Tags

, , , , , , , , , , , , , ,

It has happened; more than once in fact.

One such instance was in 1983, when an auctioneer in Indiana opened the Sunday newspaper to see that he and another auctioneer in that same city had booked (contracted) the same auction. Both auctions were scheduled for 10:00 a.m. the next Saturday …

Our question here is: Can two auctioneers book the same auction?

From the standpoint of the seller looking to hire an auctioneer, can that seller sign a valid contract with two (or more) different auctioneers to conduct the same auction? While the answer may seem elementary, it might not be quite that simple.

From a contract standpoint, it may depend on the wording in the contract. Contracts for auctioneering services generally fall into three different types:

  • Exclusive Right To Sell
  • Exclusive Agency
  • Open Agency

In an Exclusive Right To Sell contract, the seller is granting the auctioneer the sole right to sell certain property for him at auction. Most courts have ruled that in instances such as this, if the seller sells anything himself or via another auctioneer, the contracted auctioneer is due commission and possible other rewards due to breach of contract.

In an Exclusive Agency contract, the seller is granting the auctioneer the right to sell certain property for him at auction, but retaining the right to sell the property otherwise himself. In these types of contracts, the seller could sell some or all of the property prior to the auction, and the seller would be in complete compliance with the contract.

In an Open Agency contract, the seller is granting the auctioneer a right to sell certain property for him at auction, but retaining the right to hire other auctioneers to do the same. Courts have ruled routinely that in open agency arrangements, whichever service provider (auctioneer) is deemed the procuring cause of the sale is due compensation. For auctioneers, this would likely be determined by who’s auction was scheduled first?

Of course, in our example in Indiana in 1983, both auctioneers had scheduled the same auction on the same day and at the same time. This would be, at best, a difficult situation to rectify, assuming each auctioneer signed the same type of agency arrangement with this seller. For either auctioneer to seek breach of contract damages, that auctioneer would have to likely show that due to this auction being canceled at this late date, they have no other opportunity to schedule another auction (mitigate their damages.)

Another perspective might be that the first contract signed would be the valid contract, and the second contract signed would be invalid due to lack of authority — if the seller awarded the right to sell to auctioneer #1, the seller would not possess the right to award the right to sell to auctioneer #2.

Maybe both auctioneers would meet with the seller to try to decipher which auctioneer the seller actually wanted to engage, and/or work together in a collaborative effort. In our 1983 Indiana case, the one auctioneer called the other and told him that he was open to either having the auction, or allowing the other auctioneer to have it — either way. In the end, with the seller’s consent, both worked together on the auction.

The moral of our story here is that the phrase, “Exclusive right to sell” best protects an auctioneer from either the seller selling items themselves or other auctioneers being engaged. If the contract lacks that specific language, and/or doesn’t clearly outline the type of agency — two auctioneers may indeed book the same auction.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.