auction, Auction Law, auctioneer, auctioneers, auctions, bid calling, bidders, breach of contract, buyer, client, contract, mutual assent, property, saying "Sold!", seller, sold, subject to, subject to confirmation, subject to seller's approval, transaction, UCC 2-328
Bob replied, “Well, I’m unclear. The auctioneer said, “Sold!” but I then heard the seller had 48 hours to accept or reject the offer.”
Bob and Mary continued their discussion, and Mary finally said, “If the auctioneer said, “Sold!” then I don’t see how it can be subject to the seller’s approval?” Bob sat silent, wondering the same thing.
The word, “Sold!” has definite meaning in the United States.
Property that is, “Sold!” means the seller of the property and the buyer of the property have each tendered valuable consideration to each other, transferring title to a property (real or personal) from seller to buyer.
The origin of the word is:
- before 900; Middle English sellen (v.), Old English sellan orig., to give, hence, give up (someone) to an enemy, betray, exchange for money; cognate with Old Norse selja, Low German sellen, Gothic saljan to give up, sell, orig., to cause to take; akin to Greek heleîn to take
We note the words, “exchange for money,” “to give up,” and “to take.”
When auctioneers say, “Sold!” they firm a contract with their client, the seller, and the high bidder, the buyer. The terms of that contract include that payment is now required for the property and the seller must relinquish title to the buyer.
Essentially at auction, the word, “Sold!” means that their is mutual agreement (terms) about a future transaction, while in other scenarios, the word, “Sold!” means the transaction has taken place at that instant.
Nevertheless, it doesn’t mean that there is a lack of mutual assent or any other terms and conditions to settle. In other words, our question today is:
- “Can something be, ‘Sold!’ and still subject to seller’s approval?”
We are of the opinion that once the “D” is pronounced for the word, “Sold!” it matters not what else comes next. We believe saying “Sold, but not sold!” would still be, “Sold!”
And, selling something at auction demands this clarification: the UCC 2-328 allows an auctioneer to reopen the bidding if a bid is made, “while the hammer is falling.” It doesn’t, however, allow the property to remain subject to the seller’s approval.
Contracts are formed by offers and acceptance. If a seller is still to approve an offer, the parties are not even in contract, let alone agreeing that anything is, “Sold!”
By using the word, “Sold!” in a casual or misleading fashion, possibly indicating that no other offers are being considered (although, they probably would be considered if they were materially better,) the true meaning of the word, “Sold!” is unnecessary and unfortunately diluted.
Auctioneers should use care when uttering the word, “Sold!” (or any such word(s) with that meaning) and ensure they have the legal, expressed authority to bind their client to a contract demanding their client’s performance.
Further, auctioneers should use better care when describing properties that have been through the auction process, and are awaiting the seller’s approval — as they aren’t quite, “Sold!” yet.
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.