No agency exists unless created — and what creates it? Knowledge of the relationship, and consent to it. Agency begins with the client hiring the agent — and remaining in charge of the engagement throughout, much to the surprise of many auctioneers.
I hear auctioneers all the time desiring to unilaterally sell whatever, whenever, however, to whoever … without their client’s knowledge nor content. Of course, maybe the client has told the auctioneer, “Just take care of it and let me know when it’s over?”
Indeed, many sellers (clients) want little to do with the auction, and hire an auctioneer to take care of everything. In fact, most sellers are like this, but for all sellers, it’s important regardless to keep the client informed on what steps are being carried out on his or her behalf.
We wrote about the well-known agency (common law) duties agents owe clients: https://mikebrandlyauctioneer.wordpress.com/2009/11/18/what-do-auctioneers-owe-their-clients/. This is not to say that auctioneers can disregard bidders/buyers. Bidders are customers and auctioneers owe honesty, integrity, and fair dealing to everyone.
Client and customer duties must work in concert, and not “Because I represent the seller, I have to do ‘whatever’ to the bidders.” Besides the legal and ethical obligations, auctioneers should know that auctions with no bidders can be lonely places.
Possibly an easy way to remember it is: Auctioneers work for sellers, and work with bidders/buyers. Again, just because bidders aren’t your clients, that doesn’t mean you can take unlimited unilateral action against them to their detriment even in light of your client’s benefit.
The most commonly misunderstood duties owed to a seller/client to the buyer’s detriment might be maximizing a bidder’s absentee bid without the bidder’s knowledge or consent. What I hear far too often is “I have to maximize it — I’m working for the seller …” the reality is, “No, you don’t.”
Lastly, it is paramount that auctioneers ensure all customers know who they represent, before engaging in any substantive conversations. https://mikebrandlyauctioneer.wordpress.com/2022/08/09/disclosing-your-agency/. Lacking such disclosure would prohibit you from disclosing any of their information to your client.
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.
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