No Warranty Or Guarantees at Auction, EXCEPT…

I was presented the following scenario in the comments here

Here’s a basic summary of the comments:
I was recently duped into buying a painting supposedly from a valuable artist only to find out later that it was not. In this case, the auctioneer’s homepage posted all the items for sale and had the artist’s name and year the painting was done. The day of the sale, he said that he was told by a colleague that it was probably the work of the artist in question.

When a buyer attends an auction, there are “Terms & Conditions” that the Auctioneer usually gives at the beginning, although they may also be posted in written form. In most cases, these Terms & Conditions have a statement such as, “All items are being sold “As-Is, Where-Is, with No Warranties or Guarantees Expressed or Implied.”

Many Auctioneers think this gets them “off the hook” in case there is something wrong with the item, as buyers are also told to look things over and know what they’re bidding on. So, in this context, it appears that it rests solely with the buyer’s own judgment. And it Does… UNLESS, the Auctioneer makes a statement of the items’ condition, authenticity, value or other similar statement. Now, I know that there are some Auctioneers that may try to argue this point, but those are the ones that may find out the hard way… in front of a judge.

As long as the Auctioneer says, “I’m selling this nice painting of a farm house by a lake” and you can see that it is just that, but you know there’s a small rip in the painting, then it is up to your judgment of value for this painting. Caveat Emptor, as the saying goes or “Let the Buyer Beware”, which means it is solely up to your own knowledge and judgment. If you didn’t notice the rip, and you’re the high bidder, it’s still YOURS, when the Auctioneer calls “SOLD.”

But, what if it was a print and not a painting? What if the Auctioneer said it was by a particular artist and it wasn’t?

My first question is, “Was the Auctioneer kidding around?”, as we all know that most Auctioneers may use a bit of tongue-in-cheek humor to entertain, as well as sell stuff. This would certainly be a gray area and may depend on the reaction of the crowd. After all, if it was picture of a mallard swimming on the lake and the Auctioneer referred to it as a Walt Disney Painting of Donald Duck, then it probably wouldn’t change anything… Yes, I know that’s the extreme, but more subtle forms of humor and conjecture may also be used and if most of the crowd knows better, then it may still be hard to hold him to his word.

However, if you are bidding on something that has been held out to be much more valuable than it actually is, and the Auctioneer knowingly or not, tells you that it is “likely a Picasso”, then he may have a lot more problems trying to convince a judge that he was just “kidding around”.

If the auctioneer states “I have a Picasso”, then it may be assumed to be genuine. However, if he says, “I have a painting that is signed Picasso”, then it is up to the bidder to determine if it is real, as he has not claimed it to be genuine. However, the wording of a statement can be difficult to ascertain what he may be implying. If in doubt, stop the auctioneer and ask… “Is this a genuine Picasso?”

To state that a “colleague said that it was probably the work of the artist in question”, does not relieve the auctioneer from his obligation, as he is an agent of the seller. So, if the “seller” misrepresented the item, it may still be an invalid sale. To state “probably” is not necessarily a good defense for the auctioneer, as it may still be considered a misleading statement. I know that if I heard an auctioneer say “probably”, I am going to consider that it was not verified and unless I know that, it IS what it’s supposed to be, then I’m not going to bid very much (if I bid at all). But, that is not to say that you were not misled into thinking that it was an original… so, the actual wording of his statements may actually determine his liability.

However, if the auctioneer stated something like, “A colleague said that it was probably the work of the artist in question, but I can not guarantee it, so please bid accordingly“, then he has basically left it to the bidders to decide for themselves, as to its’ authenticity. If I made such a claim, I would make sure everyone heard me, by repeating the “no guarantee… bid accordingly” and I may also add “I have not verified this”, just to make sure there was no misunderstanding by the bidders. It’s not unusual for a seller to bring something to auction, who is also misinformed about their goods. Often, the auctioneer is only repeating what he has been told by the seller, however it still makes both, the seller and the auctioneer responsible, should the item not be as the seller believed. This doesn’t make them bad people, just misinformed… but the seller should still be held to his claim. However, if either KNEW it was a fake, then it is a serious offense, as that gets into fraud and may be a criminal offense.

As I previously pointed out, sometimes, it’s all in the way it is said and some bidders will try to use the line, “but I thought he said…”

In these types of cases, it doesn’t matter what you thought he said, as it is each individual’s own responsibility for determining the authenticity and to pay close attention to the Auctioneer. If you only heard the part when he said “Picasso”, if you aren’t sure, then you should stop him and ask for clarification before bidding.

Now, back to the original comment that was left. This Auctioneer posted this picture on his website and put the “Author’s Name” under it. This could clearly indicate to the consumer that he is claiming it to be authentic. Since this Auctioneer went on to say that “a colleague said that it was probably the work of the artist in question” is only putting additional authenticity to what was already published and he may actually be considered to be holding this out to be authentic. To put the “question” on the end of the statement may not get him off the hook in this case, without further statements to make clear that he is not sure of the authenticity that was previously claimed on the website. If I had an interest in this item, I certainly would have stopped the Auctioneer and questioned his “appraisal” of the painting. If he continues to assert that it is was probably authentic, then he would likely be held to a guarantee that he has just expressed, otherwise he may be found to have violated FTC laws for fraud.

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2 Responses to No Warranty Or Guarantees at Auction, EXCEPT…

  1. Neil Bartlett says:

    Thank you for the information. The article was a bit lengthy but worth the read. This will surely help buyers be more aware of action that can take if they are fooled and should also serve as a warning to auctioneers that trying a rip-off is more risky than they might think.

    Thanks!

    Auction Ignite
    Learn How To Set Fire To Your Auction Business

  2. Auction Law says:

    Neil
    Thanks for your comments. However, while there are a few in any profession that may be a bit unethical, this is not the “norm” by any means. The above comments were not meant to be construed that this is a common occurrence in the profession.

    In fact, in many cases, I’ve found that the buyer’s perception is often due to their misunderstanding of what was stated in the terms and conditions or any other statements made by the auctioneer.

    In any case, at a live auction, the buyer should make the effort to perform their own due diligence and know what they are bidding on to help insure they are getting what they paid for… caveat emptor applies anytime you are dealing with any salesperson. I encourage you to read my other posts, which also cover information on this subject, as well.

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