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Auction

This occurs when goods are offered fors sale in public by an auctioneer. The conduct of an auction varies according to custom. Normally goods are sold to the highest bidder. The auctioneer acts as agent for the seller. Sale of goods at an auction may be subject to a reserve price stated by the seller (this fact should known to those persons attending the auction though the price need not be disclosed). If the hammer is brought down before the price is reached the sale can be avoided. This does not apply when the contract is one to be evidenced in writing and the auctioneer has signed the memorandum. It is illegal for a dealer to offer a person a reward not to bid at the sale: penalties can be levied on both parties. A dealer is a person who buys for resale.

Reference: The Penguin Business Dictionary, 3rd edt.