The default position of the Uniform Commercial Code appears to say that title is transferred at auction upon, “Sold!” It’s quite common for auctioneers to say, “Once I say, “Sold!” you own it.” Our questions include today if that’s always true?
We ask this question in light of some buyers (denoted as such) not paying, saying they didn’t bid, wanting to renegotiate the terms or price, or more or less disappearing. So in all these cases, this person owns the item?
For that matter, could an auctioneer drive down the street and point to people saying, “Sold!” and transfer title? I would guess not but that would be a great way to get rid of used tires or old sofas … or old non-working machines.
It appears the assumption is that the buyer has to be registered and agrees to the terms & conditions. Okay. Then, auctioneer gestures to him and says, “Sold!” and he claims he didn’t bid? He still owns the lot? What if he says, “I didn’t know what you were selling … I wasn’t bidding on that.” He still owns this lot?
These questions are in regard to some contention that auctioneers cannot resell items after, “Sold!” because title (ownership) has transferred. We would hold that if there is no meeting of the minds, “Sold!” is not effectual, and therefore title didn’t transfer.
Given that holding, the property would still belong to the prior owner/seller and the auctioneer could (with authority) sell it … again. In fact, maybe it hasn’t been sold yet in that scenario?
Documentation, video, audio and/or witnesses would be important if a so-called buyer claimed he didn’t buy or didn’t understand. I would propose with that substantiation, the property could be put up again and sold otherwise. If when a contract is formed, title transfers, it seems reasonable to us when a contract isn’t formed, it doesn’t.
In fact, we did hold this position in a case in which our client was successfully relieved from taking possession of a large unworking machine where the auctioneer had gestured to him and said, “Sold!” His claim was that he didn’t bid, and didn’t want the item. Our “no contract — no title transfer” argument won that day.
In summary, “Sold!” can form a contact that transfers title, and “Sold!” that doesn’t form a contract (lack of competent parties, consideration, and/or a meeting of the minds) doesn’t transfer title. It’s a bilateral contract necessitating consent from both parties.
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.