Tags

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

goldjewelryAuction bidders are seeing and hearing more and more disclaimers before auctions begin. The trend seems to be that these bidders cannot believe anything that’s being said nor put into print.

Okay folks, let’s get our auction underway. I’m Walt Davis and I’ll be your auctioneer today. Now, remember, you can’t believe anything I tell you … Everything is selling as-is where-is today, you must pay today and we accept cash, credit cards and checks. We’ll start with the jewelry and then at 2:00 being selling furniture. Our first lot is this 18K gold necklace …

So, could it be that this in fact isn’t Walt Davis? Is nothing really selling as-is, where-is? When is payment due? What kind of payments does this auctioneer accept? Is he starting with the jewelry? Is there even any furniture to sell? Is this really a 18K gold necklace? For that matter, is it a necklace?

Who knows? As we remember Walt (if that’s his name?) told us that we “… can’t believe anything I tell you.”

For example, if an auctioneer said … “statements printed in catalogs, signs, and verbal statements made by auctioneers or auction staff are representations that are not necessarily factual or accurate and do not create any warranty — expressed nor implied,” does this give an auctioneer license to give out false information?

While it appears to many auctioneers that this does indeed relieve them from any liability from false statements, I would submit it creates material problems. These problems arise in the basics of contract construction, which require competent parties, consideration and most notably mutual assent — a meeting of the minds.

How can parties (buyer and seller) have a meeting of the minds if the auctioneer is lying to the buyers about the seller’s property? Despite an auctioneers proclamation that, “You can’t believe anything I tell you,” can a buyer even believe that? Maybe the auctioneer is misrepresenting his or her misrepresentations?

Misrepresentation need not be intentionally false to create liability; a statement made with conscious ignorance or a reckless disregard for the truth can create liability despite notice that any statements may or may not be true.

On the contrary, auctioneers can puff or express sales talk such as “Wow, look at this next piece of jewelry” and this is quite customary and would be expected. We discussed this in more detail here: https://mikebrandlyauctioneer.wordpress.com/2011/11/15/puffing-versus-misrepresentation-at-auction/

Further, sales talk or puffing is distinctly different than representation. Disclaimers can’t make all statements essentially sales talk; there is a material difference between these two legal premises. As courts routinely note, “So, if the [bidder] is to disregard, what other reason are you inaccurately describing other than to deceive?” Deceit is a false representation.

Otherwise, do auctioneers inaccurately describe property? It is understandable that not every property would be described with perfect accuracy, but a up-front statement that there is a plan to misrepresent creates liability and likely causes buyer-seller contracts to be voidable.

It is important to note that Federal Law (United States Code TITLE 15, CHAPTER 22, SUBCHAPTER III § 1125. False designations of origin, false descriptions, and dilution forbidden) prescribes that the person providing false descriptions (whether or not forewarned of such) is subject to civil action.

Auctioneers proclaiming essentially that bidders can’t believe anything they are saying is asking for legal problems. And, the more bidders can believe what the auctioneer is saying, the better for our industry.

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 Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.