Your Questions & Comments

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Answers to the most common questions can be found in my following articles:
Auctioneer Bidding… Is it Legal?
Auction House Bidding & Selling
Auctioneer/Seller Withdraws an Item with Bids. Is It Legal?

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1,396 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, as it appears 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.

  5. MH says:

    Does an auction business require a license in Virginia? If I have a complaint against an auction business in VA, who do I address my complaint to?

  6. Duff Starrett says:

    Is there any level of expected fairness to the sells as an amount of time to allow bidders to bid. Just went through an auction and some of the bids were endinding in 11 or 12 seconds. They had too much equipment and seemed to be racing through it. My equipment was made available for probably 15 seconds, I videoed some of the others at less. It just seems in an absolute action people should be given a fair amout of time to bid and the auction would have a fidutiary duty to try and get the highest price.

    • Auction Law says:

      From your comment, I am assuming that you are referring to an Online Auction and will base my answer on that assumption (so, correct me if I’m wrong and provide a bit more information so I can better understand your question).

      Most online auctions start several days prior to the “Ending Time,” so bidders typically have plenty of time to bid prior to closing. The Closing Time is when the last bids are placed. Most of the Auctioneer Platforms use “Extended Bidding” which increases the closing time by “X” minutes if someone places a bid at the last minute. This is more like an actual auction and prevents the sniping as seen on ebay.

      The 12 seconds that you reference is usually the “stagger” time between lots that are closing. It has little effect if people bid at the last minute, which would extend the bidding time. The stagger time only keeps things moving expeditiously and if an item is not getting any further bids, it closes and moves on to the next item. After all, if there isn’t any interest, there’s no need for it to sit there waiting to see if anyone is going to bid at the last minute… if they did bid at the last minute, then the bidding time would extend to allow for other bidders to bid. In the mean time, the other items would continue to close at the stagger interval.

      Hope that helps.

      • Duff says:

        This was a live auction, and they had an unussually large inventory they had to rush through. Like I said the time available to bid was probaly averaging about 15 seconds when My equipment went up to the floor. I did notice a couple hours later they started giving them more time. But, my question was if there was a fedutiary responsibility to the seller that was not honored in a case like this?

      • Auction Law says:

        Live auctions are typically fast paced. Most seasoned auctioneers may typically sell between 125-175 lots per hour. That would equate to 2-3 lots per minute.

        There are many variables that may also come into play, which not only includes the amount of goods that are to be sold in a day, but crowd size can also be a factor in how fast the auctioneer goes and how long they may wait for a bid. The crowd is usually largest at the beginning of the auction, therefore one would expect the strongest interest is present during this period. So, this is when the tempo is faster and more spirited bidding would be expected. This is also the best time to sell the better items in most cases, as it may be more likely to have those stronger bidders present. By the same token, if they aren’t bidding, it may only be assumed that the interest in any particular item isn’t strong and it is sold and they move on to the next lot. As the day progresses, the crowd diminishes to some extent and the auctioneer may work harder to get the bid for items.

        All in all, it’s a combination of experience and judgement, combined with a bit of sales psychology in the attempt to get the bidders to bid fast and high, in the effort to get to everything before the crowd dwindles to a few that hang in there to the last, hoping to get the steals at the end.

        This is the basis of their fiduciary duty to the seller, in their effort to get everything sold expeditiously, while trying to get the best price possible for all of the lots to be sold in a limited amount of time.

      • Duff Starrett says:

        OK, Thank you. It just seemed very fast to me, but I do not have any real experience with this.

  7. Dwight Vaughn says:

    My wife purchased a property at an absolute auction for $1100. One year later, she received a summons. The administrator of the estate was being sued by the nursing home for money they are owed. My wife has been mentioned and they have filed suit to void the sale of the property claiming the administrator did not have the right to sell the property. My wife made the highest bid,paid the money in the time allotted, received the bill of sale, and recorded the deed. She invested money, labor, and time making the house liveable and now resides in the residence. Can the sale be voided? Who is liable? Will she be able to keep the property since she bought it legally at an auction with no reserve? Is the auctioneer liable since he is the agent or the attorney for the administrator who has not filed the proper paperwork? Deed has been transferred and recorded and paid for, for over a year now …

    • Auction Law says:

      Since you mentioned “administrator,” I would assume that this would mean that the probate court appointed an administrator to oversee the liquidation of the estate and files all information with the court. I might also assume that the court approved the absolute auction and if so, then there is nothing to be concerned with. Of course, I’m making a lot of assumptions and have no idea of the actual details involved. You need to discuss this matter with an attorney.

  8. Dwight Vaughn says:

    We hired an attorney. He said they can’t take it. She went to court and suddenly he acts like they might void the sale..The attorney for the nursing home offered her a percentage of a new auction. Her attorney says that she would be able to go after the attorney of the administrator if they void the sale. But, I read that the auctioneer must make sure the principal has the right to sell or the auctioneer is liable. Breach of contract to rescind the sale, idk for sure. The 3 attorneys are to prepare a brief and return on Jan. 14th. All 3 said that they agreed the administrator didn’t have the right to sell the property. The judge is the same judge that ok’d the administrator of estate. The administrator says that he wants removed as administrator. He is a relative of the deceased and was willed the estate.

    • Auction Law says:

      “The attorney for the nursing home offered her a percentage of a new auction.” This is a violation of federal law under the Sherman Act, in addition to unethical/illegal actions if the attorney accepted the offer. You need to find a NEW attorney.

      As far as the auctioneer being held liable… both, the principle (administrator) and the auctioneer could be held liable if there is wrongdoing by both or either. It’s not one or the other.

      Once again… you need to get an attorney.

      • Dwight Vaughn says:

        Could she get a home equity loan? She has maxed out credit cards on home repairs and attorney fees. Getting money for another retainer is going to be nearly impossible. Is it a conflict of interest if the judge is the same judge that handled the initial authorization to go forward with the sale? Could Legal Aid possibly help? I appreciate your responses. Thank you.

      • Auction Law says:

        She could try contacting pro-bono legal services, but it may be difficult to find someone that will be willing to accept the case. From your comments, you may have more than one legal issue involved in this situation. If her current lawyer is not properly representing her, that is a separate issue from the voiding the sale issue.

  9. Geraldine Griffin says:

    Do you need an auctioneers license to auction in the charity arena ? I have been a licensed auctioneer for a well respected auction house for over 20 years and retired last year . Now I am being asked to auction for a charitable organization in CT at their fund raising event. I still hold a current license in the state of NY which is up for renewal in 2020 .

    • Auction Law says:

      Each state may have their own licensing requirements. Therefore, you would need to check the laws of a particular state. Typically, if one is conducting an auction for any form of payment/compensation (even if it’s only a meal, it is considered compensation) in a licensing jurisdiction, you would have to be licensed. Benefit auctions are not an exception unless you’re doing it for free (i.e. you must even pay for your own meal, etc.).

      Connecticut does not have state licensing, but towns may have their own licensing requirements.
      https://www.cga.ct.gov/current/pub/chap_403.htm

  10. Josiah says:

    I had my corn dryer on a auction and it sold. Prior to the auction I talked to the auctioneer and he said that if the dryer doesn’t get picked up by the first of the year it would go back to the previous owner ( which is me) now it’s been a full year and the guy hasn’t picked it up and it’s been 7 months from the year that it was to go back to me. I talked to the auctioneer and he wants nothing to do with it. Is it mine?

    • Lindsey Reed says:

      Can’t you just go and pick it up? Is it in a locked building?

      • Josiah says:

        I didn’t buy the dryer. I own the yard that the drying is sitting on. I’m wondering how long it can sit there before it either goes back to me or something happens. I have tried to contact the guy who bought it but I can’t get ahold of him.

    • Auction Law says:

      My first question is, what did the buyer’s Term and Conditions state regarding Pick-up time? What did the Terms state would happen if items were not picked up within the given time-frame?

      Next, you may need to determine if the buyer is still at the same address or not.
      The procedure at that point may be determined by your state laws. You may be able to send a certified letter providing a reasonable time frame to pickup or what will happen to the property. In other states, you may have to get a judge to make a determination.

  11. Dwight Vaughn says:

    Whatever happened to possession is 9/10 of the law? Pretty sure if someone leaves something on my property for 30 days it’s abandoned. Also, did the guy die? If you place a notice in the local newspaper and no one shows up by a set date, it is yours.

  12. Takky says:

    Hi,
    I would like to start Online Whisky Auction in the states. Do I need to get a license?

    • Auction Law says:

      You will probably need more than an auctioneer license. Most states require licensing for the sale of alcohol. So you would need to check with each individual state licensing requirements for the sale of alcohol and any stipulations for sales across state lines if you are thinking of shipping.

  13. Jeff (Ozzie) Pelzer says:

    I had an auction at my ranch on 9-26-2020. I was originally going to have the auction in May of 2020, but due to covid, it was cancelled. The auctioneer I had chosen called me at the end of July and told me that we should do the auction in September, stating that people have been locked up all summer and are spending money like crazy. I had 65 people at my place at any one time and no one was bidding. I had reserve bids with the auctioneer since I was sceptical of his claims from the beginning. He sold everything without honoring the reserve bids. He has told me numerous times that he and his partner are going to come to my house to explain things to me, ie; reserve bids, his fee, and other experiences. Seven months today and he still hasn’t shown up. We were friends and I believe he stole from me and is too ashamed to sit down with me now. What can I do?

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