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Outside of Louisiana, all auctions are “with reserve” by default. That is, they are with reserve unless explicitly denoted as without reserve (absolute.) So, what is explicit? What words constitute this type of change?

Synonyms for “explicit” include “clear, direct, plain, obvious, straightforward … ” in other words, does the advertising or other announcements indicate clearly, plainly, obviously … that it’s a without reserve auction?

Maybe, more importantly, do these expressions matter from the bidders’ perspective or only matter from the sellers’ or auctioneers’ perspective? Can the same words mean different things to different people?

Could an auctioneer say something he or she thought indicated “without reserve” even though bidders didn’t see it that way? Could bidders get the impression by expressions used by the seller/auctioneer that the auction is without reserve even though it’s not?

There are undoubtedly misunderstandings — the most common being that the auctioneer is using some expressions to suggest the auction is without reserve even though the auction is being held with reserve. This is done to attract bidders but reserve rights including price protection.

Three examples:

‘Our clients have put everything in the auction today and they are not taking anything with them to Florida.’ A bidder might reasonably conclude that since they ‘selling‘ everything and not taking anything with them, it’s a without reserve auction. However, maybe the seller is giving items that don’t meet their reserves to their son?

‘Only the real property today has a reserve.‘ A bidder might reasonably conclude since only the house and lot have a reserve, all else is selling without reserve. However, maybe the seller has yet to set specific reserves on the two automobiles and will offer them with ‘seller confirmation?

‘We are retiring and completely liquidating our business today.’ A bidder might reasonably conclude since they are completely liquidating that all is selling without reserve. However, the seller is reserving the right to no-sale certain items and plans to give those items to their daughter.

Our view is this … any expressions which “clearly, directly, plainly, obviously or straightforwardly” indicate the auction is without reserve likely make it without reserve. More importantly, why else would sellers/auctioneers use such language unless they wanted bidders to think so? If that’s the intent of the expressions and it’s accepted as such, is that not explicit?

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 Supreme Court of Ohio for attorney education.