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No warranty of authenticity, buyer nevertheless gets a refund!

Published on 27 January 2014 at 12:07

The buyer of four bronze sculptures may annul the sale and get a refund from the selling gallery. The buyer presumed that he bought genuine sculptures (authorized) by Rodin and Giacometti.

 

Later It turned out that that was not the case: experts later labelled the sculptures as mere copies. The Court of Appeals of Arnhem-Leeuwarden recently held that the selling gallery must take the sculptures back, regardless of the fact that he had not warranted authenticity. The court held that the seller should not have given the impression that the bronzes were by famous artists.

 

Background

The Appellate Court's decision follows on the earlier interim judgment in this matter in 2012 in which the court held that the sold sculptures could not be attributed to Rodin and Giacometti. In this recent, final, decision, the issue arose whether seller or buyer should bear the risk of the incorrect attribution.

 

The seller argued that the buyer ought to keep the sculptures: the price was significantly lower than the market value of similar bronzes of which the authenticity is a certainty. Seller, moreover, claimed that he had not warranted the authenticity of the works of art. He asserted that he made that very clear before the sale took place. What is more, the buyer had a greater expertise of similar bronze sculptures than the seller.

 

The buyer, on the other hand, argued that the bronzes were offered to him as genuine (authorized) sculptures: seller had explicitly pointed to the signatures and foundry marks on the bronze sculptures. Buyer claimed had not asked for a warranty or authenticity, given that he felt that the description on the invoice provided sufficient warranty, as well as the fact that he bought from a professional gallery.

 

Appellate Court in the final judgment: the seller should have observed greater level of care

The case hinged on the issue whether the selling gallery - whom by trading under the name "European Fine Art" gave the impression of operating in the higher segment of the art market - had made a (sufficiently clear) proviso that the sold sculptures might not be authentic.

 

The Appellate Court held that the seller had told the buyer (or at least gave the impression) that the sold bronzes were authentic works by Rodin and Giacometti, and that he had failed to disclose the reasons to doubt the authenticity. Given the seller's knowledge of the provenance of the sculptures, the seller should have known that there was a significant chance that the sculptures were not "the real deal".

 

In short, seller should have provided more clarity on the level of certainty of the authenticity. The seller should have made the buyer think again, according to the Court of Appeals. Whether the seller issued a warranty of authenticity is irrelevant: he should have observed more clarity and transparency.

 

The Appellate Court was not convinced that the prices of the sculptures should have served as a warning to the buyer. The court held that the buyer at the time of the sale was not aware of the usual price level of genuine sculptures. Furthermore, the court was not convinced that the buyer was a greater expert than the seller.

 

The Appellate Court therefore annulled the sales agreement on account of error (dwaling). The buyer is entitled to a refund of the purchase price (approximately 180.000 euro in total).

 

Commentary Oostwaard

The case shows the importance of clarity and disclosure in art sales transactions. The Appellate Court held that the seller failed to make a sufficiently explicit proviso that the sculptures might not be authentic. When in doubt, selling galleries are well advised to disclose the risk of non- authenticity (and to adequately record that disclosure).

 

Buyers of art can take heed as well: it took this collector six years to learn that he was entitled to a refund. An important disputed fact was whether the seller had made firm statements on the authenticity of the sculptures. From witness testimonies it became apparent that this particular collector felt it was generally "not done" to outright inquire about authenticity with a professional seller. In the next art sales transaction, as this case about the sculptures shows, buyers may want to consider not shying away from the (important) questions: "is it genuine" and "how do you know it's genuine"? And, better yet, getting something on paper to this end.

 

LINK TO THE JUDGMENT OF THE APPELLATE COURT (in Dutch)

 

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