walking away after being successful at auction

[Hodge]

Just wondering, and this hasn't happened to me or any one I know but had a discussion with a few work colleagues today and everybody is interested to know:

Say you are the successful bidder at auction, you walk inside to sign contracts and on the way you notice something you don't like and walk away.

Legally what could happen? Contracts haven't been signed.

 

[marg4000]

We attended an auction recently (Qld) where bidders have to register to be able to bid. The auctioneer said that if the successful bidder failed to sign the contract after the fall of the hammer, then the auctioneer was authorised to sign on his/her behalf and the contract was legally binding.

Laws differ from state to state.
Marg

 

[oc1]

In Victoria it's not binding until the contracts are signed by both parties.

Oscar

 

[Propertunity]

We attended an auction recently (Qld) where bidders have to register to be able to bid. The auctioneer said that if the successful bidder failed to sign the contract after the fall of the hammer, then the auctioneer was authorised to sign on his/her behalf and the contract was legally binding. Marg

^ ^ this that Marg has posted also applies in NSW.

 

[Hodge]

problem with Victoria is you don't need to register to bid.

 

[lizzie]

^ ^ this that Marg has posted also applies in NSW.

Yes - we had a successful bidder walk away from one of our auctions. Were not happy but nothing we could do about it.

 

[TMNT]

In Victoria it's not binding until the contracts are signed by both parties.

Oscar

yes, that is correct, however, im very sure that if you do bid at auction, and you win , and walk away, you are liable for costs etc. etc.

so if you did get taken to VCAT, then you'd be deemed liable without too much convincing, what law this comes under I have no idea

 

[cu@thetop]

So the way to do it is to bid on behalf of a two dollar company with no assets.

 

[AlmostBob]

or to bid after completing due diligence

 

[oc1]

yes, that is correct, however, im very sure that if you do bid at auction, and you win , and walk away, you are liable for costs etc. etc.

so if you did get taken to VCAT, then you'd be deemed liable without too much convincing, what law this comes under I have no idea

Totally off the mark. But correct me if you find something concrete

 

[Ausprop]

So the way to do it is to bid on behalf of a two dollar company with no assets.

or look at the house properly before you bid and save everyone the grief

 

[MsAli]

I've seen a dummy bidder in NSW. Following that the auctioneer trying to convince the 2nd and third (only 3 bidders existed!) a chance to acquire the property. I reminded him that this was a matter for Fair Trading as it appeared that by law that person had won the auction. Clearly he was aware of this and then drove off. There were two separate properties on the lot and this guy who won the bid was telling us how he got vals and was going to purchase both. He got burnt by his greed. The two houses remained on the market for many months after that.

The agents were given a slap on their wrist by Fair Trading and that's it. But they repeat this practice frequently in Parramatta and surrounds where they get the best offers and in many cases the "neighbour" has bought the property by beating the highest offer. I think it's very unethical.

 

[bcole2012]

From experience in a couple of states, you have to register before an auction if you intend to bid. That way they've got details for exactly this reason. Not sure how legally binding a winning bid is if you haven't signed anything though.

 

[Terry_w]

I recall reading a case in law school many years ago about this. I think there is a principle that means the auctioneer can actually sign the contract on behalf of the bidder - they are effectively appointing the auctioneer their agent once they bid - of course this won't be much help if they don't know who the bidder was!