I have not once said that bidders need to be identified when bidding. I have noted that California has passed a law which requires the seller to be identified when bidding in a with reserve auction.
We have written about this more than once, including here: https://mikebrandlyauctioneer.wordpress.com/2012/07/17/who-else-was-bidding/ and further have noted that with more disclosure (and transparency) more people will likely participate in auctions.
Nonetheless, the question of identifying (representing) and misrepresenting bidders came up in court the other day while I was on the witness stand. My answer to the question: “Do auction bidders need to be identified when they place a bid?” was:
There is no requirement for an auctioneer to represent a bidder during an auction — unless it is the seller and the auction is in California — but I believe that an auctioneer is not permitted to misrepresent a bidder.
Virtually any type of intentional misrepresentation is actionable and likely illegal. When an auctioneer takes a bid from the seller or the auctioneer — or anyone else — and portrays that bid is coming from someone other than the seller and auctioneer and that someone else, that’s intentional misrepresentation.
What are the possible issues with such misrepresentation? One such issue is fraudulent inducement which we wrote about here: https://mikebrandlyauctioneer.wordpress.com/2018/06/21/that-other-bidder-and-fraudulent-inducement/
As we write this story, we’ve been contacted by an attorney with what he deems to be a case of fraudulent inducement at auction. As he told the story, the auctioneer was telling the crowd the other bidder was “Bob” and/or “Rick” who were registered bidders — when in fact the other bidder was David … the seller.
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.
Comments