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Auctioneer Defined

Usually, an auction is conducted directly by a seller.  A seller can also employ another on his behalf to conduct the sale.  Such person is known as an auctioneer.  An auctioneer is an agent of the seller, sells the property of the principal, and is employed by commission or for reward.  The term auctioneer can be defined as “one who sells goods at public auction for another on commission, or for a recompense; one who conducts a public sale or auction, whether the goods sold are his own or those of another person who employs him”[i].

An auctioneer’s primary duty is to make an offer to dispose of goods or lands by public sale to the highest or best bidder[ii].  Selling goods or any property at public auction is a legitimate and a common right. Therefore, the business of conducting auctions or acting as an auctioneer is also lawful and legitimate.  The business of auctioneering should not be subject to arbitrary interference.  However, the right to sell goods at a public auction is not an absolute right.  Auctioneering is a special privilege, which can be withheld unless reasonable regulations are complied with.  The business of an auctioneer is a matter of public policy and subject to legislative restriction and regulation in order to prevent abuses and frauds.  State legislatures can impose reasonable limitations or regulations upon the acts of an auctioneer[iii].

The legal position of an auctioneer is the same as that of an agent. An auctioneer must act in good faith and in the interest of his principal.  He/she must conduct the sale in accordance with the instructions of his principal.  An auctioneer is a special agent, who can act only under the authority of his/her principal.  An auctioneer cannot bind his principal beyond his actually granted authority.  Moreover, an agreement or a contract, which is beyond an auctioneer’s authority will not be binding on the principal.  An auctioneer’s authority ends when a sale is completed and the purchase price is collected.  After an auction, an auctioneer cannot vary the contract of sale or the terms on which title is to be given, without any special authorization[iv].

Moreover, an auctioneer will be liable if he/she conducts auction without knowledge of the principal’s lack of title or authority to sell, although he/she acts in good faith.  An auctioneer will be liable for selling property with defective title, although he/she was conducting an auction in compliance with the principal’s specific instructions[v].  An auctioneer’s good faith and his/her lack of knowledge is not a defense in an action for conversion[vi].

[i] State ex rel. Danziger v. Recorder of Mortg., 206 La. 259, 266-267 (La. 1944)

[ii] Pyles v. Goller, 674 A.2d 35 (Md. Ct. Spec. App. 1996)

[iii] State ex rel. Danziger v. Recorder of Mortg., 206 La. 259, 267 (La. 1944)

[iv] In re Premier Container Corp., 95 Misc. 2d 859, 866 (N.Y. Sup. Ct. 1978

[v] Parker v. P & N Recovery of N.Y., 182 Misc. 2d 342, 346 (N.Y. Civ. Ct. 1999)

[vi] State Sec. Co. v. Svoboda, 172 Neb. 526, 530 (Neb. 1961)

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