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.”
Countless people have asked me if this refers to a tie bid and my reply is it does not, and rather refers to a higher bid placed as the hammer is falling, giving the auctioneer discretion to reopen the bid and accept this “last-second” bid as the new high bid – thus continuing the bidding.
What the state of Kentucky has codified is this:
If it becomes immediately apparent at the close of the bidding that the auctioneer and a bid assistant or ringman have acknowledged the same bid from different bidders, the auctioneer may continue the bidding between the disputed bidders. KRS 330.220
Therefore the UCC § 2-328 denotes a higher bid whereas Kentucky denotes a bid of the same amount. Clearly, Kentucky’s law is not consistent with the UCC § 2-328 as it doesn’t mention anything about a tied bid. In other words, these two statutes are inconsistent.
While the UCC § 2-328 implies a solution, the Kentucky law is a mess. Why is that? As I’ve previously noted, there’s no concrete, discernable solution to break the so-called tie. “Continue the bidding between the disputed bidders …” means what?
The auctioneer’s bidder must bid higher? The ringman’s bidder must bid higher? Do they flip a coin? What if both (or all) disputed bidders refuse to bid anymore? How is this so-called tie resolved? Kentucky provides no directions.
Just to affirm these are higher bids and not tie bids:
Ragusa v. Greco, 171 La. 686, 131 So. 849 (1930) the auctioneer considered reopening the bid with a higher bid.
Hoffman v. Horton, 212 Va. 565, 186 S.E.2d 79 (Va. 1972) the auctioneer reopened the bid with a higher bid.
Kline v. Fineberg, 481 So. 2d 108 (Fla. Dist. Ct. App. 1985) the auctioneer [tentatively] reopened the bid with a higher bid.
Callimanopulos v. Christie’s Inc., 621 F. Supp. 2d 127 (2009) the auctioneer reopened the bid with a higher bid.
Just to affirm these are [held as] tie bids and not higher bids:
KRS 330.220 says … “the auctioneer and a bid assistant or ringman have acknowledged the same bid from different bidders.”
A higher bid is different than a bid of the same amount. All over the United States, auctioneers routinely take higher bids, but cannot accept a bid of the same amount in place of a current bid. For those unfamiliar with bid-calling contracts: https://mikebrandlyauctioneer.wordpress.com/2023/03/28/yes-auction-bid-calling-or-online-creates-contracts/.
Even in Kentucky, it’s not the auctioneer taking a bid of the same amount over a current bid, and rather reopening the bid when the bid assistant or ringman has acknowledged a bid of the same amount. There’s no auctioneer saying “I have $1,000 (from A) and I want $1,100 … oh, I have a new bid of $1,000 (from B), so A, you’re out …”
Lastly, if you’re arguing there’s “consistency” in the UCC § 2-328 reopen provision and Kentucky’s tie bid reopen provision, some offer that both lack the desired integrity of the process and respect for bidders’ reasonable expectations: https://mikebrandlyauctioneer.wordpress.com/2017/07/28/the-integrity-of-the-bidding-process/.
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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