An auctioneer meets with a seller who owns a house full of personal property — furniture, kitchen items, decorative pieces, artwork, lawn and garden, car and a sewing room full of sewing machines and accessories.
The seller/owner tells the auctioneer she wants to sell all her property to the highest bidder — but that she wants to sell her sewing items to the highest bidder so long as the buyer is anyone other than her neighbor Janice.
The auctioneer inquires — “Why not Janice?” The seller responds that her daughter owns a sewing shop in town and Janice is her daughter’s primary competition. She doesn’t want Janice to upgrade her equipment to further compete with her daughter.
“Why doesn’t your daughter attend the auction and outbid her?” the auctioneer inquires. The seller says that her daughter has all the equipment she needs and that they just don’t want Janice to own any of it.
The absolute best answer to this seller is this: “We can sell your sewing room items at auction to the highest bidder, but if you want to control who does/doesn’t buy these lots, it’s best to sell these items yourself, outside of the auction.”
Otherwise, it would be possible to deny Janice to participate in this auction, but given that race, color and ancestry are federally protected classes, it might invite a discriminatory lawsuit. We previously wrote about that: https://mikebrandlyauctioneer.wordpress.com/2014/10/08/auctions-the-1866-civil-rights-act/.
Additionally, if Janice is denied from participating, she will not be able to bid on nor buy any of the other items in the auction, which will possibly affect prices. Possibly the auction event (all of this personal property) could be divided into two auction events — the sewing items (Auction event #1) and all the rest (Auction event #2) and Janice could be allowed to register accordingly?
Auctions are controlled events — not necessarily open to the public because they are “public auctions.” We discussed the concept of “public auctions” here: https://mikebrandlyauctioneer.wordpress.com/2013/03/27/what-exactly-is-a-public-auction/. Further, registration can be (and typically is …) dictated resulting in only certain bidders being allowed to participate.
The concept of capricious or arbitrary registration is often discussed — and we’ve held that different bidders with different contemporaneous registration criteria makes for an unmanageable auction unless those bidders meet predetermined and consistent registration terms and conditions.
For instance, your terms are cash only — but you allow a bidder to register and pay with a credit card. Is that auction bidder unjustly advantaged? Are other bidders unjustly disadvantaged? Would you take a bid of $1,025 cash over a prior bid of $1,050 using a credit card? You should since the $1,050 credit card bid is actually $1,013.25 after the fee. More on that common misconception: https://mikebrandlyauctioneer.wordpress.com/2017/01/17/is-bidding-at-auction-a-privilege-or-right/.
Ideally and ultimately, auctions are open to anyone meeting the predetermined registration requirements and thus able to bid on any property being put up under those terms. A seller wanting to sell to only certain people isn’t necessarily a good fit for auction marketing — and possibly should be avoided.
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.