The vaunted London auction house Bonhams has announced that in October it will auction a two-cornered hat once belonging to Napoleon Bonaparte.
Its provenance was confirmed by hair follicles found in the hat which match the Emperor’s DNA.
So, what is the law on conducting auctions?
We can’t say how they do things in jolly old England, but here in the American colonies an auction is a public sale of property to the highest bidder.
Except in forced sales like foreclosures, auctioneers conducting an auction act as agents for the seller, and their authority to conduct the sale comes from the seller.
Auctions are held either with reserve or without. With reserve means the seller can withdraw the property without accepting any bid even after a bid has been made (a bid is an offer to buy). The seller can also set a reserve price in advance. If bidding does not reach the reserve price, the property remains unsold. If a sale is without reserve, then the highest bidder whose bid has been accepted is the declared buyer.
The manner of submitting bids is under whatever terms the seller authorizes the auctioneer to announce.
In-person open bids, submitted sealed bids or bids tendered electronically (eBay, for example), are typical methods. Open bidding held by Zoom has been used extensively during the pandemic.
Under Illinois and most other state’s laws, a bid is accepted when the auctioneer announces it by the fall of a hammer or other customary manner (such as the verbal declaration, “SOLD!”)
Once a bid is accepted, the seller has no right to accept a higher bid, nor can a buyer withdraw the buyer’s bid. A binding contract is created and subject to enforcement by either party under the law just like a normal sale contract. Some sales whose sale price ends up being over a certain amount, or sales involving real estate, might be subject to laws which require being memorialized in writing to be enforceable.
Under the terms of most auctions, a buyer is not entitled to possession of the purchased thingamajig unless and until payment is made.
After sale, the risk of loss of the sold doodad (loss by fire, theft, etc.) is on the party who has control over it, not who then owns it. But parties to an auction can alter the liability for loss of the property by an agreement to that effect. The seller who desires to shift the risk of loss to the buyer before the buyer receives the property must clearly communicate seller’s intent to the buyer.
The seller is also subject to warranties imposed by law or specifically given by seller. If a hat is represented by seller to have once been on Napoleon’s noggin, the buyer might be entitled to a refund if it turns out that representation is false.
So, if you yearn to own a Bonaparte bonnet, you may want to start cashing in those 401ks.
He had several bi-corn hats during his long career of conquest and slaughter. The last bi-corn sold for around $2 million.
Talk about conquering and slaughtering 401ks.
What’s in your wallet, monsieur or madame?
Brett Kepley is a lawyer with Land of Lincoln Legal Aid Inc. Send questions to The Law Q&A, 302 N. First St., Champaign, IL 61820.