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wizardofozIn my recent discussion with Andy Imholte on his Fast Talking Podcast I pointed out ways that auctioneers risk being sued.

One such way auctioneers are sued is for not following the contract with the client … and/or not following the client’s legal directions.

You can hear that entire podcast here: (http://www.fasttalkingpodcast.com/new-blog/87).

However, today we explore if (and when) auctioneers have some implied authority — where they might not have to check with their client or the contract specifically before making a decision about that seller’s auction, for example.

Let’s say an auctioneer is in a remote part of Wyoming, where most auction advertising involves newspapers. The contract between the auctioneer and seller expressly lays out three specific newspapers for such advertising.

See here three scenarios for which there is either a breach of contract, or implied authority:

    1. Auctioneer advertises in three other newspapers and not the newspapers listed in the contract. (breach of contract)
    2. Auctioneer advertises in the one additional newspaper, instead of one of the three noted in the contract. (breach of contract)
    3. Auctioneer advertises in two other newspapers in addition to those three denoted in the contract. (implied authority)

While the principle of implied authority is shown here by doing more of like kind in addition to what is expressed in the contract, there are other ways implied authority may be exercised by an auctioneer.

For example, let’s look at three more scenarios for which there is either a breach of contract, or implied authority:

    1. Auctioneer calls some past customers telling them about the upcoming auction. (implied authority)
    2. Auctioneer puts the auction on his website, with pictures and descriptions. (implied authority)
    3. Auctioneer tells his staff not to mention the auction to anyone since there are items the auctioneer wants to buy. (breach of contract)

Here implied authority allows the auctioneer to do further advertising including calling past customers and his website, but he can’t make efforts to suppress bidding in any way.

Lastly, sometimes circumstances dictate that our auctioneer has to make decisions even during the auction to benefit the client. For example, let’s look at three more scenarios for which there is either a breach of contract, or implied authority:

    1. Auctioneer decides to sell the items he’s interested in first, before most of the crowd arrives (breach of contract)
    2. Auctioneer notes in the western sky significant clouds and a good chance of forthcoming rain, and therefore delays selling inside the barn first as planned, selling the outside items first. (implied authority)
    3. Auctioneer moves one piece of antique furniture away from all the other like furniture and into the barn with all the tools and equipment, since his brother is interested in that particular piece. (breach of contract)

I suspect most auctioneers who have reviewed these above scenarios well understand which ones constitute inappropriate behavior (breach of contract,) and which ones are prudent actions (implied authority.)

Implied authority is an important aspect of contract (agency) law where it’s thought that no contract is complete and there’s always more duties and behaviors which arise as implied from the expressions in the contract.

Too, if the client — our seller here in these examples — doesn’t object after seeing ads in additional newspapers, or the website, or watches without expressing disapproval as the outside items are sold first, then the implied authority is firmed as simply authority since there was apparent acquiescence.

Auctioneers must be good at deciding when — and to what extent — they have implied authority, and at the same time be careful to not breach the contractual arrangement with the client.

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.