THE CAUTIONARY TALE OF THE FAKE ROLEX - BUYER BEWARE!
Buying second hand goods at live local auctions can sometimes be problematic and leave the buyer without a satisfactory legal remedy if the goods do not comply with their descriptions and are later proved to be forgeries or fakes. A recent example involved a second hand watch to be auctioned and described as a Rolex.
I was recently contacted by a lady who bought a Rolex watch through a local auction house. She went to see the watch before the auction and had a chat to a member of staff along the lines of how nice it was. The watch was described in the catalogue as a ‘Rolex in Rolex box’, but there was no paperwork.
As an online bidder, she successfully bid £4k (she would expect to pay circa £6k retail). She collected it (same watch as she viewed) but then subsequently took it to a Rolex shop to have links removed from the strap and was told ‘it’s a copy or fake’. She sent me an extract from the auction house terms and conditions (Ts & Cs) and sought my advice as to her legal rights.
The Auction House’s Ts & Cs state:
The auctioneers act only as agents for the vendor the auctioneers accept no personal liability under contract made at or prior to auction.
All bidders are deemed to have viewed or requested an appraisal for a lot being bid on. All lots are sold as seen there are no guarantees. All descriptions and pictures are produced as a guideline only.
Bidders will be deemed to have read and understood the terms below. No refunds, credits or storage waivers will be given once acceptance and registration is approved.
Viewing is available Fridays and Mondays from 3pm-6pm, and 9am-10am before the Auction begins on Saturdays, Tuesdays and Thursdays. All verbal appraisals must be obtained in office hours 9am-5pm Mondays - Fridays and 9am-4pm Saturdays.
Viewing Extra Note
All items are sold as seen in the auction centre. All images and descriptions are for guidance purposes only and in NO WAY replace viewing or appraisal. We have a viewing every Friday at our auction centre from 12-4pm, Saturday and Monday by appointment only. All Lots are sold as per our Terms and Conditions on display in the Auction Centre and are available on request. Please see section 5 of our customer terms and conditions. PLEASE NOTE NO credits or refunds will be issued for items that have not been viewed by the buyer or appraised by a member of staff.
Assuming the Rolex is a fake, it is necessary to consider:
Contractual rights; and
As a prospective online bidder, you should have been directed and accepted the auction house's Ts & Cs before registering and being allowed to bid. This could have been done online or perhaps at the auction house when you viewed the watch at an earlier time.
The auction house state that their Ts & Cs are also on display in the auction premises or are available on request.
Therefore, the Ts & Cs were brought to your attention before bidding and are incorporated into the contract of sale between the seller and you. Ts & Cs will also usually appear in the catalogue.
Auctioneers act solely for and in the interests of the seller. They do not act for the buyer or give advice to the buyer.
The auctioneers have an express term that the goods are 'sold as seen' and no guarantees are given. Again, this is standard in many live auction sales. Sometimes, condition reports are prepared but there is usually an express term that by providing the condition report the auctioneers are not entering into a contract with the buyer.
By contrast, Bonhams' Ts & Cs have what is termed a ‘Contractual Description’ of a lot which is printed in bold letters together with the photograph. Everything else regarding the lot, including its alleged provenance and any oral or written statements made before or during the sale, do not form part of the contractual description. So, a watch stated to be a Rolex with a brief description and photograph appearing in a Bonhams catalogue is a contractual description. Bonhams Buyer's Ts and Cs also have a section dealing with forgeries stating that Bonhams undertake a personal responsibility for any forgery and, subject to certain conditions, will agree to buy the lot back from the buyer.
I recommend you double check to see whether there is such a clause in the Ts & Cs. It appears that this is the statement regarding descriptions - 'All descriptions and pictures are produced as a guideline only'.
Auction sales are covered by The Sale of Goods Act (SOGA) 1979. However, due to the 'sold as seen' express term in the contract the implied terms regarding sales conforming to their description in the SOGA will not apply.
So, from the information provided, you do not have any legal recourse against the auctioneer as agent based on the Ts & Cs reproduced above. In addition, the Ts & Cs limit the seller's liability in respect of its conformity with any descriptions and right to claim a refund.
On a practical point, it emphasises the need to take specialist advice before buying at auction. Certainly, paperwork does add to the authenticity of a lot and increase the value of watches but again could be forged. It is possible that it is a bad fake and that a specialist auction house would have easily seen this and refused to accept it for the auction. Again, perhaps more reason only to buy from specialist auction houses.
The auctioneer is under no duty to disclose the identity of the seller and whether they are a professional or a private individual.
Are the Ts & Cs subject to Unfair Contract Terms Act (UCTA) 1977?
3.-(1) This section applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business.
Liability arising in contract.
(2) As against that party, the other cannot by reference to any contract term -
(a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or
(b) claim to be entitled -
(i) to render a contractual performance substantially different from that which was reasonably expected of him, or
(ii) in respect of the whole or any part of his contractual obligation, to render no performance at all, except insofar as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness.
Dealing as a consumer ...
But the buyer is not in any circumstances to be regarded as dealing as consumer -
(a) if he is an individual and the goods are second hand goods sold at public auction at which individuals have the opportunity of attending the sale in person; (my emphasis)
Despite the bleak legal position for the buyer, I am pleased to report that on being presented with the allegation that the Rolex was a fake based on two independent inspections by authorised Rolex retailers the auction house acted professionally and provided a full refund including the buyer’s premium. They kept the fake Rolex.
ON A PRACTICAL NOTE ...
Checklist of Fake vs. Real Rolex
Attribute Real Rolex Fake Rolex
Extra seal within the threads around triplock crown Yes No, have screw down threads
Clear display or caseback No Maybe
Smooth caseback Yes Maybe, many have logos
Engraved caseback No Maybe
3-D Hologram encoded sticker on caseback Yes on Models after 2002 Probably not
2.5 magnification on Cyclops lens Yes No, most fakes have 1.5 magnification
Serial and Case Reference numbers on side of case Yes, and is light-reflecting and very fine Yes, but most have poor spacing and lines are etched
This article contains general advice and comments only and therefore specific legal advice should be taken before reliance is placed upon it in any particular circumstances.