The word “customary” gets attention in the auction business. What is customary? Live and/or online bidding? A variety of payment methods? A detailed settlement for the seller? What is not customary? No property previews? Financing terms for personal property? “Live” auctioneers talking slowly …?
Besides general customary practices, the law provides in the United States that auctioneers are to close the bidding on lots — real or personal — per the § UCC 2-328 (2): “A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner.”
In this regard, most live auctions involve a “customary manner” which is, “Sold!” Online bidding platforms use a variety of closings including “Sold,” “Won,” “Closed” and others … although any one platform is typically uniform with its closing verbiage.
Yet, does the law consider customary what is customary in the industry, or customary for that particular auctioneer? Could an auctioneer have his or her own “customary manner” which is not customary otherwise? It seems the courts have largely agreed it’s whatever that auctioneer is portraying as “customary.”
In other words, if an auctioneer says “Sold!” for 800 lots, would the words, “You bought it!” bind the seller and buyer on lot # 801? One could argue the latter is not customary, but it begs the question of what “You bought it” was intended to mean if not “Sold!” What could it possibly mean otherwise?
I’m not convinced that the § UCC 2-328 (2) denotes the fall of the hammer or one other single method. Rather, ” … or in other customary manner” could potentially include more than one expression — especially if a bidder/buyer interpreted the closing to equate to “Sold!” and/or these expressions have been used prior.
I’m truly baffled by auctioneers endeavoring to make the closing process confusing or inconsistent. What possible merit is there indicating something is “Sold!” when it’s not? Why would we want bidders to think they are buyers when they are not? Just because we can?
Of course, there are those who argue that all the time … per later in the § UCC 2-328 (2) [Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.] that we should do exactly that.
This reopening campaign isn’t a customary manner issue per se, and rather saying “Sold!” or anything else, and then reopening the bid with a higher bid. There’s no provision to indicate “Sold!” and then void the contract without a higher bid — except in Kentucky where the final resolution remains incoherent and elusive.
As we’ve noted prior, Aaron Traffas wrote about the customer experience, which seems to many of us to be the most important factor here. In other words, why are we as auctioneers desiring to make the buying experience confusing? https://auctioneertech.com/2016/sold-doesnt-mean-sold/.
Further, as we’ve previously written, reopening the bid (legally or illegally) can result in lawsuits, whereas not reopening the bid rarely — if ever — results in any legal action. https://mikebrandlyauctioneer.wordpress.com/2023/01/11/the-cost-of-that-one-more-bid/.
We’ve suggested looking at the plane (court case) with damage should tell you to fortify that plane where there’s no damage (change your behavior,) as that’s where the planes that are missing were hit. https://mikebrandlyauctioneer.wordpress.com/2023/06/28/auctioneers-and-survivorship-bias/.
Here are our recommendations: (1) say “Sold!” or whatever your bidders would consider the same (customary) and mean it. (2) Provide a good customer experience that will benefit your seller with more and better bidders, higher prices, and better results otherwise — that’s your duty.
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 formerly at 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.
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