I wonder if these six points below sound familiar to any auctioneer in regard to their buyer registration terms and conditions (a.k.a. terms?)
Here are our terms and conditions which we wrote; they are non-negotiable.
You can register and accept these terms — and if not, you can’t register.
Our terms are presented in a way that no bidders read nor understand.
A bidder could argue he didn’t read nor comprehended these terms.
You are selling property (or service) that cannot readily be found elsewhere.
You the auctioneer have the sole bargaining power regarding these terms.
Now we invite you to look at a common-law adhesion standard in regard to contracts and it typically goes something like this:
By definition, an adhesion contract is drafted unilaterally by a business enterprise and forced upon an unwilling and often unknowing public for services that cannot readily be obtained elsewhere. … It is a contract generally not bargained for, but which is imposed on the public for necessary service on a “take it or leave it” basis. Even though a contract is on a printed form and offered on a “take it or leave it” basis, those facts alone do not cause it to be an adhesion contract. There must be a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation and that the services could not be obtained elsewhere. Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 924-25 (Minn. 1982)
This issue would not be a material one for every auctioneer. Some auctioneers sell property (or a service) that can be readily found elsewhere. Some auctioneers have terms and conditions (and contracts otherwise) which are simple enough to be read and understood. However, for the rest of the auctioneers out there, this may be (and is becoming) an issue.
Before you say, “But … I found a court that said …” I will answer that. There are many contract disputes in court every day and some courts are more attentive to adhesion than others. Many attorneys I’ve spoken to tell me they’ve seen a shift in the last few years, where courts have become more protective of the party with less (or no) bargaining power.
Who is this party with less bargaining power? At auction, it’s mostly bidders/buyers but this could even apply to sellers where you are the only auctioneer who sells “this type of thing,” and you have an unconscionably long and detailed contract or agreement. Further, it could even involve an auctioneer hiring another auctioneer …
Some courts are ruling that these adhesion(ary) contracts with disparate bargaining power are unconscionable and therefore unenforceable. This could potentially mean your contact with your seller is invalid, or that your bidders can’t be held to your terms and conditions.
What’s the solution? The single most easy solution is to have your contract and other agreements written where the principal can’t argue that he or she didn’t read nor comprehended the terms. We previously noted that the United States has long struggled with privity of contract balanced with the public good: https://mikebrandlyauctioneer.wordpress.com/2014/11/24/auctioneers-must-or-must-they/.
You’ll have to also resist the temptation to put 100+ disclaimers and 100+ assignments in those contracts/agreements — no matter how persuasive the argument is — because that will likely subject you to a court viewing your contract as highly unbalanced (unreasonably one-sided) and therefore unconscionable (manifestly unreasonable) — probably leading to a conclusion your contract is unenforceable.
Importantly, when someone tells you (including me) what a court is sure to do, be skeptical. Even those who nearly always give you advice landing you in court don’t know that for sure, let alone me who repeatedly tells you to avoid court, rather than possibly winning or possibly losing in court. Endeavor to stay out of court and you won’t have to wonder.
Lastly, I am an advocate of “You can register and accept these terms — and if not, you can’t register“ and had that advice been followed, rather than dispensed without a “fair, reasonable analysis,” the Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020) case never would have made it into a courtroom.
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.
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