Why can’t a seller bid up his items at auction? If he tries, the auctioneer isn’t allowed to accept his bid. Why should he anyway? With a secret reserve, the auctioneer is doing what he legally can’t do. If logic follows, an auctioneer can’t accept the seller’s bid with or without a reserve, so why is the auctioneer able bid for him? It’s the same as having an illegal ring to drive up the bidding. An auction is defined as a bidder against bidder, not an artificially induced format.
I believe the laws are crystal clear on restricting both rings and seller actions in the auction process, and auctioneers, as agents of the seller should comply with the same rules. However, doesn’t the auctioneer’s mantra “we work for the seller” make them complicit with breaking the rules? Score one more deception and flaunting of the regulations by the auctioneer. And if it’s accepted by the public and government organizations like the New York City Department of Consumer Affairs, then let the good times roll.
I don’t want to be totally naïve about seller motives in the bidding process; these are sticky and difficult issues that the auctioneer has to deal with when negotiating reserve prices and the expectations of a seller. However, the relationship between the seller and his auctioneer agent takes on more than just a fiduciary purpose. Profits received from the buyer’s premium and sale at any price is a supreme motivation for the auctioneer. That trumps being a fiduciary no matter what the UCC conventions may say or imply.
The seller’s options are quite limited and highly restricted beyond agreeing to a reserve price. With the Sotheby’s/Christie’s duopoly, the restrictions disclosed in their catalogue rival the complexity of their consigner contracts. Perhaps we should all have an attorney with us like when we might close on a house. Maybe after my son finishes law school I can have an in-house attorney explain what they’re doing to a seller!
All any auctioneer really wants is the juicy buyer’s premium over the hammer price. No legalise to decipher here. It’s non-negotiable and the auctioneer legally doesn’t have to tell the seller the amount. I couldn’t think of a better legal environment scenario for the auction profession.