top of page
  • Writer's pictureMike Brandly, Auctioneer

More on auction contract assignability

We wrote that bid-calling contracts are assignable focusing on the bidder’s (or buyer’s) ability to assign their equity to another entity. Specifically, bidders can assign to other properly registered bidders, and buyers can assign to virtually anyone.

That is unless the terms and conditions of the auction — or sales or purchase contract — expressly prohibit such, although we see no reason for sellers or auctioneers to deny such actions, of course, unless bidders are registered arbitrarily.

Here is that recent writing: https://mikebrandlyauctioneer.wordpress.com/2023/03/31/are-bid-calling-contracts-potentially-assignable/. As you can see, we pointed out that such assignments cannot involve illegal purposes.

Assigning to any other bidder would assume all bidders are registered to the same terms and conditions (equal footing) which we’ve consistently held and was supported in Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020).

More generally, there are three types of contracts auctioneers typically are involved in (1) Engagement contracts between the seller and auctioneer, (2) Bid calling contracts between the seller and bidders, and (3) Sales or purchase contracts between the seller and the buyer.

These three types of contracts are described in more detail here: https://mikebrandlyauctioneer.wordpress.com/2009/12/29/the-three-3-types-of-auction-contracts/.

Therefore in regard to “assignability,” we conclude the following:

1. The auctioneer’s contract with the seller is a personal services contract that the auctioneer couldn’t likely assign, and the seller could not.

2. When an auctioneer is bid-calling, I hold those contracts between the seller and bidders. Bidders could assign, but sellers could not.

3. Once the seller and buyer are in contract for a lot, the buyer could assign, but the seller could not.

We hold these beliefs in that the auctioneer could not likely assign his or her duties as this is a “personal service” contract, and sellers couldn’t assign their duties as they are typically uniquely in title.

Relatedly, in my home state of Ohio, an auctioneer is defined as: “Auctioneer means any person who engages … either directly or through the use of other licensed auctioneers” suggesting the auctioneer could potentially assign his or her duties to another auctioneer.

Importantly assignment means that another party takes over primary responsibility for performance, while the assignor remains secondarily liable for those duties As such, the contracting auctioneer should make sure these “other auctioneers” are competent to complete those tasks.

Of course, an auctioneer’s (personal service) contract could specify that he will use other auctioneers to complete the job, coupled with the client’s knowledge and consent as memorialized in the engagement paperwork.

Some contracts are assignable, and others are not. However, most contracts are by default assignable, so if you as an auctioneer want any certain contract to not be assigned, ensure that provision is noted.

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, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.

1 view0 comments

Recent Posts

See All

Comments


bottom of page