11.3 Auction Types, Bid Calling & Operational Conduct

Auction types PSI actually tests

'Other topics' items mix method with legal character. Method is how bids are invited. Legal character is with reserve versus without reserve / absolute. Do not confuse them. A Dutch clock can still be with reserve. An English sale can be absolute if explicit terms say so.

225 ILCS 407/5-10 (as amended by P.A. 104-145, effective January 1, 2026) defines an online auction as an auction or auction service conducted by an auctioneer through a website, application, interactive computer service, or similar media. An Internet auction listing service is a self-serve platform: it does not examine the goods, does not set the price, does not prepare the description, and does not use a natural person as an auctioneer. Posting a consignment to a licensed auctioneer's bidding site is an online auction. A seller typing a classified listing onto a self-serve marketplace that never supplies an auctioneer is in a different statutory box. Hybrid sales are still auctions. The online paddle does not freeze 2-328, 15-10, or 1440.260.

Hammer price, invoice, increments, and tied bids

Hammer price is the amount of the recognized high bid at completion. Invoice is what the buyer owes after buyer premium, sales tax if applicable, and any announced charges. A $10,000 hammer with a 10 percent buyer premium invoices $11,000 before tax. Chapter 10 does the arithmetic. This chapter's point is operational: clerks, cashiers, and terms must use the same definitions, and 1440.230(d) plus 15-10 already required the premium to be disclosed.

Bid increments are at the auctioneer's discretion unless the terms freeze a schedule. Customary jumps ($25, $100, $1,000) are implied authority. An increment is not a secret reserve. Using increments to skip past a bidder who is clearly in, or to favor a house paddle, is a 20-15(22) problem, not 'discretion.'

Simultaneous identical bids. Two paddles flash $5,000 at the same instant, or two online stamps hit the same increment. The professional custom, and the clean exam answer, is to reopen between those bidders (and only those bidders) rather than guessing who was first. That is the same discretion 2-328(2) gives on a hammer-falling bid: reopen rather than invent a winner. Terms of sale should say so; if they say the auctioneer's decision is final, that finality still has to be exercised in good faith.

The crew: ringman, clerk, registration, lots

Rule 1440.240 and Rule 1440.10 split the microphone from the floor. A ring assistant (ringman/spotter) may acknowledge a bid and convey it. Only the auctioneer accepts the bid. A ringman who yells 'sold!' or nods a contract into existence has performed licensed activity. The firm and managing auctioneer eat that violation under 15-15 and 1440.220.

The clerk records lots, bidder numbers, and amounts. That record is the backbone of the deal file in Chapter 8 (journal, bidder identities, hammer, premium, settlement). If the clerk's sheet and the auctioneer's memory disagree, the terms and the deal file — not a hallway reconstruction — are what IDFPR will audit.

Buyer registration / bidder numbers identify who is bound. Terms commonly require registration, a paddle, and a signature acknowledging the terms of sale. A person who bids has accepted those terms even if they later claim they 'didn't read the poster.' Rule 1440.230(c) already required conspicuous posting or delivery of complete terms and a pre-sale announcement of payment, removal, registration, and any buyer premium (Chapter 7).

Lot splitting and combining are lawful if authorized — in the 15-10 contract or by a seller instruction that does not contradict advertised absolute-or-reserve character. Splitting a 'set of four chairs' after two bidders have been bidding on the set as one lot, without announcing the change, is a terms and 15-5 problem. Combining leftover lots into a 'choice' or 'times the money' round is customary when announced.

Default, as-is, stolen goods, and who the terms bind

Buyer default. If the high bidder refuses to pay, the terms typically allow the auctioneer to resell (immediately or later) and pursue the defaulting buyer for deficiency, resale costs, and any announced damages. 2-328(1) still treats that lot as its own sale; default on Lot 4 is not a walk-away from Lot 5. Do not invent a statutory liquidated-damage percentage — use the announced terms.

'As-is, where-is' allocates unknown condition risk. It does not disclaim fraud. A catalog that says 'John Deere 4440, 8,000 hours' when the auctioneer knows the hour meter was rolled still violates 15-5. As-is language is in the terms; honesty is in the Act.

Stolen goods. If the firm learns a lot is stolen or that title is not the seller's to give, refuse the sale and notify law enforcement. Crying a stolen trailer to 'let the buyers sort it out' is not as-is practice. Seller acknowledgments of ownership in the 15-10 contract (Chapter 6) are the paperwork; they are not a substitute for stopping a known stolen lot.

Terms of sale bind bidders who participate. Registration, a raised paddle, an online click-through, or a shouted bid after terms were announced is assent. A bidder cannot take the benefit of winning and later disown the removal deadline, the premium, or the dispute clause.

Bid disputes. Terms commonly provide that the auctioneer's decision is final. That clause is enforceable as between participants when exercised in good faith: reopen a genuine tie, do not 'finally' award a lot to an undisclosed seller bid. Finality is a dispute-resolution term, not a shield for 2-328(4) or 15-5.

Operational checklist:

• Register bidders and issue numbers before recognizing bids
• Announce or post terms, including payment, removal, premium, reserve vs absolute, and dispute finality
• Take increments at discretion; reopen genuine simultaneous identical bids
• Accept bids only as the auctioneer; treat ringmen as conveyors
• Clerk every lot, buyer, and amount into the deal file
• Split or combine lots only with authorization and an announcement
• On default, resell under the terms and pursue deficiency as those terms allow
• Keep as-is in its lane: condition risk, not a fraud license
• If goods are stolen or the seller lacks title, stop and call law enforcement
• Online and hybrid: same completion, reserve, and shill rules as the live ring