11.1 UCC Section 2-328 / 810 ILCS 5/2-328

Why three PSI items still turn on the Uniform Commercial Code

The PSI Illinois Auctioneer content outline puts other topics related to the auction business at only 3 of 50 scored items. Candidates treat that bucket as leftover vocabulary. That is a scoring error. Those three items are where the outline parks contract formation at the gavel, seller bidding, and the agency and operations rules in the next two sections. Illinois did not write a unique auction-formation statute. It adopted UCC Article 2, Section 2-328, codified as 810 ILCS 5/2-328. The Illinois text is the same as UCC §2-328. Memorize four subsections, then stack them onto 225 ILCS 407/15-10, 68 Ill. Adm. Code 1440.260, 15-5, and 20-15(22). That stack is how a 'UCC' item becomes a discipline item.

810 ILCS 5/2-328 governs sales of goods by auction. Real estate offered at auction still needs a RELA broker or managing-broker license (20-15(23); Chapter 9). The formation mechanics PSI tests — lots, the hammer, reserve versus without reserve, shill bids — are the 2-328 rules. Do not invent an Illinois-only rewrite. If a commercial outline paraphrases 2-328 loosely, the statute controls.

Subsection (1): each lot is a separate sale

810 ILCS 5/2-328(1): in a sale by auction, if goods are put up in lots, each lot is the subject of a separate sale.

Work it. A farm-dispersal catalog lists Lot 12 (a round-baler), Lot 13 (a hay rake), and Lot 14 (a utility tractor). Three different high bidders, three hammer prices, three contracts. If the Lot 13 buyer later defaults, Lots 12 and 14 do not unravel. The defaulting buyer is not entitled to walk Lot 14 because Lot 13 failed. Conversely, a defect or title problem confined to Lot 12 is not an automatic excuse for the Lot 14 buyer.

The same rule bites the seller. A consignor who wants 'all three pieces sold together or not at all' must put them up as one lot or must write a lawful combination term before bidding starts. Once the lots are cried separately and sold, 2-328(1) has already split the transaction. Combining or splitting lots after a hammer without authorization is an operations problem in Section 11.3, not a way to rewrite subsection (1).

Subsection (2): completion and the falling hammer

810 ILCS 5/2-328(2): a sale by auction is complete when the auctioneer announces completion by the fall of the hammer or in other customary manner.

'Other customary manner' is the online and hybrid hook. A verbal sold, a nod to the clerk, a strike of the gavel, or a platform Sold action that the terms treat as the announcement can complete the sale. Completion is an announcement, not the high bid sitting on the board. A high bid that has not been accepted is still a bid; it is not yet a contract.

The second sentence of subsection (2) is a favorite construction item. If a bid is made while the hammer is falling in acceptance of a prior bid, the auctioneer may, in discretion, either reopen bidding or declare the goods sold under the bid on which the hammer was falling.

That is discretion, not a duty to chase the last shout. Suppose the standing bid is $6,000, the gavel is coming down, and a ringman yells $6,100 as the hammer hits. The auctioneer may reopen from $6,100. The auctioneer may also knock the lot down at $6,000. The late bidder has no statutory right to force the higher bid into the contract. A candidate who answers 'the auctioneer must accept the bid made while the hammer was falling' has inverted the statute.

Discretion is not a license to play favorites. Terms of sale commonly make the auctioneer's call on bid disputes final. Abuse of that call — recognizing a planted seller bid, ignoring a clearly earlier bona fide bid — stacks 2-328 onto 15-5 (material misrepresentation) and 20-15(22) (dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public).

Subsection (3): with reserve is the default; retraction does not revive

810 ILCS 5/2-328(3) does four things at once:

1. The sale is with reserve unless the goods are in explicit terms put up without reserve.
2. With reserve: the auctioneer may withdraw the goods at any time until completion is announced.
3. Without reserve: after the auctioneer calls for bids on an article or lot, that lot cannot be withdrawn unless no bid is made within a reasonable time.
4. In either case, a bidder may retract the bid until the announcement of completion, but a bidder's retraction does not revive any previous bid.

Default with reserve is the exam's first trap. Silence is reserve. 'We'll see how it goes,' a secret minimum in the clerk's book, and a consignment that never uses the word absolute are all with-reserve sales. Without-reserve status requires explicit terms. In Illinois those terms are not only a microphone phrase. 225 ILCS 407/15-10 (P.A. 104-130, effective January 1, 2026) requires the written seller contract, entered into prior to the auction date, to state whether the auction is with reserve or absolute. Rule 1440.260 independently polices advertising an absolute auction or auction without reserve: no minimum-bid language; liens other than current tax obligations, easements, or restrictions of record must be cleared or released without regard to bid amount; and the contract must bind the seller to accept the highest bid, transfer ownership, and not bid or otherwise participate in the bidding process (Chapter 7).

Put those sources on one fact pattern. A livestock lot is advertised absolute — no reserve. Two bids land at $800 and $950. The seller, watching from the fender of the trailer, tells the auctioneer to pull the lot because 'that's not enough.' After bids have been called and made, 2-328(3) forbids withdrawal. Pulling the lot is also a 1440.260 advertising violation, a 15-10 contract breach if the writing said absolute, a 15-5(1) material-fact misrepresentation, and 20-15(9)/(12)/(22) discipline. The same seller, at a with-reserve sale that was advertised honestly and contracted as reserve, may withdraw until the hammer if the bid is below the reserve.

Bidder retraction is the second trap. Bid sequence: A at $1,000, B at $1,100, B retracts before 'sold.' A's $1,000 does not come back to life. The auctioneer must reopen. Treating the prior bid as automatically reinstated is a statutory error, and it is how bid-rigging disputes start.

Subsection (4): seller and shill bidding; the forced-sale exception

810 ILCS 5/2-328(4): if the auctioneer knowingly receives a bid on the seller's behalf, or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at the buyer's option avoid the sale or take the goods at the price of the last good-faith bid prior to completion. This subsection does not apply to any bid at a forced sale.

Two independent triggers: the auctioneer knowingly takes a seller-side bid, or the seller makes or plants one (cousin, employee, 'house' paddle). The statutory cure is advance notice that seller bidding is reserved — and that notice is compatible only with a with-reserve sale. Rule 1440.260(b)(2) forbids seller bidding at an advertised absolute auction. You cannot 'reserve liberty' to shill an absolute sale.

Remedies are the buyer's, not the auctioneer's. Last good-faith bid $7,200, seller's nephew runs it to $8,400 without notice. The buyer may unwind the sale or keep the goods at $7,200. The auctioneer does not get to keep the $8,400 hammer and 'sort it out later.'

Forced sale is the exception: execution, foreclosure, tax, and similar compelled sales. A planted bid at a Saturday consignment is not a forced sale. Shill bidding without reserved liberty is not only a UCC problem. It is 15-5 if the crowd is led to believe it is competing with genuine demand, and 20-15(22) as conduct likely to deceive, defraud, or harm the public.

Exam traps to refuse on sight:

• Treating the default as without reserve because the sale is an auction
• Believing a late hammer-falling bid must be accepted
• Assuming a retracted bid revives the prior bid
• Allowing the seller to withdraw after bids at an absolute sale
• Advertising absolute while running a secret reserve or a seller paddle
• Applying 2-328(4) to a forced sale, or refusing the buyer's last good-faith election at a consignment shill