, , , , , , , , , ,

Auctioneers, auction associations and others regularily share information on so-called “deadbeat” bidders — bidders that don’t pay, write bad checks, give false information, etc.

For the most part, this is really good information in that other auctioneers can take note, and take precautions to avoid the same these people/problems. We were recently asked, “Is there any concern posting such information?”

The only concern seems to be a claim of defamation. Defamation is a false statement made about someone which disparages one’s reputation, where the average person would think less of this person if they read or heard this information.

Therefore, so long as the posted information is true [verified] (and carefully worded) all is probably fine. However, if such a listing or posting is constructed with false information that could injure someone’s reputation, a claim of defamation could be brought.

To encourage truthfulness, and maybe avoid some possible liability, it may be good practice to name the accuser along with the accusations. For instance, “John Smith, Auctioneer tells us that …” In this way, John is encouraged to be truthful and the association and/or Internet site might be better shielded from culpability.

As well, there was a question about the possible damages. In essence, how material could any damages become by not allowing someone to bid or participate in a subsequent auction? While a claim of defamation can be difficult to prove, as the value of the property rises, the inability to bid becomes equally relevant.

There is also the related issue of rating bidders, similar to how eBay rates buyers and sellers. Some software rates bidders on past performance and those postings should be substantiated as well to avoid any claims of defamation.

For auctioneers allowing certain bidders to participate and not allowing other bidders to participate — it’s important to have that policy approved by your seller prior to the auction and be consistent with your bidders. Treating all bidders on an equal basis (other than price) is an important standard to avoid litigation.

We wrote two prior articles about treating bidders equitably and consistently:

Finally, care and purpose are good qualities in regard to banning any bidders, allowing other bidders and protecting your seller from unqualified participants as well as legal liability.

Mike Brandly, Auctioneer, CAI, CAS, 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, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.