{"id":568,"date":"2006-12-01T15:28:48","date_gmt":"2006-12-01T20:28:48","guid":{"rendered":"http:\/\/www.danziger.com\/articlesnews\/?p=30"},"modified":"2006-12-01T15:28:48","modified_gmt":"2006-12-01T20:28:48","slug":"the-proper-pedigree","status":"publish","type":"post","link":"https:\/\/danziger.com\/?p=568","title":{"rendered":"The Proper Pedigree"},"content":{"rendered":"

The provenance of an artwork can greatly influence its value, so it pays to be protected from possible errors.<\/strong><\/p>\n

Like much of the art world, we head down to Art Basel Miami Beach every December for culture (sort of), sun and an escape from our legal practice in New York.\u00a0 Occasionally we manage two out of the three.<\/p>\n

Last year we ran into our old friend Madeleine while checking into our hotel, and before we could even get our room keys, she cornered us for some professional advice.\u00a0 Madeleine was interested in buying an unsigned painting on display in the booth of a Chelsea gallery.\u00a0 The picture was nice enough, but its main selling point was that it had once been owned by a prominent collector, and the dealer was being cagey about guaranteeing the provenance in writing.\u00a0 Madeleine knew others were keen on buying the picture and wanted us to protect her interests while securing the sale.<\/p>\n

Good provenance is especially important for unsigned works because it can be persuasive evidence of a picture\u2019s authenticity.\u00a0 Provenance should not be confused with authenticity- which is typically determined by expert opinions, physical examination and even scientific analysis- or with an appraisal, which is the opinion of a work\u2019s value.<\/p>\n

Even courts have been known to conflate provenance and authenticity, and though this hasn\u2019t necessarily affected the outcome of the ruling, it underscores how the terms can be mistakenly used.\u00a0 For example, in the 1990 federal case Jafari v. Wally Findlay Galleries, which concerned a collector\u2019s attempt to purchase a Dali Painting from an art consultant, the court observes that the consultant couldn\u2019t provide the \u201coriginal certificate of authenticity,\u201d which it incorrectly defines as \u201cprovenance.\u201d<\/p>\n

Our work for Madeline seemed easy enough, or so we believed.\u00a0 For such transactions, we normally prepare two documents: a purchase agreement, which contains the relevant terms of the deal (such as purchase price, terms of payment and delivery conditions), and a brief bill of sale (which serves to transfer title to the buyer).\u00a0 Many people don\u2019t pay attention to the bill of sale, but as the legal matter it\u2019s important.\u00a0 Its provisions generally last for an extended period, while those of the purchase agreement, including the seller\u2019s representations regarding provenance, often end on delivery of the artwork.<\/p>\n

After attending there opening-night dinners, we returned to our hotel and spent most of the night preparing Madeleine\u2019s purchase agreement.\u00a0 Our draft contained a strongly worded warranty by the seller attesting to the work\u2019s provenance; a provision stating that Madeleine was expressly relying on the ownership history in buying the picture; and an indemnification provision (which specifically survived the delivery of the work) saying that if the painting turned out not to belong to the famous collector, Madeleine could rescind the sale and receive a full refund of her purchase price, together with interest.<\/p>\n

So far so good.\u00a0 However, after sleepily e-mailing the draft agreement to the dealer\u2019s attorney, we received a quick reply: Either we forgo the warranty of provenance or there would be no deal.\u00a0 The lawyer insisted that the past ownership of the painting was such common knowledge that putting it in writing was unnecessary.<\/p>\n

Unfortunately, that didn\u2019t work for us. Under New York\u2019s Uniform Commercial Code (UCC), which governs the sale of goods, including art, a seller\u2019s assertion of provenance can create an express warranty as long as it forms part of the so-called basis of the bargain.\u00a0 Should Madeleine later discover that the painting had not been owned by the collector, she would have an easier time recovering her money from the dealer with written documentation of the seller\u2019s claims in hand.<\/p>\n

Although the UCC itself does not define the meaning of basis of bargain, art-law specialist John Cahill notes that almost any fact a seller offers in making the sale (including statements about provenance) are likely to become part of the basis of the bargain, according to the UCC\u2019s comments.\u00a0 Predictions or vague statements, such as \u201cthe work has an illustrious history,\u201d are less likely to be considered part of the bargain.<\/p>\n

A famous federal case in this area, Weber v. Peck, held that a dealer\u2019s statement about a painting\u2019s provenance can create an express warranty and may make the seller liable for a mistake in the provenance.\u00a0 The 1999 litigation involved an oil on canvas, supposedly by Jacob van Ruisdael, and a bill of sale that incorrectly listed its ownership history.\u00a0 Some time after the plaintiff, Francis Weber, purchase the piece, and about 10 days before it was due to be offered at Sotheby\u2019s, he learned that the auction house couldn\u2019t verify the provenance and had therefore deleted references to seven previous owner and five publications.\u00a0 (Sotheby\u2019s also found that the painting had been previously sold to someone else as merely \u201cattributed to\u201d Ruisdael.)\u00a0 Nevertheless, Weber proceeded with the sale, which went poorly: A bid of $300,000 was accepted, but payment was never made.\u00a0 Weber sued the dealer, Ian Peck, and the court ruled in Weber\u2019s favor on the issue of breach of warranty based on the accuracy of the provenance.\u00a0 It ruled that damages would depend on the extent to which the painting\u2019s loss in value was caused by the breach.\u00a0 The court did not, however, allow Weber to rescind the entire sale.<\/p>\n

Interestingly, not all warranties of provenance appear in written contracts.\u00a0 Some may be conveyed by a dealer\u2019s advertisements and catalogues, assuming the buyer relies on them.\u00a0 Moreover, even if a seller honestly believe that the painting was once part of an important collection, he could still be liable for breach of warranty if he\u2019s wrong.\u00a0 Of course, if a seller deliberately misleads a buyer about provenance, he could also be charged with fraudulent misrepresentation, larceny by false pretenses and other criminal offenses.<\/p>\n

When we met Madeleine for stone crabs that evening, she said the dealer had agreed to state the provenance in the bill of sale.\u00a0 She asked how U.S. courts go about ruling on the matter.\u00a0 According to Georges Lederman, an attorney who handles cases in this area, \u201cin the U.S., the parties produce their own expert witness testimony and the court weights the credibility of their opinion.\u201d\u00a0 The plaintiff bears the burden of proving that the seller breached the warranty.<\/p>\n

We thought we had successfully resolved the issue, but the next day, we bumped into Madeleine on the terrace of the Delano Hotel.\u00a0 She told us he dealer now wanted to include a specific disclaimer of the ownership history in the purchase agreement- in short, caveat emptor.\u00a0 Since the disclaimer was vaguely worded and inconsistent with the bill of sale, we believed any New York court would probably disregard it.\u00a0 Still, we weren\u2019t taking any chances and insisted that it come out.\u00a0 The dealer\u2019s attorney reluctantly agreed.<\/p>\n

Madeleine headed off happily to the beach after lunch, but the story didn\u2019t end there.\u00a0 When we saw her at the Miami airport late that afternoon, she was sporting a truly vicious sunburn.\u00a0 Through blistered lips, Madeleine explained that while she had dozed off at the beach, the dealer has sold the painting without any warranty of provenance to another buyer.<\/p>\n

We weren\u2019t too sorry.\u00a0 Although we had spent most of our stay working indoors and had missed much of the fair, we had prevented Madeleine from making a foolish purchase.\u00a0 She had gotten burned in Miami, but at least not by her dealer.<\/p>\n

Download This Article Now<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The provenance of an artwork can greatly influence its value, so it pays to be protected from possible errors. Like much of the art world, we head down to Art Basel Miami Beach every December for culture (sort of), sun and an escape from our legal practice in New York.\u00a0 Occasionally we manage two out … <\/p>\n

Continue reading “The Proper Pedigree”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-568","post","type-post","status-publish","format-standard","hentry","category-articles-brothers-in-law"],"_links":{"self":[{"href":"https:\/\/danziger.com\/index.php?rest_route=\/wp\/v2\/posts\/568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/danziger.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/danziger.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/danziger.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/danziger.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=568"}],"version-history":[{"count":0,"href":"https:\/\/danziger.com\/index.php?rest_route=\/wp\/v2\/posts\/568\/revisions"}],"wp:attachment":[{"href":"https:\/\/danziger.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/danziger.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/danziger.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}