No contract where the auctioneer’s authority has been revoked

An auctioneer can only create a binding contract for the sale of land where he has the actual authority of the seller.

In Hoie Sook Fong v Ismail Halima ([2008] HKEC 2213) the owner of a flat arranged for it to be sold at auction. She revoked the auctioneer’s authority before the auction. Despite that, the property was offered for sale and there was a successful bid. The flat owner refused to complete the sale. It was held that there was no binding contract since the auctioneer’s authority had been revoked and auctioneers need actual authority if they are to bind the principal. The auctioneers were liable to the successful bidder for breach of warranty of authority.

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