top of page
  • Writer's pictureMike Brandly, Auctioneer

Auction cancellation fee that is fair


It’s always a good reminder for auctioneers — your contracts, terms, conditions, policies, etc. likely need to be “fair” (maybe even “reasonable?) for a court to uphold them.

As such, in the National Auctioneers Association award-winning magazine (Auctioneer, December 2019/January 2020) Matthew Parker (Auctioneer/law school student) told James Myers (Freelance Author:)

… the court is likely only to award a cancellation fee that is fair, which is an approximation of what the auctioneer can anticipate the actual damages to be when the contract was signed or at a later time when the cancellation clause is enforced. If a court finds that you’re trying to penalize them with a cancellation policy, the court won’t do it … You’re not helping your case by calling it a penalty; that’s making it worse.

We wrote in 2016 about a legal proposition that “contracts can say anything” and as such can be entirely auctioneer-favorable vs. the seller and/or entirely seller-favorable vs. bidders/buyers. That writing is here: https://mikebrandlyauctioneer.wordpress.com/2016/08/01/an-auction-where-21/.

I think it’s probably a fair argument that anything in your contract and/or terms and conditions viewed as unfair, inequitable and/or unreasonable might well be voided by a court.

And here again, do you want to win or lose in court? It’s likely you are far better off staying out of court: https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.

Our recommendation remains to talk to an attorney and see that your contracts, terms and conditions and the like are all compliant and reasonable — and why would you want to do that?

A good reading might be our treatise on manifestly unreasonable issues, as the UCC § 1-302 specifically uses those words — which are not often cited (or purposely omitted) when citing changes to the Uniform Commercial Code: https://mikebrandlyauctioneer.wordpress.com/2017/03/01/auctions-that-are-manifestly-unreasonable/.

We asked some time ago if you — as the auctioneer — would sign your own contract as a seller? Another fair question might be, “Would you be a bidder/buyer at your own auction?” If either answer is, “no” then it may be time for a rewrite.

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.

0 views0 comments

Recent Posts

See All

Comments


bottom of page