We regularly write to [attempt to] help auctioneers stay out of court, rather than attempting to win in court, or worse yet, lose in court. One such writing is here: https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.
Most importantly, it seems we have to counter somewhat legal arguments about fortunate (lucky?) bidders versus high bidders, tie bids, missed bids, late bids, disputed bids, and most importantly customizing the Uniform (making it non-uniform) Commercial Code. For example, https://mikebrandlyauctioneer.wordpress.com/2022/03/10/only-the-first-sentence-of-%c2%a7-1-302/.
One may “vary” the Uniform (I just said that?) Commercial Code, but such modifications can’t be in bad faith, negligent, unreasonable, careless nor — generally speaking — manifestly unreasonable: https://mikebrandlyauctioneer.wordpress.com/2021/04/22/good-faith-diligence-reasonableness-and-care/.
What is “bad faith?” What is “negligent?” What is “unreasonable?” What is “careless?” What is “manifestly unreasonable?” How does one typically find out? It seems most of the time, a court, judge, and/or jury will tell you. https://mikebrandlyauctioneer.wordpress.com/2018/01/08/unfair-unreasonable-inequitable-what-does-it-all-mean/.
How does an auctioneer typically end up as a defendant in court? It’s not because you or your attorney thinks your policies are fine, and rather what your seller’s and/or buyer’s attorney thinks: https://mikebrandlyauctioneer.wordpress.com/2022/01/12/alex-lyon-case-and-the-larger-issue/.
In regard to the Uniform Commercial Code § 1-302, the “Official Comments” include this passage:
2. An agreement that varies the effect of provisions of the Uniform Commercial Code may do so by stating the rules that will govern in lieu of the provisions varied. Alternatively, the parties may vary the effect of such provisions by stating that their relationship will be governed by recognized bodies of rules or principles applicable to commercial transactions. Such bodies of rules or principles may include, for example, those that are promulgated by intergovernmental authorities such as UNCITRAL or Unidroit (see, e.g., Unidroit Principles of International Commercial Contracts), or non-legal codes such as trade codes.
Most hold that the “official comments” are not meant to override the textual law, but rather to add context and possibly be used to persuade a judge or jury. This would mean there could be another basis for varying the Uniform Commercial, so long as any changes were in good faith, diligent, reasonable, and with care.
What does this all mean? Using private “trade codes” and the like would seem to increase to odds of bad faith, negligence, unreasonable, and carelessness. Why do I think that? Let me guess … your print is so small nobody can read it, your terms are [purposely?] full of malarkey, and your bidders/buyers don’t read anything anyway, how is that going to work out?
It is a somewhat perplexing time to be an auctioneer — in that auctioneers complain when bidders don’t read nor understand the terms, but then auctioneers make the terms as difficult to read and understand as possible — even suggesting an attorney’s opinion may be needed to clarify: https://mikebrandlyauctioneer.wordpress.com/2019/04/18/are-we-making-buying-at-auction-easier-or-more-difficult/.
Incidentally, the most modified auction-related law seems to be the UCC § 2-328 and we continue to ask when the “textual” unmodified version of the UCC § 2-328 has been a bad idea? The short answer is “It hasn’t ever been” and I have keen insight into that as I’m frequently asked to assist in such cases. https://mikebrandlyauctioneer.wordpress.com/2018/08/01/when-has-the-ucc-2-328-been-a-bad-idea/.
One recent case (arbitration) exhibited this principle quite clearly when the judge asked the auctioneer, “Why are your terms so counter to the general principles of auctioneering?” General principles? What would that imply? I happen to know what this judge was implying … and the resolution, in this case, demonstrated the more modification, the less understanding courts may exhibit.
In over 45 auction cases (litigation) to date, I find unique versions of terms and conditions in almost every case, when actually the subject property doesn’t generally demand any customization of fairly straightforward terms: https://mikebrandlyauctioneer.wordpress.com/2021/12/31/auctioneers-less-risk-who-decides/.
Finally, rules modifying terms and conditions (varying the Uniform Commercial Code) tend to suggest the parties together set (agree to) the modifications. Yet, with page after page of unreadable and/or unintelligible text, is this really two parties agreeing to these changes, or rather the auctioneer designing them and giving bidders (and even sellers) no choice?
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 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 is 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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