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rainingThe UCC 2-328 is but four (4) paragraphs.

Yet, it’s maybe the most misunderstood (or at least the most misinterpreted) four paragraphs of law involving auctioneers.

Today we focus on one particular topic relating to the UCC 2-328: The withdrawal.

The UCC 2-328 only mentions “withdrawal” (using the word “withdraw”) one time in regard to an absolute (without reserve) auction: Here it is in full text:

In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time.

Seems clear enough.

We previously wrote about “reasonable time” here: https://mikebrandlyauctioneer.wordpress.com/2011/06/22/ucc-2-328-reasonable-time/

After the auctioneer calls for bids — so anytime prior to that the seller can withdraw the property. Further, if the auctioneer calls for bids and receives none within a reasonable time — the seller can withdraw the property. However, if a bid is made within this reasonable time, the seller may not withdrawal the property.

Roger is an auctioneer, and opens the auction by saying, “Folks, we have this quite nice desk lamp here, and I’d like to have $100 for it!” The auctioneer has just called for bids.

Roger then says, “Well, somebody give me $50? $25, and let’s go?” A bidder bids $10 and Roger hears that bid. The desk lamp cannot be withdrawn at this point.

However, some say:

      1. But, what if the seller at this point doesn’t want to sell the lamp?
      2. How about if the high bidder retracts his bid?
      3. What if the auctioneer feels this is an insufficient bid?
      4. However, it started raining?

We are kidding about the rain — sort of.

Here’s the issue. No matter can this item be withdrawn at this point — not if the seller doesn’t want to sell, not if the high bidder retracts, not if the auctioneer feels this is not enough … nor if it starts raining.

And why is that? Because at the point the $10 bid was made, the right of withdrawal disappeared.

To paraphrase only part of the famous auction case Zuhak v. Rose 264 Wis. 286 (1953) from the Supreme Court of Wisconsin:

      “We conclude that when the real estate in question was put up for sale and the first bid made on it, defendant could no longer withdraw it but was bound to accept the highest bid …”

The withdrawal at absolute auction? It is certainly acceptable anytime up until the auction is opened for bid, but vanishes once the auctioneer calls for bids.

This right of withdrawal only reappears if no bid is made within a reasonable time. As such, between the opening and a reasonably timed bid and thereafter, the right of withdrawal doesn’t ever exist again for that item — even if it starts raining.

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.