This somewhat regularly cited case United States v. Blair, 193 F.2d 557 (10th Cir. 1952) has been used to substantiate a claim: That auctioneers can set any seller terms and conditions no matter — and auction bidders/buyers have to be held to them.
The essence of this case is noted here:
On Friday, July 25, 1947, the War Assets Administration conducted a sale of war surplus property at the Denver, Colorado Medical Depot. Under the regulations of the War Assets Administration, bids were accepted if made either in person at the site of the sale, or by mail if received prior to the time of the sale. Before the commencement of the sale in question, the following announcement was made to all present, including Blair: “In all cases the property will be awarded to the bidders submitting the highest bid. If through error we should make an award to someone other than the high bidder, the erroneous award will be revoked and the proper award will be made.” Among the items offered for sale was the lot of oxygen gas masks involved here, on which Blair bid $100.50. At the close of the sale, it was announced that his was the high bid, and in accordance with the rules of the sale, Blair paid the $100.50 and received a bill of lading for the goods. This was about twelve o’clock noon. At about two-thirty of the same afternoon, it was learned for the first time by those in charge of the sale, that a St. Louis firm had bid $1,542.00 on the oxygen masks by mail; that it had been duly received and stamped at ten-thirty on the day prior to the sale; and that for some unaccountable reason had not been reported to the auctioneer or those immediately in charge of the sale.
Then here’s the [bolded] basis of the argument: The owner … has the right to prescribe the manner, conditions and terms of the sale. That the buyer may rely upon such announced terms and conditions of the sale, and he is likewise bound thereby …
Generally, a sale by auction is complete when the auctioneer announces its completion. 7 C.J.S., Auctions and Auctioneers § 7, page 1250. And, title passes to the successful bidder at that time, unless the parties intend to the contrary. Harris v. Merlino, 137 N.J.L. 717, 61 A.2d 276; Lott v. Delmar, 2 N.J. 229, 66 A.2d 25; 7 C.J.S., Auctions and Auctioneers, § 8, page 1260. The owner of the property offered for sale at the auction has the right to prescribe the manner, conditions and terms of the sale. 7 C.J.S., Auctions and Auctioneers, § 7, page 1251. The buyer may rely upon such announced terms and conditions of the sale, and he is likewise bound thereby, whether present at the time of the announcement or has knowledge thereof. 5 Amer.Juris. Auctions, Sec. 15, p. 454; Kivett v. Owyhee County, 58 Idaho 372, 74 P.2d 87; Erie Coal & Coke Corp. v. United States, 266 U.S. 518, 45 S. Ct. 181, 69 L. Ed. 417; See Annot. 28 A.L.R. 991.
Interestingly, a similar lesser-frequently-publicized case was decided a year later known as United States v. Weisbrod, 202 F.2d 629 (7th Cir. 1953) where another circuit court ruled auctioneers/sellers could use reasonable conditions as are necessary for the general welfare.
Reasonable conditions that are necessary for the general welfare? Yes, that’s not what United States v. Blair stated, but rather what United States v. Weisbrod concluded.
Of course governing state law in 1952 concerning this reopening of the bid in United States v. Blair was scant — even the Uniform Sales Act didn’t talk at all about reopening bids.
Auctioneers only earned the narrow statutory right to reopen the bid with adoption of the UCC 2-328. We previously discussed here: https://mikebrandlyauctioneer.wordpress.com/2012/10/03/uniform-sales-act-of-1906/.
In fact, the UCC 2-328 made auctions more equitable for buyers and sellers contrasted with the Uniform Sales Act; a trend we continue to see in courts around the United States.
Nonetheless, we note that this United States v. Blair case was [at least partially] based upon references from 5 American Jurisprudence, Auctions, Sec. 15, p. 454 and that seems to be the more material issue. It’s now 2020 and we have American Jurisprudence 2d.
American Jurisprudence (second edition is cited as Am. Jur. 2d) is an encyclopedia of the United States law, published by West. It was originated by Lawyers Cooperative Publishing, which was subsequently acquired by the Thomson Corporation.
American Jurisprudence was updated beginning 10 years (1962) after this United States v. Blair case known now as American Jurisprudence 2d. We reference such as now the standard for auctioneer’s terms and conditions is here: 7 Am. Jur. 2d, Auctions and Auctioneers § 17.
Upon review of Young v. Hefton, Court of Appeals, Kansas (2007) and Money v. Ft. Hays State Univ. Endowment Ass’n, 31 Kan. App. 2d 322, 327, 64 P.3d 458, rev. denied 276 Kan. 969 (2003) plus my November, 2019 version of American Jurisprudence 2d (including 7 Am. Jur. 2d, Auctions and Auctioneers § 17) we find this:
The general rule regarding terms and conditions of an auction sale is that the seller of property at auction has the right to prescribe, within reasonable limits, the manner, conditions, and terms of sale. Usually the auctioneer, at the time and place appointed for the auction, announces these terms and conditions that, when so announced, are generally deemed to supersede all others and to bind the purchaser even though he or she did not hear or understand the announcement or was not present at the time of the announcement and such terms were not brought to his or her actual attention. Money v. Ft. Hays State Univ. Endowment Ass’n, 31 Kan. App. 2d 322, 327, 64 P.3d 458, rev. denied 276 Kan. 969 (2003); 7 Am. Jur. 2d, Auctions and Auctioneers § 17.
We have in bold “within reasonable limits” as this is the issue. Coupled with United States v. Weisbrod, 202 F.2d 629 (7th Cir. 1953) and subsequent cases, the current standard is clearly reasonable terms.
For reopening the bid after, “Sold!” it seems more and more courts are in tune with balance — equity — in that, for example, if the auctioneer can reopen the bid, the buyer should be able to void is confirmed bid as well. Yes, terms can be reasonably seller favorable — but that standard continues to move to making auctions more fair for bidders/buyers.
Can auctioneers reopen the bid after, “Sold!?” They can in a specific circumstance per state law and the courts have been remarkably consistent regarding that issue as we analyze Hoffman v. Horton 212 Va. 565, 186 S.E.2d 79 (Va. 1972) as well as Callimanopulos v. Christie’s Inc., 621 F. Supp. 2d 127 (2009).
In fact we wrote specifically about Hoffman v. Horton 212 Va. 565, 186 S.E.2d 79 (Va. 1972) and Callimanopulos v. Christie’s Inc., 621 F. Supp. 2d 127 (2009) and the fact these cases are unremarkable and do not grant auctioneers any unusual rights: https://mikebrandlyauctioneer.wordpress.com/2016/08/05/two-confusing-auction-cases/.
We continue to caution auctioneers to reopen the bid after, “Sold!” at your own peril. Lawsuits happen when a bidder is awarded the subject property only to have it ripped from him by a late bidder, and lawsuits are virtually nonexistent when the auctioneer leaves the bid where he first says, “Sold!”
It’s probably worth noting that famed attorney at law and auctioneer J. Stephen Proffitt III (Steve Proffitt) held that auctioneers could not reopen the bid — and at minimum that there are no “tie bids” nor “disputed bids.” We wrote about his position here: https://mikebrandlyauctioneer.wordpress.com/2019/12/30/john-stephen-proffitt-iii-and-your-right-to-reopen-the-bid/.
We wrote about staying out of court (rather than winning or losing) and noted cases usually cited allowing you to reopen the bid are cases for this specific reason — because that prior bidder became upset and sued. https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.
If you are being told that you the auctioneer/seller can set any terms you desire and the bidders basically have no choice but to agree (or not participate in the auction) you have been mislead. Those terms and conditions can be written favoring the seller but not exceed reasonable limits.
Lastly, have (and do) “reasonable standards” change over time? Absolutely: https://mikebrandlyauctioneer.wordpress.com/2017/07/19/reasonably-advantageous-auction-terms/. What was reasonable in 1952 isn’t necessarily reasonable today — and more likely isn’t reasonable at all.
Mike Brandly, Auctioneer, CAI, CAS, 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, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.