Possible risk with assigning risk
We recently posted that as an auctioneer — assigning risk could [can] actually increase your risk. Here’s our prior reference:https://mikebrandlyauctioneer.wordpress.com/2018/10/18/puffing-or-representing-while-bid-calling/ and as promised, here’s our more in-depth analysis.
Our prior example regarding this topic involved product descriptions. On the one hand, auctioneers can be held to any description of the goods [property] which is made part of the basis of the bargain as such creates an express warranty that the goods shall conform to the description.
On the other hand, there are those who suggest and advocate that auctioneers assign this type of “risk” and as such recommend terms which say for example, “Bidders are not to rely on anything expressed by auctioneer.” Therefore, the auctioneer can misrepresent, deceive … lie to the bidders … and be protected from the risk of a lawsuit or other action; at least that’s the theory.
It seems the prevailing thought here is the auctioneer can win in court because he/she can show this “non-reliance” clause to the judge/jury and they will rule against the aggrieved auction buyer. Yet, as we have held, it’s much better to stay out of court than winning — or losing — in court:https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/
Is it conceivable that there’s a much more likelihood of getting sued when lying to people as contrasted with telling them the truth? It seems to us that we’re told to assign this type of risk thus allowing us to misrepresent, thus increasing our risk of a lawsuit.
Further, auctioneer terms and conditions typically suggest “no exchanges, no returns” so we not only can lie but the buyer has no recourse? What other industry … what other transactions … do people engage in/with here in the early 21st century that work like this? For the most part, most all other retailers offer guarantees and returns/exchanges. Why do they do that? Because they are trying to engage more buyers in their commerce stream.
“But these buyers secure real and personal property at auction at a discount — it’s only fair they take on more risk for that reward.” Oh really? We auctioneers are selling property at auction at a discount? Auctions [often] provide for the prospect of a deal, but a deal is rarely realized.https://mikebrandlyauctioneer.wordpress.com/2011/09/02/auctions-are-an-illusion/
Lastly, the term “as-is” along with “where-is” are often used to cloud the issue of what exactly is (or is not) selling … because you’re just buying it “as-it-is.” While I’m certainly not opposed to auctioneers selling as-is, I think we have to take a hard look to ensure we’re offering adequate inspection opportunities, not hiding latent defects, any hazards, etc. We wrote more about that here:https://mikebrandlyauctioneer.wordpress.com/2015/11/10/an-auctioneers-as-is-primer/
I’ve seen many references and comments about the recent demise of Sears (& Roebuck) and how they didn’t adjust to the move to online purchasing. I think auctioneers need to remind ourselves we might be the next “Sears” if we don’t adjust to how people expect to buy things these days.
This article has been published with permission from the author.
The original article and image can be found here.
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.