Plain language law

New Zealand law explained for everyone

Fair Trading Act 1986

Consumer transactions and auctions - Auctions

36ZD: Vendor bids

You could also call this:

“Rules about sellers bidding on their own items at auctions”

When you go to an auction, you might hear about something called a ‘vendor bid’. This is when the person selling the item (the vendor) or someone working for them makes a bid. The auctioneer, who runs the auction, has some rules they must follow about vendor bids:

They can only accept a vendor bid if the auction rules say it’s allowed. This means everyone knows it might happen before the auction starts.

If there is a vendor bid, the auctioneer must tell everyone. They can’t keep it secret.

Vendor bids are only allowed when there’s a reserve price. This is the lowest price the seller will accept. The vendor bid must be less than this reserve price.

Remember, a vendor bid can come from the seller themselves, or from anyone helping them sell the item - even the auctioneer could make a vendor bid for the seller.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6156671.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection
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36ZC: Vendors selling in trade, or

“Rules for buying things at auctions from businesses”

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36ZE: Bids may be withdrawn until end of auction, or

“You can take back your bid before an auction finishes”

Part 4A Consumer transactions and auctions
Auctions

36ZDVendor bids

  1. An auctioneer must not accept a vendor bid unless—

  2. the terms of the auction specify that vendor bids are permitted; and
    1. the auctioneer identifies each vendor bid as it is given; and
      1. the property is offered for sale with a reserve price and the vendor bid is less than the reserve price.

        1. In this section, vendor bid means a bid made by the vendor or any person (including an auctioneer) acting as agent for the vendor.

        Compare
        Notes
        • Section 36ZD: inserted, on , by section 23 of the Fair Trading Amendment Act 2013 (2013 No 143).