You are an auctioneer in Maine. You sell an item (for your seller) to a buyer in Alaska. Your terms and conditions say that any disputes must be settled in Maine.
However, a court says that because you have had emails, phone calls and/or website advertising into the state of Alaska the dispute can/should be heard in Alaska. As the auctioneer in this example, you could fly to Alaska or drive (around 4,700 miles) but either way this is not convenient.
The buyer agreed to your terms and conditions that the venue for any dispute would be your home state of Maine, but a court disagreed. since you emailed, called and/or advertised to the buyer in Alaska — thus “conducting business there.”
Could this happen? It’s already happening. What can auctioneers do about this? I suppose keep putting in the terms and conditions that disputes must be settled wherever you prefer, but don’t be surprised when a case merits court intervention, the court will decide the buyer’s home state is preferred.
Certainly commerce in the United States for auctioneers changed June 21, 2018 with the South Dakota v. Wayfair, Inc., et al. case (https://mikebrandlyauctioneer.wordpress.com/2018/06/23/south-dakota-v-wayfair-inc-et-al/) and this new development further complicates auctioneers selling into other states.
Most entities which sell across state lines and around the world are able to facilitate out-of-state sales tax issues and litigation matters. Most auctioneers are small businesses (and small in numbers) but with global reach in regard to bidders/buyers — thus auctioneers don’t get much attention when policy is set.
This is exactly our (auctioneers’) issue: We sell personal property to buyers all over the United States and into other countries. However, is the typical auctioneer prepared to handle tax and legal issues away from home? I would argue most are not.
An even better question is can auctioneers avoid litigation away from home — and otherwise? Many have argued that “winning” in court with highly one-sided adhesionary terms and conditions is the best strategy — where we have submitted that “staying out of court” is far better with more reasonable terms which tend not to entice unhappy bidders/buyers to take action.
We discussed our position here in that you can make moves to lessen your chances of litigation which start with basically being more “reasonable.” https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/. Keep an eye out for a upcoming story with more on that theme.
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, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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