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  • Writer's pictureMike Brandly, Auctioneer

Does the UCC [§ 2-328] only apply to “auctioneers?”

The Uniform Commercial Code § 2-328 is titled “Sale by auction.” It appears the drafters assumed anyone who is selling property by auction would be an auctioneer. In fact, the code mentions “auctioneer” six times in a total of 254 words (2.36% of the text.)

Yet, would this same code apply to someone who isn’t “an auctioneer” but rather anyone selling “at auction” such as an attorney, trustee, court, receiver, owner, etc.? In the court cases in which we’ve consulted, it seems clear it would apply as it has repeatedly.

For the drafters to write “Sale by auction” and then limit applicability to only licensed (or self-proclaimed) auctioneers would make no sense. Rather, the term auctioneer here indicates to most in the legal community “the person conducting” the auction, and no more.

Therefore, if a trustee of a trust was selling property “by auction” would these same rules apply? They would. In fact, as we’ve noted, the UCC § 2-328 has been regularly applied to online auctions, real estate auctions, simulcast auctions … all auctions, no matter who’s conducting.

The UCC § 2-328 is not etched in stone, as the Uniform Commercial Code permits the parties to [possibly] agree otherwise. Yet, no modifications can be “manifestly unreasonable” and auctioneers (or those acting like auctioneers) too often are told to ignore that.

Specifically, all obligations to act with good faith, diligence, reasonableness, and care cannot be disclaimed — as we wrote about here:

Relatedly, nobody has yet to prove using the UCC § 2-328 “AS IS” (conspicuously) is a bad idea; on the contrary, there is ample proof modifications cause more litigation.

As we famously wrote, as an auctioneer, do you want to win in court or stay out of court? We think staying out of court is a far better strategy:

Anyone acting as an auctioneer should concern himself with what he “should do” and not what he simply “can do.” Just because you can doesn’t mean you should, nor just because you don’t have to, doesn’t mean you shouldn’t.

In that spirit, we think the UCC § 2-328’s “reopening” clause should not be invoked, and rather that auctioneers should say “Sold!” and mean it, as we hold money shouldn’t trump principle — integrity — and we’re not alone in this thinking:

In summary, the rules for auctions prescribed by the Uniform Commercial Code are used for all types of auctions, no matter who (or what) is actually conducting the auction. As such knowledge of these laws, and the correct (reasonable) application of such is paramount.

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 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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