Just today, I was discussing a situation where, basically, personal property was up for sale at an auction, and the high bidder was established as such, and then auctioneer said, “Sold!” but title wasn’t transferred to the high bidder.
What does it mean when the auctioneer says, “Sold!?”
In the United States, contract law is fairly clear that upon the declaration of “Sold!” by an auctioneer, whatever is being offered is the subject of a contract between the seller and the high bidder. If either party refuses to perform, either would be in breach of contract.
Yes, the Statute of Frauds notes that for personal property $500 in value or more, a written contract would be necessary to make this contract between the seller and high bidder enforceable. Yet, most courts have not ruled in this fashion, and have rather noted that such oral contracts are enforceable.
A key state supreme court decision only a few years ago noted that even if the auctioneer made a mistake, such as declaring the item, “Sold!” without authority, or for an amount less than the seller was willing or able to accept, the word, “Sold!” means just that, and such contracts stand.
Many confuse the UCC 2-328 as legal authority over the word, “Sold!” and actually the UCC 2-328 only mentions this concept in regard to when (and only when) the bidding may be reopened following “Sold!” and in regard to withdrawal of the item prior to, “Sold!” So far as denying the high bidder after, “Sold!” the UCC 2-328 is silent.
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.