It went like this.
Bidding climbed from €260,000 to €280,000 to €300,000, at which point the dealer, who was on the phone, was told ‘it looks like the other party is out’.
He was then, after some minutes, advised by phone that the auctioneer had asked if he would bid €320,000.
Feeling uneasy, the dealer declined to go further, at which point, the hammer went down and the telephonist advised him: “You’ve got it for €300,000”. Congratulations all round.
Later that night in an email, the dealer was told by the auction house “You’ve got it” but “subject to condition”, which the auctioneer explained meant that the deal was subject to the owner agreeing to accept a price below the reserve.
The auctioneer advised the dealer that in the small print, (which the dealer comments facetiously he had obviously read because all dealers do!), the following conditions applied:
“A bid may be accepted subject to reservation in individual cases, which the auctioneer shall point out in each case. Any such acceptance of a bid shall only take effect if [the auctioneer] confirms the bid in writing by presenting a statement of account within eight weeks of the date of the auction.”
And even better, the next part: “the bidder shall be bound by his bid for the duration of this period of time.”
Perplexed and incandescent, my dealer friend pointed out the lunacy of this arrangement: a dealer makes a bid which to all intents and purposes appears successful. He is then told that he is committed for eight weeks on his bid, but doesn’t even know if meanwhile his bid is actually going to be accepted!
Which dealer is happy to set aside his or her capital for eight weeks, not even knowing if the deal has been done?
Which dealer is happy to set aside his or her capital for eight weeks, not even knowing if the deal has been done, while the auctioneer leaves them dangling on the end of a string, in the hope of getting a better deal meanwhile?
Readers will not be surprised to hear that my friend made his views on these arrangements known to the auctioneer with some force. To add insult to injury, the auctioneer, without getting back to the dealer, told him, with no sense of apology, that they had sold the work elsewhere now in any event.
Buyers beware – the dealer was told this was common in Germany.
Milton Silverman is Senior Commercial Dispute Resolution partner at Streathers Solicitors LLP, London.