1861-1963, 29:40, agency, auction, auctioneer, auctioneers, auctions, contracts, England, Harvard, Law Professor, memorandum, North Dakota, Richard A. Lord, South Dakota, Statute of Frauds, United States Supreme Court, Williston, Williston on Contracts
Samuel Williston (1861 – 1963) was a famed lawyer and law professor. His accomplishments included helping to formulate the state constitutions of North Dakota and South Dakota, private secretary to U.S. Supreme Court Justice Horace Gray, Harvard Law School Professor, and regarded author on contract law and treatise. Among Williston’s most known works is “Williston on Contracts,” which is still published today, as edited by Richard A. Lord.
In Williston’s “Williston on Contracts” an important point about the Statute of Frauds for auctioneers is noted. In § 29:40 (4th Ed), as follows:
- “In part at least, from the necessity of the case rather than from evidence of actual authority, it has been continuously held that the auctioneer at an auction sale is not only the agent of the seller, but is also the agent of the buyer for the purposes of making and signing a memorandum. This memorandum, as in other cases under the Statute of Frauds, must contain all the essential terms of the contract. It has been said with regard to an auctioneer’s memorandum:
- While the petition refers to the instrument here involved as both an auctioneer’s memorandum and a sales contract, it is not an auctioneer’s memorandum … for it is not signed by the auctioneer, but it purports to be a contact for the sale of land entered into between and signed by both the seller and purchaser. Whether it be one or the other, it falls within the statute of frauds which requires that all contracts for the sale of land shall be in writing. In order to be sufficient to satisfy the statute, the wiring must cover the entire contract.”
- The signature by the auctioneer must, however, be made immediately or it will not be binding, since the auctioneer’s authority is temporary; as a court has said: “While it is sometimes stated that the auctioneer’s authority ceases as soon as the sale has taken place, it is now generally held that his agency for the vendor is not necessarily coexistant with his agency for the purchaser. His agency for the purchaser end with the sale; and unless the memorandum be made and signed contemporaneously with the sale, or immediately thereafter, it is not binding on the purchaser.”
What are the implications of this? Put simply, upon the sale of real property, or personal property $500 or more in value, where the Statute of Frauds dictates that such must be in writing to be enforceable, the auctioneer would have the authority to sign such contract for the buyer.
This argument stems from several English court cases, and United States court cases with remarks summarized as follows:
- “By reason of the nature of the transaction, of the sale by auction, an auctioneer is presumed to be an agent of the high bidder, to sign on the highest bidder’s behalf a binding note of the contract; but this authority is of but brief duration and lapses unless it is exercised at the sale or soon thereafter that it can be said that the making or completing of the writing by the auctioneer is substantially part of the transaction of the sale.”
Many discussions have taken place across the United States in recent years about auctioneers selling real property at auction, and the issue of the oral pronouncement of “Sold!” not being enforceable. As such, many auctioneers hurriedly approach the buyer with such paperwork, and sometimes find resistance, confusion or delay. Of course, these discussions usually turn to “What if the buyer doesn’t sign?”
Per Williston’s treatise here, an auctioneer selling real property (or chattels $500 or more in value), has the authority to sign a written contract for sale for the buyer, making such sale enforceable. This would suggest if the buyer was absent, or had not signed such contract yet, the auctioneer could sign for him.
Good news for auctioneers, it appears to me.
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 is Executive Director of The Ohio Auction School.