Friday, 9 January 2015

Lessons for Antiquity Collectors from Art Market

Madison Avenue New York law firm Frankfurt Kurnit Klein and Selz have published an article about two recent fine art cases which concern the consequences of the failure of buyers to exercise due diligence but instead making decisions based on dealers' representations ('Lessons Learned from 2014 - Six Steps Collectors Should Consider Before Buying Fine Art',  7th Jan 2015). It is a text which antiquity collectors would be well-advised to read and think about.

In both cases the  courts said 'caveat emptor', the collectors should not have relied on the dealers' representations. Instead, they should have verified what they were told, emphasising as a point of law that to have any recourse to legal protection collectors need to conduct due diligence before any art purchase.

In one case the appeal court turned down a case because the collector failed to ask the dealer to show the supporting document for a statement which they made and which later turned out to be false, reducing it to 'non-actionable opinion'. "From an old Swiss collection" is opinion, showing the sales documentation and export licence on request makes it into fraud should these turn out not to be what they are represented as. It follows from this that a dealer who does not indicated up-front that the presence or absence of documentation supporting the reported collecting history is avoiding legal responsibility if he or she is caught lying. A buyer of an object who cannot document that they asked to see this documentation and what the result was is asking for trouble. Responsible buyers should not let dealers get away with such dodgy business practices.

While the law firm's 'take away six steps' apply more to paintings and fine art than dug-up antiquities (which by the nature of the manner in which they 'surface' will not be, for example, in any Art Loss Register), some of the points apply to antiquities - often marketed as 'ancient art' - too.  The points covered were independent authentication and valuation, determination of title and provenance ("doing some background research to verify the provenance information provided by the seller"), physical condition expertise, ascertaining overall legal compliance (ensuring "that the sale of the work would not violate the laws of any jurisdiction"). They also suggest obtaining a written agreement protecting the buyer through representations and warranties from the seller. While many antiquity dealers offer "certificates of authenticity", none that I have come across offer to issue such buyer-protection documentation as a matter of course. Why not?

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