I love to teach auctioneer continuing education (CE). Fortunately, I have the opportunity to teach it somewhat frequently.
The joy of teaching is almost always amplified by questions and commentary from attendees before class, at breaks and after class; nearly every class results in me learning something new.
At a recent class regarding the UCC 2-328, an auctioneer described reopening the bid after signaling that an item was sold, citing that he didn’t say the word, “Sold!” but rather said, “You bought it.” He felt that since he didn’t utter the word, “Sold!” he could reopen the bid at will.
He asked me what I thought of this practice.
I responded that the UCC 2-328 dictates that bids may only be reopened after the “fall of the hammer” or other customary closing if a bid is received “as the hammer is falling.” I told him that if his customary closing was, “You bought it,” and his situation involved something other than a bid coming in as the hammer was falling, then he voided a valid contract — something he wasn’t authorized to do.
His response stunned me to some extent. He said:“I don’t have a customary closing … I use various ways to signal that an item is sold, so I’m not held to the customary closing part of the UCC 2-328.”
No customary closing?
I told this auctioneer that not using any customary closing seemed ill-advised. If whatever closing he was using allowed him to void the contract, then that same closing would allow the buyer to void the contract.
I asked him in this instance, if the high bidder at the point that he said, “You bought it,” decided he didn’t want the item, and refused to pay for it, what would he do? He replied:“Well, he couldn’t do that, since I declared the item, “Sold!” — although I didn’t use the word, “Sold!”
It seems clear that auctioneers must use some manner to close the bidding. The UCC 2-328 suggests the fall of a hammer, or any other customary fashion.
What the UCC 2-328 doesn’t say is if the customary closing is particular to each auctioneer, or generally, any customary closing auctioneers use.
Regardless, it seems obvious if an auctioneer wants to bind the high bidder, then the auctioneer’s right to void the contract must be waived as well. Said another way, if the auctioneer’s closing desires to hold the buyer in contract, then that same closing must hold the seller (auctioneer) in contract.
I would recommend this. Every auctioneer should use a rather consistent, customary closing to end bidding on real and personal property. In this way, bidders and buyers know when the contract is firmed, and the seller is protected from bidders and buyers retracting their bids, or otherwise claiming they aren’t in contract.
Further, we wrote some time ago about auctioneers not saying, “Sold!” at all; this seems particularly unwise as we noted in that article.
In summary, whatever closing (customary or not) that an auctioneer uses to bind the high bidder equally binds the seller. Auctioneers really can’t have it both ways.
No customary closing? If it’s a closing, and means, “Sold!” then it probably doesn’t matter if it’s customary or not.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
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