There’s been a tad of discussion lately about auctioneers selling “as-is” and not affording the bidders/buyers any right to inspect ahead of time. It would seem to me to be a dreadful business practice, but some auctioneers and their attorneys are apparently so inclined.
However, what are the implications? While you’re basically hearing crickets on that, let me tell you … the ultimate buyer has the right to complain. Further, you don’t have to take my word for it — and take rather New York Attorney at Law, Richard Stim‘s word for it.
Mr. Stim holds that buyers have been traditionally obligated to seriously inspect every purchase (caveat emptor) but today buyers can be held to “as-is” purchases so long as they have the reasonable opportunity to inspect beforehand, and therefore cannot complain later.
I encourage you to read his entire article here: https://www.nolo.com/legal-encyclopedia/contract-disclaimers-as-is-provisions-34944.html. What should any reasonable-minded auctioneer learn from his conclusions in this article? Any auctioneer want to minimize risk?
If an auctioneer is selling “as-is” and does not offer any reasonable opportunity to preview, the buyer can complain. In fact, Mr. Stim offers that decades ago, buyers had an obligation to inspect — and how does a buyer fulfill this obligation without any opportunity?
What does it mean that a buyer may complain? Any guess where the word, “complaint” comes from? I can tell you what it means: a “cause of action” or a lawsuit … and why would any auctioneer or attorney desire to subject himself or his client to a possible lawsuit?
In the Supreme Court of the United States case Mottram v. United States, 271 U.S. 15 (1926), the fact Mr. Mottram had an opportunity to inspect prior helped hold him to the Government’s “as-is” sale. Mr. Stim might say, “He had no right to complain.”
Here’s the bottom line for all auctioneers in the United States. If you are selling “as-is” and not — at a minimum — offering a reasonable opportunity for preview (whether or not that offer is accepted) then your buyers will have a right to complain — in other words, pursue damages.
“As-is” & Inspection 04/30/20
Lastly, despite auctioneers for centries routinely selling “as-is” and “where-is,” there is no obligation to do so. If an auctioneer describes the property selling and allows the buyer recourse if there’s any misrepresentation or concealment of material facts, that’s all good, and maybe better.
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.