In an Auction Sale Where all Items are not subject to the Same Condition, a Condition to be Properly Imposed on a Specific Item Should Explicitly State the Condition/s and Identify the item/s that are Subject to those Condition/s

The Missouri Court of Appeals in Coleman v. Duncan, 540 S.W.2d 935 (Mo. Ct. App. 1976) stated that, in heterogeneous auction sales, a condition can be properly applied on a particular item only if it is explicitly imposed on the item on which it is sought to be imposed.   

This case involved disputes relating to the conditions that applied to D-7 tractor (one among the approximate 200 items in the auction sale) in an advertised public auction that was held by defendant Bartle (described in the printed sale bill as "owner") and the defendant auctioneer.  Plaintiff was the highest successful bidder for the D-7 tractor, and his bid was accepted by the auctioneer and the item struck off.  Defendant Bartle later announced that a few items belonging to his friends and customers had been included in the auction "as a courtesy deal."   The D-7 tractor was actually owned by defendant Duncan although it was listed on the printed sale bill. However, the auctioneer did not make any announcement that the tractor belonged to Duncan or that it was subject to any special conditions.   The sale bill also did not include any sale conditions. 

Soon after the auction, Plaintiff tried to make payment for the D-7 tractor.  But defendant Duncan refused to sell the tractor to the Plaintiff for the bid amount that was accepted by the auctioneer.  Consequently, the Plaintiff filed a suit in the trial court to recover damages for alleged breach of contract. The trial court ruled in defendants’ favor and this appeal followed.   

The Court of Appeals stated that, at auctions where all items are subject to the same condition, a bidder is expected to reasonably understand the conditions imposed on the items. Id. at 939.   However, when a condition is not applicable to the great majority of the sale items but only to a limited number of items which are never identified as being subject to the condition, the bidder cannot be expected to be affected by that condition. Id.

According to the Court, for a condition to be properly imposed at a "heterogeneous auction”, it should be specifically and clearly applied to the particular item upon which the condition is sought to be imposed. Id. If the auctioneer/owner/ holder of the auction fails to specifically state, mark or otherwise identify which item or items are subject to the special condition, at least in the published sale bill or by appropriate announcement during the auction, then the conditions are not adequately imposed on the item and the bidder is not affected by by these conditions. Id.

The Court found that, in the instant case, an effective explicit condition was not placed on the sale of the D-7 tractor. Id. Therefore, the Court reversed the trial court’s decision and remanded the matter for a determination of damages. Id.