Knock Out - Definition - Law Dictionary Home Dictionary Definition knock-out

Definition :

Knock-out. The arrangement made between persons attending an auction to refrain from bidding in competition one with the other on the sale of certain articles and for the subsequent private sale among themselves of the Articles thus bought at a low price.

At Common Law such an agreement is not illegal [Rawlins v. General Trading Co., (1921) 1 KB 635], and to an action by the purchaser of goods sold by auction for the delivery up of the goods, the fact that the sale was a 'knock-out' does not of itself afford a defence [Cohen v. Roche, (1927) 1 KB 169], but now the (English) Auctions (Bidding Agreements) Act,1927 (17 & 18 Geo. 5, c. 12), prohibits a dealer from giving any consideration or reward to anyone for abstaining or having abstained from bidding, under penalty on summary conviction to a fine not exceeding 100l. or imprisonment for not more than three months. A bona fide joint account, a copy of such agreement has been deposited before purchase with the auctioneer, is not an offence.