How Do You Feel?
Steve Proffitt | January 14th, 2013
Auction Law & Ethics
By Steve Proffitt
Remorse can be a good or bad thing. The answer is often a matter of circumstance. Bidding and buying at auction is not such a circumstance—more on that shortly.
The dictionary defines “remorse” as “a gnawing distress arising from a sense of guilt for past wrongs.” So, when someone does something wrong and subsequently regrets it, that person is said to be remorseful. As a society, we generally appreciate and embrace a remorseful person.
A lot of people commit crimes and then express remorse for their actions. We all have seen this many times on TV, folks weeping and wailing with profound sorrow for their wrongs—from behind bars! I have often wondered how many of these inmates are truly sorry for what they did, as opposed to regretting that they were apprehended, prosecuted, and incarcerated for their crimes. Of course, some commit misdeeds and never feel any remorse; take my cousin, Junior, over in Boaz, Alabama…
My Family
Junior and I grew up together and still spend a lot of time with each other—much of it within hunting and fishing boats. Good judgment is not Junior’s forte; neither is being quiet. The boy is famous for saying the wrong thing at the wrong time to the wrong person—like he did last year during duck season.
Marlin Perkins was hunting at Lake Guntersville when a conservation officer came upon his boat moored along the bank. The man asked Junior if he had bagged anything. He answered that he had not. The officer checked his license and was handing it back when Admiral Farragut added, “But I got me sumptin’ yesterday.”
The curious officer inquired what Junior had bagged the day prior. That is when Buffalo Bill revealed he had taken an eagle!
“You shot a bald eagle?” the incredulous officer asked.
“Yep,” Brainiac answered.
Two months later, Junior was in U.S. District Court in Birmingham to answer a charge that he had illegally killed not only a federally protected species but the national bird.
When the charge was read, the judge asked how he pled. Gomer Pyle had no clue how to answer, so the judge simplified the issue.
“Did you shoot and kill an American bald eagle?”
“Yes, sir,” the Wizard of Marshall County replied.
“Well, that sounds like you’re guilty,” His Honor opined.
“But I didn’t know ’twas against the law.” Davy Crockett explained, “and it didn’t go to waste ’cause I ate it.”
The judge was incredulous of this news.
“You cooked and ate an American bald eagle?”
Junior nodded his assent.
“What on earth did that taste like?” the jurist asked with stomach-churning dismay.
Keeping to his reputation for turning the bad into the catastrophic, Einstein deadpanned, “I’d scribe it sumptin’ ’tween a whoopin’ crane and a spotted owl.”
Junior never disappoints, and less frequently regrets, the latest debacle he has produced, directed, and starred in. His philosophy is to never wallow in regret when you can better spend your time searching for an escape from the consequences.
Bidders and Buyers
Others feel regret from time to time about various things, and auction bidders and buyers are amongst them. This can arise when a bidder “has the bid” on an item during the auction and suddenly has a change of heart about the lot and wants out of it. The regret malady also can strike when a bidder who has become the buyer of a lot suddenly feels the pangs of regret for having made the purchase.
In either case, the instant regret sets in, the remorse takes over, which results in mounting pressure that needs relief. This is where a bidder’s/buyer’s remorse can spread like a contagion and quickly becomes a seller’s/auctioneer’s sorrow. Indeed, the remorse issue for auctioneers is sometimes such that where a large bid has been made for a lot or an item has been hammered down for a handsome price, there is the temptation for the auctioneer to run to the bidder/buyer and fearfully ask, “How do you feel?”
Distinction
We should make a critical distinction. The type of remorse that I am talking about arises when a bidder/buyer decides an item is not worth the bid or purchase price, is not desirable under the terms of auction, or is not wanted by the buyer for some other reason. I am not referring to remorse that springs from bidding for or buying an item that is not wanted because it was misrepresented or is involved in some other form of wrongdoing. In such a case, the bidder/buyer is justified in denouncing the fraud or other wrongful act by the seller/auctioneer and moving to avoid any bid for or purchase of the lot.
Two Times
As noted, remorse can strike on the buying side in an auction at either of two times—during the bidding for a lot (presale), or following the auctioneer’s knocking the lot down to a buyer (post sale). We will consider each scenario.
Presale
When regret strikes during the bidding, it is bidder’s remorse. Something causes the bidder to suddenly rue the bid just made. There are two ways a bidder can remedy this situation. The first is to have another bidder trump the bid and thereby release the regretful bidder from the potential buying hook. This has probably happened to everyone who has ever done much bidding in auctions, and when it occurs the relief gained is highly satisfying.
The problem with an unhappy bidder waiting for another to take him off the hook is that the “escape” bid might never come. Considering the brisk pace at which most auctions proceed, there is not much time for another bidder to offer more for the lot, and this increases the risk that the unhappy high bidder could be declared the buyer. The commercial code offers a statutory remedy for such an instance that takes the bidder’s fate away from chance. This is the ability for the bidder to retract the bid. Here is how it works.
During bidding for a lot, a high bidder who wants out from a bid made may interrupt the bid-calling and advise the auctioneer that the bidder retracts the last bid placed. This has the effect of wiping the slate clean of all prior bids and taking the lot back to zero, unless a prior bidder is willing to reaffirm a previous bid. A bidder can exercise the retraction option, without adverse consequence, whenever it is done before the auctioneer announces the sale of the lot to that bidder. A bid retraction will be void where attempted after the auctioneer has announced a sale of the lot to the bidder.
Post sale
My last two columns focused on the recent New York State Court of Appeals decision in William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh. An auction buyer’s sudden cooling on the purchase of a Russian silver/enamel box saw the buyer walk away without paying the $400,000 purchase price because of some unexplained onset of regret. You do not have to be clairvoyant to divine that this damaged both the seller and auctioneer and made them extremely unhappy.
Like results occur so frequently with buyers that the condition has been tagged with the moniker “buyer’s remorse.” A buyer suffering this kind of remorse feels no regret about backing away from a purchase and wanting out of a sale. To the contrary, the only action such a buyer regrets is having made a purchase that is no longer wanted.
The source of “buyer’s remorse” is focused on the purchase price of the lot (usually) or the applicable terms of sale (sometimes). The buyer feels no sense of personal wrongdoing or other responsibility. Instead, the buyer’s aim is to relieve himself of the purchase just as quickly as possible. The obvious and adverse impact of this effort on the seller and auctioneer will not typically enter into the buyer’s thinking. This is because “buyer’s remorse,” from the buyer’s perspective, is solely about the buyer.
Selling-side tips
Here are several tips for dampening and attempting to quash the threat and damage from bidder’s/buyer’s remorse.
First, the auctioneer should employ written terms for the auction that are clear, complete, and correct in order to carefully define the procedures for bidding and the details for buying the lots and closing these sales.
Second, an accurate introduction should be given by the auctioneer for every lot offered. This will go a long way toward ensuring there is no misunderstanding amongst the bidders.
Third, the auctioneer should have a commanding and professional “presence” that plainly shows the auctioneer is in charge of the auction and all that occurs relative to it. Bidders and buyers are less likely to act on feelings of remorse when faced with an authority figure on the other side of the auction block.
Fourth, a high-quality tape recording should be made of the auction to memorialize the proceedings and guard against the awkward and dangerous potential for “he said, she said” allegations and claims made by bidders and buyers.
Fifth, every sale should be expedited to a rapid closing strictly in accordance with the written terms of auction. The glue to hold a sale together starts with sealing the deal at closing. The faster this is accomplished, the less likely a buyer’s remorse is to undercut the sale.
Bidder/buyer tips
Finally, here are several tips for auction bidders relative to an onset of remorse.
First, never bid for what you do not want and cannot use. While this seems fundamental, a lot of folks do it and then regret it.
Second, do not bid for what your instinct tells you to leave be. Instinct develops over time as a result of accumulated knowledge and experience. You have these feelings for a reason—trust them.
Third, do not bid for what you cannot afford.
If while bidding for or buying you are suddenly sickened by the nausea of regret, try to determine the root of it. If you are bidding, you will have to think quickly, but try to do so. You want to always act on such matters with reason and not emotion.
If you have bought an item that was properly represented but have not closed the sale, and regret hits, lean toward being a big boy or girl and performing the contract for sale you made with the seller. Mark the purchase off as a learning experience. If you are sure you want no part of the item, ask the auctioneer how you can resell the piece to minimize any loss you might suffer. An auctioneer will be a lot more receptive to this approach than with a buyer who refuses to perform because of some subjective remorse about a purchase.
That’s it until the March issue of M.A.D. Until then, good bidding.
Steve Proffitt is general counsel of J.P. King Auction Company, Inc., Gadsden, Alabama. He is an auctioneer and instructor at the Reppert School of Auctioneering in Auburn, Indiana, and at the Mendenhall School of Auctioneering in High Point, North Carolina. The information in this column does not represent legal advice or the formation of an attorney-client relationship. Readers should seek the advice of their own attorneys on all legal issues. Proffitt may be contacted by e-mail at <sproffitt@jpking.com>.
Originally published in the February 2013 issue of Maine Antique Digest. © 2013 Maine Antique Digest
