If we’ve stressed one notion lately, it’s that all auction bidders must be held to the same terms and conditions. In other words, if the terms say, “Driver’s license required” then everyone registering must have a driver’s license — no exceptions.
We have also suggested in various litigation that all bidders should have [the same] opportunity to preview the property prior to auction — in essence that a uniform period of time is allotted for all bidders to inspect. We noted our work on that very issue here: https://mikebrandlyauctioneer.wordpress.com/2020/10/02/terms-conditions-fairness/.
Today, we explore another concept. What about staff registering to bid (with driver’s licenses) but privy to additional information (certainly more time) not necessarily available to other bidders?
For example, Olivia works to set up the auctions, sometimes doing inventory, photographs, sorting, cataloging, etc. She has to take a close look at all the property she is uploading to the website.
Let’s say Olivia becomes interested in a few items in next week’s auction, and she’s been working with that inventory for several days. Our question is, can Olivia bid given she’s had more time to preview than other bidders? Can she bid if she’s privy to information other bidders may not have?
The more bidders and the more bids benefit the seller. But is it fair, reasonable, equitable that Olivia may (or may not) have more information than other bidders and participate as a bidder?
I suppose an argument could be made that everyone has the opportunity to work for the auctioneer in doing set up work, but most (other than Olivia) choose other employment. Additionally, somebody has to do the setup, and denying Olivia the chance to bid injures the seller.
As well, it would make little sense to allow all bidders to inspect while Olivia was completing the setup. In other words, is there any other answer? We deny Olivia the chance to bid and the seller is hurt accordingly, and we might well lose Olivia as an employee.
Maybe most importantly, I know of no lawsuits concerning the unfair, inequitable inspection opportunities given disparate roles of employees/contractors and all other bidders. Is the risk of such a lawsuit high? I think not. Does the seller benefit? I think so.
Finally, it is paramount that Olivia is loyal to the auctioneer and seller — in that, she cannot discover material facts about the property she is preparing for the auction, and conceal that information. If she had information about a certain item making it more valuable to her, all of that should be disclosed to the auctioneer and marketed to the public.
Therefore, even with this additional preview time Olivia has by virtue of her role in the auction company, any material information she discovers should be disclosed to the other bidders, therefore negating any advantage she gained by disparate inspection opportunities. In fact, maybe Olivia’s closer inspection benefits everyone involved …
Lastly, should bidders have the opportunity to preview prior to the auction event? Indeed, the auctioneer/seller faces possible tort (and other) claims at a minimum with lack of inspection opportunity as we’ve discussed numerous times including here:
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.