Arthur made a bid at an auction by calling out the amount of $250. The auctioneer acknowledged Arthur's bid. There were no higher bids, and before the fall of the auctioneer's hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?
A) Arthur's bid is an ordinary offer that can be revoked.
B) Arthur's bid is firm and cannot be withdrawn.
C) Since the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller.
D) Since the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective.

Question

Quizplus · Accepted Answer

DArthur's bid at an auction is considered an offer that he can revoke at any time before acceptance, which in the context of an auction, is typically signified by the fall of the auctioneer's hammer. Therefore, Arthur's attempt to withdraw his bid before the hammer fell is a valid revocation of his offer. However, once the auctioneer acknowledges Arthur's bid and no higher bids are made, a contract is formed by way of offer and acceptance when the auctioneer signifies acceptance by the fall of the hammer. Since Arthur attempted to withdraw his bid before the fall of the hammer, his revocation should be effective, but the scenario also suggests that a contract had been formed by the auctioneer's acknowledgment, making Arthur's withdrawal ineffective. This presents a nuanced situation where both A and D could be argued based on the specifics of the auction process and the timing of events.

Arthur Made a Bid at an Auction by Calling Out