Who Is Looking After My Interest At An Auction?

Rons-Blog   An auctioneer’s fiduciary duty is to the seller. That is, he’s looking after the interest of the seller and not the buyer. This means the auctioneer is an agent for the seller and must act in the best interests of the seller. Now, this does not mean that if the seller misrepresents something, that the auctioneer doesn’t have a “duty” to the buyer to correct the problem. However, the auctioneer and the seller are both responsible for providing a reasonable duty to provide said goods in the condition stated for the agreed upon price/trade. As this falls under the Fair Trade Agreement statutes that you can  search for under the FTC’s website at www.ftc.gov. However, this does not create a fiduciary duty to the buyer, but only serves to treat the buyer fairly under the FTC’s Fair Trade Agreement. This falls back on the basis of general law, widely accepted in all courts of law throughout the U.S.: (1) “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument (i.e. “contract”). (2) “Represented person” means the principal, beneficiary, partnership, corporation, or other person to whom the duty stated in subdivision (1) is owed. The primary point is regarding the auctioneer’s fiduciary duty to act on behalf of the seller. The difference between the Fair Trade Act regarding buyers and fiduciary duty to the client (seller) is the same, regardless of whether it is a real estate transaction or the sale of any other type of property. A Fiduciary cannot represent two different parties with opposing intents. It’s kind of like having the same attorney for the defendant and plaintiff in a court room. The primary fiduciary is to the client that has contracted the auctioneer to sell (act on their behalf for the sale of) their goods. Some have attempted to imply that the Terms and Conditions of Sale implies a fiduciary duty. This is not the case, as the FTC’s Fair Trade Act specifically demonstrates that it is only an agreement for the terms of the sale and creates no other duty upon the seller (or their agent, viz., the auctioneer) as a representative of the buyer, as they are opposing parties until the final agreement has been reached. The Terms & Conditions (terms of their agreement) for an auction are only the conditions of finalizing the transaction, which both, the buyer and the auctioneer (seller’s fiduciary agent) are agreeing to as part of the sale, with only price being the final factor and determined upon the call of “Sold”. Therefore, the auctioneer has only “perfected a sales agreement” (that’s how a lawyer would state it) with the buyer on behalf of the seller (the principal fiduciary). You can find additional commentary on the basis of fiduciary duties and conflict of interest at: http://en.wikipedia.org/wiki/Fiduciary and at http://en.wikipedia.org/wiki/Conflict_of_interest . So, whose interest is being protected by the auctioneer, the agent? His client, that is, the seller.

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