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  • Writer's pictureMike Brandly, Auctioneer

Reopen with a tie bid is fair to both?

Countless auctioneers and those in the auction business believe they have the discretion per state law to reopen a so-called “tie-bid” — the same bid amount from two or more bidders.

In other words, typically, the auctioneer says “Sold” to Amy for $300,000 but the ringworker had Jose at $300,000. The auctioneer tells me that state law allows him to reopen the bid in this case, to resolve the tie.

Here’s the state law referenced:

UCC § 2-328 (2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. 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.

We invite these (countless) auctioneers to find the words “tie” or “tied” bid here and they can’t. That’s because this doesn’t reference a tied bid, but rather a higher bid that comes in at the moment the hammer is falling — which is necessarily not a bid the auctioneer has and the ringworker thinks he has.

So, if you are an auctioneer working in any state except Kentucky, you do not have authority per state law to reopen a “tie” or “tied” bid. You do have the right to reopen a bid when a higher bid comes in while the hammer is falling in acceptance of a prior bid.

  1. Don’t believe us?

  2. You’ve been told otherwise?

  3. What did the drafters of the UCC § 2-328 (2) intend?

For one, they hoped to harmonize rules of commerce around the United States, proving uniformity to the laws governing transactions, particularly across state lines. In regard to our subject today, what did the drafters of this particular law want this law to mean? One could look at the “Official Comments” to get some insight:

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.

Fairness? So the actual buyer (owner of the property) has to now compete with another bidder who only believed he was the buyer? What if every single bidder claimed to be the high bidder upon “Sold!?” Reopen the bid to everyone? Does the auction ever really conclude?

So, I’m today saying it again … there is a very good chance (98% in one regard) that state law in your state does not expressly note you can reopen the bid with a “tie” or “tied” bid with two or more bidders — despite how “fair” you think it is.

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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