What responsibilty does a Dealer have when selling a slabbed coin?
UncleJoe
Posts: 2,551 ✭✭✭
For example look at this 1921-S Buffalo Nickel
This coin is not VF IMO let alone VF-30
Should a dealer blindly sell a slabbed coin or does the dealer have some responsibility to try and sell a correctly graded coin or at least mention a possible problem?
Yes, I know Buffaloes are tough to grade but this one is way off base IMO.
Joe.
This coin is not VF IMO let alone VF-30
Should a dealer blindly sell a slabbed coin or does the dealer have some responsibility to try and sell a correctly graded coin or at least mention a possible problem?
Yes, I know Buffaloes are tough to grade but this one is way off base IMO.
Joe.
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BTW, that Buffalo doesn't seem all that bad.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
They're offering a 7-day return privilege, which seems adequate to me for a slabbed coin. There's only so much you can protect the uninitiated.
Every now and then there are dealers that will give their own opinion of grade if they think the TPG overgraded. For example, if a coin is in an AU-55 holder and they think it's only a 50, they say so. I know I've seen Alpine and Jack Beymer do that frequently, and I'm sure there are others...but as long as they offer a reasonable return privilege and some warranty of authenticity, I think that's enough.
The problem with the advent of coins-as-investments is that it has a lot more people buying coins who really don't know whether the coin is graded accurately or "good for the money." That makes the integrity of the dealer that much more important when you don't really know coins all that well.
On the other hand, the buyer needs to accept part of the responsibility in the transaction. There's dozens of grading companies out there - and let's face it, not all are grading to the same standards.
But heres my take on it --
Whenever you purchase a coin from a dealer -- slabbed or not, along comes a Warranty of Merchantability under the Uniform Commercial Code sections 2-314(1) 2-315 which is implied in every sale and must be excluded or modified by the seller and reads as follows;
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§ 2-314. Implied Warranty: Merchantability; Usage of Trade.
(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promise or affirmations of fact made on the container or label if any.
(3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.
§ 2-315. Implied Warranty: Fitness for Particular Purpose.
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.
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Which means that to a certain extent he has offered a guaranty that the coin is a 1921-S Buffalo Nickel and to a certain degree the coin is close to the grade offered. A dealer should tell you that he feels that coin is overgraded, but if its isnt grossly overgraded pursuant to the standards of the industry, ie., Sheldon's scale he's probably okay. If it were a counterfeit, you have would have different remedies. Unless the seller modified or disavowed implied warranties which can be accomplished as follows;
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§ 2-316. Exclusion or Modification of Warranties.
(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (Section 2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.
(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof."
(3) Notwithstanding subsection (2)
(a) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty; and
(b) when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and
(c) an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
(4) Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (Sections 2-718 and 2-719).
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With Heritage's auction Terms and Conditions, I dont see any language as noted above which would exclude all implied warranties. However, realistically its a $600 coin and all of that isnt going to come into play unless the coin is of a substanial value. And there is a 4 year Statute of Limitations on the sale of goods;
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§ 2-725. Statute of Limitations in Contracts for Sale.
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
(3) Where an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.
(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this Act becomes effective.
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Sorry for all the legalese, but those buying and selling coins, whether on Ebay, at a small local show or as a major player has to realize their rights and responsibilities when doing so. Now of course this is much simplied and the Uniform Commercial Code is much more comprehensive that the couple of sections posted but they do apply to the sale of coins/numismatic items. However, I hope this helps.
TPN
In the case of this coin, by virtue of your own stated assessment that the coin is overgraded, the problem must be clearly visible, thus the seller is not obligated to mention it.
Russ, NCNE
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