Otherwise, this same brief 254 words is referenced in courts around the United States every day; the implications of the UCC 2-328 are widespread.
We’ve written extensively about the UCC 2-328, and most notably the 15 most misunderstood things about the UCC 2-328 here: https://mikebrandlyauctioneer.wordpress.com/2013/09/02/the-15-most-misunderstood-things-about-the-ucc-2-328/
Further, we wrote about the 13 things the UCC 2-328 doesn’t quite answer here: https://mikebrandlyauctioneer.wordpress.com/2015/03/18/13-things-the-ucc-2-328-doesnt-quite-answer/
As I’ve traveled the country assisting notable attorneys with significant auction/auctioneer-related litigation, I’ve witnessed those attorneys successfully argue that the UCC 2-328 (for instance) provides:
- Except in Louisiana, unless the words, “without reserve,” “no reserves,” or “absolute” are used, chances are the auction is considered “with reserve.”
- There are only two types of auctions, and therefore auctioneers may only contract with sellers to conduct one of those two types, and such related advertising can only indicate that the property is selling in one of those two ways.
- The auctioneer may (or by direction of the seller must) withdraw property from a with reserve auction anytime before the “completion of the sale.”
- The auctioneer may (or by direction of the seller must) withdraw property from a without reserve auction anytime before the property is put up for sale, or if no bid is received within a reasonable time, up until the “competition of the sale.”
- The auctioneer is not obligated to accept any bid received from any bidder — except for any higher bid at a without reserve auction before the “competition of the sale.”
- There are no tie bids nor reopening to only two bidders — the bidding may only be reopened due to a bid coming in “while the hammer is falling in acceptance of a prior bid,” and otherwise limiting bidding to these two bidders violates fiduciary responsibilities.
We cite these examples to show the wide implications of the UCC 2-328 in legal proceedings offered by highly skilled barristers. It’s often not precisely what the UCC 2-328 says, but what it implies in combination with customary practice, agency obligations and the like.
We will continue to report to the auction community — as we are able, given confidentiality constrains — what we’re seeing in the various court cases for which we consult … which hopefully can help us auctioneers navigate to avoid such litigation.
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.