Which statement is true regarding the presumption of auctions?

The statement that all auctions are with reserve unless stated otherwise is a key principle in auction law that establishes a baseline expectation for how auctions will operate. In a with reserve auction, the seller retains the right to accept or reject the final bid and does not have to sell the item if the bids do not meet a predetermined reserve price. This means that unless the seller specifically indicates that the auction will be absolute—meaning the item will be sold to the highest bidder regardless of the final bid amount—participants should assume that there is a reserve. This understanding helps protect the seller’s interests by allowing them to set a minimum acceptable price.

In contrast, the other statements do not accurately reflect the standard practices associated with auctions. Not all auctions are absolute; in fact, many are conducted with reserves, responding to the typical expectations of sellers and buyers alike. While advertising is not a legal requirement for an auction to take place, effective marketing is crucial for attracting bidders and maximizing auction success. The last statement could be misleading; while auctions can indeed be both absolute and with reserve, the phrasing of the question focuses on the presumption underpinning auction structures, which typically leans towards the with reserve classification unless indicated otherwise. Understanding this presumption is essential for both participants