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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.

We have written about Samuel Williston twice before:

The Uniform Sales Act, drafted by Professor Williston, was a precursor to Article 2 of the Uniform Commercial Code. Between 1906 and 1947 it was adopted in 34 states.

    § 21 [Sale by Auction.] In the case of sale by auction

    (1.) Where goods are put up for sale by auction in lots, each lot is the subject of a separate contract of sale.

    (2.) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner. Until such announcement is made, any bidder may retract his bid; and the auctioneer may withdraw the goods from sale unless the auction has been announced to be without reserve.

    (3.) A right to bid may be reserved expressly by or on behalf of the seller.

    (4.) Where notice has not been given that a sale by auction is subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ or induce any person to bid at such sale on his behalf, or for the auctioneer to employ or induce any person to bid at such sale on behalf of the seller or knowingly to take any bid from the seller or any person employed by him. Any sale contravening this rule may be treated as fraudulent by the buyer.

Work on the Uniform Commercial Code began in 1942, being ultimately published in 1952; by 1967 the Uniform Commercial Code was adopted by 49 states (in part by Louisiana, later.)

    § 2-328. Sale by Auction.

    (1) In a sale by auction if goods are put up in lots each lot is the subject of a separate sale.

    (2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

    (3) Such a sale is with reserve unless the goods are in explicit terms put up without reserve. In an auction with reserve the auctioneer may withdraw the goods at any time until he announces completion of the sale. In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. In either case a bidder may retract his bid until the auctioneer’s announcement of completion of the sale, but a bidder’s retraction does not revive any previous bid.

    (4) If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.

So, what rules did auctioneers in the United States act under when bid calling prior to the 1960’s? The Uniform Sales Act of 1906 § 21.

How are the rules under § 2-328 of the Uniform Commercial Code different than § 21 of the Uniform Sales Act of 1906? Let’s take a look. § 2-328:

    1. Adds the text involving, “Where a bid is made while the hammer is falling.”
    2. Makes it clear that the “with reserve” auction is the default type of auction.
    3. Clarifies that the goods may be withdrawn prior to being “put up for auction” independent of the auction being with reserve or without reserve.
    4. Permits retraction of bids in auctions both with reserve and without reserve.
    5. Explicitly notes that the retraction of a bid does not revive a prior bid.
    6. Further details the remedies for a buyer who has won an item where the seller bid without authority.

The Uniform Sales Act of 1906 § 21, was an important precursor to the Uniform Commercial Code § 2-328.

For auctioneers operating in the United States prior to the 1960’s, § 21 provided a sound outline for auction structure and bid calling practice. Further, how interesting that we’ve had such rules now for over 100 years.

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.