The ring worker holds up Lot #26 and the auctioneer asks for a bid of $5,000. Nobody bids $5,000 so the auctioneer asks for $2,000 and ultimately a bidder offers an initial bid of $1,000. Bidding continues until the auctioneer announces, “Sold!” for $4,300 to bidder number 312.
Or is this lot sold for $4,300 to bidder 312? Bidder 184 says he bid $4,400 about 10 seconds ago but the auctioneer didn’t take his bid. Bidder 218 says she bid $4,500 about a minute ago but apparently nobody heard her. Bidder 63 thought he was the high bidder at $4,300 … there was even a bidder who said she would be willing to bid $5,000 if the auctioneer reopened the bid.
So the auctioneer awaits the “red flag” and the closing is under review. A referee will review the video and audio to determine who bid and when in order to maximize the seller’s sale price ignoring the integrity of the process and respect for bidders’ reasonable expectations. Incidentally, what does the law say about this?
The Uniform Commercial Code § 2-328 denotes that “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.”
So this particular state law says the auctioneer may (or may not) reopen the bid if a higher bid was made “while the hammer is falling.” It would appear any bids made prior to the hammer falling — or any bids made (or suggested) after the hammer fell — would not be considered.
Bidder 312 believes she is the buyer as the auctioneer gestured to her and indicated “Sold!” to her number, for her high bid of $4,300. Yet, four other bidders think otherwise and three (or four) of their bids will (or might) increase the seller’s sale price.
It’s being suggested auctioneers have to reopen the bid anytime a higher bid can be obtained, no matter if that bid came in a minute before, 10 seconds before, a bidder thought she was the high bidder, or even after “Sold!” These “missed,” “disputed,” “late,” or otherwise “not accepted bids” must be considered?
I’m waiting for some to suggest while we’re at it, let’s consider bids that come in the next day … or even two weeks later, or were offered a month before the auction. If they are higher bids, wouldn’t that help the seller? Then the bidding has to be reopened, right? These higher bids have to be accepted, right?
I was reminded today by an attorney friend of the confusion in Kline v. Fineberg, 481 So. 2d 108, 109 n.1 (Fla. Dist. Ct. App. 1985):
Joseph M. Fineberg testified that E.B. Kline’s bid was made after Vivian Clark said, “sold.” Mr. Kline testified that he made the bid either before or simultaneous to the time Ms. Clark said, “sold.” Counsel representing another bidder at the auction testified that Mr. Kline’s bid was made after Ms. Clark said, “sold.” Kline v. Fineberg, 481 So. 2d 108, 109 n.1 (Fla. Dist. Ct. App. 1985)
I guess we’ll need red flags, referees, video and audio recordings, courts, judges, juries, and terms that say we are selling to the highest bidder no matter what we need to do to accomplish that … forgoing the integrity of the process and respect for bidders’ reasonable expectations. Well, let’s hope not.
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 Auction 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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