In Alex Lyon & Son, Sales Managers & Auctioneers v. Leach, 844 S.E.2d 120 (W. Va. 2020), the Supreme Court of Appeals of West Virginia grappled with the contractual relationships among participants in an auction transaction and rendered an opinion that (i) misstates and misaligns the rights and obligations among auctioneers, sellers, bidders, and buyers, (ii) impedes the ability of an auctioneer to reasonably control the conduct of an auction, and (iii) threatens to artificially circumscribe the prerogative of sellers and auctioneers to assume greater risks relative to certain bidders in an effort to expand the bidder pool in the legitimate pursuit of the highest auction price. In this article, the author argues that the Leach Court (i) failed to recognize the nature of, and the parties to, the various contracts involved in an auction transaction, (ii) failed to recognize the purpose, and the beneficiaries, of bidder qualification provisions, and (iii) embraced an inverse offer and acceptance sequence supposedly applicable to absolute auctions but not to auctions with reserve (elevating what should have been errant dicta to unnecessary holding that is inconsistent with applicable West Virginia statutes). The author suggests a contractual approach to unambiguously articulate the rights and responsibilities of various auction participants to step out of the unfortunate shadow cast by Leach.
George A. Michak,
Alex Lyon & Son, Sales Managers & Auctioneers v. Leach: Auction Contracts, Bidder Qualifications, Offer and Acceptance, Waiver, and the Fallacy of Treating All Bidders the Same,
W. Va. L. Rev. Online
Available at: https://researchrepository.wvu.edu/wvlr-online/vol124/iss2/1