Where in the United States can an auctioneer legally say, “This is selling absolute over a minimum bid of …?” The answer? Nowhere in the United States, independent of any occupational licensing law. Does “context” matter? It certainly does matter …
Absolute auctions (without reserve auctions) have no minimum bids. Auction [events or lots] with minimum bids are with reserve auctions. For this example, no auctioneer can legally sell any lot in the United States with both no minimum bid (absolute) and a minimum bid (with reserve.)
Some would call this practice an “irreconcilable conflict” in that both can’t be true at the same time. Such as, “using ‘absolute’ to define a reserve.” Similarly, an auctioneer can’t express a warranty and disclaim it simultaneously. https://mikebrandlyauctioneer.wordpress.com/2022/05/28/irreconcilable-eo-disclaimers/.
We have written about this before, including three such treatises:
Most in the legal profession know that if something is selling “absolute” it must sell to the highest bidder with no reservations. These same people generally know that if something is selling “with reserve” then the seller isn’t obligated to sell unless the hammer falls, and such an auction can have reservations such as minimum bids.
It’s really not complicated but appears worth noting that some sellers are suitable for absolute auctions, and some sellers are more suitable for with reserve auctions. If a seller requires a minimum bid, a with reserve auction can be held. If the seller will be happy with “whatever it brings” then an absolute auction can be held.
Even having the need for this discussion would suggest that every state should require auction schooling, testing, and continuing education. Of course, all that wouldn’t guarantee any understanding nor compliance, because too many auctioneers are under the impression they can do anything they want: https://mikebrandlyauctioneer.wordpress.com/2021/12/26/auctioneer-has-the-right-to-do-whatever/.
Quite frankly, I don’t even comprehend the phrase “Using ‘absolute’ to define a reserve?” Defining a coin’s head by its tail? Turning left to define how to turn right? Using odd numbers to define how a number is even? I’ve been at sixes and sevens ever since I read it.
My continued advice to all auctioneers is to have — for any lot — a with reserve auction unless your seller wants that lot sold with no reservations whatsoever. This way, you will better insulate yourself from litigation and shield your seller from the same. Acting contrary to this increases unnecessary risk for no benefit and as such … you should stay away from this kind of “absolute” nonsense.
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 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 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.
Comments