ask your client, auction, Auction Law, auctioneer, auctioneers, auctions, bidders, breach of contract, client, consent, contract, disclosure, Farmall M, Farmall MD, real estate, real property, seller, Vaughan v Menlove
We wrote about duties auctioneers owe their clients (sellers) in 2009. As we noted then, auctioneers are special agents for their clients, acting on the seller’s behalf and benefit.
Therefore, what auctioneers must do when working for a seller is act with the seller’s consent and direction, and within the laws governing that jurisdiction.
Some sample questions I’ve been asked which require this answer:
- Some items didn’t sell at the auction, so can we take those to our next auction and try to sell them there?
- If we only had 4 registered bidders at an absolute real estate auction, should we go ahead with the auction, or cancel it?
- An auction attendee wanted to take away any items that didn’t sell at the farm auction. Can we let him do that?
- Was it okay that we postponed the auction due to weather, and started it about 2 hours later?
- Is it acceptable that we require $100 minimum increments on any items in excess of $1,000?
- We sold what we thought was a Farmall M last week, and the buyer brought it back yesterday wanting his money back. He said it’s not an “M” but a “MD.” Do we refund his money?
- Our auction Saturday includes a diamond ring that everyone who’s looked at it says, “It’s not a diamond.” Do we go ahead and sell it?
Of course, there are many other examples of such questions. “Ask your client” means check with your client and discuss the situation with him or her, and find out what your client wants you to do.
What if the client is not available to discuss the situation, and a resolution is needed right away? Then, the axiom known as “reasonable care” needs to be utilized. We’ve noted before that the standard for reasonable care was essentially established in the famous English court case Vaughan v Menlove (1837) 132 ER 490 (CP).”
Let’s say an exceptionally rare comic book is found the morning of the auction, and it hasn’t been advertised. Is it right to sell it anyway, or hold it out, and sell it later, after it can be marketed?
Given the seller is not available to ask, auctioneers should do what is “reasonable.” Would it be reasonable to keep it back and sell it after some additional marketing and promotion? Probably.
However, also important is the contract between the auctioneer and seller. This document outlines the meeting of the minds of the parties.
If the contract said, for example, that the auctioneer can use his judgement about any late “finds” or significant items, and sell them later, then the auctioneer can do that without further consultation with the seller — although keeping the client informed throughout the process is also a required duty.
I was consulted on an auctioneer-related court case several years ago. The auctioneer had disposed of some items that didn’t sell at the auction. The seller was suing the auctioneer claiming he had no authority do throw anything away. The seller won this case against the auctioneer for the lack of one simple question: “Do you want me to throw these items away?”
In other words, if the auctioneer had asked his client, the seller wouldn’t have won this case — in fact, there probably wouldn’t have been any case at all.
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.