Summary of McManus v Fortescue [1907] case

McManus v Fortescue [1907]

Facts – in this case, there is an auctioneer (the Defendant in the case), who advertised the sale of a horse. He stated in the notice he gave that the sale of the horse “would be sale without reserve price”. The Plaintiff (the person who brought the action to court) also participated and bid for the horse. After the plaintiff bid for the horse, the person who own the horse (who the auctioneer works for) then bided higher for that same us, then the auctioneer knocked his hammer down that the bid was in favour of the owner. He (auctioneer) then entered the name of the horse owner as purchaser of the horse.

The plaintiff then institutes an action in court, that as long as he was the highest bona fide bidder, he was entitled to buy the horse at the price bid. The defendant however refused to sell the horse to the plaintiff.

The court decision inter-alia includes that when an auctioneer puts up goods for pledges or decides to sell such, such goods must be “without reserve”, he, thereby makes a contract with the highest bona fide bidder to sell the goods to him at the price bid, whether the sum bid is equal to the value of the goods or not.

Principle: When property is put up for auction subject to a reserve price, there is no contract if the auctioneer by mistake purports to accept a bid lower than the reserve price

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