, , , , , , , , , ,

Could an auctioneer lie about what is being sold, the high bid, shipping charges, provenance, and a bunch of other stuff and then claim he’s not liable for any of those false statements because you (the bidder) knew he was lying? Would he not be liable if you told a bunch of people he was a perpetual liar?

Such is the defense to an over $1 billion civil lawsuit, where the defendant is holding that despite lies and false statements — because “no reasonable person” would believe any of these lies and/or false statements as shown by them saying they were lies and false statements — nobody could believe any of these expressions were “truly statements of fact.”

I don’t necessarily think this defense will be sufficient to avoid liability, but the legal theory here is intriguing. Could auctioneers start to lie to sellers, bidders, buyers, and everyone else without any recourse so long as the targeted person held those statements were lies or told people that the auctioneer was a regular deluder?

In fact, auctioneers are already doing this. Many auctioneers currently have in their terms that bidders “can’t rely on anything we say” and if you don’t, you’re being told to put such in your terms: https://mikebrandlyauctioneer.wordpress.com/2020/03/05/so-youre-telling-me-i-cant-rely-on-anything-you-say/.

In light of this current pending litigation, maybe that advice has merit as it’s the central defense to over $1 billion in damages. If you can avoid over $1 billion in damages with this type of verbiage in your terms and conditions, it must be essentially bulletproof, right?

However, we’re yet to see the results of this somewhat unusual case, and of course, it’s much better to stay out of court than lose in court or even win in court: https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.

We noted a significant increase in sales talk starting in about 2015 and evaluated if that sales talk in our view could constitute actionable false statements and/or misrepresentation: https://mikebrandlyauctioneer.wordpress.com/2019/11/25/sales-talk-and-puffing-held-as-fact/.

In fact, we’ve seen a substantial rise in the number of cases regarding what we call the “just joking” defense as a result of making false statements: https://mikebrandlyauctioneer.wordpress.com/2019/12/16/an-auctioneer-and-the-just-joking-defense/. As we noted, this doesn’t appear to be a good strategy either.

The unfortunate trend lately has been to disclaim and assign all responsibility for honesty and integrity. We have written many times about this type of bad advice, and the disastrous results of such, including that auctioneers then think they can say and do anything because they aren’t responsible, and the seller/bidder/buyer rather are responsible: https://mikebrandlyauctioneer.wordpress.com/2021/02/17/are-auctioneers-intentionally-misleading-buyers/.

Here’s a better strategy … tell the truth, exaggerate or use sales talk when everyone knows you are (when it’s abundantly obvious,) and otherwise stand behind what you express or imply. In other words, to the contrary, we think honesty and integrity have an abundance of merit.

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.