4.3 Cataloging, Inspection, and Lotting

4.3 Cataloging, Inspection, and Lotting

The catalog is part of the sale: A description can become an express warranty, a misleading representation, or evidence of what the buyer was invited to inspect.

Inventory and Chain of Custody

Occupations Code § 1802.121 requires the auctioneer and client to agree in writing to an itemized inventory before the auction. Amendments must be written and signed by both.

Turn that inventory into controlled lots. Record seller code, lot number, description, serial or VIN, quantity, reserve instruction, photographs, location, and condition notes. High-value property may need measurements, maker marks, signatures, or independent authentication.

When property moves from seller to warehouse, display, and buyer pickup, record custody. A missing tag or substituted item creates both settlement and consumer-protection risk.

Catalog Facts

Under § 2.313, a factual affirmation, description, sample, or model that becomes part of the basis of the bargain can create an express warranty. Formal words such as “guaranteed” are unnecessary.

Examples:

• “Oil on canvas signed by the artist in 1964” is factual.
• “The most beautiful landscape in Texas” is usually opinion.
• “Runs and drives” states present functionality.
• “Consignor reports that it ran last year” accurately attributes a narrower fact.

Attribution is not a shield for a statement the auctioneer knows is false. Verify high-risk claims, state the source, disclose uncertainty, and correct errors conspicuously before offering the lot.

Photographs should represent the actual lot and show material damage. Avoid filters, angles, or reused stock images that conceal condition. Keep the original images.

Lotting Methods

An individual lot has one bid price for one identified item or group. A box lot sells the contents as one unit.

A quantity lot must state the multiplier. If the auctioneer takes a $25 bid “times 40,” the hammer extension is $1,000. If the terms say “one money,” the $25 is the total for the group.

A choice lot may let the high bidder choose one or more items at the bid amount per chosen item. State whether the bidder can select repeatedly, whether remaining items reopen, and how many must be taken. Repeat the rule before calling bids.

Poor lotting can hide defects or confuse value. Separate a working machine from untested attachments when title or ownership differs. Do not split regulated parts to evade a law.

Inspection Under § 2.316(c)(2)

Section 2.316(c)(2) removes an implied warranty concerning defects an examination ought to have revealed when the buyer, before contracting, examines the goods as fully as desired or refuses to examine after the seller demands examination.

That rule has limits:

• it concerns defects the examination ought to reveal;
• a latent defect may remain outside the inspection effect;
• the buyer must have a meaningful pre-contract opportunity in the statutory circumstances;
• the rule does not erase an express warranty; and
• deception or concealment is not protected.

Simply scheduling a preview does not automatically extinguish every implied warranty for every bidder. Document the opportunity, allow reasonable access, identify test limitations, and avoid interfering with inspection.

“As Is”

Section 2.316 permits “as is,” “with all faults,” and conspicuous warranty limitations. A written disclaimer of merchantability must mention merchantability and be conspicuous.

Texas causation law can give a freely agreed “as is” clause significant effect, but facts matter: bargaining position, conspicuousness, fraudulent inducement, concealment, and impairment of inspection can defeat reliance on the clause. It is inaccurate to say an “as is” clause works only for patent defects, just as it is inaccurate to call it immunity from fraud.

Inspection Safety

Define whether bidders may start engines, energize equipment, climb, disassemble, or test-drive. Use lockout procedures, ventilation, guards, staff supervision, and personal protective equipment. State “not tested” when testing was not performed.

For vehicles, firearms, medical devices, and electrical equipment, inspection does not replace title, transfer, health, or safety compliance.

Pre-Sale Review

Before publication, compare catalog to inventory, seller documents, photos, and lien/title research. Before bidding, announce corrections. After the sale, preserve the final description, correction, clerk result, and buyer acknowledgement.

Exam Rule

Inventory proves authority; description can warrant; inspection affects only what it should reveal; lot math must be explicit.

Final Practice Check

Before opening a lot, compare the physical tag, clerk record, image, inventory, and announced description. If any differ, pause and correct the record before accepting bids. That short control protects seller accounting as well as buyer understanding.