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fakepatekThere might not be one auctioneer on earth who hasn’t uttered the words, “You’re buying today as-is.” or something to that effect.

But in reality, despite this disclaimer, the more accurate phrase might be, “You’re buying today as-is as I describe the lots for sale.”

In other words, despite the as-is disclaimer, anything said about the property being sold nullifies the basic premise of as-is, which is there are no guarantees.

If an auctioneer says, “You’re buying this wristwatch as-is” then this has to be a wristwatch or the buyer and seller aren’t in contract upon, “Sold!” If an auctioneer says, “You’re buying this Patak Philippe wristwatch as-is” then the buyer and seller aren’t in contract because it’s not a [genuine] Patek Phillippe wristwatch.

The courts in the United States have consistently ruled that the as-is clause at auctions is upset by any representations which accompany the offering. If an auctioneer says, “You’re buying this as-is …” then it’s likely selling as-is as certainly this fake Patek Phillippe wristwatch is arguably a “this.”

And there’s even more about “as-is” than meets the eye. https://mikebrandlyauctioneer.wordpress.com/2011/08/12/the-effect-of-the-as-is-clause/ As such, “as-is” generally doesn’t protect auctioneers from misrepresentation — because essentially property sells “as-it-is represented.”

However, could an auctioneer be accused of fraud in such instances? Apparently not, if such buyer terms included a no-reliance provision. We wrote more about that here: https://mikebrandlyauctioneer.wordpress.com/2015/05/01/as-is-and-fairness/ In essence, fraud requires bilateral action while misrepresentation is more unilateral.

Buying anything in the United States has largely been based upon the maxim of caveat emptor (“let the buyer beware”) up until more recent times, when buyers have been provided more protection by the courts — in light of decades of sellers quite frankly abusing the “as-is” standard.

How does all this impact auctioneers? It suggests that while claims of fraud might be defeated by terms including non-reliance of descriptions, misrepresentation is still a plausible claim if as-is is used in combination with inaccurate descriptions.

As we’ve written about before, is it prudent for auctioneers to describe property accurately and disclose all known material facts about that same property. Combining all this describing with the as-is condition actually does more to discourage buyers from taking action than it prevents recourse — and encourages bidders to further inspect.

Our writing on disclosure of all known material facts can be read here: https://mikebrandlyauctioneer.wordpress.com/2014/07/21/all-known-material-facts/ Finally, here is our writing on the basic tenets of “as-is” including this writing concerning descriptions and the “as-is” clause. https://mikebrandlyauctioneer.wordpress.com/2015/11/10/an-auctioneers-as-is-primer/

By being honest with buyers, they are encouraged to return to the next event. On the contrary, dishonesty discourages future buyers and therefore injures that auctioneer’s subsequent clients. Yes, as the saying suggests, there are trees and then there is the forest.

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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.