Rescinding a contract is essentially putting both parties back where they were before they were bound by a contract. In other words, in the auction business, the buyer returns the property and the auctioneer (or seller) refunds the purchase price.
Check your auctioneer terms and conditions … I’m willing to bet you are [attempting to] disclaim “expressed warranties” and so if you express (use words,) for example, that a lot is a “New Samsung 36a Television” and it is not, the buyer can unilaterally rescind the deal.
Further, your “AS IS” and “WHERE IS” disclaimer does nothing to override or void this expressed warranty. Your “AS IS” and “WHERE IS” disclaimer does protect you to some extent, and if, for instance, a buyer can inspect this television, and it’s missing a knob, your “AS IS” disclaimer is largely effective.
We in the auction business have been announcing and/or printing “We’re selling everything today as is and where is with no warranties expressed or implied …” for decades. The issue is, the law says otherwise and a buyer can — based upon your misrepresentation — take action to receive a refund.
So what should auctioneers do? We suggest you remove that “expressed warranty” disclaimer for two reasons: (1) it’s not effective. (2) it may void some or all of your other terms and conditions. If you leave it in, it may serve as a “bluff” but otherwise, it should not be there.
Relatedly, can you disclaim any implied warranties? You can “imply” this is a new television when it’s not — but why would you? However, you must offer an opportunity to inspect the television prior or the buyer can rescind the purchase. https://mikebrandlyauctioneer.wordpress.com/2022/12/28/buyer-inspection-ucc-2-316/.
Some auctioneers are arguing their expressions are only for “marketing purposes” or only “what the seller said …” but an expression is an expression — it’s about that simple. If you do not want to be held to your express(ed) warranties, don’t express them or the buyer can potentially rescind the transaction.
What if your expressed warranty indicates, for example, that this is an “RCA 10b portable television?” Further, let’s say the buyer feels he received a better television than described … can the buyer still rescind the deal? He can, but he likely won’t. Can you (or your seller) rescind the deal? Probably not.
How long after the “fall of the hammer” can a buyer rescind a contract under these circumstances, and receive a refund? First, some states have laws regulating this situation, and auctioneers are advised to conspicuously post return/refund policies where bidders see such before bidding. Any policy (written or not) should provide the buyer “reasonable time.”
Finally, this is certainly manageable news for auctioneers — all you have to do is accurately describe what you are putting up for auction, and allow bidders the opportunity to preview; if you’re unsure of a certain fact … don’t say it. As such, buyers won’t have the right to rescind the contract.
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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