Scott / Aquarian...
I don't see how that clause 7 of your contract can be stretched to say that unless buyer and seller agree to pull a lot from the auction, then it cannot be done and you must continue with a lot's auction when you no longer have the item; and that as a seller you are authorized to defraud bidders and an eventual winner by accepting bids when you well know that you don't have the item.
Regardless of clause 7, you know that's not right.
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