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carasisI’m asked frequently, particularly in regard to our car auctions and real estate auctions — is the auction, “as-is?” The question is probably just as well worded, “Are there any warranties, or guarantees?”

Actually, most auctions have some sort of guarantee or warranty. With only a few exceptions, auctioneers warranty clear title — in other words, that upon, “Sold!” that the seller will transfer ownership clear of adverse claims. It would be difficult at best to get a crowd at a “This-stuff-is-all-stolen-and-so-when-you-buy-the-real-owner-may-come-after-you Auction.”

Beyond clear title, many auctions don’t guarantee or warranty much else up-front, and it is common to hear “You folks today are buying as-is and where-is,” meaning more or less, you get what you get, and you get it where it is currently located.

However, once this common announcement is made regarding “as-is” and “where-is,” then auctioneers do warranty and guarantee things all the time — by denoting quantity, quality, maker, size, color, age, etc.

For example, an announcement such as “You’re buying this Roseville 9″ Vase” supersedes any prior as-is statements, and provides the buyer a guarantee that this is indeed a Vase, made by Roseville, and 9″ tall. This is because the auction sale is a contract, and per our prior blog on essential ingredients (The essential ingredients of any contract) there must be mutual assent, or a meeting of the minds.

If the buyer is buying a Roseville 9″ Vase, and the seller is selling a Weller 8″ Bowl, there is no meeting of the minds, and therefore no contract. Lacking the contract, there is no sale or legal basis for transfer of interest. (It’s important to note, however, that some courts rule in cases such as this that the buyer can enforce, or recreate the contract unilaterally, and keep the Weller Bowl for the price paid.)

Let’s take another example; the auctioneer says, “You’re buying all this stuff as-is and where-is” and then the first item is held up by the ringman, and the ringman says, “It’s one of these …” Well, it would be hard to argue that whatever he’s holding up isn’t “one of these” so not much further guarantee or warranty here. A buyer buys this “one of these,” and the auctioneer moves to the next item …

Or does it work that way? Common law in the United States says that auctioneers can sell items “as-is” if, and only if, three (3) tenets are offered potential buyers:

    • Open for inspection
    • Reasonable inspection opportunity
    • No fraud

In summary, if an auction is denoted as “as-is” and “where-is,” buyers have recourse if:

    • Items are not as described, or
    • Items were not open for inspection, or
    • There was no reasonable opportunity to inspect, or
    • There was fraud on the part of the auctioneer and/or seller

It is always “as-is” at an auction? Actually, it almost always isn’t.

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.face book.com/mbauctioneer. He is Executive Director of The Ohio Auction School.