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auctI’m reading over my own auction contract written by my attorney several years ago, including many revisions since.

I note a particular paragraph found in my contract as well as many (I suspect) other auction consignment contracts used by auctioneers all over the United States.

It is mutually agreed that this contract shall be fully binding and obligatory upon the undersigned, and their separate heirs, administrators, executors, agents, assigns, attorneys, beneficiaries, devisees, legatees, representatives and successors in interest of the undersigned

This paragraph intends to bind the seller (and thereafter title holders) to such contract in the event the seller dies, sells or gives this subject property to someone else, or allows anyone else to do the same.

I recently met with my attorney and noted this paragraph, asking if my contract was actually enforceable upon these other parties (heirs, administrators, executors, agents …) Her reply? “Probably not.”

Essentially, my attorney told me this was a “contract bluff.” “Even though the terms are likely unenforceable, it looks and reads as if it is, suggesting to others that they must honor your contract,” she said.

A contract bluff? Well okay. So, who are we trying to bluff? Let’s take a closer look at these people …

  • Heir: Is legally entitled to property upon a person’s death, usually related to the decedent
  • Administrator: Is charged with handling the affairs of an estate, typically appointed by the court
  • Executor: Is charged with handling the affairs of an estate, typically named by the decedent
  • Agent: Acts for another under that other person’s authority
  • Assignee: Rights have been transmitted by particular title, such as sale, gift, legacy, transfer or cession
  • Attorney: Is a lawyer
  • Beneficiary: Is legally entitled to property upon a person’s death, usually not related to the decedent
  • Devisee: Takes real property under a will
  • Legatee: Takes personal property under a will
  • Representative: Acts for another in legal standing, such as a power of attorney or executor of an estate
  • Successor of interest: Acts as a transferee in regard to real or personal property

At issue here is that auction consignment contracts are considered personal service contracts, and therefore generally terminate when the seller dies, becomes incompetent or the title for such subject property changes.

We wrote about this here:

Imagine someone signing a contract with a dentist to fill a gold tooth. Then, the owner of said tooth pulls it out and gives it to his son. Can the dentist still demand he fill the tooth, and be compensated accordingly?

My attorney did not suggest removing this paragraph from my contract. On the contrary, she said, “The worst that could happen is it be unenforceable, which it would be anyway …”

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.