I’ve said numerous times that there isn’t a 5-year-old alive in the United States today who doesn’t know what an auction is.
In fact, maybe in the entire world?
Our question today is: Does anyone really know what an auction is? In that regard, does the word “auction” mean the entire event or just the one item?
I suspect if we went out on the street and asked people walking along a busy sidewalk in a major city in the United States, most all would answer that an auction is an event. In other words, an auction encompasses all the property being sold at that one, singular auction.
We previously wrote about auctioneers counting the number of auctions they’ve held here:http://mikebrandlyauctioneer.wordpress.com/2012/05/12/how-many-auctions/
Our focus in this article is more on the technical nature of the word, as used in terms and conditions, contracts and the like.
For instance, let’s say an online auction denotes the following terms:
“This online-only auction is a timed event and has an auto-extend feature. Any bid placed within ten minutes of the auction ending will automatically extend the auction for ten minutes from the time the bid is placed. For example: If an auction scheduled to end at 10:00 a.m. receives a bid at 9:59 a.m., the close time of the auction automatically extends to 10:09 a.m. The auto-extend feature remains active until no further bids are received within the ten minute time frame.”
One would conclude, if the word “auction” means the entire event, that the entire event will continue until no bids are placed on any items for ten minutes.
One would conclude, if the word “auction” means each item, that the bidding for each item will continue until no bids are placed on that item for ten minutes.
Let’s just say that the auction (event) is scheduled to end at 10:00 a.m. A bid is placed on one auction (item) at 9:59 a.m. so bidding for that auction (item) is extended to 10:09 a.m. — or the bidding for that auction (event) is extended to 10:09 a.m.
What if bidding on one item continues to 10:09 a.m., 10:12 a.m., 10:16 a.m., 10:20 a.m. … 11:45 a.m. … 12:31 a.m. … 2:59 p.m. … 5 hours past the 10:00 a.m. end time? And, what if no other bids are placed on any of the other items in the auction (event) after 10:00 a.m.?
That means if there are 200 items, 199 high bidders await 5 hours or more before being awarded their item because of highly contentious bidding on just 1 item — that is, if we use the word “auction” to mean the event.
As we wrote about back in May, 2012: The UCC 2-328 (1) suggests an auction (event) with 10,000 items may actually mean 10,000 auctions (items.) In particular, it says:
In a sale by auction if goods are put up in lots each lot is the subject of a separate sale.
As such, each item constitutes a separate sale, and the UCC 2-328 uses the word “sale” as equivalent to “auction” throughout.
In our online-only example, just as concerning would be a bidder needlessly and unexpectedly waiting five hours for their item to close following the last bid — as would be a bidder waiting to bid on a particular item after five hours of contentious bidding on another certain item, only to find out all the other items closed five hours ago.
Given that generally people think of an auction as an event, and the legal definition tends to suggest an item, terms and conditions should be endeavor to clearly define what the word “auction” is meant to denote.
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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