People threaten to sue all the time. In the auction business — and much less frequently — people threaten to sue auctioneers; auctioneers threaten to sue sellers, bidders, buyers; sellers threaten to sue buyers; buyers threaten to sue sellers; even attorneys sometimes threaten to sue other parties …
What is the status of somebody saying, “I’m going to sue you unless …?” It’s a threat that if certain requests are not met, there will be a lawsuit … or not. In fact, many times the threat to sue results in no lawsuit at all no matter what actions are (or are not) taken.
Legal threats basically involve one party demanding the other party either stop doing something (cease and desist) or do something (a demand letter) with the possibility of legal action if the demand is not met. Usually, the amount of damages has to be sufficient for one to justify a possible lawsuit of any kind.
As we suggested, auction-related lawsuits with “material damages” are rare. Our experience in this area suggests there are no more than a dozen or so per year in the United States. Auctioneers on the whole are well behaved and/or are eager to settle disputes before they become highly contested.
As an auctioneer, you are advised to secure competent legal counsel if you are named as a party in a lawsuit, or otherwise threated with legal action. We frequently assist attorneys in such cases when a third-party is needed to comment on customary practice, industry standards and related issues. Our site explaining those services in more detail is here: https://auctionlegalconsulting.com/.
One has to be careful if you are threatening to sue someone else. If you’re threatening to sue, you better have the facts and the willingness to sue if your demands are not met. As such, repeatedly and/or threatening/filing frivolous lawsuits can potentially expose you to some legal liability.
And finally, we encourage you to remember what we have advised for years … losing in court is the worst, winning in court is better, but staying out of court is best. We wrote more about that here: https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.
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.