What would fair, balanced and reasonable auction terms and conditions look like? What does current law say about that? The governing law is the UCC 2-328 as adopted by states around the United States.
Then too, there is general contract law and a select number of court cases which have ruled in fashions which affect how auctioneers can operate.
Here’s our thoughts on what is reasonable, fair and balanced auction commerce:
- Once a bid is made/accepted, the auctioneer can accept a higher bid from someone else, and the current bidder can retract his bid.
- Once the auctioneer says, “Sold!” then the auctioneer cannot accept any higher bid, nor can the current bidder retract his bid.
- In a with reserve auction the seller can withdraw the property prior to, “Sold!” and not withdraw the property after, “Sold!”
- In a without reserve auction, the seller can withdraw the property essentially prior to receiving a bid, and not withdraw the property essentially after receiving a bid.
- If the property is “as-described” then the buyer must accept, and if the property is not “as-described” then the buyer isn’t bound to the contract.
- The auctioneer will only take real, legitimate bids from bidders and your bid must represent the genuine intent to purchase.
However, here’s what far too many auctioneers choose to do which severely upsets this basic balanced commerce:
- Once a bid is made/accepted, the auctioneer can accept a higher bid from someone else, but the current bidder can’t retract his bid.
- Once the auctioneer says, “Sold!” then the auctioneer can reopen the bidding for any reason, but the buyer cannot unilaterally void his obligation to purchase.
- In a with reserve auction the seller can withdraw the property prior to, “Sold!” and even after, “Sold!” by just refusing to “close.”
- In a so-called without reserve auction, the seller can withdraw the property by canvassing for pre-auction “offers” and then cancel the auction if there’s not a high enough offer pending or have the auction and then just refuse to close if the high bid is deemed insufficient.
- If the property is “as-described” then the buyer must accept, but if sold “as-is and where-is” then the buyer can’t rely on any of the property descriptions.
- The auctioneer will take fake, fictitious, shill and/or fraudulent bids against you, but your bid must represent the genuine intent to purchase.
We would suggest that if we auctioneers want people to continue to patronize our auctions, we better be careful with unfair, one-sided, unreasonable auctioneer/seller terms and conditions.
If fact, we invite you to look around and find any other retail operation with success being this seller-favorable/buyer-unfavorable here in 2020. Chances are even if you find one, it won’t be around long.
We’ve asked this question before … and here it is again: Would you as an auctioneer prefer to participate as a bidder in our first (balanced) or second (unbalanced) scenario above? It should go without saying that bidders/buyers have choices too.
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.