Since the virtually universal adoption of Article 2 of the Uniform Commercial Code, and in particular the UCC 2-328, interpreters of this rather short legal treatise have said that the UCC 2-328‘s wording:
“Where a bid is made while the hammer is falling in acceptance of a prior bid …”
meant that somewhere between the “S” and the “D” of the word, “Sold!” denoted the start and end of the hammer falling.
Given this interpretation, if a bid comes in prior to the “S” [which normally would be accepted] or after the “D,” the auctioneer has no option to reopen the bid; however, if a bid is made while the hammer is falling — after the “S” and before the “D,” the auctioneer may reopen the bid.
Our question today involves, “When does the hammer start to fall?” In other words, does the “S” essentially denote the start of the hammer falling?
It seems fair to assume that the drafters of the UCC 2-328 addressed this issue in particular for a reason.
If an auctioneer was “in the midst” of saying, “Sold!” it would be reasonable to assume most auctioneers could both recognize a bid in that split second, but not be able to stop saying, “Sold!” Therefore, a remedy was provided.
However, this isn’t a universal view. As we’ve previously noted, the famous auction case Hoffman v. Horton, 212 Va. 565, 567, 186 S.E.2d 79 (1972) ruled that an auctioneer may reopen the bidding if a bid was made “prior to or simultaneously with the falling of the hammer.”
I’m not convinced the Virginia Supreme Court ruled in conflict with the UCC 2-328 in any other fashion than to move when the hammer starts to fall. It would seem the Virginia case suggests the hammer essentially starts to fall at the beginning of the auction.
While this isn’t our subject today, the UCC 2-328 in talking about bids, uses the word made rather than recognized or received. In Hoffman v. Horton, the Court ruled that a bid made (and not recognized nor received by the auctioneer) could be accepted after the hammer fell.
One problem — of many potential problems — with assuming the hammer starts to fall at the beginning of the auction (for that item/property) is that then any completed sale could be reopened by anyone claiming to have made a bid anytime between the opening of the item/property … all the way until the “D” is uttered.
I wonder conceivably if an auctioneer said, “Folks, I’m about to drop the hammer …” that such an announcement would signal an actual start to the hammer’s fall? In other words, could an auctioneer expressly delay (or move up) the start of the fall until a moment of his or her choice?
It seems unlikely the UCC 2-328‘s drafters meant anything other than the hammer falling in essence at the “S” of the word, “Sold!” They were certainly familiar with the concepts of “calling for bids,” “reasonable time” and “completion of the sale,” as used elsewhere in the UCC 2-328.
When does the hammer start to fall? It seems when the hammer begins to descend, or at the utterance of the “S” of the word, “Sold!” or other similar moment, unless the auctioneer expressly overrides this custom.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
January 22nd, 2012 at 11:15 pm
One might consider that the gavel used to be utilized more at auction than today. Now, considering that the gavel may be falling, and even hit the block before the word “sold” is uttered… or in such cases that the word “sold” is not even used since the gavel denotes the end of the sale, any of these may be given wider latitude in determining the final agreement.
So, if the auctioneer slams the gavel on the block and a moment later decries sold, one might question whether the final agreement was formed when the hammer hit or when the auctioneer finished uttering the word “sold.”
After all, the UCC also states “A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner.” So, if one auctioneer only cries “sold” and another only uses a gavel, the finality would be determined by the particular auctioneer’s “customary” manner. To take it a step further, the auctioneer that uses the gavel and also cries sold (before or after the hammer strike) may be determined to have their own “customary” manner.