Last week’s column dealt with auctioneers conducting auctions when the heat is on, like we are presently experiencing across much of the nation, and there is no air-conditioning. I closed that piece by noting that I would have more to say this week about auctions and weather, and I do.

Let us start with a provision that I frequently use in auction contracts with sellers: “Auctioneer is authorized to auction the property consigned by Seller, consistent with the terms of this Agreement and without regard to weather conditions.” I employ this term to avoid issues with nervous sellers who might want to cancel an auction just because the sky grows dark, the wind blows, and the rain or snow starts to fall.

I made the point last week that the auction business is like business in general which is like show business in particular – in most situations, “the auction must go on” – or at least it should. I believe firmly in this principle, just like our third president did.
When I was a student the University of Virginia School of Law, I leaned that the University’s founder, Thomas Jefferson, once penned “Ten Rules” for life. I acquired a copy of Jefferson’s Rules which I still consult. At the top of the list is this gem: “Don’t put off until tomorrow what you can do today.”

I am sure there are some auctions that could be postponed without much adverse impact, but the opposite is true with most. Here are several reasons why auctions should not be postponed for weather, when conditions are manageable:

Marketing – conducting an auction is the final 10 percent that goes into such an event. Ahead of that is the great bulk of the work that an auctioneer does to prepare for the auction, including all of the marketing. The marketing campaign is directed at notifying potential bidders that the property will be offered for sale on a certain date and time and at a designated place. This effort has three, key objectives with potential bidders: (a) to give notice of the upcoming auction, (b) to create interest in the property, and (c) to build a sense of urgency to drive these people to attend the event and bid to buy the property. Effective marketing campaigns require a lot of time, effort, and are often expensive.

If an auction is postponed due to weather, all of the time spent, work done, and money paid will be for naught and will have to be repeated. There is one word for that result – loss!

Seller’s need – an auction works to liquidate hard assets into cash and this process can be completed in a very short period, even minutes with a limited number of lots. Sellers frequently come to auctioneers with property to sell because they need the rapid liquidation that only an auction can yield. There are all sorts of reasons why sellers want quick sales and the need to raise money to pay creditors or use otherwise, settle an account or decedent’s estate, free up storage space, and sell goods to avoid waste or other loss are a few. If an auction is postponed, whatever the need is for an expedited sale will be frustrated and not satisfied – and, perhaps, exacerbated.

Auctioneer’s schedule – like every businessperson, auctioneers work on a schedule. Successful practitioners have full schedules and an auction that was due to be conducted today, but was postponed for weather, cannot be rescheduled for just any other time. Some future dates would create a conflict with other pending auctions. This could cause a postponed auction to be delayed sometime into the future and that might be a substantial problem for a seller with a pressing need for a fast liquidation.

Bidders – when potential bidders receive notice of an upcoming auction that will offer goods of interest, they often respond by making plans to attend. These plans can involve creating a schedule commitment, changing pre-existing plans, reserving hotel rooms, traveling to the site, and investing a lot of time, effort, and money with the expectation that the auction will be conducted, as advertised. A late postponement can hit these people hard and cost them everything that they have poured into attending. The result for an auctioneer and seller can be a public-relations nightmare wrapped around lost bidders and the selling opportunity that disappeared with them.

Site – a specific auction site might be important to an auctioneer or seller for some reason. Where a site is not exclusively controlled by the auctioneer or seller, the site would have to be rescheduled before the auction could be. As with the auctioneer’s schedule, this can become a problem where the site might be unavailable for whatever reason for a certain, future date the seller might want to choose to reschedule the event.

Staff – auctions involve manpower and auctioneers use staffs of workers to perform the functions essential to successfully conducting these events. When trying to reschedule an auction that was postponed, scheduling conflicts that can exist for auctioneers and sites can also reach staff members. It is a chore to coordinate all of the different calendars that must be considered in the decision as to when an auction can be held and, once an agreed date is lost, finding a new one can sometimes be even more challenging.

“So Steve, do you think an auction should be conducted when the site is eight feet under floodwater … or after the governor has declared a snow emergency and advised everyone to stay home … or when a hurricane is scheduled to make landfall near the location and during the event?”

Of course not, and that is not what I am advocating. What I am saying is that there is a big difference in a snowfall where people can get out and safely travel versus a blizzard that makes roads impassable … in a summer heat wave versus a Tsunami wave … in a day with thunderstorms versus Hurricane Katrina. Reasonable judgment must be applied to all matters and decisions made accordingly. Some extreme situations might require an equivalent response, including the postponement of an auction for extraordinarily severe weather. I am urging that postponement be a last resort and not used unless absolutely necessary.
I include a force majeure clause in the auction contracts that I draft to contemplate such a situation. In referencing weather, this clause reads in part: “A party to this Agreement will not be liable to the other for any failure or delay in performance arising out of an unforeseeable cause or contingency beyond that party’s reasonable control and without that party’s fault, negligence, or wrongdoing, including, but not limited to, Acts of God (e.g., earthquake, fire, flood, hurricane, or other natural disaster) ….”
Now here are two final points on postponing an auction due to weather conditions.

First, a postponement can set a bad precedent. Once you have done it, for what reason do you next postpone an auction? A step in the wrong direction can lead to a slippery slope, so any move should be carefully considered before being taken.
Second, an auction is not an auctioneer’s event. It is a seller’s event and the auctioneer is an agent working under the direction and control of the seller. Wherever possible, the decision to postpone an auction should be made by the seller, in consultation with the auctioneer, with that instruction given to the auctioneer … in writing!

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Steve Proffitt may write to him in care of this publication.