Tags

, , , , , , , , ,

We have tried to help auctioneers understand that setting the terms and conditions for your auction, and then sticking to them, requiring every bidder to comply is wise, and any other registration scheme is ill-advised and likely unenforceable.

So how does this work? An auctioneer can accept a bid from someone who has not satisfied the terms and conditions, but by bidding this same bidder agrees to be bound by the terms and conditions?

Auctioneers may, in auctioneers’ sole and absolute discretion, receive bids from a person or entity that has not registered to bid and/or has not satisfied all requirements for bidder registration, and, by bidding, such person or entity will be bound by these bidder terms and conditions.

For instance, I must have a driver’s license I don’t have — so I bid — and I still don’t have a driver’s license, that I now have to have? I’m bound (contractually) to terms I don’t (and can’t) comply with? This appears to be nonsense.

Could it be that if this same bidder with no driver’s license becomes the buyer with no driver’s license the purchase/sale contract is void? What benefit would that result have? Now the property isn’t sold, the seller still owns it, and the auction has been basically a waste of time.

Even more concerning, let’s just say the bidder with no driver’s license bids against another bidder satisfying the terms and conditions (has a driver’s license) from say $210,000 up to $280,000, and then the properly registered bidder/buyer at $290,000 takes legal action to recover the additional $90,000 he shouldn’t have had to bid.

Maybe these highlighted terms and conditions are remnants of past erroneous assurances that bidding is not a right, but a privilege and auctioneers can arbitrarily and capriciously allow anyone to bid — but binding someone who can’t comply is an even more interesting twist.

Or it is a bluff, in that this auctioneer says anyone who bids will be bound by these bidder terms and conditions, so he then claims the aforementioned $280,000 bidder was properly registered so far as he knew? Does the auctioneer claim no knowledge of his non-compliance?

We would hold that all auctioneers have a duty to ensure every bidder is properly registered and complies with the terms and conditions. The Supreme Court of Appeals of West Virginia and other courts appear to agree with us.

Here’s possibly our most comprehensive treatise on this subject, with many others on this same platform for your reading pleasure: https://mikebrandlyauctioneer.wordpress.com/2022/06/24/auctions-equal-footing-binding-alike/.

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, Brandly Real Estate & Auction, 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 has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.