A sharp bid is an arrangement where an unknown bidder places a bid relative to the highest bid.

In Breitbach v. Christenson, 541 N.W.2d 840 (Iowa 1995),  the owner of the land located in Black Hawk County died and her will was admitted to probate with Kenneth Shannon and Carolyn Christenson appointed as executors. The executors decided to arrange for the sale of the land and they had their attorney publish a Notice of Intent containing the clause that the co-executors reserve the right to reject any and all bids. The notice also included a description of the bidding process, which was that each bidder was to submit a $1000 down payment along with his bid. The co-executors would then examine the bids, notify all bidders of the highest bid, and allow them one week to raise their bids.
 
The plaintiff eventually submitted a high bid of $725 per acre and during the meeting with the attorney, it was indicated to him that the executors would not accept any bid less than $800 per acre. Plaintiff then offered $800 per acre and read and signed an offer to buy real estate and acceptance which contained the clause that it is understood that the tenant living in the farm residence at that time has a week from that date to match the offer and if he does, the offer would be void and the down payment shall be returned. Later, the attorney notified Plaintiff that the tenants had exercised their option to purchase the property and returned the $1000 deposit.
 
After the plaintiff’s suit in equity seeking specific performance from the executors and an injunction forbidding the executors and the attorney from selling the property was dismissed by the court, he amended his complaint to assert a claim for reformation of the contract.  The court denied all claims of the plaintiff during the trial holding that the defendants were free to consummate the sale. Plaintiff then filed a motion under Iowa Rule of Civil Procedure 179. The court entered an order stating that the executors could proceed with the sale under the terms of the judgment pending appeal because Plaintiff had not filed a supersedeas bond and obtained a stay of execution. Plaintiff filed a request for stay of sale to which Tenants and the estate resisted. The court denied Plaintiff's application for stay of execution and set a supersedeas bond in the amount of $77,500.
Plaintiff appealed and filed another motion for stay of sale in the Supreme Court of Iowa.  Plaintiff's argument is that the sale should be set aside because it would not be allowed to stand under the Uniform Commercial Code or the Iowa Probate Code.
 
The court held that this argument will fail and stated that, “[a]lthough it is true that the U.C.C. Iowa Code section 554.2328 provides if a seller receives bids knowing bidding is reserved but without giving such notice, the buyer may avoid the sale or take the goods at the price of the last good faith bid, this was not dispositive of the present case for two reasons. First of all, the sale at issue in this case was clearly not controlled by provisions of the U.C.C. See Iowa Code § 554.9102 (1993). Although Plaintiff argues that U.C.C. should be applied here, he had not provided one single Iowa decision establishing that the court should do so or even any policy considerations advocating such action. For this reason, the Supreme court declined to apply the U.C.C. to the real estate auction at issue.” Breitbach v. Christenson, 541 N.W.2d 840 (Iowa 1995).
 
Additionally, Plaintiff's claim failed when the court applied and interpreted section 554.2328 to the case, because notice was clearly given that the auction was to be conducted with reserve. The Notice of Intent to Sell Real Estate unambiguously provided ‘Right to Reject Any and All Bids. The Co–Executors reserve the right to reject any and all bids.’ This was certainly sufficient to put bidders on notice the auction was to be conducted with reserve. Id.
 
Plaintiff's claim that the sale should be set aside under the provisions of the Iowa Probate Code was also equally without merit. The court held that, “[p]laintiff was correct in his statement that the Iowa Code section 633.399 requires a personal representative of an estate to report to the court following any sale of real property and prove to the court the sale has been conducted on terms advantageous to the estate. But the plaintiff failed to acknowledge another section of the statute, section 633.383, which provides when a will gives the personal representative the power to sell property, these statutory requirements do not apply. Iowa Code § 633.383 (1992). The owners will clearly did this as it provided that, ‘My Co–Executors ... shall have full power during the probate of my estate without court order or approval to sell, convey, or lease any real estate ... upon such terms as may seem to them best.’” Id.
 
Plaintiff further made the argument the sale should be set aside because the bidding process had amounted to a ‘sharp bid,’ which is contrary to public policy. A sharp bid is an arrangement where an unknown bidder places a bid relative to the highest bid, for instance ‘$1,000 greater than the highest bid.’ See Short v. Sun Newspapers, Inc., 300 N.W.2d 781, 787–88 (Minn.1980). The right of the Tenants to match the highest bid was nothing more than an option, consistently recognized by this court as valid and binding. See In re Estate of Claussen, 482 N.W.2d 381, 384 (Iowa 1992).” Id. at 845.
 
Plaintiff also argued that this arrangement was a secret bidding arrangement and should therefore be set aside. This argument had no merit as the Plaintiff was charged with his actual knowledge received from the Notice of Intent to Sell. Id. The Supreme Court affirmed the district court's decision in defendants' favor on the merits. Id. at 846.