The Australian Consumer Law (ACL) imposes important obligations on businesses that conduct auctions. Among the most significant are the responsibility of auctioneers to take reasonable steps to ensure that information provided to prospective bidders is accurate, balanced and capable of supporting informed purchasing decisions. These obligations extend to the information that auction houses communicate to prospective purchasers through catalogues, online listings, condition reports, advertisements and verbal statements made before or during a sale.
For auction businesses, compliance with the ACL encompasses both the conduct of the auction itself and the descriptions used to market assets. Bidders are entitled to rely upon representations concerning an asset’s authenticity, provenance, condition, rarity, ownership history, functionality and other characteristics when deciding whether to participate in a sale and determining how much they are prepared to bid.
The responsibility of an auction house is therefore twofold. It must act in the interests of its vendor client while also ensuring that information communicated to the market is accurate, fair and not likely to mislead prospective purchasers. This responsibility exists regardless of whether information originates from the auction house itself or has been supplied by the vendor.
A significant challenge for auction houses is that much of the information included in a catalogue originates from the vendor. Details concerning provenance, ownership history, authenticity, restoration, service records, operating condition or historical significance are often supplied by the consignor rather than independently created by the auctioneer.
The fact that information originates from a vendor does not automatically remove responsibility from the auction house. Once information is incorporated into a catalogue, online listing, condition report or other marketing material, the auction business may be regarded as having adopted and republished those representations. Simply attributing a statement to a vendor may not provide protection if the information proves to be inaccurate or misleading.
This does not mean that auctioneers must independently verify every statement made by every vendor. The level of enquiry required will depend upon the nature of the asset, its value, the significance of the representation being made and whether circumstances exist that would reasonably give rise to doubt. Nevertheless, auction houses should take reasonable steps to satisfy themselves that material representations are accurate and supportable before publication.
Particular care should be exercised where statements are likely to influence value. Claims relating to authenticity, authorship, rarity, provenance, originality, ownership history, restoration history, mileage, operating condition, age or completeness can have a substantial impact on bidder behaviour and sale outcomes. Where uncertainty exists, descriptions should accurately reflect that uncertainty rather than present assumptions as established facts.
Photographs should also be carefully considered. Images form part of the overall representation made to the market and should accurately depict the item being offered. Material defects, repairs, alterations, damage or limitations that may influence a purchaser’s decision should be disclosed wherever reasonably practicable. Photographs should complement, rather than contradict, the written description.
This is particularly important in specialist sectors such as fine art, antiques, collectables, jewellery, rare books, motor vehicles, plant and machinery, aviation an marine assets. Many bidders participate remotely and may rely heavily on catalogue descriptions and photographs when deciding whether to bid. In these circumstances, the quality and accuracy of the information provided becomes even more important.
The ACCC’s guidance on consumer rights emphasises the importance of truthful and accurate representations in trade and commerce. Auction businesses should regularly review their catalogue preparation processes, ensure staff understand the distinction between fact and opinion, maintain records supporting material representations and adopt procedures that encourage appropriate enquiry before publication.
Responsibility therefore exists at two levels. Vendors are responsible for providing truthful and accurate information about the property they consign. Auctioneers are responsible for ensuring that information communicated to prospective purchasers is not misleading or deceptive and is presented fairly, accurately and in a manner capable of substantiation. The source of the information may be the vendor, but responsibility for how that information is communicated to the market rests with the auction business.
Carefully prepared item descriptions help support informed bidding, reduce the risk of disputes and strengthen confidence in the auction process. In a marketplace built on trust, accurate and well-substantiated catalogue descriptions remain one of the most important responsibilities of every professional auction house.
The Auctioneers and Valuers Association of Australia (AVAA) works to support this objective by engaging with regulators, including the Australian Competition and Consumer Commission (ACCC). By monitoring regulatory developments and communicating emerging issues to members, those with the respected AVAA Certified Auctioneer (CVAu) credential better understand their obligations and adopt practices that support compliance with the ACL.
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Interested In Finding Out More?
If you’re interested in AVAA’s engagement with the Australian Competition and Consumer Commission (ACCC), send an email to government.affairs@avaa.com.au or telephone 1300 928 165. You can also stay up to date by following AVAA on LinkedIn, X/Twitter and Facebook.
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