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Let’s look today at two (2) statements in the same online auction terms and conditions:

  1. Selling to the highest bidder, regardless of price.
  2. Auctioneer reserves the right to add or delete property from this auction or to alter the order of sale from that published herein.

All of these auctions are taking place in the United States (Texas, New York, Virginia, etc.) Therefore, the laws in all of those states say:

    … In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time.

First, we have already established that the term, “absolute” is synonymous with the term, “without reserve” here:

Too, the UCC 2-328 does apply to online auctions, as we wrote about here:

Further, while some say that the UCC 2-328 does not apply to real property, we find that it routinely does, and discuss here:

Therefore, if indeed these properties are selling absolute, then there cannot be an unencumbered right to “add or delete” any certain property (no deleting) after a bid is placed on such property.

That’s because the right to delete the property from the auction would only exist if “no bid is made within a reasonable time.” The right to withdraw a property after a bid is placed is a form of reserve, which cannot be part of an absolute auction.

In fact, the two aforementioned statements seem to conflict almost immediately: “Sells absolute, but auctioneer reserves …”

I wonder if the sellers of these properties were told, “We can advertise your properties selling absolute in order to maximize participation, but of course, if they don’t bring enough, we’ll just delete them from the auction.”

Lastly, and somewhat innocuously, even the suggestion that the auctioneer reserves the right to, “alter the order of sale from that published herein” would likely be deemed a prohibited reserve in an absolute auction — especially if a bid had already been made.

Even if this particular auction was uneventful, such advertising advances the idea that sellers can enjoy the benefits of an absolute auction with additional protections, and bidders cannot trust that an auction advertised as absolute really is.

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.