The Buyer's Premium Buried in the Website
A nonprofit hires an auctioneer for a May 10 benefit auction. The one-page signed agreement states: 'Commission: 10% of gross proceeds. Date: May 10. Location: Concord armory. Seller may set minimum bids on select items.' It says nothing about a buyer's premium, license status, or whether the sale is absolute or with reserve. The auctioneer's website and bidder registration page say 'A 15% buyer's premium will be added to all purchases.' At the door, a volunteer tells bidders about the premium only if asked. A bidder wins a $4,000 painting, receives a $4,600 invoice, and refuses to pay the premium. The nonprofit says it never approved a buyer's premium and that its net should be based on hammer prices. The auctioneer says the website gave notice. The bidder demands cancellation; the auctioneer has already deposited the $4,000 hammer price in the operating account.
1. What terms must a New Hampshire auction contract contain, and which are missing or inconsistent here?
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The written contract should identify the parties, the auction date, time, and place, the commission and how it is calculated, the terms of sale, whether the sale is absolute or with reserve, any buyer's premium, and the auctioneer's license status. It should be signed before the auction. This agreement omits the buyer's premium, the license statement, and a clear absolute/reserve term. The clause about 'minimum bids' is not the same as a clear reserve disclosure. Because the nonprofit never approved a premium, the contract does not support charging one. Under RSA 311-B and Board rules, material terms must be in writing and consistent with the advertising.
2. Was the buyer's premium effectively disclosed to the bidder? Analyze timing and consumer protection.
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A buyer's premium is an added charge and must be disclosed clearly before the bidder bids, in advertising and at registration. A website statement may help, but if the registration page is ambiguous and the volunteer discloses only on request, the auctioneer has not proven effective notice. Adding 15% to a $4,000 invoice after the hammer is a material change that can be an unfair or deceptive practice. The bidder's refusal is reasonable if he did not know. The auctioneer should either honor the $4,000 hammer price or cancel the sale and return any deposit. He cannot use the operating account as leverage.
3. How should the parties resolve the invoice and the consignor payment?
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The auctioneer should issue a corrected invoice for $4,000, or rescind and refund, and give the nonprofit a written accounting. If the premium is to be charged in future, it must be in the contract, ads, registration materials, and oral announcements. The $4,000 already deposited belongs in trust until disbursed. The parties should sign an amended contract for future sales. The auctioneer should also correct the missing license and reserve terms.