Just last month, I was contacted by an attorney in New Hampshire. He wanted to know if I could help him with some auction-related litigation. We regularly provide such help: https://auctionlegalconsulting.com/
His story was fairly straightforward in that his seller-client had hired an auctioneer to sell a coin collection. The auction took place and the seller was not satisfied with the auctioneer’s knowledge of the coins nor the marketing of those coins.
I asked this attorney, “What makes your client believe the auctioneer had expertise [prowess] with these coins, or coins in general?” The attorney replied, “The auctioneer basically said, ‘We are experts at selling coins and sell coins of this type all the time.'”
My response in light of the auctioneers statements — assuming he made them — was, “I think I can help you.” However, had this auctioneer said, “I don’t know much about coins, but we can sell them for you …” then I probably wouldn’t be much help.
This represents the gist of the auctioneer’s extent of potential liability to a seller. Hold yourself out as an expert — and you had better be one. Hold yourself out as not having such expertise, and you don’t necessarily need to have it.
All auctioneers working for sellers have liability — a duty to perform in a manner equaling or exceeding the customary and generally expected way of conducting business: property will be properly marketed, inquiries will be answered, property will be displayed and otherwise readied for auction and the auction will be preformed to maximize the sellers proceeds.
Nevertheless, when auctioneers hold themselves out as having an increased knowledge and expertise (as experts) then they have raised the bar in terms of what a seller has a right to expect.
This particular seller held that his auctioneer didn’t properly identify the coins — something an expert would certainly know how to do — and that the auctioneer didn’t market the coins appropriately — here again, something an expert would know how to do.
Do auctioneers hold themselves out as experts? Yes, they do all the time. One might argue that by holding oneself out as an expert in coins (or whatever,) it is much easier to attract clients with such property; of course with this increase in reward, comes risk.
In this aforementioned case, ultimately with my guidance, the seller agreed to not pursue the auctioneer after the realization that the coins were [largely] identified correctly, and advertised adequately. Further, the auction prices were commensurate with market value.
The lesson here for auctioneers? Beware holding yourself out as an expert to get clients who will sue you when they discover you aren’t. In other words, accurately represent you and your company to the public and this expert/risk issue becomes almost non-existent.
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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.