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Auctioneering laws in Nigeria: Matters arising


 Attorney General of the Federation, Abubakar Malami (SAN)

Attorney General of the Federation, Abubakar Malami (SAN)

Auction can be defined as the public sales of property conducted by means of oral or written exchanges between the Auctioneer and the members of the public. The exchanges includes expressions that consist of series of bidding for the purchase of goods, livestock, art and antiques, real estate, machines and other form of chattels made available by Auctioneer and offer made by members of the public, culminating in the acceptance by the Auctioneer of the highest offer made by a member of the participating public. Thus auction is essentially the sales of various types of goods, be it household and industrial goods such as industrial equipments, beddings, furniture, utensils etc or office furniture and properties and also other moveable goods such as light and heavy vehicles to the public at a designated public venue.


It also means sales through competitive bidding to the highest bidder. It must be done in a transparent manner devoid of corrupt and sharp practices to be acceptable to all. It is the best form of achieving true monetary value for any form of goods and properties in most developed parts of the world.
On the other hand, an Auctioneer is a trained individual, duly qualified and licensed under the relevant laws of the Federal Republic of Nigeria governing Auctioning business. He represents the seller. When he makes a contract with the buyer he undertakes the following obligations:

. He warrants his authority.
. He warrants that he knows of no defect in his principal’s title.
. He undertakes to give possession against the price paid into his hands.
. He undertakes that such possession will not be disturbed by his principal or himself.
. Auctioneer has the right to refuse bids without explanation to any party at auction.
. Right to determine disputes between bidders.

. The right to regulate the bidding increments during the auction.
. To accept telephone, postal or internet bids by way of proxy (with appropriate indemnities from the seller and the bidder in the event of a failure of communication.

. The right to release any bidder acting as agent from personal liability.
. The right to sign the auction contract on behalf of the seller (and the buyer).
. The right to change the venue or date of the auction.
Laws regulating practice of Auctioneering in Nigeria

The laws regulating auction sales in Nigeria was derived from Sale Of Goods Act 1893.
Section 58 (1) of the Act makes special rules relating to auction sales. For instance, where goods are put up for sale by lot in an auction, each lot is deemed to be the subject of a separate contract of sale.

Section 58 (2) states that sale by auction is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner and until such announcement is made any bidder may retract his bid. This is a common law rule as held in PAYNE V. CAVE (1789) 3 TERM Rep. 148. Note property passes on the fall of the hammer.

Section 58 (3) provides that if the sale is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller or a person employed by him to bid at such sale or for the auctioneer knowingly to take any bid from the seller or any such person. A sale contravening this rule may be treated as fraudulent by the buyer.

What is a reserve price? It is a price fixed by the seller and communicated to the auctioneer below which the goods must not be sold.
The other laws regulating auctioneering practice and auctioneers in Nigeria are the various state laws derived from the former Western Region and Northern Region of Nigeria in the colonial era from Britain. They are as follows:-

. Auctioneers Law Cap. 10 Laws of Northern Nigeria, applicable in the Northern States:Law of PropertyEdict Cap. 128, Laws of Kwara State,
Auctioneer’s law, Laws of Lagos State 2005 derived from the Western Region auction law.

For a better understanding of the above laws we shall look at some decided cases which has to do with auction sales of mortgage properties by banks.

ALHAJA K. F. IBIYEYE v. A.A. FOJULE & 2 ORS (2006) 3 NWLR (Pt.968)640
In the instance case the supreme court held that an improper conduct will not impeach the ultimate sale of a Purchaser for value without notice who bought in good faith as he is protected under the law so far as the sale is not tainted with any fraud or collusion. That is the breach of statutory notice will not affect the sale.

Another important applicable statute is the Law of Property Edict Cap. 128, Laws of Kwara State. Section 123 which seeks to protect purchasers without notice provides: 123 (1) A Mortgagee exercising the power of sale conferred by this Edict (Law) shall have power, by deed to transfer the property sold, for such interest therein as he is by the Edict (Law) authorized to sell or transfer or may be the subject of the mortgage, freed from all interests and rights to which the mortgage has priority, but subject to all interests and rights which have priority to the mortgage.

(2) Where a transfer is made in exercise of the power of sale conferred by this Edict (Law) and title of the purchaser shall not be impeachable on the ground.

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