The Law of Contract | Auctions and Tenders.
Remembering that a contract equals offer + acceptance, at an auction, the auctioneer is not “offering to sell”. If this were the case, and 10 people accepted this by raising their hand then 9 of those people would be entitled to damages due to breach of contract.
It is accepted and understandable that the auctioneer is inviting offers. The auctioneer has not accepting any offers until the acceptance is communicated, usually by the fall of the hammer. So until that hammer drops, there is no contract. The auctioneer need not accept the bid, and the bidder can retract the bid. In real life, you would be booed out of the room, and the auctioneer may never accept another bid from you, but nevertheless, you have the law on your side. This has interesting implications for online sites such as eBay. We will cover that at a later date.
Tenders are also an area where numerous breaches of contract are possible. For this reason, the words “highest tender not necessarily accepted” are common.
The advertisement for a tender process is considered an “invitation to treat”, with each tender constituting an offer. This offer is either accepted or not. The person calling for tenders can stipulate the process by which contracts will come into force.
Next week we will discuss tickets. When you hand over you $20, you are handed a list of conditions that you apparently just agreed to. But did you?
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This is intended for general information and does not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.