Could an auctioneer (and/or seller) be guilty or liable for restraint of trade for restricting an auction to only certain — qualified — bidders? Could an auctioneer (and/or seller) successfully sue a bidder for buying and not paying citing that the nonperforming bidder restrained trade?
The Sherman Antitrust Act and some states treat restraint of trade and other antitrust acts as a crime. Too, injured parties (with ascertainable losses) from the restraint of trade may pursue monetary recovery in civil courts.
We wrote about the aforementioned registration issue (and wacky argument) here: https://mikebrandlyauctioneer.wordpress.com/2016/12/16/another-wacky-auction-legal-argument/. We think possibly by the bidder not paying that this argument is an uphill battle as well.
Virtually any civil case requires sufficient damages — or the cost of litigation will make such an imprudent action. With auctioneers having bidders/buyers buying and not paying nor taking possession, there are remedies in the law already: https://mikebrandlyauctioneer.wordpress.com/2020/11/25/auction-buyer-didnt-pay/.
I must note on Facebook and otherwise, dozens of times per week that “something has to be done” about this bidder/buyer not paying … or “I’m going to have the police, sheriff, prosecutor,” or another look into this bidder/buyer not paying. The thing is if you still have the subject property, it’s likely merely a civil matter.
Otherwise, “criminal intent” might allow a criminal charge to stick — such as a bidder bidding and buying with the premeditated intent to refuse to pay. Here again, however, the criminal case is not likely to help you recover on the property left unsold, and a related civil case can cost far more than the actual damages.
I recently heard an auctioneer tell me that the laws must change — so that bidders can’t get out of paying once they are deemed the high bidder (buyer.) I don’t believe it is likely at all any laws in this regard are going to change — and the legislative, executive and judicial branches of government have plenty to do as it is.
Further, how do we make — compel — a buyer to pay? Go over and knock on their door and demand payment? Send over a “bouncer?” Call the sheriff? Police? Court order? That’s just not how it largely works in the United States when you (auctioneer/seller) still have the property. In other words, you have the option to sell it to someone else. Then, if you have documentable damages you can take legal action.
Nevertheless, it appears highly unlikely a “restraint of trade” claim would prevail here — as for one if the buyer doesn’t pay — the property is probably available (and therefore not restrained) from other bidders subsequent. I wouldn’t lay awake at night thinking this has to change, as it’s doubtful it will.
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 and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.