Sale of Goods Act 1979

• S57(2): A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid.

Sale of Goods Act 1979

• S57(3): A sale by auction may be notified to be subject to a reserve or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller.

Warlow v Harrison (1859) 1 E & E 309

Facts:

• defendant (D), an auctioneer, advertised a public auction of a horse without reserve
• plaintiff (P) bid 60 guineas and the owner of the horse bid 61 guineas and D put his hammer down on bid for 61 guineas
• P claimed the horse should be his as he was the highest bona fide bidder

Issue:

• was there a contract for sale?

Held:

• advertisement, as it included the words without reserve, was an offer to sell to highest bidder
• D was in breach of that promise, a unilateral contract
• P had performed the required act (made the highest bona fide bid)
• however, the hammer had not been put down on the~P's bid so there was no contract of sale between P and D
• P was only entitled to sue D for the loss of the opportunity to buy the horse

Barry v Davies (Heathcote Ball & Co.) [2000] 1 WLR 1962

Facts:

• D, auctioneers, were instructed to sell two machines
• claimant (C) was told the sale would be without reserve
• C was the highest bidder, bidding £200 for each
• D refused to sell to C, as the machines were worth £14000 each
• C sought damages for breach of contract

Issue:

• was there an offer made by D?

Held:

• followed Warlow v Harrison, finding there was an D made an offer (because the auction was without reserve) and C accepted by making the highest bid
• D was in breach of contract
• C awarded £27600 in damages to compensate his loss, the cost of buying machines (£28000) minus his bid (£400)