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As the demand for guns remains strong, auctioneers selling guns are under heightened scrutiny regarding proper procedures and licensing. We wrote about auctioneers selling guns here: https://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/ which has been widely accepted as accurate guidance for auctioneers.

Our question here regards, must an auctioneer sell a gun to a buyer in light of a “proceed” from the ATF? In processing background checks, the ATF will issue a licensee a “proceed,” “delay” or deny” answer. According to the ATF, these are the actions in regard to those answers:

    NICS RESPONSES: If NICS provides a “proceed” response, the transaction may proceed. If NICS provides a “denied” response, the seller is prohibited from transferring the firearm to the buyer. If NICS provides a “delayed” response, the seller is prohibited from transferring the firearm unless 3 business days have elapsed and, prior to the transfer, NICS has not advised the seller that the buyer’s receipt or possession of the firearm would be in violation of law. See 27 CFR § 178.102(a) for an example of how to calculate 3 business days.

We highlight here that the proceed instructions say, may proceed, and not must proceed. We believe this answers the question, “Must auctioneer sell him that gun?” in light of a proceed.

We ask this question because of several hypothetical situations auctioneers might find themselves, for example, the buyer says he is going to:

  • Load this gun, and kill you
  • Use this gun to kill someone else
  • Use this gun to rob a bank

You get the idea … what if the buyer of this gun affirmatively announces that he/she is going to commit an illegal act with this gun that you have sold to him/her, and the ATF has issued a “proceed” to the background check?

At first, an auctioneer might be thinking, “Well, if I don’t let him have the gun, I will be breaching our contract that was formed when I said, ‘Sold!'” And, on the other hand, if I do let him have the gun, something terrible seems likely to happen.

We have heard some say that the FBI and/or ATF has told them that they must provide possession of a gun to a buyer receiving a proceed from the ATF. We don’t think this is correct.

I would suggest that contract law helps us with this situation. If a buyer of a gun affirmatively announces some illegal intent, the auctioneer may be able to argue that the buyer is amending the contract between the seller and buyer, and amending it with an illegal intent makes the contract invalid. Noting here, a legal purpose is necessary for a valid contract.

While I don’t think this type of situation is common, it is important for auctioneers to know if they must or may provide possession of guns to buyers who are part of a “proceed” instruction from the ATF.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.