An auction is the process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. An “auction” is a sale by consecutive bidding, intended to reach the highest price of the article through competition for it. Since goods are sold to the highest bidder, a sale in an auction enables the seller to get the best financial return by free and fair competition among bidders.
Competitive bidding is an essential element of an auction sale. Therefore, any agreement which restricts that opportunity is against public policy and void. Many people have the opportunity to bid on the property or advance the current bid at an auction. It is not necessary that those present at an auction actually bid on the property for the event to be competitive.
One who conducts an auction for another on commission or for recompense is called an auctioneer. An auctioneer is authorized or licensed by law to sell land or goods of other persons at a public auction, or as one who sells at an auction. The relationship between a seller and an auctioneer is that of principal and agent. An auctioneer is the agent of the person whose property the auctioneer sells. However, in some circumstances, an auctioneer is also deemed the agent of the purchaser. A person may also act as an auctioneer even though the goods disposed of are his or her own.