We have previously written about online auction bidding becoming unavailable: https://mikebrandlyauctioneer.wordpress.com/2017/02/06/online-bidding-goes-down/. Today, we explore if an online-only auction platform goes down during the auction.
It’s well established that contracts between the auctioneer and the seller, and auctioneer and the bidders should — for the auctioneer’s benefit — disclaim responsibility for any such platform malfunction.
Too, we know that almost any online auction bidding platform will have in their contract with the auctioneer that they are not responsible for any downtime or malfunction.
In other words, the auctioneer and the online-only platform will both say that they are “not responsible.” And that’s okay, but does that help the seller? Does that help the bidders? Not hardly.
Ironically, the UCC 2-328 as adopted in the United States over 50 years ago provides a solution to auctioneers’ possible Internet issues here in 2017. The key component in regard to any online-only auction is that the auction should be a “with reserve” auction. In such, so long as the auctioneer/seller does not declare any property sold, it can be withdrawn.
So … if the online-only auction platform does down … the lots (properties) could just be “no-saled” — withdrawn — and rescheduled for auction when the platform regained functionality. In this way, the seller is protected and the bidders are protected — rather than just told that they are out of luck and nobody is responsible for their misfortune.
Further, can an online-only auction be anything but a with reserve auction?
Can it be an absolute auction? We analyzed this in more detail here: https://mikebrandlyauctioneer.wordpress.com/2013/08/14/can-you-have-an-absolute-online-only-auction-should-you/, where we concluded that an absolute online-only auction is ill-advised — if not impossible.
Finally, in the case of a seller wishing to sell his or her property regardless of price, the online-only auction should still be structured as a with reserve auction to protect in the event of a technology crash. Here again, protecting the seller rather than merely telling the seller you are not responsible is the prudent action.
We as auctioneers should be mindful that disclaiming responsibility and averting risk is sometimes advisable and clever — but if there are other mutually beneficial solutions, which help our clients and assist our bidders, those contract terms should be explored; auctions without sellers and/or bidders are lonely events.
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.