By-bidding in United Kingdom

Meaning of By-bidding

The following is an old definition of By-bidding [1]: Fictitious bidding; running up the price of an article, not to save it from sacrifice, but to mislead bona fide bidders; puffing. Upset bid. A more liberal bid on property sold at public sale, offered to the court having jurisdiction in the proceeding, in order that the sale already made may be set aside, or confirmation thereof withheld, and that the new bid may be entertained, perhaps along with other bids. whence (the word(s) which follow it are derivatives from the same root word) upset-hidder, for the person who makes such offer. (Local.) The article offered for sale is to be delivered to the highest real bidder. If a minimum price is fixed notice thereof must be given. By-bidding, since it deceives and involves falsehood, is a fraud. An agreement not to bid, that is, to prevent competition and possibly to cause a sacrifice of the property, is void, as against public policy. On a breach of a contract to pay a bid the measure of damages is the amount which would have been received if the contract had been kept. It was formerly the rule in England, in chancery sales, that, until confirmation of the master’s report, the bidding would be ” opened ” upon a mere offer to advance the price ten per centum. But Lord Eldon expressed dissatisfaction with this practice, as tending to impair confidence in sales, to keep bidders from attending, and to diminish the anioupt realized, and his views were finally adopted in the statute of 30 and 81 Vict. (1867), c. 48, § 7. . . In this country his views were followed at an early day by the courts, and the rule has become almost universal that a sale will not be set aside for inadequacy of price unless the inadequacy be so great as to shock the conscience, or unless there be additional circumstances against its fairness; being very much the rule that always prevailed in England as to setting aside a sale after a master’s report had been confirmed. . If the inadequacy of price is so gross as to shock the conscience, or if, in addition to gross inadequacy, the purchaser has been guilty of unfairness, or has taken any undue advantage, or if the owner of the property, or the party interested in it, has been for any other reason misled or surprised, the sale will be regarded as fraudulent and void, or the party injured will be permitted to redeem the property sold. Great inadequacy requires only slight circumstances of unfairness in the conduct of the party benefited by the sale to raise the presumption of fraud. See Adequate; Auction; Responsible; Sale, Judicial.

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Notes and References

1. Concept of By-bidding provided by the Anderson Dictionary of Law (1889) (Dictionary of Law consisting of Judicial Definitions and Explanations of Words, Phrases and Maxims and an Exposition of the Principles of Law: Comprising a Dictionary and Compendium of American and English Jurisprudence; William C. Anderson; T. H. Flood and Company, Law Publishers, Chicago, United States)