The dangers of “absolute discretion”


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Tom is an auctioneer who takes various live and online classes on the subject of “auctioneering,” surveys the Internet for articles, and certainly follows related posts on Facebook. It’s not hard to find a recommendation of “absolute discretion.” In other words, auctioneers can reserve the right to do anything — no matter what the seller (client) or buyer wants or requests?

Let’s say our auctioneer Tom books an auction — an estate — with lots of china, glassware, collectibles, etc. He puts the entire inventory online (in lots and descriptions as he alone decides) and the auction begins Thursday, at 2:30 pm. It is set to run for 10 days with a soft close.

Soon after, a buyer notifies Tom that a cup in Lot # 212 matches a saucer in Lot #384. The buyer asks Tom if these two lots shouldn’t go together, as the cup and saucer as one lot may be worth over $1,000, but alone, each might not demand over $10. Tom, of course, says he has “absolute discretion …” This buyer also notes that the auctioneer allowed a mutual friend to register without a credit card, even though the terms mandated a valid card be on file.

About an hour later, the seller notifies Tom that Lot #212 and Lot #384 should be one lot and not two, and of course, Tom states that he has “absolute discretion …” and has the right to lot as he alone decides. Unfortunately for Tom’s seller, Tom figured out that the two selling separately will result in a commission of $50 ($25 minimum for both) rather than the 4% commission for selling together (4% over $999) for a commission of $40.

I’m not suggesting any auctioneer would do any such thing … thinking about the benefits to himself or herself more than the benefits to the seller (or conceivably a bidder) but this is the danger of such advice. One, as an agent for the seller, an auctioneer is obligated to obey all legal directions of the principal — counter to an absolute discretion to do whatever.

Further, what if a buyer called Tom to let him know that upon closer inspection the cup and saucer are both slightly damaged, and that’s not noted on the website. While this is not a legal direction as it’s from a customer rather than a client, could an auctioneer — with knowledge — refuse to disclose such issues? I suppose he could with absolute discretion?

What I am noticing in the auction community is some auctioneers taking “absolute discretion” to mean that nobody (seller, bidder, attorney, court, sheriff, police, federal marshall …) can overrule what the auctioneer decides. We previously wrote about this disturbing trend here:

This issue of being absolutely in control without being able to be influenced by anyone came up before this spring when the Coronavirus pandemic was proliferating — and auctioneers were defying governor’s orders, state law, and even federal mandates

It’s not that the notion of absolute discretion that requires such behavior, but the empowerment of the auctioneer which also tends to result in ill-advised decisions thinking there are no possible ramifications. As we’ve previously written if you’re told you can’t be stopped for speeding, do you drive faster? More unsafely? You do.

It is a mindset [the message] in a general sense, in that if an auctioneer has absolute discretion and is not responsible for anything, disclaiming any and all duties and assigning all risks to others, we see auctioneers using poor judgment in how they carry out [and don’t carry out] their required responsibilities. On the contrary, auctioneers must remember that they owe agency duties (including obedience) to their seller, and owe customers honesty, integrity, and fair dealing.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.