Online auctions can be wonderful … until a bidder, some bidders or maybe no bidders can access the platform. What’s the cause? Who knows, but bidders don’t like it, sellers don’t like it and auctioneers don’t like it.
So, auctioneers are no-doubt being advised to put in their terms that if the online bidding platform is not accessible, the auction can be suspended and/or current bids can be voided … and almost assuredly even completed sales can be rescinded.
It might be reasonable to conclude this behavior is necessary — as the seller and auctioneer are injured, and bidders not able to bid are injured. However, the high bidder at the moment of system failure is not injured — until his purchase is voided.
Focusing on that high bidder (aka buyer,) how many seconds, minutes, hours or days does it take before he is notified his purchase is not? Is it just after he wins? After he receives an invoice? After he pays? Maybe it’s a month later …?
Auctioneers represent sellers and endeavor to maximize their position but without bidders/buyers auctioneers fail at that. In fact, without bidders/buyers there are no auctions. Just how do auctioneers treat bidders/buyers?
First, many auctioneers sell with a reserve so bidders only have a chance to buy if the seller consents; other auctioneers reopen bids so “Sold!” doesn’t really mean sold — unless of course, the buyer wants out of the contract. Regarding today’s subject, if the system goes down, bidders don’t get to buy either?
Additionally, we typically sell “as-is and where-is” with no guarantees nor warranties. We don’t honor any returns, exchanges or subsequent discounts. For personal property, payment is usually due and payable immediately without any financing nor payment plan.
Here’s our remaining question: If one bidder’s access is denied, or 10 bidders’ access is denied, or 1,632 bidders’ access is denied … when exactly does the auctioneer’s right to void the entire auction and/or start over become available?
Is this possibly no different when a few years ago when we had a live auction scheduled with the morning bringing a Level 3 snow emergency? Actually, it was different in that we could have just canceled the auction before any property was put up for auction — although we had a good crowd and went ahead with our event.
Further, if the Level 3 snow emergency came during the auction, what we had already sold would remain sold, with what hadn’t yet set aside for another day … and online auctions should be no different in this regard — if bidding has run its course on some items, and the system goes down, those sales should remain valid.
We wrote about online auctions canceling all transactions — even those which had closed — in the case of system failure: https://mikebrandlyauctioneer.wordpress.com/2018/05/07/online-only-auction-starts-to-close-and-we-have-a-problem/ and noted that faulty thinking herein.
We also have held that a “with reserve” auction is best for any online or simulcast auction; you can read that treatise here: https://mikebrandlyauctioneer.wordpress.com/2013/08/14/can-you-have-an-absolute-online-only-auction-should-you/.
Consulting with an attorney is prudent — but we recommend you consider not only the seller/auctioneer perspective but bidders/buyers as well. It doesn’t have to be all about the seller and/or auctioneer because again — if you don’t have any bidders/buyers it can be very lonely being an auctioneer.
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.