auction ring

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A group of buyers who agree not to compete against each other at an auction with a view to purchasing articles for less than the open-market value. The profit earned thereby is shared among the members of the ring, or a second “knock-out” auction is held in private by the members of the ring with the article being sold to the highest bidder and the profit shared among the members. Under the Auctions (Bidding Agreements) Acts 1927 (as amended by the Criminal Justice Act 1967) and 1969 it is a criminal offence for a dealer to participate in an auction ring and a seller is given the right to set aside the contract of sale if one of the purchasers is a dealer in a ring.

Subjects: Law.

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