In situations such as this, it is customary for the primary auctioneer to maintain his (or her) relationship with the client(s). Then, the assisting auctioneer establishes a sub-agency type relationship between himself and the primary auctioneer.
In these scenarios, it is important for the primary auctioneer to have in the contract(s) between himself and his client(s) a provision that allows the auctioneer to utilize other auctioneers.
We wrote previously about items that should be in any auctioneer’s contract with a client: https://mikebrandlyauctioneer.wordpress.com/2012/08/20/the-29-things-that-should-be-in-an-auctioneers-contract-with-a-seller/
Additionally, if state law requires that every auctioneer who bid calls (or otherwise acts as an auctioneer,) has entered into a written contract, that type of contract is usually drawn between the primary auctioneer and the assisting auctioneer.
Alternately, the assisting auctioneer could sign a contract with each of the primary auctioneer’s clients, but that is usually impractical and cumbersome.
Even if state law doesn’t require an contract, a contract is still prudent outlining the exact agreement between the primary auctioneer and the assisting auctioneer.
It’s important for this contract, when required by statute, to be compliant. For example, if the state licensing regulations require 13 distinct contract items, then this sub-agency contract has to have these same 13 contract items — even if some seem not to apply.
We have been asked to help write these types of contracts in several situations. Typically, we suggest in this type of contract that the primary auctioneer is treated as the consignee, and the seller is the consignor. The assisting auctioneer can be noted exactly as such.
Most of these sub-agent auctioneer contracts have been written for a period of time — for instance, from January 1 – December 31 for a given year. They can easily be customized for any period of time, or just one event.
What are the repercussions from a lack of this type of contract? For one, if it’s required, the auctioneers are not in compliance with state law. As well, what if there’s a misunderstanding about compensation or responsibilities? Having it in writing solves both these potential issues.
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. He serves as Adjunct Faculty at Columbus State Community College, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.