Auction Houses: How does strict liability help you?

April 27, 2020
Joseph Holland

Your First Car and the Auction House

Imagine that you are buying your first car. Starting your search online, you find an auction house that has the exact car you’ve had your eye on for months. In a rush, you call the auction house to confirm and to get a ballpark estimate of how much it will cost. The friendly auctioneer picks up, confirms the car is available, gives you an estimate, and says to come bid the day of the auction.When the time comes, you attend the auction, purchase the car, and drive home with it the same day. For a while, life is good, until you hear a knock on your door a week later. A police officer greets you and informs you that the car you purchased has fraudulent title. Your options are to give them the car or go to jail. An easy choice. Helplessly, you watch as they tow away your first car and realize that your hard-earned money just got flushed down the drain.Whose fault is this? Is it your fault for buying the car? Is it the seller’s fault? Or is it the auction house's fault for not checking the title in the first place? What you really want to know is who can be held liable for the money you just watched get towed away?

What's Liability?

Liability is the state of being responsible for something, especially by law. Some auction houses outline in their contracts that they don’t warrant title. Meaning that if you unknowingly buy a car without a clean title through their services, it's not their problem. This can be very dangerous for the buyer because it might not be a first car you are buying, you could be purchasing a high-end vehicle, and the same thing could happen you.Of course, you could just sue the person who sold the car through the auction. They are in the wrong for knowingly selling a car that had a fraudulent title. But what if that person has no money or possessions you can be compensated with? What then? Unfortunately, you are in an unfair and unlucky situation, and you are told there is nothing you can do about it.

Strict Liability to the Rescue

Good news: There is something you can do after all. Strict liability is a standard of liability under which a person is legally responsible for the consequences flowing from an activity even in the absence of fault or criminal intent.Similarly, to liability, strict liability holds people responsible by law. However, strict liability differs because you can't disclaim strict liability. Even though the auction house or dealership sold the car in good faith. They can be held strictly liable for the loss acquired by the purchaser of the vehicle. Meaning that for our situation above, you can get your money back for the car you bought.Cases and situations like these can be a headache. They can seem unfair, hopeless, and too much to tackle on your own. However, there are options and our problem-solving team here at Sumsion Business Law is the best one for you. Knowledgeable and understanding, we know how to listen to you and find a solution that works for you.


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