We are reminded that an auctioneer can reopen a closed bid in light of a missed timely tendered (made) bid. We ask today, what exactly is this missed “timely tendered” bid? The UCC § 2-328 gives a hint:
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. UCC § 2-328 (2)
The above state law doesn’t say “before” or “after” the hammer falls, but rather “while” the hammer is falling. That would appear to be somewhere after “before” and before “after” from my reading.
In reviewing the Official Comments concerning the UCC § 2-328 which we’ve noted prior:
The auctioneer may in his discretion either reopen the bidding or close the sale on the bid on which the hammer was falling when a bid is made at that moment. The recognition of a bid of this kind by the auctioneer in his discretion does not mean a closing in favor of such a bidder, but only that the bid has been accepted as a continuation of the bidding. If recognized, such a bid discharges the bid on which the hammer was falling when it was made. UCC § 2-328 Official Comments
In these Official Comments, this subject higher bid is made “at that moment” which again appears to confirm this isn’t a bid that was made before the hammer fell, nor after the hammer fell, and rather “while” or as the hammer is falling.
Can your own terms counter all of this — and anything else for that matter — to include reopening bids that were made minutes before and/or minutes after the hammer fell? For that matter, could you open a bid that came in a year before or a year after the hammer fell?
Our reading of this particular statute includes both UCC § 1-302 (a) and UCC § 1-302 (b):
§ 1-302. Variation by Agreement. (a) Except as otherwise provided in subsection (b) or elsewhere in [the Uniform Commercial Code], the effect of provisions of [the Uniform Commercial Code] may be varied by agreement. (b) The obligations of good faith, diligence, reasonableness, and care prescribed by [the Uniform Commercial Code] may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever [the Uniform Commercial Code] requires an action to be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement. UCC § 1-302 (a) and UCC § 1-302 (b)
Indeed you can modify the UCC § 2-328 but … your modification cannot be in bad faith, lack diligence, be unreasonable, or lack care. We defined good faith, diligence, reasonableness, and care here: https://mikebrandlyauctioneer.wordpress.com/2021/04/22/good-faith-diligence-reasonableness-and-care/.
Finally, now maybe you have a better idea of what a missed “timely tendered” bid is and isn’t, and what your options are given this circumstance.
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 Auction 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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