highest bid.

The seller is able to withdraw the property before the reserve price has been reached. If this happens in a sale with no reserve, and the item is withdrawn after bidding has started, it does not enable the highest bidder to claim that he has contracted to buy the item.  He may be able to sue the auctioneer on the grounds that it was to be an auction without reserve.

A sale will be fraudulent if  a bid is made on behalf of the seller in a sale without reservation of a right to bid.

Buying at auction - Citizens Advice

The hidden risks of buying at auction | Money | The Guardian

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