What must an auctioneer do if they become aware of a material defect in an item for sale?

An auctioneer has a legal and ethical obligation to disclose any material defects in an item for sale to prospective bidders. This responsibility stems from the principle of transparency in transactions, particularly in an auction setting, where bidders rely on the auctioneer to provide accurate information that may impact their purchasing decisions. By disclosing the defect, the auctioneer ensures that all bidders can make informed choices and understand the true value and condition of the item.

Failure to disclose such defects could lead to claims of misrepresentation or fraud, jeopardizing the auctioneer's reputation and potentially leading to legal consequences. The auctioneer acts as an intermediary between the seller and potential buyers, and honesty is crucial in maintaining trust in this relationship. Thus, the correct action is to openly inform bidders about any known material defects to uphold integrity in the auction process.