Commercial Division Blog
Auctioneer Exception to Statute of Frauds Satisfied by Multiple Writings
On December 17, 2013, the Court of Appeals issued a decision in William J. Jenack Estate Appraisers and Auctioneers, Inc., v. Albert Rabizadeh, Docket No. 229, addressing the Statute of Frauds' requirements for sales at auction.
William J. Jenack Estate Appraisers and Auctioneers involved an auction buyer who sought to avoid a $400,000 auction purchase on the ground that the auctioneer's documentation could not satisfy the UCC's Statute of Frauds, and the exception thereto contained in GOL 5-701(a)(6), which provides:
Notwithstanding section 2-201 of the uniform commercial code, if the goods be sold at public auction, and the auctioneer at the time of the sale, enters in the sale book, a memorandum specifying the nature and price of the property sold, the terms of the sale, the name of the purchaser, and the name of the person on whose account the sale was made, such memorandum is equivalent in effect to a note of the contract or sale, subscribed by the party therewith to be charged.
The buyer argued that the sale book failed to satisfy Section 5-701(a)(6) because it failed to name either the buyer—who was identified by a number—or the seller. The Court of Appeals disagreed, holding that an absentee bidder form, which did include the buyer's name along with his identifying number, could be considered together with the auctioneer's book as a "related writing":
We agree with the Appellate Division that the absentee bidder form, along with the clerking sheet, provide the necessary information to establish the name of Rabizadeh as the buyer. This conclusion is inescapable given that each of the documents contained information pertaining to the terms of the sale as required by the Statute. Both contain the item number, the bidder number, the auctioneer, and a detailed description of the item.
The Court of Appeals went on to reject the buyer's second argument, holding that Section 5-701(a)(6) did not require disclosure of the seller's name but could be satisfied if the writing named the seller's agent, such as the auctioneer in this case.
In this case, despite statutory language apparently focusing specifically on the auctioneer's sale book, the Court of Appeals looked outside the sale book and considered other writings on order to rule that the Statute of Frauds was satisfied, seeming to show their unwillingness to allow parties to avoid commercial transaction based upon purely technical violations of the Statute of Frauds.