He conducted mostly onsite auctions where we were selling primarily antiques, collectibles, furniture, tools, etc.
We would often get into a garage or basement and offer a shelf for auction — noting that the high bidder on the shelf would be gifted the contents.
I was told we did this because we couldn’t actually sell the various chemicals, etc. on the shelf, so we sold the just the shelf (and necessarily didn’t sell the chemicals.)
Or did we sell the chemicals? On the contrary, we explore today if this amounts to selling both the shelf and the chemicals.
Now, this isn’t about if we could sell those chemicals or not. In fact, I’m not convinced we couldn’t. It’s about if this is a work-around for things auctioneers can’t sell.
For example, let’s say an auctioneer has a Class 3 firearm and is not legally permitted to sell it. Can he just grab a Ball canning jar and say, “Folks, I’m selling this Ball canning jar and giving you the Class 3 gun?” I don’t probably have to tell you how the ATF would view such a transaction.
Selling something (A) including something for free (B) is actually and materially no different than selling both A & B. So, if an auctioneer can’t sell B, then he can’t sell A & B.
Most legal definitions for “selling” something are along the lines of, “To exchange or deliver for money or its equivalent.” So, if B is the troublesome lot (as in our chemicals above,) then B can’t be exchanged for any valuable consideration.
And if B has no value whatsoever, then why is it being offered with A? It’s not being offered due to lack of demand — it’s rather being offered because presumably it “can’t be sold.”
However, if the bidding is based upon receiving both A & B and B has any value at all, then the consideration paid for A & B constitute a “sale.”
Next time you hear an auctioneer offering a shelf with the contents free, or a bed with the mattress free, or a bottle with the ingredients free … keep in mind as a buyer that you are actually purchasing the contents, mattress or ingredients if included with the shelf, bed or bottle.
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 serves as Adjunct Faculty at Columbus State Community College, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.