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As I understand the story (or stories) is that this one item had a particularly latent issue that the auctioneer wanted his bidders to understand was not warranted. In the most recent story I heard about this, it involved a tractor that had an hour indicator which appeared to be much less than actual hours.
Regardless of the particular issue, we ask, can an auctioneer have an “as-is auction with an especially ‘as-is’ item?
Some years ago, a prominent department store had a sale of distressed merchandise. From the court records, despite signs up all around the store that all items were selling “without warranty or guarantee” a customer overheard a salesperson note to another customer that a certain washer and dryer set were being sold without warranty. When this other customer approached the same salesperson about another appliance (a refrigerator,) the salesperson didn’t say anything about the absence of a guarantee or warranty.
The customer took his refrigerator home, and it didn’t work. He contacted the department store and was told that they could do nothing about his refrigerator since he purchased it without any warranty or guarantee. They reminded the refrigerator purchaser that signs were posted throughout the store noting such.
The refrigerator purchaser sued the department store. The court ruled that in light of a salesperson telling another customer that their prospective purchase was without warranty or guarantee but not telling the plaintiff the same, and in the same manner, that it was not unreasonable for the plaintiff to assume some warranty or guarantee was offered and/or included with his refrigerator purchase.
This case might have resulted in a different verdict if the salesperson noted to the washer and dryer customers something such as, “Folks, remember all items here today sell without warranty or guarantee?” Instead, the notation was about that particular item and not a reiteration of the overall story policy.
Back to our auctioneer. By announcing at the start of his auction that all items would be selling “as-is” would be viewed as customary and reasonable. Yet, by especially noting that a particular item is selling “as-is” could reasonably lead bidders to assume that all other items were selling with some sort of warranty or guarantee (i.e. not “as-is.”)
When terms and conditions that are meant for all items selling at an auction are in place, it would seem an auctioneer should refrain from repeating them in regard to any particular item. Of course, if the terms and conditions were that all items were selling “as-is” except for any items so noted otherwise (or that all items had a warranty except for …,) then individual announcements would be necessary and prudent.
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.