Also known as: private sales
Written by attorneys · grounded in primary & secondary sources — see below
A method of transferring property or title for a price conducted without public auction or competitive bidding. The seller negotiates directly with a chosen buyer on terms that must satisfy any applicable requirements of commercial reasonableness or court approval.
Max serves as trustee of a revocable trust holding a collection of classic cars. After the settlor's death Max contacts a museum curator and negotiates a direct transfer of three vehicles in exchange for cash plus future ticket revenue rights. The transaction qualifies as a private sale because it occurs outside any public auction and satisfies the trustee's statutory power to sell trust property on credit or other terms.
A bank holds a mortgage on a farm during an economic crisis. When the mortgagor defaults the bank arranges a direct transfer of the property to a neighboring operator at a negotiated price rather than conducting a public auction. The private sale allows the bank to realize value without the depressed bidding that would occur at a forced public sale.
Select any source to read its text and confirm it supports the definition.
Under the UCC the seller must give the buyer reasonable notification of the intention to resell when the resale occurs at private sale. The notice allows the buyer an opportunity to cure or bid and protects the seller's ability to recover damages measured by the contract-resale differential plus incidentals.
Supporting sources
Article 9 permits a secured party to dispose of collateral by private sale without prior court approval provided every aspect of the disposition is commercially reasonable. The secured party may lease or sell the collateral and later account for proceeds subject to the debtor's right to challenge reasonableness.
Supporting sources
Under federal statute a private sale of realty may not be confirmed at a price less than two-thirds of the appraised value after three disinterested appraisers value the property and ten days' published notice. A bona fide offer exceeding the private-sale price by ten percent also blocks confirmation.
Supporting sources
…executions against him; the sheriff had seized his property and had sold it at one-thirteenth of what it would have brought at private sale in ordinary times." Nevins (The American States During and After the Revolution, p. 536) says: "The town of Greenwich computed that during each of the five years preceding 1786 the farmers…