The auctioneer says “Buy at your price …” so I assume I will willingly bid against other bidders, and if I’m the high bidder I get the property. Actually, it doesn’t appear so.
Besides the suggestion that this is much like an absolute (without reserve) auction, it’s not. The auctioneer reserves the right to bid for the seller, and all lots are selling “subject to the seller’s acceptance” of the high bid.
This is hardly the first time we have talked about this, and will likely not be the last time: https://mikebrandlyauctioneer.wordpress.com/2022/11/09/buy-at-your-price-or-not/. Auctioneer after auctioneer suggesting “absolute” when it’s not.
Reminiscent of a case heard by the Virginia Supreme Court, here we are again with an auctioneer suggesting an absolute auction, where the auction is actually with reserve. We explored the argument favoring auctioneer malpractice here: https://mikebrandlyauctioneer.wordpress.com/2022/12/24/auction-bright-lines-and-a-noteworthy-footnote/.
We’ll note again, that when auctioneers can suggest that “with reserve” auctions are absolute (without reserve) the public is misled. Nobody should bid at an auction thinking it’s absolute only to find out the seller might not sell the property.
It’s not necessarily intuitive. The “bright line” argument says that auctions (outside of Louisiana) are with reserve unless the auctioneer explicitly uses the words, “absolute” or “without reserve.” That might seem like a great idea, but it’s a horrible concept.
Read this (again:)
I believe that that rule is too rigid Your Honor, and that would afford sellers of property to glean the benefits of auctions without reserve and to tiptoe around those specific words but still otherwise convince participants at the auction that they would be able to walk away with that property on that day provided they tendered bids and to otherwise lend in their mind that a contract would be formed upon by doing so. However, they would be able to avoid liability as long as they didn’t use those specific words. Defense counsel/witness
Courts should be able to look at the context, gauge intent, and analyze patterns of practice to determine if any advertising is suggesting an absolute auction that’s not. Further, auctioneers shouldn’t be using words suggesting absolute auctions that aren’t.
The law denotes the word, “explicit” is used to determine if an auction has been advertised as “absolute” or “without reserve.” What does explicit mean? Here are some synonyms: clear, obvious, plain, definite … so is “Buy at your price” explicit?
Obviously, auctioneers tend to say words other than absolute or without reserve are not explicit, but does it matter what auctioneers think? Doesn’t it matter what the public thinks? If the public believes “Buy at your price” means absolute, is that what should matter? Maybe the best question is, “Why is the auctioneer using this particular phrase?”
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 formerly at 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 Auction 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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