Auctions

An auctioneer serves as the agent of the seller who employs him or her, and the auctioneer must act in GOOD FAITH, advance the interest of the seller, and conduct the sale in accordance with the seller's instructions. If real property or goods priced at $500 or more are sold at auction, a written agreement is necessary to satisfy the STATUTE OF FRAUDS, an old ENGLISH LAW adopted in the United States that requires certain contracts to be in writing. The auctioneer is authorized to sign a memorandum of sale on behalf of both parties, but this authority is limited and expires shortly after the sale has been concluded. Both the buyer and the seller are bound by the announcement of the auctioneer concerning the identity of the property and the terms and conditions of the sale.

In the absence of a statutory provision requiring authority to be in writing, an agent, pursuant to oral authorization, can execute any contract required to be in writing. The statutory provisions vary, however, in regard to the execution of contracts to purchase real property.

Because of the trust and confidence the seller reposes in an auctioneer, the individual cannot delegate the power to sell without special authority from the seller. The delegation of insignificant duties, such as the striking of the hammer and the announcement of the sale, is allowable if conducted pursuant to the auctioneer's immediate supervision and direction.

An auctioneer's authority normally terminates upon the completion of the sale and the collection of the purchase price, but the seller can revoke the authority at any time prior to the sale. According to some authorities, the buyer or seller can end the auctioneer's authority to sign a memorandum on his or her behalf between the time of the fall of the hammer and the signing of the memorandum, but the prevailing view deems the auctioneer's authority to be irrevocable. Private sales by an auctioneer are generally impermissible.