Absolute in the Ad, Reserved in the Contract
Hoosier Equipment Auctions runs a liquidation for a failed excavation contractor. The print ad, the Facebook event, and the listing-platform page all read: "COMPLETE LIQUIDATION - ABSOLUTE AUCTION - NO RESERVES - EVERYTHING SELLS TO THE HIGHEST BIDDER." Among the 42 lots is a 2019 skid steer with 900 hours. The consignment agreement the contractor signed sets a $25,000 reserve on that machine. The ads also state "10% buyer's premium," while the online bidding platform's terms page shows 15% for internet bidders and 3% extra for credit cards. The ad says the sale starts at 10:00 a.m.; the platform displays 9:00 a.m. because it defaults to Central time. On sale day the skid steer opens at $12,000 and climbs to $19,000, then stalls. The auctioneer announces that the seller has a reserve, passes the machine, and tells the crowd it will be re-listed online next month.
1. Analyze the "absolute, no reserves" advertising against the $25,000 reserve. What exposure does the auctioneer have, and what options existed before and after bidding opened?
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"Absolute - no reserves - everything sells" is a promise to every bidder that the seller has waived the reserve and the high bid wins, whatever it is. Running that ad while holding a signed $25,000 reserve is a material misrepresentation. The bidder at $19,000 bid on the strength of the promise; the crowd was told the machine would sell. A bidder can rescind or claim the difference between $19,000 and what the machine costs elsewhere, and the Commission can treat the advertising as false or misleading independent of whether anyone was actually harmed. The consignor also has a claim against the auctioneer for advertising terms the auctioneer had no authority to offer.
Before bidding opened, he had one clean option: correct the record. A conspicuous announcement before the lot is offered - "the skid steer is offered subject to the seller's confirmation of a $25,000 reserve; the earlier advertising was wrong" - cures most of the deception going forward, though it does not erase the printed ads, and it should be followed by corrected online listings. The better fix is upstream: at contract intake, the reserve and the advertising language have to be reconciled before anything is printed. If the seller insists on a reserve, the ad says "reserve auction" or states the reserve.
After $19,000 in bids were taken, the answer is no. You cannot retroactively impose a reserve on a lot you advertised as absolute. The auctioneer either sells at $19,000 and settles the shortfall with the seller, or sells and absorbs the difference himself for having promised more than he had authority to promise.
2. Evaluate the buyer's premium and start-time discrepancies. What should the advertising and the platform have said?
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Two different defects, both avoidable with one careful sentence.
Buyer's premium. The premium is a term of the offer and must be stated clearly and consistently before bidders commit. If the ad says 10%, the internet bidder who read the ad is entitled to assume 10%; discovering 15% on the platform's terms page at invoicing is a classic bait-and-switch complaint and a discipline risk. Where online and live premiums genuinely differ, disclose both in every ad and on the registration screen: "10% buyer's premium for live bidders; 15% for online bidders." The 3% card fee must be disclosed the same way - and described accurately, because charging card users 3% more while cash users pay less is either a disclosed surcharge or a disclosed cash discount, and the ad needs to pick one and say it plainly.
Start time. 10:00 a.m. Eastern and 9:00 a.m. Central are the same moment; the platform default is what confused people. That is a labeling failure, not a time change, and the fix is explicit: "10:00 a.m. ET (9:00 a.m. CT)." A bidder who arrived at 10:00 Central and found the sale over has a legitimate grievance, and "read the platform" is not a defense.
The discipline: one ad, one set of terms, matching the platform, the print piece, the registration card, and the invoice. When they conflict, the bidder gets the benefit of the most favorable version and the auctioneer wears the cost.
3. What should have happened at the fall of the hammer when the skid steer stalled at $19,000? Analyze the pass, the announcement, and the re-listing.
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Sell it. At $19,000, after advertising the machine as absolute and taking bids without a pre-bidding correction, the high bidder is entitled to the skid steer at $19,000, and the auctioneer should knock it down and invoice it.
The wrong move is the one that was made: pass the lot, announce a reserve nobody had heard of, and re-list it online. That converts a disclosure problem into a broken contract. The high bidder can now argue the sale was made and then repudiated - and the re-listing is the evidence. If the same machine sells next month for $24,000, the original bidder has a damages claim, and the consignor may argue the auctioneer gave away a $25,000 asset.
The internal problem is real but it belongs between the auctioneer and the consignor: the auctioneer advertised a no-reserve sale without authority. The options are to negotiate the $19,000 sale with the consignor, or to honor the reserve by treating the $6,000 as the auctioneer's own cost of the mistake. Either way, the auctioneer should be talking to the consignor before the hammer falls, not after the re-list.
Going forward: the reserve goes in the consignment contract, in the ad, and in the online lot description in the same words. An auctioneer who cannot reconcile those three has not finished intake.