An auction is a public sale of goods where:
- People bid for the goods, can see other peoples' bids and can re-bid if another person has made a higher bid.
- The goods are sold to the person who makes the highest bid.
- The seller is not necessarily a private individual or selling in the course of a business.
- Usually, the only statutory (or implied) warranty is that the goods must be sold with 'clear title'.
Some auction websites also let you buy goods at a price predetermined by the seller like eBay's "Buy it now" option. Buying at a predetermined price is not an auction.
Goods bought at auction are not covered by statutory warranties. Before buying at auction, you should make sure that you’ve done your homework, checked the quality of the goods and are aware of the average market value of the goods, because you can’t change your mind once the bid is accepted. In lots of auctions, the seller is a private individual which means any disputes are a civil matter not a Fair Trading issue.
Obligations of sellers and auctioneers
The seller has an obligation to provide ‘clear title’ to the goods. This means that the goods must be free of any debt, charges or mortgages. Some auctions are covered by specific legislation, including auctions of motor vehicles and real estate. The auctioneer must not mislead or deceive the seller.
As outlined above, Fair Trading is unable to help in most disputes from an auction purchase. Complaints can be lodged with Fair Trading when:
- the goods were purchased by negotiation prior to the auction and the seller is in the business of selling those types of goods
- the seller has not provided ‘clear title’, or
- the auctioneer has misrepresented the goods.
Go to the online auctions page for more information on online auctions.
Real estate auctions
Motor vehicle auctions
Got to the where to buy a car page for more information.