Very interesting and helpful! Thanks everybody (CJJ’s cite was especially informative).
Is there some distinction between whether or not you pay someone for the “appraisal?”
Meaning, if I walk into the coin store and say “How much is this worth and how much will you give me for it?” I expect them to quote a number that will allow them to resell the item at a profit. It is my obligation to determine if that profit is too great.
However, if I go into a coin store and pay them $x to appraise the coin, I have a much higher expectation as to the accuracy of the appraisal, since considerations have been exchanged and we now have a binding, enforceable contract.
Am I way off base here?
I think it might also depend on how the dealer phrased his response. If I walked in and asked him how much the coin was worth, did he say “It’s worth a hundred bucks” or “I’ll give you a hundred bucks for it”? The first might be fraud; the second, while misleading, was factually correct.
Turek
IANAL, but-
Generally, when somebody pays for an appraisal they want a written statement of the item’s value to give to the insurance company. They pay for an accurate statement. If the appraiser is a member of any organization, their statement is generally backed by a series of guarantees made by that organization.
An appraisal is a contract between the appraiser and the customer. Undervaluing an item would be a breech of the contract, and probably fraud.
If somebody is just trying to sell an item to a store, the only contract is money for goods. You haven’t asked for an appraisal, or agreed to pay for one (This is not just a fee to make money. Determing whether an item is genuine, an old copy, a new copy, a reproduction by the original maker, etc and exactly what condition the item is in can be a very time consuming process.) and the buyer hasn’t agreed to provide an appraisal. The seller and buyer are simply negotiating a price.
Ok, so far we’ve been talking about a three sentence transaction:
Seller: “How much will you give me for this?”
Merchant: “100 bucks”
Seller: “Ok.”
Once more statements start getting made, there is the opportunity for fraud, misrepresentation, negligence, or breach of warranty to occur.
You can rescind or sue for fraud or misrepresntation under some circumstances. http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=4th&navby=case&no=011834P (permitting claim for negligent appraisal of real estate).
The thing to distinguish is “puffery.”
An example that has been discussed here before is the television coin dealer’s suggestion that their collectible coins are sure to appreciate. That’s not an appraisal or a statement of fact. It’s sales puffery. http://www.mansfieldtanick.com/CM/Articles/Articles63.asp; http://www.allbusiness.com/periodicals/article/264800-1.html; http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID887720_code341176.pdf?abstractid=887720&mirid=1 (click “document delivery” for entire article in pdf). Usually puffery is used to encourage a purchase by exaggerating a product’s performance. http://www.horses-and-horse-information.com/articles/0498moneyback.shtml The analogy here would be disparaging the product or market to justify a low-ball offer by the merchant.
At the other end of the spectrum are statements like, “these aren’t selling at auction right now” or “I just sold one of these for 75 dollars.” These are factual representations which (I am assuming) are false.
Similarly, if I get an appraisal from a merchant, I am expecting an objective assessment of fair market value. If the merchant gives me bad information, I can probably win a lawsuit against that merchant–even if I rely on the appraisal to sell the property to somebody else.
I am not your lawyer; you are not my client. I am not providing this information as legal advice. Different fact patterns will yield different results. State laws vary on this. YMMV.
Legally, does it make a difference if rather than a negotiation between a shop owner and a visitor, it’s between the owner of a garage sale and a visitor?
I’m surprised by that. I remember when the Bradford Exchange ads stopped representing their plates as great investments and and added the disclaimer “Not all plates go up in value. Some go down.”