Auctioneers without a Federal Firearms License (FFL) can sell firearms under very specific circumstances. Auctioneers with an FFL can sell firearms in a variety of circumstances. The differences are material to all auctioneers.
More specifically, as we have written before, the non-FFL auctioneer can sell firearms in basically one situation:
The sole circumstance where an auctioneer selling guns would not be considered engaged in the business appears to be an occasional onsite auction where a single unique seller maintains control and possession of all the guns at that location from prior to the auctioneer’s involvement through delivery to the buyers (constituting the auctioneer assisting with private sales.)
Too, this non-FFL auctioneer can sell an FFL’s inventory of firearms at that licensed location, and sell firearms to out-of-state FFL holders (and necessarily not through FFL holders = no straw purchases, and not sell firearms to out-of-state buyers otherwise.)
Auctioneers who are FFL’s can sell firearms virtually anywhere (generally transferring at their licensed location,) from multiple sellers, conduct regular firearms auctions and sell to out-of-state buyers. Our question today regards if a non-FFL auctioneer contracts with a seller to sell firearms, can he act like or utilize an FFL?
Our answer today is rooted in basic contract law. Valid contracts must have competent parties, consideration and mutual assent. Too, valid contracts have to have a “legality of object:” A legal purpose. Said another way, valid contracts can’t contemplate a purpose that is illegal or against public policy.
Therefore, an auctioneer signing a contract as a non-FFL can only sell those firearms as a non-FFL, and cannot facilitate the sale otherwise. Further, an FFL signing a contract can sell firearms as an FFL. As such — in both instances — the contract must align with the legal object (purpose) of the agreement.
There is the thought that a non-FFL auctioneer can sign a contract to sell a seller’s firearms and use an FFL for the transfers and background checks. We discussed this in more detail here: https://mikebrandlyauctioneer.wordpress.com/2015/08/17/auctioneer-with-the-help-of-an-ffl/
What are the implications of a contract by an auctioneer without an FFL providing (requiring) that the auctioneer act like (or utilize) an FFL? What are the consequences of such? Such a contract would be void; in other words, there would be no contract.
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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.