Ever eat at a McDonald’s? I bet most auctioneers have at least once, if not more. I’ve eaten at one particular McDonald’s more lately as my granddaughter Ella has lunch requirements which typically include a Chicken McNugget Happy Meal, Extra Fries, Orange Drink, and Strawberry & Crème Pie.
Today, we propose a demonstration. Let’s say you are an auctioneer and with a tight schedule and not many other choices, you pull into a McDonald’s for lunch. You park your truck, walk-in and stand behind 3 other people ordering. The McDonald’s employee (seller’s agent) is taking the first person’s (Customer #1’s) order.
Customer #1 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee says “Sure, we’ll add some extra ketchup for you.”
Customer #2 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee says “Sure, we’ll add some extra ketchup for you.”
Customer #3 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee says, “Sure, we’ll add some extra ketchup for you.”
You order a #1 (Big Mac Meal) which includes a Big Mac, fries and a drink. You want “extra ketchup” on your Big Mac and the employee tells you, “We can’t put extra ketchup on Big Macs.”
How would you feel as this auctioneer? Everyone else got some ketchup, but now suddenly, McDonald’s refuses to put extra ketchup on your Big Mac? Is this unfair? Unreasonable? Are you upset?
Here’s another example:
Customer #1 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee tells him “We can’t put extra ketchup on Big Macs.”
Customer #2 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee tells him “We can’t put extra ketchup on Big Macs”
Customer #3 orders a #1 (Big Mac Meal) which includes a Big Mac, fries, and a drink. He wants “extra ketchup” on his Big Mac and the employee tells him, “We can’t put extra ketchup on Big Macs”
You order a #1 (Big Mac Meal) which includes a Big Mac, fries and a drink. You want “extra ketchup” on your Big Mac and the employee says, “Sure, we’ll add some extra ketchup for you.”
How would you feel as Customer #1, #2 or #3? McDonald’s can’t put extra ketchup on Big Macs, but suddenly when an auctioneer shows up he gets extra ketchup on his Big Mac? How do these other folks feel? Is this unfair? Unreasonable? Are they upset?
Could McDonald’s have a better policy? Yes. Could auctioneers take a lesson from this better McDonald’s policy and have a better policy for themselves? They could indeed. Registering your bidders arbitrarily and capriciously independent of certain terms is misguided and based upon highly unsound judgment.
In fact, this is part of a series of ill-advised recommendations (reopening the bid, capricious registering of bidders, pandemic waivers, denying pre-auction inspection, etc.) that continue to land auctioneers in court instead of staying out of court. Case in point: Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020.)
Here’s a summary of what this Supreme Court of Appeals of West Virginia said:
Finally, as a general principle, all the bidders at an auction must stand upon an equal footing. Accordingly, an auctioneer cannot vary the announced terms of the sale as to some bidders, or any one bidder, to the detriment of the other bidders. Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020)
Specifically addressing this aforementioned West Virginia litigation, here’s yet another frightful proposal — “Put in your terms that the auctioneer may unilaterally register, deny, revoke or allow bidders to participate independent of the otherwise specific terms the seller has agreed-to …”
In other words, note your terms really aren’t your terms, and risk registering someone who doesn’t perform (and/or not registering someone who could perform) where your seller finds you exclusively at fault. Auctioneers assuming unnecessary risk? My head is spinning (not really) — I thought we’re supposed to be disclaiming and assigning risk?
Further, how often is it that this “$50 Million lottery winner” attends at the last minute without his driver’s license and you “must register him” even though your terms require that specific identification? This is all part of the greater issue of auctioneers acting as anomalists, with a special erroneous interest in all the exceptions to the rules where the risks typically outweigh the benefits.
While this same Supreme Court of Appeals likely fumbled the longstanding offer/acceptance sequence at absolute auctions — far more importantly, and materially, my “fair reading” would suggest that advertised terms and conditions (registration requirements) do warrant to all that each bidder will indeed be burdened by the same qualifications. If my provisions say bidders need “10% and a bank letter” but some people don’t, isn’t that at minimum false advertising?
If some bidders meet or exceed the registration requirements while others necessarily do not, can auctioneers then sell to the “best” bidder rather than the “highest” bidder citing his terms are preferred? Auctions for centuries have sold to the highest bidder where the auctioneer (and his client) comfortably knows the highest offer is also the best offer.
Maybe this West Virginia Court has saved us from a future abomination — a recommendation that auctioneers can waive or disclaim their duty to sell to the highest monetary bidder, and reserve the right to sell to the “highest and best” offeror, where the price alone is conceivably less than other offers tendered?
Finally, we invite you to read (again) our thoughts on the clear choice auctioneers have: to act with good faith, diligence, reasonableness, and care rather than what we continue to see recommended — bad faith, negligence, unreasonableness, and carelessness: https://mikebrandlyauctioneer.wordpress.com/2021/04/22/good-faith-diligence-reasonableness-and-care/.
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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