We have held that by registering for an auction — live and/or online — that such constitutes a contract. We have competent parties, consideration and presumably a meeting of the minds, or do we? Do bidders actually read, let alone understand, what they are agreeing to?
If I’ve heard it once, I’ve heard it countless times from auctioneers all over the world … “Bidders don’t read anything” is basically the message. In fact, it’s hard to find any auctioneer not agreeing that bidders don’t read anything and so today we wonder if they don’t read your terms and conditions, can they be held to them?
In fact, we had two Nobel Prize winners — Paul Milgrom and Robert Wilson (October 22, 2020) — suggest that when the seller/auctioneer increases disclosure, it maximizes the seller’s proceeds. Why wouldn’t actual disclosure of the terms and conditions including all waivers and assignments be just as prudent? Maybe not just disclosed, but received and understood by the bidder? https://mikebrandlyauctioneer.wordpress.com/2020/10/12/auctions-the-nobel-prize/.
Most say that not reading or not otherwise being aware of a contract’s contents but signing it nonetheless, does not enable one to ignore one’s duties outlined in that contract. However, that’s the general rule and if there’s fraudulent inducement, mutual mistakes of fact, or unconscionability, the contract might be void.
As I referenced in a prior writing, a judge told an auctioneer: “You just told me your bidders don’t read anything so how do you expect to hold them to your rules … as they clearly wouldn’t understand?” It might be one thing to hold someone to a contract they signed but didn’t read, but can we hold people to contracts we know they didn’t read, understand nor comprehend?
I’m wondering if auctioneers can do better? What if bidders did read the terms and conditions and understood them — or ask questions until they did — wouldn’t that be preferred? You see, if they understand what they’re being held to, they are less likely to claim fraudulent inducement or unconscionability. Or, is that untenable in the auction business where we’re regularly encouraged to put as many pages, waivers, and disclaimers in every document we possibly can?
We’ve held that auctions are fast, fun, and transparent: https://mikebrandlyauctioneer.wordpress.com/2018/06/04/auctions-fast-fun-transparent/. Yet, are they transparent? Are they fun? If I’m registering for your auction without the knowledge that the terms favor the seller and hold harmless the auctioneer in every way — is that transparent? When something goes wrong, is that fun?
We’re hardly alone with pages and pages of terms and conditions as most online software has us agree to thousands of words constituting the terms of the agreement, which we don’t read nor understand. Yet, that experience is markedly different in that often we receive guarantees, warranties, a return policy, and the like … something rare in the auction business.
Many auctions are more-so a bucket of bad news you must agree to in order to bid. We’ll say “Sold!” and mean it sometimes and not so much other times, there’s no guarantees, warranties, return policy, nor financing, and we can probably lie to you legally (?) since we told you in the terms, “do not to rely on anything we say …” There’s no chance to preview, you have to pay immediately, and there’s no recourse if you’re not happy about any of this.
Quite frankly, other than at auctions, most of my contact with retail in regard to food, electronics, housewares, car parts, clothing, furniture, groceries … involves companies worried about our long term relationship. Auctioneers are (told to be) more-so, take it or leave it, and if you’re not happy, don’t come back.
Oh, that discount, right? Auction buyers don’t pay retail so they don’t deserve guarantees, warranties nor good customer service? Discounts? Really? You aren’t selling property for market value? Your firearms sales aren’t exceeding store prices? Your cars aren’t exceeding used car dealer pricing? Your gold, silver, and jewelry aren’t selling for more than in the jewelry store down the street?
Where can buyers pay top dollar and get treated badly all at the same time? That’s just how seductive the “prospect of a deal” really is I guess. Make the lottery $150 Million and people stand in the rain, sleet, and snow for miles to possibly buy a ticket? Yep, it’s that powerful and it continues to work today.
But for how long? There’s not one single company not looking for simple and easy. In fact, there are few people left not looking for the same thing. It seems to me auctions are going to have to become simpler, easier, and more equitable to survive in the next decade. Incidentally, that’s not going from treating them badly at live auctions to treating them badly at online auctions …
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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