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UCC § 2-328 (Sale by Auction) only has nine sentences, but they all are widely misunderstood. Here we take a look at sentence #1, shedding some light on what it means. Here is this first sentence:
In a sale by auction if goods are put up in lots each lot is the subject of a separate sale.
We would first comment that despite this saying “goods are” it should say “property is” instead, as the courts have ruled consistently that the UCC 2-328 applies equally to real property and personal property. More on that here: https://mikebrandlyauctioneer.wordpress.com/2012/01/07/when-where-the-ucc-2-328-applied-to-real-estate/
Secondly, it’s also probably worth mentioning here that the UCC 2-328 applies equally to live auctions, online auctions, simulcast auctions and any other type of auction. We wrote about that here: https://mikebrandlyauctioneer.wordpress.com/2011/09/01/does-the-ucc-2-328-apply-to-an-online-auction/
Third, this first sentence explains that every lot (item) sold at auction is an auction in itself. A 500-lot auction “event” is actually 500 individual auctions with each capable of their own terms and conditions. For instance, one lot could be sold absolute, while another with reserve; one lot could require payment in cash, while another lot subject to a credit card transaction. Again, each lot is its own auction.
Lastly, any number of lots could be sold, while other lots could be withdrawn from the auction event. In other words, any auction event could conclude after any certain lot; any particular lot could be withdrawn subject to it being “put up” as selling without reserve or with reserve. We’ll discuss this particular issue further in a subsequent post.
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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and Faculty at the Certified Auctioneers Institute held at Indiana University.
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