What is the consequence of failing to enter into a written contract with a seller or consignor before advertising an auction sale?

Entering into a written contract with a seller or consignor before advertising an auction sale is a crucial requirement in the auction industry. This legal obligation ensures that the terms of the sale are clearly defined and agreed upon by both parties. Without a written agreement, there can be significant misunderstandings regarding the sale conditions, fees, and responsibilities, leading to potential disputes.

Prohibited conduct includes actions that go against established laws and regulations set forth to protect both auctioneers and participants in the process. By not having a written contract in place, an auctioneer risks failing to comply with state regulations, which can lead to penalties, sanctions, or a loss of license. Thus, entering into a written contract is not just advisable but mandatory in order to maintain transparency and legality in auction transactions.