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Auctioneers would have much better chances of avoiding litigation (and the related) if they understood and applied “good faith” and “fair dealing” to their business operations. These concepts have escaped many in the auction industry and certainly some advising the auction industry.

Legally, “good faith” deals with honesty, faithfulness to one’s duty or obligation, observance of reasonable commercial standards of fair dealing, and absence of intent to defraud or to seek an unconscionable advantage.

“Fair dealing” is related but adds the duty to not act contrary to the spirit of contracts and other promises made to others. For example, one shouldn’t contract with someone and then act to injure or diminish the benefits of that relationship.

There’s maybe no more stark example of bad faith and unfair dealing than an auctioneer setting terms and conditions for the auction and then registering others who don’t meet those same standards. Such was the crux of the matter in Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020).

In particular, when this auctioneer allowed Mr. Lerch to bid without meeting the registration requirements against Mr. Leach who did meet the registration requirements, the auctioneer injured Mr. Leach’s consideration in his contract with the auctioneer.

I believe anyone arguing this decision is a fallacy, wrongly decided, unsound or any other such similar proclamation is indeed arguing in favor of bad faith and especially unfair dealing. It also appears clear these decrees land largely ineffective except for auctioneers who as well favor bad faith and unfair dealing.

How can someone hold that terms stating “You must have 10% and bank letter to register” aren’t binding upon the one expressing those terms? So it’s okay to lie? It’s advisable to misrepresent? Consistency, fairness, and reasonableness are terrible ideas?

There is also the system of judicial law review (law-making) which isn’t specified in the Constitution, and rather implied within. Nevertheless, as auctioneers we regularly see and hear, “This court ruled correctly and here’s why we agree …” and “This court ruled incorrectly, and here’s why we disagree …” For many years, we’ve offered our own opinions about dozens of auction-related court cases.

This concept of judicial review was solidified by the landmark Supreme Court of the United States case Marbury v. Madison (until the Supreme Court of the United States rules otherwise) where John Marshall deemed the following:

It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret the rule. If two laws conflict with each other, the Court must decide on the operation of each.

Chief Justice John Marshall

Any court any day of the week can rule in any fashion it deems appropriate based upon its interpretation (view) of those laws and related testimony, and we’ve personally privy to many such cases. Again, courts can rule however they want to … and as auctioneers, we’re pretty much stuck with the results.

But, if anyone is telling you a certain court case was ruled incorrectly, and suggesting you openly defy it, that’s more than horrible advice, and borders on malpractice. An expression or writing that a court case is wrongly decided doesn’t change the court ruling in any way despite any suggestion it does.

We would contend your behavior would be best directed to act in accordance with any court precedent and act to avoid the same issue regardless of the outcome. It’s not that difficult as we noted here prior: https://mikebrandlyauctioneer.wordpress.com/2021/10/11/an-auctioneer-court-ruling-guide/.

If auctioneers (and those around the auction industry) paid more attention to judicial review (courts can rule however they choose,) good faith (honesty and reasonableness,) and fair dealing (treating people uniformly and not capriciously) there would be far less litigation and related disputes, and possibly less misrepresentation about these same cases.

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.