We have written about three (3) distinct standards that auctioneers are held to in court proceedings or by regulatory agencies:
- Customary practice
- Industry standards
- Commercially reasonable
Previously we wrote about these three (3) standards here: https://mikebrandlyauctioneer.wordpress.com/2020/01/13/customary-practice-industry-standards-and-commercial-reasonableness/.
Today, we are writing about “customary bad practice.” In other words, we ask if what is done customarily could be insufficient to provide a guide for good behavior?
For instance, what if auctioneers across the United States are reopening the bid routinely at various moments before, during, and after the hammer falls? What if auctioneers are customarily selling property without offering bidders any opportunity to preview?
Of course this relates to a recent case in which we’ve been hired as an expert witness. In trial preparation and the discovery stage we see that the opposing side will claim the auctioneer acted in accordance with customary practice.
Our plan will be to argue that such customary practice is bad practice — even though it is customary. Thus, we will hold that such practice is bad practice despite widespread use. In other words, in some cases, customary practice doesn’t mean correct practice.
I can easily think back to the 1980’s when I was working for another auctioneer. I witnessed many procedures and practices I considered less-than-wise despite every auctioneer in the Central-Ohio marketplace doing the same thing.
Friends of mine tell me of times even before then (1960’s, 1970’s) when running the bid was customary — despite being unethical and illegal. Certainly, we would argue that despite being standard practice, that was bad practice.
Of course, our attorneys told me it was perfectly fine to share this on this platform. As the case proceeds, I’ll update as I’m able. However, one thing’s for sure … just because everyone is doing it doesn’t make it acceptable behavior.
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, and an Instructor at the National Auctioneers Association’s Designation 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.