An Auction Advertisement is not an Offer that is made by the Seller; Rather an Invitation to the People Attending Auction to Make an Offer by Bid.

When an auction is announced or advertised, it does not mean that it is an offer to sell a property or good.  It is only an invitation to the public to make an offer if they are interested in purchasing the property/good at auction. 
In Dry Creek Cattle Co. v. Harriet Bros. Ltd. Partnership, 908 P.2d 399 (Wyo. 1995), the court held that an announcement made at an auction that the property will be sold to the highest bidder is only showing of the seller’s intention to hold an auction at which bids will be received. An auction contract is materialized only when the bid is accepted by the seller or his agent. 

This case involved an auction sale in which there were 11 parcels of land that were offered for auction sale. Id. at 400. The ranch was owned by Harriet Bros. who entered into a listing contract with Lowham Associates to sell the ranch at public auction. Id. Auction brochures stated that, in first considering the bids, a minimum bid was required as to each parcel of land. Id . at 399. The auctioneer did not receive minimum bids for all eleven tracts even after three rounds of bidding. Id . at 401. After the third round, Dry Creek submitted a bid of $ 270,000 for Parcel 5, which was $ 71,000 above the minimum listed in the brochure. Id. However, at this time, parcels 3 and 11were left without receiving their minimum bid amount. Id. At this time, a bid for the entire ranch wad made for $ 3,960,000. Id.

Even after the final round, the auctioneer did not receive minimum bids for tracts 3 and 11 and hence the auctioneer, by the fall of hammer, sold the ranch to the highest bidder. Id.  Dry creek filed an action against Harriet Bros. seeking to establish a contract to purchase tract 5 on which he had bid. Id. at 402. Hariet Bros. in response said that no contract was formed between them. Dry Creek relying on the auction advertisement that was made contended that the auction that was announced was an absolute auction. Dry Creek stated that he made the highest bid over the minimum on Parcel 5 before the fall of auctioneer's hammer and therefore Harriet Bros. was contractually obligated to sell Parcel 5 to Dry Creek. Id.

After analyzing the facts of the case, the court held that the bid that was accepted by the auctioneer was $ 3,960,00, for the entire ranch property. Id. at 403. And only when the bid was accepted, a contract was formed between the seller and the bidder. The court stated that an advertisement of an auction is not an offer to sell. Id.  And therefore it does not become binding on the owner when a bid is made, even conditionally. Id. The court made it clear that, an announcement of auction to sell a property to the highest bidder is only a declaration of the seller’s intention to hold an auction at which bids will be received. Id.   An advertisement is only an invitation to interested parties to come and make offer by bids. Id.  A contract is effectuated only when the bid is accepted, and this is generally denoted by the fall of the auctioneer’s hammer. Id.

The court added that, any difference between the parties' interpretation of the language in the advertisement does not constitute a material fact. Id. at 404. The significance of the advertising brochure language is limited to its role in structuring an auction as one "with reserves" or "without reserves." Id. The Court held that the auction in this case was one "with reserves," and therefore no contract was formed for the sale of Parcel 5 between Harriet Bros. and Dry Creek. Id

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