Practice caution during auction sales
January 21, 2021
Used cars, antiques, real estate and other products are often sold at auctions where consumers bid for items. It is a process where products or real estate are offered for sale by an auctioneer on behalf of a vendor. Consumers interested in purchasing these items can bid against each other in real time, in person, by phone or by internet live streaming and the auctioneer determines when the product or real estate is sold. In light of recent issues raised with respect to auction sales, the Council is encouraging consumers to exercise caution when purchasing items via the process.
As is where is basis
An auction sale is a contract and is legally binding once the auctioneer accepts the final bid. In an auction agreement, the crucial warranties that a buyer would provide under a normal sale in the ordinary course of business are often void, including requirements that the item is in working order and devoid of any defects.
There has been a growing number of concerns related to the specific assumption of caveat emptor or buyer be aware which is reflected and practiced in the set of terms and conditions of the auction sales agreement, on the “as is where is basis”. Consumers are urged to read documents carefully as the presence of this condition means:
- Products sold through auction sale does not have express or implied warranty which consumers can depend on to remedy the faults that might arise after the purchase.
- No guarantee or responsibility is implied on the part of the auctioneer when the item is faulty.
- While the auctioneer is within their rights as the auction clause is clearly disclosed, this is costly to the consumer particularly when they are not aware of and were not provided sufficient information to understand the conditions thoroughly to move forward with the transaction.
- In the event of a grievance, the consumer is less empowered to seek redress for a repair, replacement or refund and is faced with further financial costs incurred in the absence of redress mechanisms. The consumer is locked in an unconditional agreement and is not able to pull out of the deal in this event.
The Council recently dealt with a complaint whereby a consumer purchased a second-hand vehicle in an auction sale in good faith as he was advised that there was no issue with the vehicle. According to the consumer, he had requested for a test drive of the vehicle, which was turned down. After the purchase, the car broke down as the consumer was driving home. The consumer requested for a quotation to have the vehicle repaired and found out that the cost of repairing the vehicle was more than the price at which he had bought the vehicle for.
Terms and Conditions
It is imperative that consumers exercise their rights and responsibility when participating in auctions and request for copies of auction terms and conditions to be made available to them for review prior to purchase. While this is not mandatory, the auctioneer may provide a copy free of charge.
In Fiji, most auctions are advertised without terms and conditions and thus it becomes imperative to request for this prior to participating. This ensures that consumers are acutely aware of the conditions when signing once a bid is accepted. The auctioneer is obliged to assist consumers with any questions. While this may seem time consuming, it is a proactive measure to ensure that the amount being invested by the consumer and the possible cost of having to remedy any defects in the future does not cost more than sale price.
Reasonable actions may also be taken to request for an opportunity to conduct a pre-auction inspection of the item which is usually free of charge. Depending on the extent and timeframe the auctioneer allows, you may take a professional for evaluation and assessment should the item not be exactly what you wanted. This helps the consumer may discover an unsafe product characteristic, failure, defect or hazard.
For issues with relevance to auction sales, consumers are urged to contact the Council on toll free number 155 or email email@example.com. Alternatively, consumers can lodge a complaint via the Consumer Council of Fiji Mobile App, available for download from Google Play Store.