Getting seller terms right protects your business and builds trust. Here is a plainspoken guide to what belongs in an auctioneer-consignor agreement, with a checklist you can put to work today. State rules differ, so always review with a local attorney. Laws and licensing requirements vary by state and sometimes by municipality.
For a deeper dive, consider reading my Guide to Auctioneer-Consignor Contracts in the U.S. on LinkedIn.
1) Parties, Scope, and Exclusivity
Name the consignor, the auction business, and any affiliates. Define the asset class and whether the agreement is exclusive for a period of time. Example agreements commonly make the auction company the exclusive agent for listed items.
2) Authority and Ownership
Require the consignor to warrant clear title and the right to sell. Include representations against stolen or encumbered goods, with remedies if a claim appears post-sale. You can model language from standard consignment agreements, then tailor with counsel.
3) Fees, Commissions, and Expenses
Spell out the seller commission schedule, any buyer’s premium, setup fees, and what expenses are recoverable. List who pays photography, transport, storage, and disposal if items are pulled or unsold.
4) Reserves, Bidder Rules, and Seller Buybacks
Document reserve prices, how they can be changed, whether seller buybacks are allowed, and how they are charged. Clarify how shill bidding is prohibited and how ties or bidding errors are handled.
5) Risk of Loss, Insurance, and Security
Explain when risk of loss shifts from consignor to auction company, storage standards, and any insurance carried. Bankruptcy or trustee matters may require specific bonds or proof of coverage.
6) Marketing and Sale Format
State how items may be sold: timed, live, simulcast, or private treaty if authorized. Set expectations for cataloging standards, lot grouping, reserves, and reruns or post-auction offers.
7) Payment Timing and Chargebacks
Give a clear settlement timeline and method, note any escrow use, and specify how chargebacks or non-paying bidders are handled. Many sample contracts set a fixed payout window after funds clear.
8) Taxes and Compliance
Clarify who is responsible for sales tax, title transfer fees, lien searches, or certificates. Note that the auctioneer will comply with state licensing and recordkeeping rules. Requirements differ by state; keep a local checklist handy.
9) Item Withdrawal, Abandonment, and Disposal
Set fees and notice periods for consignor-initiated withdrawals. Define abandonment after a set time and authorize disposal or resale procedures.
10) Disputes and Governing Law
Choose venue, governing law, and dispute process. Include indemnification and limitation of liability consistent with your state’s rules.
Parties identified with full legal names and addresses
Term and exclusivity window
Detailed asset description and intake method
Consignor warranties on title, liens, and authenticity
Commission schedule and all fees listed in one table
Reserve price rules and seller buyback policy
Risk of loss, insurance, storage, and security terms
Marketing scope, sale format, rerun policy
Settlement timeline, escrow details, and chargeback policy
Tax handling, title and lien processes
Withdrawal, abandonment, and disposal terms
Dispute resolution, venue, indemnity, and limits of liability
Signatures, date, and copy provided to consignor at signing
Sit with your attorney once each year to review your standard contract.
Build one intake checklist per asset class. Farm equipment needs different fields than fine art.
Train staff to explain reserves, fees, and payout timing the same way every time.
Provide a copy of the signed contract to the consignor at signing and keep it tied to the auction record. Many states expect this.
Ready to make your contracts clear and your workflows smoother with online auction tools that back them up in the real world?