Is this scenario suitable for circuit court?

My understanding is that the sale isn’t complete until contracts are signed and money is transferred, guessing this didn’t happen and seller has the right to withdraw at any stage.

(Might be different for auctions, check auction house rules on sale...if sale is final it would imply contract is binding)

Was there a reserve price on property? Was the buyer using a proxy bidder because they knew seller wouldn’t sell to them ?

Donald Trump wrote: »

Some property for sale by auction. Gets knocked down on the day to a bidder bidding on behalf of someone else. Deposit paid on the day. final price less than 500k.

Seller later finds out who the buyer is and refuses to complete the sale. The claim is that the auctioneer "made a mistake" and brought the hammer down before the reserve was reached. I assume that the seller should not have the right to do this.

I see that the circuit court is for claims less than 75k but it says that it can handle property up to 3million (although it seems to give examples in relation to will etc)

I'd imagine that the Circuit Court is much more affordable than the High Court should the "buyer" try to enforce their rights. I understand it would be a "how long is a piece of string" but what would be a typical amount for a case like this? I am not expecting an exact answer - just as a person who has no experience of the system, I would have no notion of whether you are talking thousands, tens of thousands or even millions to have it decided there.

Does this even sound like the type of case that the Circuit Court could adjudicate on? I'm not looking for legal advice - I would go to a solicitor for that if I needed it. Just a general chat about the scenario.

The 3 million property value jurisdiction only applies to ejectment (i.e eviction) actions and to applications for tenancies. So this is basically for resolving trepsass and landlord/tenant disputes affecting properties worth up to 3 million. For an action to enforce a contract for sale of the property, you're in the High Court.

The property was knocked down to Buyer at auction by the auctioneer, acting as agent for Seller. Seller is generally bound by the acts of his agent. Contracts were signed and exchanged, and the deposit paid. Looks to me as if Buyer has a very strong case. Plus, in practical terms, once it becomes s known that a dispute of this kind exists, no other potential buyer will touch the property with a forty-foot bargepole.

Talk to a solicitor, and quickly - pressure to have the matter dealt with rapidly carries much less credibility if the Buyer dawdles about dealing with the matter himself. Buyer was going to have to instruct a solicitor round about now anyway, in order to proceed with the purchase.

Signing contracts at the auction is standard. No (sane) bidder is going to pay over a deposit without getting a signed contract; no (sane) Seller is going to expect to get a deposit without delivering a signed contract.

Donald Trump wrote: »

Not all auctions are auctions in a physical location. You can have online auctions too with similar conditions.

You participate in online auction. Receive notification that you are the winner. Pay over your deposit as instructed and then seller refuses to sell.


Regardless, in a physical auction, if the bidder refuses to sign after being the winning bidder- doesn't (s)he lose their deposit? Surely it has happened in the past that people have been in this scenario and said "it wasn't me"? What happens there?
What happens when the reverse happens? No contracts are signed after the winning bid because the seller refuses to sign?

I'm assuming we're talking about auctions of land here.

Someone whose knowledge is less rusty than mine can confirm, but I recall that there's a provision under which, if the successful bidder refuses to sign the contract, the auctioneer is constituted as the bidder's agent to sign it on his behalf. The question of whether he would or might lose his deposit in this scenario doesn't really arise; if he has refused to sign the contract he has presumably also refused to pay over the deposit. The risk is not that he gets sued to pay over the deposit, but that he gets sued to complete the purchase, or gets sued for damages for his failure to complete.

The seller refusing to sign seems like an improbable scenario. The seller wants to sell; otherwise the auction wouldn't happen in the first place. The norm, I think, is that the seller has signed the contracts before the auction happens and they are in the auctioneer's possession so they are there ready to be put in front of the buyer for him to sign as well.

If the seller changes his mind after the property has been knocked down, as in the OP, presumably he tells the auctioneer not to proceed, and in particular not to allow the successful bidder to sign the contract, or to give him a copy of the contract signed by the seller. Everyone heads off to the High Court until,. unless there are some highly unusual facts, the seller realises he is on a hiding to nothing and agrees to proceed with the sale.

Donald Trump wrote: »

. . . It just seems a little one-sided in terms of the seller/auctioneer! Seller will claim that auctioneer was not authorized to sell for price X. How can a seller be held to an auctioneer doing something they didn't have permission to do?

Because if you appoint an agent to act on your behalf, you are generally bound by the acts the agent performs on your behalf. If the agent exceeds his authority, you have a beef with the agent, but a third party dealing in good faith with the agent is not affected.

(Different if the agent exceeds his authority, and the third party knows or should know that he is acting in excess of his authority. But there is no suggestion here that bidders at the auction knew that the auctioneer had been told to apply a reserve; still less that they knew what the reserve price was.)

Claw Hammer wrote: »

The most likely defence is that there is a cause on the terms and conditions of the auction that the bidder must bid as principal only and the seller is not bound by any assignment of the contract to a third party.

That seems like a rather onerous condition. Surely bids at many auctions are done by an agent (solicitor, accountant, property professional) acting for the actual bidder, who is likely present, but not used to auctions.

Would such a condition fall foul of the Equal Status Acts?

hullaballoo wrote: »

I think it's been disposed of as a question in this thread already that the Circuit Court is deficient on jurisdiction to deal with the case as set out.

A case to seek to enforce a contract of this value ought only be brought in a court of competent jurisdiction so to speak.

The Circuit court has jurisdiction to deal with specific performance cases where the land has a market value of less than €3 million.

Victor wrote: »

Someone might have a disability that impairs their ability to take part in an auction.

As long as they can bid through a disclosed agent, on the same terms as a bidder without a disability can, there is no discrimination.

Peregrinus wrote: »

Is it common? It would have to be a special condition; the general conditions of sale do not include it, and in fact make express provision for the possiblity that a purchaser might sign "as agent" without disclosing the identity of his principal.

It is common in online auctions. I see it frequently in the draft contracts on the Bidx1 site. Some developers selling newly built property also iclude such a clause as they don't want people who are no genuine buyers pre-booking and then flipping.

Peregrinus wrote: »

On the latter point, I don't see why the vendor should have a problem. If I have a contract to buy land from you, my interest in the contract is presumably something I can assign, absent any special condition in the contract. And what would be the point of such a special condition, since I can certainly complete the purchase from you and then immediately sell or trasnfer to a third party?

If you buy a property and sell it after, stamp duty will hve to be paid on your purchase and again on the subsequent sale whereas selling off the contract means stamp duty is paid once. conveyancing fees are likely to be higher. furthermore if you buy a property an close, all of the money must move through your bank accounts. this may be problematic if you are just buying as an agent.
Some vendors, such as receivers don't want repossessed individuals buying back the property they have just been ousted from. It is much more difficult for a former owner to arrange it if they have to close twice.

Many of the receiver sales are also order by vulture funds who have an American approach and operate a kyc "know your client" system where they insist on knowing who they are dealing with.
Whether it is wise, makes any business sense or not, that is a matter for them as they are drafting the contract.