What type of auction requires specific wording to be clear?

The correct answer focuses on the reserve auction, which indeed requires specific wording to ensure clarity in the terms of the sale. In a reserve auction, the seller sets a minimum price that must be met for the item to be sold. This means that if the highest bid does not meet the reserve, the item will not be sold, and the seller is not obligated to complete the sale.

To avoid confusion, it is essential to clearly state the existence of a reserve price in the auction announcement or catalog. Specific terms regarding how the bidding will proceed, what constitutes a valid bid, and under what circumstances the auctioneer may accept or reject bids need to be explicitly laid out. This clarity prevents misunderstandings among bidders and ensures that they know what to expect during the auction process.

The other types of auctions, such as silent, absolute, and online auctions, generally follow different rules or formats that do not necessitate the same level of detailed terminology regarding reserve prices. For example, in an absolute auction, the item is sold to the highest bidder regardless of price, so specific wording about reserves is unnecessary. Similarly, silent and online auctions may have different rules concerning bids that do not require such clear definitions concerning reserve prices.