Knowing your Auction Rights

"THE NOTICE SAID THAT THE PEW WAS FROM BRECHIN UNITED AND 70 YEARS OLD, BUT NOW I'M NOT SO SURE".

"I MISSED THE PREVIEW, BUT HE DIDN'T TELL ME THAT THERE WAS A CHIP OUT OF THE LID".

"I GUESS I JUST GOT CAUGHT UP IN THE BIDDING UNTIL IT WAS TOO LATE, AND COUDN'T JUST TURN AROUND AND CHANGE MY MIND, SO I HAD TO BUY THAT TRACTOR".

"I WAS SURE HE WAS LOOKING AT ME WHEN HE SAID 'SOLD'".

Each of the foregoing scenarios occurs frequently, and we've probably each been "burned" at least once...buying something we didn't realize was damaged, learning that the historical background or provenance was not as represented, wishing we could take back that last bid or not being sure that ours was the winning bid.

The dynamics of auctions are straight forward yet complex, exhilarating yet heartwrenching, and simple yet based upon sound legal principles. The players and rules are the same whether you attend a small country estate auction comprising a smattering of antiques, farm equipment and used appliances; or a color catalogued auction of fine quality furniture complete with estimates of market values and several pages of terms and conditions.

Understanding your rights and obligations in such situations requires having a basic understanding of the relationships between the players. This article is tailored to traditional auctions where bids are received orally and the bidder whose dollar amount is accepted buys the product.

The auctioneer is the agent of the seller who is generally the consignor. His role is to get the best possible price, by "working the crowd". When he believes that he has it, he gives notice by saying"once, twice, sold", or something similar. A bid is merely and offer, and it is not accepted until the auctioneer indicates that the product has been sold. This is the law of contract in its simplest form... an offer and acceptance which forms a binding agreement.

The relationship between the auctioneer and seller is based upon trust. The auctioneer is supposed to get the highest price and the seller is supposed to give the auctioneer the information (condition, provenance, etc.) regarding the products so as to enable the auctioneer to do his job. The auctioneer may be required to do some investigation regarding the consignment and to promote the event so as to enable him to fulfill his obligation to the seller. Accordingly, selecting the appropriate auctioneer for the sale is extremely important, in particular if you are relying on his expertise and reputation within the local community. It is his reputation that is at stake when he makes representations to the bidders.

The legal principle of play between the auctioneer and bidder is in the nature of representations. The auctioneer, although representing or as agent for the seller, makes statements regarding condition, value and so on. He is also responsible for insuring that the public is aware of the terms of the auction and that "good title" or "ownership" is able to pass to the purchaser. Accordingly, we as attendees at an auction place a great deal of reliance upon the auctioneer.

So what happens if something goes wrong? Let's go back to our four examples. The quicker you bring a problem to the auctioneer, the greater the likelihood you will get satisfaction and the smaller the likelihood that you will become embroiled in a legal battle or harbour ill feelings towards the auctioneer or another bidder. Auctioneers generally try to inform bidders of defects in products, reproductions, replaced pieces, and so on. Nevertheless, we generally are expected to bid only after we have satisfied ourselves with respect to the condition of the item. Since the auctioneer has a reputation to uphold, and since he attempts to rely upon what his seller has told him, he should be prepared to carefully listen to all complaints brought to him if done so in a timely way. If you speak up as soon as you receive that bowl with the chipped lid, there is really very little lost by the auctioneer putting it up again. He will get a few dollars less for his seller, but his reputation will maintained and possibly enhanced. He may reprimand the disgruntled first purchaser and serve notice on the rest of the crowd to be more careful when previewing. The law would probably protect the auctioneer if he refused to put the damaged goods up again since the auction terms were clearly spelled out orally at the outset and a binding contract has been made. But common sense usually prevails. Remember, however, if you wait until the end of the sale and the auctioneer is unable to resell that bowl, your chances of achieving the justice you think you deserve are greatly diminished.

Provenance or Authenticity. My example of purchasing the pew is similar to a problem I personally encountered a couple of years back. I had just purchased an antique decoy represented in the auctioneer's catalogue as being a merganser by an Ontario carver. After the hammer fell I was discussing my great buy a so-called expert in the field. He told me that there was no way that it was an Ontario decoy and explained why. The explanation made sense. I approached the auctioneer discretely while he was on a break, and without batting an eyelash he said "no problem, come over here and we will credit your account". That was a clear example of "innocent" misrepresentation. The auctioneer regained my confidence, even if I had waited until after the sale, if the auctioneer had not given me the credit, I still would have been entitled to sue him for the difference in values between the item I purchased and the item I was told I was purchasing.

Can you retract a bid before the hammer falls? Since the law of contract governs, and a contract is not formed until an offer (bid) is accepted by the fall of the hammer, you are able to do so provided you speak up loudly and clearly. Embarrassment is probably the only reason that we generally opt for praying that someone else offers a higher bid rather than speaking up.

Frequently there is confusion respecting whose bid has been accepted. The auctioneer has the last word. He will either put the item up from the beginning or acknowledge the bid of the disgruntled buyer and offer everyone else an opportunity to bid higher. Sometimes it is simply a matter of the assistance of the auctioneer not doing their jobs properly or their being an inexperienced bidder. In this case, the seller is more than happy to see the piece go up again since a higher price will be realized.

The legal rationale is found once again in the law of contract. A contract is generally formed and enforceable when both sides of the same mind. If there is at least some confusion, then it could be argued that a valid and binding contract has not been formed since we really don't know with any degree of certainty who the contracting parties are.

Even once you understand the auction process, you should realize that it might not be in your best interests to dispute what may have been in part your mistake. Do you want to maintain a certain reputation with the particular auctioneer for fear that the next time he may fail to acknowledge your bid or look a little bit longer and harder for a bid higher than yours? Are you going to be counting upon a favor or break from the auctioneer when you are the consignor? Is it in your long term interest to develop or maintain a reputation amongst fellow dealers or local residents? If you consult a lawyer after an unfortunate experience has taken place, make sure that you have reasonable expectations and that your lawyer spells out the range of likely results and the cost involved in attempting to achieve your goal. Sometimes a carefully worded letter from a lawyer with strong negotiating skills, and the subsequent exchange of two or three additional pieces of correspondence will achieve a good net result in a timely fashion.

 

[ Home ] [ Firm Profiles ] [ Practice Areas ] [ Commitment to Clients ] [ Publications ] [ News & Events ]
[ Ask Us ][ Sitemap ] [ Location & Directions ]
Disclaimer © copyright 2000 Banks & Starkman Lawyers. All rights reserved.