Definition
A bid is an offer to pay a specified price or to perform specified work at a stated price. The term carries two primary legal meanings that arise in distinct contexts:
1. Auction bid. An offer made by a prospective purchaser at an auction, stating the price the bidder is willing to pay for property being sold. The bid is not itself a contract; it constitutes an offer that the auctioneer may accept or reject, and it is generally revocable before the hammer falls. Acceptance by the auctioneer creates the binding contract of sale.
2. Competitive bid (procurement/contracting). An offer submitted in response to a solicitation for work, services, or materials — most commonly in government procurement or construction — stating the price at which the bidder proposes to perform. Competitive bids are typically governed by formal procedures specifying how bids must be submitted, when they may be withdrawn, and under what conditions they are binding. A bid in this context is the precursor to a contract, not the contract itself.
Common Language
Modern common usage (Wiktionary): An offer at an auction, or to carry out a piece of work; also informally, an attempt or pursuit of a goal (as in "a bid for the presidency"), and in British slang, a prison sentence.
Historical common usage (Webster's 1913): To offer to pay a certain price for a thing put up at auction, or to offer to take a certain price for work to be done under a contract; also, to offer in words, as a wish or greeting.
The ordinary-language sense of "bid" as any informal attempt or pursuit — a "leadership bid," a "championship bid" — has no legal significance. Researchers should be alert when reviewing non-legal sources: the word appears frequently in journalism in a sense entirely unconnected to offer-and-acceptance doctrine or procurement law.
Recognized Forms
/SUBTYPES
Bid in. When property sold at auction is purchased by the owner, a mortgagee, or another party with an existing interest in the property, it is said to be "bid in." The legal significance is that such a buyer is not a disinterested third party, which can affect challenges to the sale price and questions of merger or redemption.
Bid bond. A form of surety bond submitted with a competitive bid, guaranteeing that the bidder will enter into the contract if awarded and will provide required performance and payment bonds. Forfeiture is triggered by the bidder's failure to honor the bid after award. See the encyclopedia entry above for full treatment.
Chilling a bid / bid rigging. Conduct designed to suppress competitive bidding — whether by agreement among bidders or by discouraging third-party participation in an auction. Treated as fraudulent interference with the sale process and, in procurement contexts, as a federal criminal offense.
Why It Matters in Research
The critical distinction in historical and modern sources alike is that a bid is an offer, not an acceptance, and not a contract. Researchers tracing auction disputes must pay careful attention to the moment of contract formation — which is acceptance, not bidding — because rights and remedies differ sharply depending on which side of that line the facts fall.
In government procurement research, the word "bid" carries layers of regulatory overlay that older common-law materials do not reflect. Federal and state procurement statutes impose mandatory competitive bidding requirements, prescribe bid opening procedures, and restrict the circumstances under which bids may be withdrawn after submission but before award. The common-law rule that an offer is freely revocable before acceptance has been significantly modified in the procurement context by promissory estoppel doctrine and by statutory bid-security rules. Researchers moving between nineteenth-century auction cases and modern public contracting disputes should not assume continuity.
Anderson's Dictionary of Law's material under this heading addresses inadequacy of price in trustee sales — a related but analytically distinct issue. That discussion concerns when a low bid, once accepted, can be challenged as evidence of fraud or unfairness. It is a post-formation question, not a formation question. Conflating the two produces errors in both directions.
Jurisdictional variation in competitive bidding law is substantial: what constitutes a responsive bid, the treatment of bid mistakes (and the right to withdraw for clerical error), and the remedy for improper bid award all differ significantly across federal, state, and municipal frameworks. Any research into a specific procurement dispute must go to the governing jurisdiction's statute and regulations, not to general common-law bid doctrine.
Historical Dictionary Support
Black's (both editions) and Bouvier's are in agreement on the core definition: a bid is an offer to pay a specified price at auction. Bouvier adds the procurement sense explicitly — "an offer to perform a contract for work and labor or supplying materials at a specified price" — making him slightly more useful for researchers working on contracting disputes rather than auction cases.
Black's 2nd edition adds the "bid in" concept and supplies case references for the auction context. The entry is otherwise thin on the procurement side, reflecting the era: systematic public competitive bidding law as we know it is largely a twentieth-century statutory development, and the historical dictionaries do not capture it adequately. Researchers should not rely on any of the shelf sources for the modern procurement framework.
Anderson's entry, as noted, is not really a bid definition at all — it addresses the standard for impeaching a trustee's sale on inadequacy-of-price grounds. It is useful research material for challenges to auction outcomes but does not define the term.
All four sources omit any treatment of bid bonds, bid rigging, or the regulatory procurement context. For those topics, the historical dictionaries are silent and researchers must work from statutory and regulatory materials.
Jurisdictional Note
Public competitive bidding requirements are creatures of statute and vary significantly. Some states require competitive bidding for all public contracts above a low threshold; others have broad exceptions. The right to withdraw a mistaken bid before award — and the mechanics of bid security forfeiture — is governed by jurisdiction-specific rules that may override common-law offer-and-acceptance principles.
Encyclopedia Cross-Reference
Surety Bonds — Performance, Payment, and Bid Bonds (Law Mind Insurance Law Encyclopedia)