Posted by John Merchant on September 20, 2002 at 17:38:10:
There are some legal (court) decisons I recall, where there was an auction, like you’re contemplating, and then the seller reneged, saying he didn’t get enough bid, etc.,…and the courts held that THERE WAS A CONTRACT and the seller was required to sell for the highest bid! Because he had said, in writing, he’d take the highest bid, without reserve, and the buyer, relying on that written statement and advertisement, went to some trouble and did go to the auction and bid.
So either openly advertise that you have a reserve that must be met before the highest bid is accepted, or don’t do it at all! Because a court might require you to follow through with the deal, or render a Judgment against you for breach of contract and damages for reneging on the contract.
You definitely could use some local attorney’s opinion in the jurisdiction/state of the property before going any further, so you understand what that state law requires of you.
Nothing new about auctions, and there’s lots of old settled law about the duties of the auctioneer and seller, which you’d better know before proceeding…and before getting yourself in a messy legal jam.