The Reserve Price allows the seller to set a minimum price at which they are willing to sell the item being auctioned. Many sellers start auctions at a low price to encourage bidding, but set a Reserve Price to keep the auction from selling for too little.
In the event that an auction ends without meeting the Reserve Price, the seller and bidder are not obligated to complete the transaction with each other. The seller may negotiate with the winning bidder for an acceptable price, or they may cancel the sale and relist the auction.
Note: Proxy bids compete with the Reserve Price, meaning that if you place a Proxy Bid that's higher than the Reserve, the Current Bid Price will immediately jump to the Reserve Price. Remember that the purpose of the Proxy Bid system is to say how much you're willing to pay for the item, don't ever bid any amount if you're unwilling to pay that amount.
In the event that the Reserve Price is met, or there is No Reserve on an auction, both the seller and the buyer are legally obligated to continue with the transaction as normal.