Auction Bidders – 5 Rights You Need To Know!

Are you hoping to pick up a bargain at a public auction but are put off by the media uproar over allegations of undisclosed “vendor” or “ghost” bidding?  If so, read on……

Auctioneers and the CPA

The Consumer Protection Act and Regulations impose very strict and detailed obligations on auctioneers in regard to how they must advertise and conduct auctions.  Which gives you, the bidder, a raft of important rights.

You need to know them – particularly these: –

1.     All prospective bidders must register before bidding.  You will need to comply with          FICA (the Financial Intelligence Centre Act) and, if you are bidding on behalf of a third party, you must have proper written authority to do so (with a company resolution if bidding on behalf of a company).

2.     Auctions must be properly advertised (amongst the many detailed rules for adverts – any “advance notices” as below must be disclosed).

3.     “Rules of Auction” must be prepared and available for inspection.

4.     Advance notice must be given of –

  • Any reserved or “upset” price i.e. minimum price below which bids may be declined (if such a price is applicable),
  • Any right to bid by or on behalf of the seller or auctioneer.  Note that any violation of this second requirement would entitle you to “approach a court to declare the transaction fraudulent”.

5.     The “bidder’s record” (with names and bidder numbers of all bidders) must be available for inspection free of charge before, during and after the auction. Bidders must be given “a paddle or other device” with their bidder’s number attached so as to be “clearly visible to the persons present at the auction.”

And a Caution

The provisions in the Act relating to the “Consumer’s rights to safe, good quality goods” do not apply to auctions – instead, auctioneers may not “knowingly misrepresent, or cause or permit to be misrepresented the value, composition, structure, character or quality or manufacture of the goods put up for sale at an auction”.

N.B. Special rules apply to electronic, Internet, game/livestock and motor vehicle auctions, whilst the Regulations don’t apply where lots are donated to charity auctions.  The above is of necessity only a short summary of very detailed provisions – take specific advice in need.  

Should you have any queries please contact Johan on johan@gtlaw.co.za or 028 3123626.

© DotNews, 2005-2012. This newsletter is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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