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1,372 Responses to Your Questions & Comments

  1. Ward Eisinger says:

    My children participate in 4-H and sell their animals at an Auction at the County Fair. This past year the Auction was taken over by the parent organization for the 4-H clubs in the County and they implemented new rules for the auction, that they are now requiring the children to agree to be bound by.

    There are two rules that seem to favor the buyer over the seller, which raises issues of why 4-H would want to saddle their youth with the risk of the sale and absolve the buyers from any risk. The rules also serve to minimize the risk to the parent organization as well.

    Rule 1: “If a sale animal dies after the auction but before being processed at the plant the buyer will be contacted and given the choice of a replacement animal of like quality and size or their money refunded. The [Name Redacted] fund will contribute up to $2500 for the replacement of the animal. If the replacement cost of the animal is more than $2500, the seller will be responsible for the difference (difference to be withheld from sellers proceeds). If the buyer chooses to be refunded, the buyer will be refunded from the sale proceeds and the seller will be paid from [Name Redacted] fund for the sale cost of the animal, payment not to exceed $2500.”

    It is important to note here that animal transport is arranged by the Auction, not the seller, and that some livestock sold at the auction will sell for close to $20,000. Also some animals do not go to a processing plant and may be used in a petting zoo or other arrangement and animals that die within a few days of the auction are again the responsibility of the seller even though the animal has been relocated to another venue and is no longer under the seller’s care.

    The more troubling rule is:
    Rule 2: “If a buyer fails to pay their invoice, every effort will be made to collect monies owed with letters and statements. If those efforts fail after 5 months, the [Name Redacted] Auction Committee will pay out to the sellers fair market value according to the September USDA Report not to exceed $2500 per animal.”

    The Auction will withhold a 5% fee for running the auction, but the parent organization refuses to take legal action in the event of a buyer failing to pay after 5 months, even though the buyer received the animal and failed to abide by the auction rules for payment. I perceive this as a conflict of interest for the parent organization since the buyers are likely to be corporate buyers that may also be donors to the parent organization.

    Regardless it is my understanding that the sale through the auction process represents a sales contract between the buyer and the seller. The Parent organization arranges the auctioneer, is supposed to vet the buyers, collect the money, and transmit the funds to the seller once all of the auction payments have been made. Five months seems like a crazy payment period for a consumable commodity. Compensating at a price significantly less than the value of the animal or the agreed auction price seems troubling, if not illegal.

    I attended an Auction Committee meeting where these rules were discussed along with the cost for kids to purchase their pedigreed show animals ($200+) for a piglet. Market price last year for swine in September was about $0.50 per pound. Pigs in the auction will weigh from 260-325 lb. So market price for these pigs would have been $130-$162.5. In other words the Auction Committee is comfortable forcing kids to take a loss on the animals without even considering the costs of feed, and the time and effort to raise and show an animal. Pigs typically sell for about $2 per pound at the auction which again shows that they are valued higher than market rate on the day of the auction.

    The auction is in Maryland and I understand that auctioneers are not required to be licensed in Maryland, but is the operator of the Auction allowed to set rules that seem to contradict the idea of the auction as a contract of sale?

    I am trying to figure out why the Parent organization is unwilling to insure and/or bond the auction. Would that be something they could do?

    Your answer would be greatly appreciated.

    • Auction Law says:

      You have brought up so many issues, I’m not sure where to begin. While there are many that I feel are just plain unethical, although not necessarily illegal issues, it’s difficult to objectively respond without finding myself on a soap box.

      First point, from a legal standpoint, a child (under 18) can not be held to a contract, so I’m assuming that the parents are actually agreeing to the terms to allow their child to participate.

      For the rest of your commentary, I find the terms set forth to be unfair to the kids. Considering the 4-H is there to help kids learn through practical application of skills, this should be their sole interest to ensure the kids are rewarded for the extraordinary efforts. I can only imagine the severe disappointment of a child that found themselves in such a situation. That said, I’ll try to step down from my soap box.

      From a contractual aspect, they can basically set the terms and you can accept the terms or not allow your child to participate.

      Based on the auction laws aspect, this remains the same whether it is for profit or charity. In other words, when the auctioneer calls “sold,” a contract has been formed. If the buyer does not pay for their purchase, they are in breach of contract. This is usually a civil matter and that means one would have to take them to court to enforce the contract. The question is, who will take the buyer to court? Typically, it would be the seller. In other words, that would be you (as the parent of the child).

      Of course, the 4-H parent company seems to be taking steps to enforce payment, but they (and the auctioneer) are only an intermediary to the sale. The actual sale is still between the seller and the buyer.

      That said, it seems that they are also taking some responsibility in remaining between the seller and buyer, by offering compensation for a bad buyer. This may have other legal ramifications that you might want to discuss with an attorney.

      As many of these terms set forth by 4-H may also be a bit one-sided, there may also be other legal issues… but again, this should be discussed with an attorney.

      • Ward Eisinger says:

        Thank you for your comments. The way at least one the parent’s read the rules it seemed that if you agreed to them, you waived your rights to pursue legal action as well, since you would have agreed to the compensation agreement if the money was not collected.

        I have been on my soap box since I heard of these rules and realized that they were put in practice by an appointed committee of the parent group, made up of all adult leaders who serve the parent group through other boards and committees, which got me going on conflicts of interests on nonprofit boards, lack of transparency, etc.

        I am meeting with the parent organization today and appreciate having your reply ahead of time. Ethics certainly seem to be a problem.

  2. Ward Eisinger says:

    I communicated this exchange with the parent organization and the State body that oversees our Club, along with some other concerns and have been told that they will look into the issues raised and get back to me.

    I do believe that 4-H is better than what was being done and that the kids deserve much better.

    I also believe that your comments from your soap box expressed the situation quite well and may have helped getting an intervention.

    We will have to see where things go from here, but I expect that it will be an improvement.

    Thank you for your assistance.

    • Auction Law says:

      I also believe the 4-H is better than that and hope there is a good outcome… especially for the kids.

      Good Luck

      • Ward Eisinger says:

        Well, they announced the modified rules this afternoon and we made a little head way.

        I am trying to consult an attorney on the matter but would again ask for your advice since it proved helpful the last time.

        The addendum to the auction rules are below.

        Thank you for your help!

        Changes to the 2019 rules are in bold.

        Pre-Fair Requirements:

        5. Sellers should contact at least two new buyers every year. The letters must be turned in to the club leader or Auction Board member for review by May 22. Buyers’ names and addresses must be turned into [Name Redacted] by April 15. The sellers are requested to visit their prospective buyers to follow up according to the suggested marketing schedule.

        General Rules:

        Rules A and B to be inserted before Rule 1

        A. In the operation of the [Name Redacted] 4-H Livestock Auction, the “Seller” is the 4-H youth offering an animal for sale through the auction process. The “Buyer” is the party identified by the Auctioneer as submitting the highest accepted bid for an animal. The Seller and the Buyer enter into a contractual agreement when the Auctioneer declares the animal “SOLD.” Both Buyer and Seller will affirm their contract by signing the [Name Redacted] 4-H Livestock Auction Agreement at the time of purchase. If the Seller is a minor (under age 18 on the date of sale), the Seller’s parent or guardian must also sign the Livestock Auction Agreement (contract).

        B. The [Name Redacted] 4-H Livestock Auction Committee will serve as host and facilitator of auction sales. The Anne [Name Redacted] Fair will provide auction facilities but does not assume any managerial or financial role in the auction. The Auction Committee will register Buyers/Bidders, provide auction management and administrative services, accept payments from Buyers, and issue payments (less fees) to 4-H Sellers. In collecting and issuing payments, the Committee does not assume, accept, or limit the legal rights or obligations of the Buyer or the Seller.

        11. If a Buyer fails to pay their invoice, the Livestock Auction Committee will make a good faith effort to collect the monies owed, through communication with the Buyer. The Livestock Auction Committee is under no obligation to pursue legal recourse or collections through legal channels against non-paying Buyers. If good faith efforts to collect payment fail after 3 months, the [Name Redacted] 4-H Livestock Auction Committee will cease collection efforts and offer to pay to the Seller the fair market value of the animal. The amount of payment will be determined according to the September USDA Report and will not exceed $2,500.00 per animal. This payment in no way limits the rights of the Seller to individually pursue legal claims or collection actions against the Buyer. If the Seller accepts the fair-market-value payment from the 4-H Livestock Auction Committee and later receives full or partial payment from the Buyer under their auction sale contract, the Seller must promptly return to the Livestock Auction Committee the fair-market-value payment that the Livestock Auction Committee made to the Seller.

      • Auction Law says:

        Well, that makes a bit more sense. I am not a lawyer, but it does appear to follow the contractual agreements of many auctioneers (myself included).

        To clarify, an auctioneer is primarily a marketer and broker for the seller(s). The seller gives them the right to bind them and the bidder to a contractual agreement. While they may collect funds from the buyer and turning them over to the seller (minus agreed expenses), they have little authority to pursue a buyer that does not pay. As the seller, you would pursue the buyer in court to enforce payment and at least obtain a judgment against the buyer, until paid.
        At least, that’s my understanding of how the law works in most cases and some details may vary depending on state law.

        I would be interested in what your attorney has to say. Thanks for the update.

  3. Sarah Koster says:

    Good Afternoon, I have a question about an appliance I purchased From an online auction. The listing stated-

    FOR THESE SCRATCH AND DENT ITEMS THE SELLER STATES THAT ALL WASHERS, DRYERS AND DISHWASHERS HAVE HAD 3 LOADS RUN THROUGH THEM AND ALL FRIDGES AND FREEZERS HAVE BEEN RUN FOR AT LEAST 3 DAYS TO INSURE THEY ARE WORKING CORRECTLY; HOWEVER THEY ARE SOLD AS IS * HOW IS * WHERE IS

    There were pictures showing minor cosmetic damage. We bid on and subsequently won a dishwasher. Once home, we discovered a hole in the frame, rending the appliance unusable.And causing water damage to our home. Someone had tried to tap the hole shut with electrical tape. Furthering our assumption this did not happen in transit. Upon review there were NO pictures of the damage to the frame, in fact where the tape was, was covered with the insulative sheet.

    Do I have recourse to take action? Was this item mis-represented?

    • Auction Law says:

      There are many that attempt to absolve themselves of liability by using the “as-is, where-is” clause. However, upon making any statement of operation to assure the customer that the product is in some particular operational condition, they have made guarantee to induce the buyer to act at a higher level of confidence and purchase the item based on information provided.

      That said, if the hole was in an obscure place, there is the possibility that they were unaware of this AND it may have operated correctly during their testing. If this is the case, it may be difficult to prove that they knew about the problem and/or attempted to make it operable by putting the tape over the hole.

      The next consideration is whether you were provided a Preview time to inspect the item. If so, it would have been up to you to take advantage of the preview inspection and ensure that the item met your expectations of condition. If no preview was provided, then the liability may fall back to the seller.

  4. Tina M. Johnson says:

    In Ohio, at storage unit auctions; is it legal for the owner of the building (not the unit renter) to bid on the units and then stop bidding when the bids have met or exceeded the amount owed on the unit?

    • Auction Law says:

      The simple answer to the question is, “Yes.”
      Storage lien auctions are not “absolute” auctions, as any unit may be withdrawn at any time prior to the call of “sold.” If a tenant shows up and pays the delinquent balance before the call of “sold,” the unit may be withdrawn. By the same token, the lien holder (storage facility) has the right to place a reserve on the unit and the unit may not be sold if it does not meet the minimum reserve price. While it’s a good idea for such bidding to be disclosed in the Terms & Conditions, it’s not necessarily required either. Since the lien holder is not the owner of the goods, they also have the right to bid & buy, just like anyone else. Therefore, if the storage facility owner is the high bidder, s/he has effectively bought the property and it becomes theirs to keep or dispose/sell or whatever they wish to do with the property. In such case, the high bid amount must be credited to the tenant’s debt and if the total amount of debt is reached, the tenant is no longer liable for the debt and depending on state law, the tenant may also be owed any amount that exceeds their debt.

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