High Bidder for Gehrig Uniform Sued

High Bidder for Gehrig Farewell Uniform Sued

Failure to pay $451,000 results in auctioneer's sale to second highest bidder for far less

New York, August 26, 1999 -- Last July, Leland's auction house announced that they had sold the uniform that Yankee great Lou Gehrig wore when he made his "I am the luckiest man in the world speech" in 1939. Jeffrey Herman, a Florida businessman was the high bidder, at $451,000.

The New York Daily News reports that Herman cannot afford to pay for the uniform and Leland's is suing him for breach of contract, seeking damages. Because of Herman's breach, the uniform was resold to the second highest (and only other bidder) for the minimum bid price of $295,000. According to the article, Herman claimed the money he intended to use to pay for the uniform was "tied up in the courts" due to an unrelated lawsuit.

Because of the disparity between the top and second bids, Herman could be liable for significant damages. Determining the amount raises a few difficulties under contract law. A common method of calculation is the difference in price between the contract price and the resale price. If that is the case, Herman could be responsible for at least $155,000 (plus the possibility of incidental damage such as expenses and attorneys fees.

However, if the uniform could not be sold (or the second bid was below the minimum), the auctioneer could force Herman to perform the contract. Under a doctrine known as "specific performance" if the contract item is "unique" and "irreplaceable," and a monetary award would be adequate, forced performance by the buyer could be mandated.

The uniform certainly is "unique" given the famous event associated with it. And if no other buyers existed, calculating damage award based on differences in price would be impractical. The big downside of specific performance is that is Herman does not have the money to pay for the uniform now, who is to say he can pay later?