Why are we looking for “tie bids?”


Mike Brandly
9 January 2019 - 10:47am

A tie? The three horses above finishing in a dead heat. Two teams with the identical score at the end of regulation. Politicians with the same number of votes after all are counted. Is this ever the desired result? What’s the theme here?

A tie implies sameness — a draw or deadlock. In other words, at auction for there to be a tie bid, both bidders would have to bid the exact same amount at the same time and be treated the same. Yet, can two tendered bids for the same amount result in more than one contract? I know virtually nobody who thinks so … and rather that this contract formed is the one that the auctioneer determines (receives/sees first?)

So if an auctioneer has $5,000 and is asking for $5,500 and begins to say, “Sold!” and at that very moment a bid is offered of $5,500 … The UCC 2-328 (2)allows an auctioneer in such a situation to reopen the bid and accept this $5,500 or leave the property sold for $5,000. Here, one bid is for $5,000 and the other $5,500 so this isn’t a tie.

Otherwise if an auctioneer has a bidder at $5,000 and that auctioneer’s ring-person [thinks he] has another bidder at $5,000 (or another bidder believes his bid of $5,000 has been accepted when it hasn’t been) and the auctioneer says, “Sold!” the UCC 2-328 (2) would not allow the auctioneer to reopen because this other bid was not made, “while the hammer is falling in acceptance of a prior bid.”

That is, outside of the Commonwealth of Kentucky where there is this law KRS 330.220 where an auctioneer may [is not required to …]” …continue the bidding between the disputed [not tied] bidders.” in our most recent above example. I suspect here the “other” bidder must bid more to continue the bidding so these bidders are hardly treated the same — so that’s not a tie either.

I have witnessed attorneys and others denote quite clearly that for “Two tendered bids for the same amount there can be only one contract, and that is the one that the auctioneer is on.” so I suppose this applies in the other 49 states outside Kentucky and otherwise? Further, I invite skeptics to find the words “tie bid” in the UCC 2-328 or KRS 330.220.

Could an auctioneer’s terms and conditions state that the auctioneer can reopen the bid in a disputed situation like the above? The obdurate “gap-filler” crowd thinks so, and often cites their favorite part of the UCC 1-302 leaving out of their proclamation UCC 1-302 (2) which states “The obligations of good faith, diligence, reasonableness, and care prescribed by [the Uniform Commercial Code (UCC)] may not be disclaimed by agreement.”

We have written extensively about this concept of modifying the UCC and this disregard that such cannot be manifestly unreasonable including here:https://mikebrandlyauctioneer.wordpress.com/2017/03/01/auctions-that-are-manifestly-unreasonable/. It’s obvious this part of the UCC 1-302 doesn’t help the gap-filler crusade so it’s routinely omitted; in other words, they say the UCC 1-302 says, “anything goes …” when it doesn’t.

National Auctioneers Association Hall of Fame member J. Stephen Proffitt III — famous attorney and auctioneer — wrote:


"A lot of good auctioneers have a firm policy to never reopen bidding once a lot has been sold, and they stick to it. This consistent policy accomplishes several important ends. First, it avoids angering the successful bidder, whose contract of sale the auctioneer would move to vacate. Second, it stops the criticism of those in the crowd who would claim favoritism and capriciousness by the auctioneer when they see the allowance given to some bidders but not to others. Third, it encourages bidders to bid fast and visibly to be sure they are “in.” This makes for a smoother, faster, and more successful auction, and nobody ends up confused about what is and isn’t a tie bid, and whether it was handled correctly. Let’s keep bidding simple."


If you are reopening the bid after, “Sold!” in order to maximize the seller’s position, I invite you to read Mr. Proffitt’s thoughts again in addition to the Honorable James Michael Peck‘s (attorney, Former Federal Judge, Senior Counsel) conclusions on the integrity of the bidding process:https://mikebrandlyauctioneer.wordpress.com/2017/07/28/the-integrity-of-the-bidding-process/.

To save you a bit of time, here’s part of Mr. Peck’s comments on the finality of sale at auction:


"… the integrity of the process and respect for bidders’ reasonable expectations is generally consistent with the goal of asset maximization, as most courts have found that the risk of an upset bid stifles aggressive bidding and ultimately results in lost value to the estate."


I would offer this: When AmazonWalmarteBay, traditional real estate and car transactions, most retail stores, lotteries, casinos and all other commerce has “tie bids” (In that “you’ve won! No, wait, you haven’t) then I’m game. Until then, isn’t it better if we — as Steve Proffitt said — ‘Keep bidding simple?”


This article has been published with permission from the author.

The original article and image can be found here.


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, AuctioneerRES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.