Plain language law

New Zealand law explained for everyone

Fair Trading Act 1986

Unfair conduct - False representations

14A: When vendor bids are misrepresentations

You could also call this:

“Sellers can't trick buyers by pretending to bid on their own items at auctions”

When you’re trying to sell something like goods, services, or land through an auction or any other kind of bidding where all bids are shown, there are some important rules to know about.

If you’re the seller, or someone working for the seller, you can’t make a bid yourself. This is called a vendor bid. If you do this, it’s considered a false or misleading representation about the price of what you’re selling.

However, there’s an exception to this rule. If you have a reserve price (the lowest price you’ll accept) for what you’re selling, you can make a vendor bid before the bidding reaches that reserve price. But you have to clearly say that it’s a vendor bid.

After the auction or bidding is over, if what you were selling didn’t sell, you can’t say it was “passed in” (not sold) at a certain price if that price was actually a vendor bid. This would also be considered false or misleading.

A vendor bid means any bid made by the seller or someone acting for the seller, including the person running the auction.

Remember, these rules are there to make sure that when things are sold through auctions or bidding, everyone is honest about the prices and bids.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5837710.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection
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Part 1 Unfair conduct
False representations

14AWhen vendor bids are misrepresentations

  1. This section applies where property (being goods, services, or an interest in land) is offered for sale—

  2. by auction (as defined in section 36X); or
    1. by any other bidding process in which all bids are disclosed.

      1. The vendor of the property makes a false or misleading representation with respect to the price of the property if the vendor, or any agent acting on behalf of the vendor, makes a vendor bid for the property.

      2. However, subsection (2) does not apply if—

      3. there is a reserve price for the property; and
        1. the bid is made before the reserve price is reached and is clearly identified as a vendor bid.

          1. If property is unsold at the end of an auction or other bidding process referred to in subsection (1), any subsequent reference to a particular bid as being the amount at which the property was passed in is a false or misleading representation with respect to the price of the property if the bid was a vendor bid.

          2. In this section, vendor bid means a bid made by the vendor or any person (including an auctioneer) acting as agent for the vendor.

          Notes
          • Section 14A: inserted, on , by section 12 of the Fair Trading Amendment Act 2013 (2013 No 143).