I’ve been writing for a while about auctioneers mistakenly reopening the bid after, “Sold!” Previous to that, we had also written about auctioneers advertising property for auction “absolute” when in fact the property isn’t selling absolute.
Some might say (including Shannon Hunter, Auctioneer) that these are the two most material issues in the auction industry today. In other words, are we saying that property is selling regardless of price (when it’s not) and declaring property is, “Sold!” (when it’s not?) Our question today is more generally, “Are we as auctioneers risking our credibility?”
In the last six months or so — basically from early 2017 through today — I’ve spoken to no less than a dozen bidders/buyers from around the country who were upset (and in some cases considering litigation) resulting from auctioneers misrepresenting the auction in one of these two fashions.
Relatedly, we discussed with Andy Imholte in October, 2015 the top five reasons auctioneers get sued: http://www.fasttalkingpodcast.com/new-blog/87 which included a mention of this “selling absolute but not.” We might today add a sixth specific reason — saying, “Sold!” and not meaning it.
As auction terms and conditions continue to get more loquacious, bidders continue to acquiesce — but that’s not the issue. The emerging problem is basically when a bidder/buyer feels harmed, these same terms and conditions are often viewed as “crazy, unfair, unreasonable, adhesionary …” and thus a legal issue emerges: Can the bidder/buyer be held to such?
We would argue that while adhesionary terms and conditions (extremely favoring the seller and/or auctioneer) may prevent some possible problems, these same 23 pages of one-sided rules gives the disgruntled bidder/buyer more fodder, and will continue to deter bidders/buyers from participating in auctions. By trying (and succeeding in some cases) to prevent problems, the actual problems get more magnified.
Further, we’re not merely guessing this proposition is true. In dozens of high-profile auction litigation cases across the United States in which we’ve been involved, these one-sided, unfair, unreasonable, adhesionary terms and conditions were often centre stage — and judges and juries were in most cases as aghast as we were.
In an auction-related deposition a few weeks ago, opposing counsel suggested to me that, “Customary practice must be deemed proper …” I countered that, “Customary practice and proper practice certainly can be mutually exclusive.” In other words, just because more and more auctioneers have 23 pages of excessively one-sided terms and conditions doesn’t necessarily mean it’s acceptable; he conceded my point.
Following the deposition this same attorney met me in a hallway outside the conference room and asked me a few more questions … and one which prompted this blog. He asked, “How would you characterize our auctioneer’s terms and conditions — you’re obviously not a fan?” I responded that I felt his terms countered the basic fabric of what the auction industry was all about. “You think this kind of thing is corrupting the auction industry?” he asked rhetorically. “Yes, I think that’s fair …” I answered.
Want to minimize your time in court? By keeping in mind that when selling absolute that you need to sell property to the highest bidder regardless of price [if you receive a bid,] and that when you say, “Sold!” it’s best to keep your word, you can spend far more days outside of court …
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, an Instructor at the National Auctioneers Association’s Designation Academy and Faculty at the Certified Auctioneers Institute held at Indiana University.