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I’ve held that “commercially reasonable” is a noble standard to adhere to as an auctioneer. Included in such is the opportunity for bidders to inspect the property prior. However, such behavior is not required by state law outside of forced sales (Article 9 of the Uniform Commercial Code [UCC]) despite some courts ruling to the contrary.

However, more important than if it’s required — it is prudent. Any seller could claim an auction was not satisfactorily conducted with their auction being held below commercially reasonable standards — and we’ve been hired more than once as an expert witness to testify regarding this issue.

One such court case is worth noting here as the auctioneer involved claimed my assertion he should have met a commercially reasonable standard was not accurate. However, he held Steve Proffitt in high regard and stated “Mr. Proffitt never made any such claim.”

Soon after, our attorneys produced an article where Steve Proffitt had commented on commercially reasonable standards and introduced it as evidence. Here’s the material part of that article from 2008:

The standard of a commercially reasonable sale is one that all auctioneers should clearly understand and work to meet.

Steve Proffitt, 2008

If you hold Steve Proffitt in high regard and suggest he never made any claim about commercial reasonableness, then maybe you shouldn’t be under oath on a witness stand. As you can see, he did make such a claim, and held auctioneers should adhere to such a level of performance.

We might ask this question another way … why wouldn’t any seller desire his or her auctioneer to hold their auction in a commercially reasonable fashion? Of course, they would include that the manner, time, place, and terms were such to maximize price.

The answer to our just-asked question is often, “I don’t have to …” We would suggest that just because you don’t have to doesn’t mean you shouldn’t. Further, why is it a bad idea to hold auctions in a commercially reasonable fashion?

For far too long, some people seem to advocate minimum-level behavior. Steve Proffitt clearly felt good behavior was (is) much more than what is merely required, and much more what you “should do” and/or more so considering what is the “right thing to do.”

Don’t know what a commercially reasonable auction is? We wrote about that here: https://mikebrandlyauctioneer.wordpress.com/2014/06/23/commercially-reasonable-auctions/.

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.