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Writer's pictureMike Brandly, Auctioneer

Does court confirmation make it a reserve auction?


I saw a recent auction advertisement … selling “absolute to the highest bidder” and then later in the same advertisement “subject to court approval.”

In other words, this is an absolute auction and it’s not an absolute auction. Is it really “the genuine intent to transfer to the highest bidder regardless of price” if it’s subject to court approval? It’s not.

An auction can essentially have no minimum bid nor seller confirmation but if it’s subject to court approval, then any bid could be declined — and thus this is a “with reserve” auction. The court is reserving the right to accept or reject.

Probably the worst use of auction advertising is saying an auction is absolute when it’s not. This makes prospective bidders suspicious of any auction advertised as absolute — even when they are truly are absolute.

We have offered the word “absolute” draws larger crowds and thus higher prices for sellers. As such, auctioneers (such as our company) that conduct almost exclusively absolute auctions can see distrust when other auctioneers are advertising absolute when it’s not absolute.

As an expert witness, we’ve been materially involved in two cases involving auctioneers advertising absolute auctions but actually conducting with reserve auctions. The results of those cases suggest to me this is extremely imprudent behavior.

We’ve written numerous times about absolute auctions, maybe most notably here: https://mikebrandlyauctioneer.wordpress.com/2015/11/27/genuine-intent-to-transfer-to-the-highest-bidder-regardless-of-price/. Essentially, absolute auctions can’t have any reservations.

Lastly, there’s nothing wrong with auctioneers conducting with reserve auctions, so long as the seller is advised of the likelihood of fewer bidders and possibly a lower final price. Some sellers are more comfortable with some sort of price protection, and with reserve auctions allow for that.

However, with reserve auctions also protect the seller from the likelihood of a higher final price. You don’t have to believe me, as you can take it from Barrett-Jackson, Ritchie Brothers, and other major auction players: https://mikebrandlyauctioneer.wordpress.com/2016/08/25/the-power-of-the-word-absolute/.

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 Supreme Court of Ohio for attorney education.

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