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Are you disclaiming implied warranties in your terms and conditions? You might be. Your terms note such and your attorney has told you the law is clear you can do so.

However, the better questions include if the law actually — clearly — denotes you can disclaim an implied warranty, and even more material, is it good practice? We will answer both questions here.

We first wrote about this issue calling your attention to the Uniform Commercial Code (UCC) § 2-316. We have a link to this statute here: https://mikebrandlyauctioneer.wordpress.com/auction-treatise/%c2%a7-2-316-exclusion-or-modification-of-warranties/.

You see, the statute also says, “Unless the circumstances indicate otherwise.” When could the circumstances indicate something else? It seems to us and others who have studied this issue that it could when the such arrangement was unreasonable, inequitable — unconscionable. For example:

  1. You express false information about the subject property with the intent to deceive.
  2. You withhold or conceal information about the subject property with the intent to deceive.
  3. You don’t provide the bidders with a reasonable opportunity to preview the subject property.

We wrote some examples where implied warranties might not be enforceable: https://mikebrandlyauctioneer.wordpress.com/2021/09/20/auctioneers-and-when-the-circumstances-indicate-otherwise/ We also linked to a study by Law Professor Robert D. Brain who wrote these “implied warranty disclaimers” are nonsense:

Should auctioneers be implying one thing, while selling something else? If the subject property is a 4 bedroom, 1 bath home should the auctioneer imply there are sufficient bathrooms for the “growing family?”

What if a family of two adults and 7 children calls about the property and says, “We’re excited to finally find a home large enough …” What if you’re putting up for auction a 900-square-foot condominium? What about that 2006 Mini Cooper that’s also selling?

Indeed a 9-member family can buy any house, condominium, or car they desire. That’s not the question. Should you be implying these are appropriate purchases for their personal use? Should you be implying anything?

We’ve long held that auctioneers should not be expressing nor implying who the appropriate buyer is, and rather just talk about the property — and let buyers decide if they are suitable or not.

Further, there’s nothing wrong with sales talk and puffing where the recipients (bidders) know you’re exaggerating — but don’t puff or sales talk unless you’re good at it: https://mikebrandlyauctioneer.wordpress.com/2019/11/25/sales-talk-and-puffing-held-as-fact/.

We regret to note that some auctioneers are not good at “just joking” [because they aren’t joking] as they only use this defense when called out and otherwise leave their comments as fact. https://mikebrandlyauctioneer.wordpress.com/2019/12/16/an-auctioneer-and-the-just-joking-defense/.

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, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.