Seller beware? Consumer protection in art transactions.
As art is increasingly marketed to a wider cross section of buyers through diverse mediums ranging from Internet sales and online auctions to international fairs and pop-up galleries aimed at attracting new audiences, there still does not appear to be a corresponding awareness of the potential perils of transacting without effective due diligence and adequate contractual documentation. The downside to the expansion of art sales, and particularly their accessibility to more inexperienced buyers, lies in the often casual manner in which contracts for the sale of artworks continue to be made. Despite soaring values, the art market remains an opaque and sometimes risky place in which to transact.
There are a number of practical and legal pitfalls that can hamper art transactions, and the law applicable to art sales is fragmented. Transactions involving artworks are not readily analysed by reference to much of the existing statutory framework. Clearly, the legislation governing the sale of goods was not designed with artworks in mind, and the key elements that define the value and importance of an artwork, such as authenticity, attribution and condition, do not easily fit within the construction and wording of the Sale of Goods Act 1979 ('SGA 1979'), for example, or the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Moreover, in practice, when disputes have been decided in English courts, judges have been reluctant to apply particular provisions of the SGA 1979 to art transactions. (1) Nevertheless, it remains the legal basis for establishing the implied terms of a contract for the sale of an existing artwork and is the starting point for considering the scope and limits of consumer protection in art transactions.
On the basis of the law of England and Wales, this paper provides an overview of key statutory provisions that relate to the legal title to, authenticity and condition of an artwork. It addresses the ways in which consumer protection provisions safeguard a buyer's rights in the absence of, or in addition to, contractual terms as well as their limitations. Of particular interest are transactions where the buyer is issued with inadequate documentation, often simply with an invoice, or where contracts are executed based solely on the seller's or agent s standard contract terms and conditions. The focus will be on the most typical transactions, namely, sales by members of the art trade (dealers, galleries and auction houses) to individuals, qua consumers; by contrast, the existing case law predominantly concerns transactions between art market professionals, and there is minimal guidance on how the rules developed in relation to transactions between professionals will apply to art sales to individuals. It follows that there is also little literature or case law on the way in which recent European consumer protection rides would be applied to art sales. The majority of the European Directives and statutory instruments implementing these rules are not particularly helpful in addressing the specific concerns of art buyers and only a handful of the most relevant of the recent consumer protection reforms will be explored here. The general development of consumer law, however, will eventually impact the trade. This paper will conclude by touching on some of the trends and developments that are affecting the traditional operation of the art market, such as e-commerce and Internet sales, which are also areas that are increasingly targeted by European and domestic legislation.
SALE OF GOODS
Generally, most artworks aimed at private buyers, once created, are treated as movable property, and their sale and acquisition is therefore in principle governed by the SGA 1979, as amended, unless there is an agreement to the contrary, and by a series of overlapping statutory instruments and regulations implemented with consumer protection in mind. Agreements for the purchase of artworks that are commissioned but not yet made are likely to fall outside the scope of the SGA 1979, as they may be considered contracts for the supply of services or contracts of work and materials, in which case they would be regulated by the Supply of Goods and Services Act 1982. The key provisions of the SGA 1979 in relation to title, authenticity and condition will be set out in the following pages, after which the effect of additional statutory controls such as the Unfair Contract Terms Act 1977 ('UCTA 1977') and subsequent legislation will be assessed. Certain terms of the SGA 1979 apply only to artworks that are sold to a consumer in the course of the seller's business and therefore may not apply if a work is bought from a private individual, and many of the additional statutory controls only apply to artworks sold to consumers. The context of the sale will determine the scope of protection afforded to the buyer.
The single most important objective when buying a work of art must be to obtain good title, as that is the fundamental basis of quiet enjoyment of ownership. Without such good title, a purchaser may face problems ranging from difficulties with arranging insurance to using the artwork as collateral for loans or an inability subsequently to sell the artwork on, and could potentially be exposed to third party claims. As will be shown, the SGA 1979, bolstered by the provisions of UCTA 1977, implies that a seller must be in a position to transfer good legal title on selling an artwork; however, in any transaction involving art, a buyer would be well advised to protect himself contractually with an express written agreement and undertake an appropriate level of due diligence, rather than simply to rely on implied contract terms. A well-drafted contract may prevent future disputes and will provide substantially greater certainty regarding the terms of the agreement in the event of such a dispute.
The SGA 1979 sets out a series of terms that are implied into all sales contracts, of which the implied terms in section 12, requiring the seller to have legal title, and consequently the right to sell the goods, are of prime importance. Section 12(1) reads:
there is an implied term on the part of the seller that in the case of a sale he has a right to sell the goods, and in the case of an agreement to sell he will have such a right at the time when the property is to pass. (2)
Section 12(2) implies a term that:
the goods are free, and will remain free, until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made. (3)
If the seller is unsure of the nature of his title and right to sell, he may wish the buyer to bear the risk and can give a limited undertaking under section 12(3). Apart from this qualification, the implied terms under section 12 cannot be excluded.
If the seller's title to an artwork is flawed, then the buyer's title may well also be adversely affected unless the defect in title is subsequently cured, for example, by a lapse of the applicable limitation period. (4) The buyer's remedy will then be against the seller for breach of the warranty implied by section 12(1). The buyer's right to return the artwork to the seller and claim a refund will apply only within six years of the sale, and provided the seller is still in business and good for the money. (5) If, however, the sale was a result of fraud on the part of the seller, or the seller deliberately concealed the buyer's right of action, or by virtue of a mutual mistake, the buyer potentially has a longer time period in which to issue proceedings. In such a case, the six-year limitation period would run from the time when the buyer discovered or could, with reasonable diligence, have discovered the fraud, concealment or mistake. (6)
The meaning of 'reasonable diligence' in relation to the buyer's discovery was considered in detail by Webster J. in Peco Arts Inc v. Hazlitt Gallery Ltd. (7) He concluded that the construction of the words depended on the context and facts of the case. In that particular case, the buyer, described as an 'enlightened amateur', bought a work, reputed to be a drawing by Ingres, from art dealers of high repute upon the recommendation of a nineteenth-century French drawings expert. The drawing was in fact a worthless reproduction and the buyer claimed the return of the purchase price on the basis of a mutual mistake of fact. Webster J. determined that:
reasonable diligence means not the doing of everything possible, not necessarily the using of any means at the plaintiff's disposal, not even necessarily the doing of anything at all; but that it means the doing of that which an ordinarily prudent buyer and possessor of a valuable work of art would do having regard to all the circumstances, including the circumstances of the purchase. (8)
The context of the purchase and the relative expertise of the parties weighed heavily in Webster J.'s reasoning. Based on evidence presented by the buyer and the expert who first discovered that the drawing was a reproduction, he concluded that a "prudent purchaser would not normally obtain authentication in the circumstances of a sale of this kind", and that the claimant was "wholly entitled to rely on the reputation and recommendation of [the expert] ... and to assume, as was indeed the case, that [the expert and the defendants' gallery] were satisfied as to the authenticity of the drawing." (9) If the buyer had been an expert art connoisseur or, alternatively, if the seller had been less reputable and there had been no independent expert involved, giving the buyer less reason to rely on their evaluation of the drawing, the conclusion may have differed. The outcome of this case, as with those to follow, turns substantially on its facts and the experience of the parties involved, which may benefit novice collectors and lay consumers.
Despite the protection afforded by the terms implied by section 12, a prudent buyer should insist on an express warranty as to the seller's legal title and right to sell the artwork being identified in the contract for sale, backed up by an indemnity. Furthermore, ideally prior to, but at least immediately after, purchasing the artwork, the buyer should begin a full investigation of title, to establish the chain of ownership, identify any gaps in provenance, check whether the artwork features on any public registers of lost or stolen art and ensure that, if any issues come to light, he will be able to remedy the situation, and, if need be, bring proceedings against the seller within the applicable limitation period. The buyer should also consider purchasing title insurance to protect against provenance and chain of title risks and, if necessary, cover legal defence costs in the event of a third party claim challenging title.
AUTHENTICITY AND CORRESPONDENCE WITH DESCRIPTION
Another major concern for buyers is authenticity, whether in relation to the age, cultural or geographic origin, provenance, material or authorship of the artwork in question. The focus of this section will be on paintings, and the identification of the artist as an indicator of authenticity, as that is where the bulk of case law in relation to correspondence with description lies. Similar principles could be applied to sculpture, photography and other art forms although additional considerations may apply in relation to the sale of antiquities and cultural heritage objects in respect of English domestic law and international conventions. On the sale of a painting, commercial value frequently depends on the work being actually by (or at least signed by) the artist to whom it is attributed, and often also on the date and positioning of the work within the artist's output; a change in accepted opinion, or even an inkling of scholarly doubt over the authorship of an artwork, can have disastrous consequences for both the seller and the buyer. An example of this phenomenon can be seen in the vast number of works that were historically attributed to Rembrandt and down-graded by the Rembrandt Research Project (RRP) during the 40-odd years that it analysed the artist's corpus. During the RRP's tenure, the number of paintings thought correctly attributed to the artist dropped from over 600 to fewer than 250, eventually settling at around 320 by the time the project ended. (10) The evolution of expertise and the frequency of revisions to artists' oeuvres are reflected in the way that auction houses and other members of the art trade construct authenticity guarantees and limited warranties; where available, they are often subject to a number of exclusions, including situations where an artwork was generally accepted as genuine by scholars and experts at the time of the sale but its authenticity has been subsequently questioned.
Section 13 of the SGA 1979 implies a term into a contract for sale of goods by description that the goods will correspond with their description. A sale by description can occur when the sale is of specific goods, which are 'bought by the buyer in reliance, at least in part, upon the description given, or to be tacitly inferred from the circumstances, and which identifies the goods.' (11) The sale can be by description whether or not the buyer examines and selects the goods himself, as long as the goods are being sold with a corresponding description, as would be the case if they were identified with a gallery or auction house label. (12) Sales that do not qualify as sales by description are those in which goods are:
sold without any description, express or implied; or where any statement made about them is not essential to their identity; or where, though the goods are described, the description is not relied upon, as where the buyer buys the goods such as they are. (13)
This seemingly straightforward definition is less so in practice when applied to the sale of artworks, as is evident from the case law.
The section 13(1) implied term is a condition, going to the root of the contract, and theoretically would give the purchaser of a work of art, which on examination turns out to be fake or misattributed, an entitlement to reject the work, rescind the contract, and claim damages, if the claim is brought within the applicable limitation period. (14) Or, as is more common, the purchaser may choose to claim under breach of contract. However, perhaps in acknowledgment of the uncertainty of the art world, English courts have traditionally steered away from attaching legal consequences to a seller's statement about authenticity. In Leaf v. International Galleries, (15) on a claim seeking the rescission of a sale contract for a 'fake' Constable painting, and thus the return of the purchase price, Lord Evershed explained his reluctance in deciding the question of authenticity, stating that:
there may turn out to be divergent views on the part of artists and critics of great eminence, and the prevailing view at one date may be quite different from that which prevails at a later date. (16)
He went on to comment that if the claimant "is entitled, perhaps years after the purchase, to raise the question whether in truth a particular painting was rightly attributed to a particular artist, most costly and difficult litigation may result." (17) In the more than 60 years since Lord Evershed's words, it is true that the subject of authenticity has been litigated at great cost; the case of Avrora Fine Arts Investment Ltd v. Christie, Manson & Woods Ltd in 2012 provided a recent example of such litigation. (18) Equally, it may be assumed that many other claims have been abandoned by buyers fearful of complex litigation and unwanted publicity.
CASES CONCERNING ART DEALERS AND AGENTS
The leading cases illustrating the reluctance of the English courts to attribute significance to a description, particularly in cases where both parties are members of the art trade, are Harlingdon and Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd (19) and Richard Drake v. Thomas Agnew & Sons Ltd, (20) In Harlingdon, the subject of the dispute was a painting bought for 6,000 [pounds sterling] in the belief that it was by the German expressionist painter, Gabriele Munter, which was proven to be a forgery with a market value of less than 100 [pounds sterling]. The claimants and defendants were both art dealers, a fact which was of prime importance to the outcome of the case for, as Nourse L.J. stated at the beginning of the judgment, there is "a difference between a sale by one dealer to another and one by a dealer to a private buyer." (21) The claimants sued for breach of the condition implied by section 13(1) SGA 1979, that the painting should correspond with its description, and by section 14(2), that it should be of 'merchantable' (now termed 'satisfactory') quality. In determining the question of whether the sale was by description, Nourse L.J. emphasised that the defendant firm specialised in the works of young British artists at the time and had no knowledge of Munter's works, and that the defendant's representative made it "absolutely plain that he was not an expert in them". (22) The Court found that the claimants had relied on their own assessment of the painting and not on the defendants' description. Although the Court acknowledged that reliance is not an essential term of a contract for sale, in the words of Slade L.J.:
where a question arises as to whether a sale of goods was one by description, the presence or absence of reliance on the description may be very relevant in so far as it throws light on the intentions of the parties at the time of the contract. (23)
In order for the sale to have been one by description, there would have had to have been a common intention between the parties for it to be so, which in this case the judges determined was absent.
In addition to considering the expertise of each party and their common intention, the Court also explored their conduct in relation to what is customary in such sales. The Court heard expert evidence on customs in the art trade provided by an art dealer and concluded that:
a dealer's success depended on, and was judged by, his ability to exercise his own judgment. It was not customary for a dealer to rely in any way on the judgment or representations of the dealer from whom a picture was being purchased. (24)
The outcome of the case reflected a view that the seller's attribution is not a matter of importance in dealings between two professionals and that the principle of caveat emptor would be accepted among dealers.
In Drake v. Agnews, the judgment again favoured the defendant firm, a London-based gallery that sold a painting attributed to Sir Anthony van Dyck to an American buyer through his agent, an unprincipled art dealer. The evidence suggested that the painting was a studio work, not an autograph work. The buyer alleged that the sale was a sale by description and that there was an implied condition in the contract that the painting should correspond with the description as having been painted by van Dyck, as stated in the sales brochure, in correspondence from the seller, and on the sales invoice. The defendant argued that the statements about attribution made leading up to the sale were statements of opinion only and not terms of the contract. Furthermore, while the defendant believed the painting to be by van Dyck, other experts had doubts over the attribution and this had been expressly stated to the buyer's agent prior to the sale (but not disclosed by him to the ultimate buyer). The judge held that the attribution was an opinion, not a term of the contract, and that there was no sale by description. He also found that there had been very limited reliance by the buyer's agent on the seller's statements, and certainly not on 'any guarantee of authorship', as the agent's main concern was securing his commission. He further determined that while the buyer relied on the fact that he was purchasing a genuine van Dyck, unfortunately his perception of the painting was different from the reality because of the dishonesty of his agent. According to legal principle, the buyer was bound by his agent's actions and therefore had no remedy against the seller.
THE IMPACT OF THESE CASES ON PRIVATE INDIVIDUALS OR CONSUMERS
The outcome of Harlingdon and Drake v Agnews has not favoured buyers who are members of the art trade or who deal through agents; however, it is suggested that the result is less clear cut in relation to private individuals buying artworks as consumers. The main principle to be drawn from these two cases is that the court will look at the common intention of the parties, their respective expertise and their course of conduct in order to establish whether a sale is a sale by description for the purpose of the SGA 1979. In a sale to a private individual, the default position presumably would be that the buyer is not expert in the subject matter and would therefore be more reliant on the seller's expertise and description of the artwork. This balances the matter more in favour of the consumer. Neither case is directly applicable to the common situation where a private purchaser buys an artwork based on the description provided by the seller and relies on that description; it remains to be seen what the result would be if such a case came before the courts. The impact of consumer legislation in the form of UCTA 1977 and subsequent European Directives and Regulations would also then need to be considered, as will be explored further below. However, even if the courts may be more receptive to protecting the position of a lay consumer who lacks the required knowledge and expertise, in order adequately to protect the buyer, the contract of sale should expressly provide that the buyer is relying on the seller's description and the seller should warrant the accuracy of the description and indemnify the buyer for any loss of value if the artwork is not genuine. Similar provisions can be drafted in relation to provenance and history of ownership, country or culture of origin and other factors determining the authenticity and value of the artwork.
Whereas the courts are hesitant to describe transactions between art dealers as sales by description, the same does not apply for auction sales, which have traditionally been regarded as sales where the description used in relation to the goods being sold is of critical importance. (25) In the case of Nicholson and Venn v. Smith-Marriot, (26) the auction catalogue described a lot including tablecloths and napkins as "all with the crest and arms of Charles I and which were the authentic property of that monarch". The sale conditions in the catalogue stated that, "As the whole is on view the genuineness or authenticity of any lot is not guaranteed, and no warranty is given or to be implied by the description in the catalogue. No allowance whatsoever will be made for errors in description, quantity, weight measurements, but the lots are to be cleared as shown at the sale." The judge ruled that such a statement could not circumvent the implied term that the goods should comply with their description under section 13 of the Sale of Goods Act 1893, the legislation then in force.
Where a buyer alleges that an auctioneer has inaccurately described a lot, or attributed it to the wrong artist, the auctioneer will usually turn to his conditions of sale to try to exclude its liability. Auction houses have precisely-drafted terms stipulating that the auctioneer's statements are expressions of opinion. By way of example, Christie's conditions of sale state that: "Any statements made by Christie's about any lot, whether orally or in writing, concerning attribution to, for example, an artist, school, or country of origin, or history or provenance, or any date or period, are expressions of our opinion or belief ..." (27) Christie's effectively seeks to exclude its accountability for cataloguing errors, unless it is evident in the way a lot is catalogued that a work is ascribed to a particular artist, without any qualification, in which case the artist's name is printed in upper case type. This designation means that Christie's warrants that the lot is the authentic work of the artist in question and not a forgery within the parameters of its limited contractual authenticity guarantee. However, Christie's limited warranty does not apply where "the catalogue description or saleroom notice corresponded to the generally accepted opinion of scholars or experts at the date of the sale or fairly indicated that there was a conflict of opinions", and neither does it apply to cases where "correct identification of a lot can be demonstrated only by means of either a scientific process not generally accepted for use until after the publication of the catalogue or a process which at the date of publication of the catalogue was unreasonably expensive or impractical or likely to have caused damage to the property" (a 'state of the art' exception). Excepting such cases, and provided various other requirements are met by the buyer, the limited warranty will apply for five years from the date of the sale. Sotheby's current conditions of sale contain comparable provisions, whereas Bonhams offers a one-year warranty.
Within these respective warranty periods, and if the additional requirements of the warranty provisions are fulfilled, a buyer is entitled to return a work of art that is discovered to be a forgery and claim back its purchase price. Importantly, however, such guarantees cover only forgeries or counterfeits, as defined. If the work is not determined to be a deliberate forgery within those terms, there is no remedy pursuant to the leading auction houses' conditions of sale. For instance, Bonhams' Buyer's Agreement defines a forgery as:
an imitation intended by the maker or any other person to deceive as to authorship, attribution, origin, authenticity ... which at the date of the Sale had a value materially less than it would have had if the Lot had not been such an imitation, and which is not stated to be such an imitation in any description of the Lot. A Lot will not be a Forgery by reason of any damage to, and/or restoration and/or modification work (including re-painting or over painting) having been carried out on the Lot, where that damage, restoration or modification work (as the case may be) does not substantially affect the identity of the Lot as one conforming to the description of the Lot. (28)
This last provision brings to mind the case of De Balkany v. Christie Manson & Woods Ltd, (29) where a buyer sued Christie's for selling a painting catalogued as being by Egon Schiele and signed with initials, which was found to have been almost entirely over-painted, including the initials, although in fact, the original painting underneath was by Schiele. While Christie's claimed that the matter was concerned with condition and not the identity of the painting, the judge concluded that the over-painting, and particularly the addition of the initials, were intended to deceive the viewer and therefore the painting fell within the auctioneer's forgery definition and was covered by the limited warranty. Generally, if a claim under a contractual warranty is unsuccessful, the buyer has the option of making an alternative case in negligence or misrepresentation, or claiming that, under the Unfair Terms in Consumer Contracts Regulations 1999, the term has the object or effect of 'inappropriately excluding or limiting the legal rights of the consumer', which would be a matter for the court to determine at its discretion.
The recent case of Avrora v. Christie's (30) is an example of an ultimately successful claim under Christie's limited five-year warranty. The claimant bought a painting, titled Odalisque, purportedly by the Russian artist Boris Mikhailovich Kustodiev, which was then examined by several Russian art experts who determined that it was a forgery. Christie's insisted that it was a genuine work; however, the Court determined that the claimant had satisfied the conditions under the limited warranty and that the 'likelihood' was that the painting was not by Kustodiev. The outcome of the lengthy trial was that the sale was rescinded and Christie's were ordered to refund to the buyer the 1.5 million [pounds sterling] hammer price of the painting, as well as the buyer's premium, and pay, according to press reports, an estimated 1 million [pounds sterling] in costs. (31) The case also confirmed that an auction house may in principle owe a duty of care to the buyer and may become liable in negligence. Although the duty can be prevented from arising by careful drafting of the conditions, nevertheless a buyer may have a successful claim in negligence depending on whether the conditions are considered reasonable in accordance with UCTA 1977. Moreover, a buyer may have a claim under the Misrepresentation Act 1967 if he can show that the auction house did not have reasonable grounds to believe and did not believe that the representation as to the authenticity of the artwork was true. In Avrora v. Christie s, the misrepresentation and negligence claims fell to be tested against the requirement of reasonableness set out in section 11(1) of UCTA 1977, which will be discussed further below.
CONDITION AND SATISFACTORY QUALITY
The condition of an artwork can have a significant effect on its aesthetic and commercial value. To protect the buyer, a contract of sale for an artwork should therefore always provide that the work is to be sold and delivered, if applicable, in a particular state and condition and give the buyer a contractual remedy if the term is breached. In addition, the implied terms about quality or fitness under section 14 of the SGA 1979 offer the buyer a degree of statutory protection. Although section 14(2) is designed to be utilised by consumers who have a complaint about defective goods, it is also of relevance to transactions involving artworks, where it would seem principally applicable to newly created artworks sold in the primary market. Section 14(2) reads: "Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality." The meaning of sale 'in the course of a business' is thought to be wide and purposive. (32) In Stevenson v. Rogers, the Court of Appeal held that the seller does not have to deal in the particular class of goods being sold in order to be considered to be selling in the course of business. (33) The words have been deemed to "cover sales which are an integral part of the business carried on, and sales which are incidental to the business but carried on with a degree of regularity, and in this context a first-time seller must be covered." (34) While difficulty can arise in the interpretation of this section, as well as the definition of 'business', it would seem that an individual, who is not a salesperson by trade, clearing out the contents of a house and offering a few paintings for sale, is unlikely to be selling in the course of business. Clearly art dealers, however, whether dealing as sole traders or under a company name, will fall within the scope of section 14(2), as selling art is their profession. (35)
Auction houses usually stipulate in their terms and conditions that they are agents selling on behalf of private sellers, in which case they are able to avoid these particular statutory requirements. This is due to the exception in section 14(5), which states that the section applies to agents in the same way that it would to a principal, 'except where that other [the principal] is not selling in the course of a business and either the buyer knows that fact or reasonable steps are taken to bring it to the notice of the buyer before the contract is made.' However, if an auction house is selling its own stock, it will be selling in the course of business, and the lot will usually be marked with an identifying symbol in the catalogue. In such cases, the implied term of satisfactory quality will apply. Auctioneers who sell goods on behalf of private and trade vendors, and who do not differentiate between the two, will be deemed to sell goods in the course of business, and so will be subject to Section 14. (36)
Satisfactory quality is defined in section 14(2A) as meeting "the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances." The following section expands on the definition:
(2B) For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods
(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,
(b) appearance and finish,
(c) freedom from minor defects,
(d) safety, and
Notably section 14(2B)(b) pertains to surface problems that would be troubling to a buyer even if they have a minimal effect on the utility or the value of the goods and is principally aimed at covering consumer goods. (37) The leading case on the point relates to automobiles so is not directly applicable; however, the Court in that case found that 'outward and interior appearance' were factors to be considered in assessing whether a vehicle is of satisfactory quality, and not just its purpose as a means of transport. (38) If an artwork is bought in purportedly pristine condition, but on delivery turns out to have scratches, scuffing or other damage, the buyer, assuming the exclusions in section 14(2) are not applicable, may have a statutory remedy in addition to any contractual provisions negotiated before the sale.
The nature of the list in section 14(2B) suggests that it would not necessarily be applicable to artworks that are not brand new, such as classical sculptures or Old Master paintings, as they are generally expected to have inherent defects in appearance and finish. However, the SGA 1979 does not draw any distinction between new and secondhand goods. There is little authority applying the implied terms about quality to second hand goods and no separate legal test. The wording of section 14(2 A), stipulating that the description, price (if relevant) and all other relevant circumstances, should be taken into account in determining satisfactory quality, gives general guidance; however the sale of artworks demands additional considerations. While many second-hand goods will be sold at a lower price than they would be if bought new, the passage of time can add to the value of art and antiques, as long as they remain relatively unspoilt by restoration, wear and tear or environmental factors, and therefore the assessment of satisfactory quality can be more problematic. If, prior to a sale of classical sculpture or an Old Master painting, the object is described as meeting a certain standard of condition, when in fact it fails to do so, the buyer could instead have a remedy for misdescription under section 13 SGA 1979, as discussed in the preceding section, which might be a more straightforward claim.
Importantly, for a buyer to take advantage of the condition implied by section 14(2), his attention must not have been drawn to the defects in question prior to the sale. Where artworks are composed of unstable or experimental materials and the problematic nature and likelihood of degradation of such works is made clear by the seller before the contract is made, the seller will not be liable for breach of contract, by virtue of section 14(2C)(a). If a condition report is available, the buyer is understood to have bought the artwork subject to the contents of that report. In addition, if the buyer examined the artwork before signing the contract, he must be able to show that the defects were not of a nature "that examination ought to reveal". (39) This provision has been interpreted in different ways; however, the wording as it currently stands makes clear that the extent of the examination is judged by whatever examination was actually carried out, and the buyer will not automatically be considered to have made a thorough and extensive examination. (40) Such a position suggests that if a buyer views a painting but does not, for example, examine it under infrared light, he would not be taken to have accepted the fact that it was extensively over-painted or had signs of damage that were not evident to the naked eye. Given the conflicting case law on what extent of examination is expected, and whether it needs to be reasonable, it appears that a buyer might be in a better legal position if he declines the opportunity to view an artwork, than if he gives it only a cursory examination.
The protection afforded under section 14 in relation to the durability of artworks may be of insufficient strength in cases where artworks are delivered to the buyer and must be of satisfactory quality both at the time of the sale and after transport. Benjamin's Sale of Goods states that:
there will in many cases be difficulty in proving that the lack of durability resulted from a defect in the goods themselves rather than from the way in which they have been treated, used and maintained. And a specific provision as to durability such as this would ideally require an implied promise that the goods would last, and a right to reject which persists for a longer time than the law normally allows, for in the case of goods which may be expected to last for a long time, any lack of durability could take some time to manifest itself. (41)
These concerns are directly applicable to artworks, which depend on being made with quality materials but which also require a sensitive combination of care, maintenance and suitable environmental conditions to prevent them from deteriorating. The considerable price paid for many artworks and the fact that most are capable of being moved from one location to another, suggests that the expectation is for them to be highly durable; however, a seller may easily be able to resist a claim by arguing that the defects arose after conclusion of the sale. This is a risk that can be partly avoided by contractual protection and careful recording of the condition of the artwork before and after the sale. In the case of consumers only, the provisions of Part 5A of the SGA 1979 go some way to tilting the scales in favour of the consumer purchaser.
ADDITIONAL PROTECTION IN CONSUMER CASES
Part 5A of the SGA 1979 provides additional potential remedies, applicable to consumers only, which could apply where, on delivery, the condition of an artwork is problematic and the buyer seeks redress from the seller. These have not been considered above in the context of breaches of terms as to title or authenticity as, in such cases, a buyer would most likely wish to cancel the sale as the artwork would be rendered virtually worthless. In cases relating to condition, however, the statutory remedies might prove useful if the defect is capable of remedy. Traditionally, if a buyer was provided with goods that were not of satisfactory quality, his strict legal remedies were the right to reject the goods and claim damages, or to elect to treat the breach as one of warranty and affirm the contract and claim damages only. The buyer was not entitled to demand an exchange or repair of the goods. However, Part 5A, inserted by the Sale and Supply of Goods to Consumers Regulations 2002, (42) entitles consumers to exercise additional rights if goods delivered to them do not conform to the contract of sale. The buyer can require the seller to repair or replace the goods or, in cases where those remedies are unavailable, can require the seller to reduce the purchase price of the goods by an appropriate amount, or to rescind the contract. If the seller is required to repair or replace goods, this must be done within a reasonable time, without causing significant inconvenience to the buyer, and the seller must bear any necessary costs incurred in doing so. (43)
Evidently, parts of these provisions would rarely apply to unique goods such as antiques and paintings, which cannot be replaced with identical goods. Section 48B(3) provides that the seller cannot be required to repair or replace the goods if the remedy is impossible or disproportionate in comparison to other remedies. Benjamin's Sale of Goods suggests that difficulties may arise with the replacement of specific goods, giving the example of a picture, in cases where they "cannot be repaired, or repair is simply inappropriate, they clearly cannot be replaced with something else, albeit of a similar nature, which the buyer has not agreed to receive." (44) There may be cases where repair is an option, however, and to have the repair undertaken by the seller at his own cost may be preferable to the buyer over other remedies.
The alternative remedies of requiring the seller to reduce the purchase price or rescind the contract, under section 48C of the SGA 1979, are available only where the buyer does not have the power to require repair or replacement, or where the seller has not effected such repair or replacement within a reasonable time without significant inconvenience to the buyer. It is unclear whether section 48C requires the return of the goods in all cases, and therefore, whether it is available if the goods cannot be returned at all or cannot be returned in their original state. (45) In the case of art installations, if an artwork is installed as intended and a defect is found, which was not caused by the buyer's mistreatment of the object, the buyer will not lose the right to reject the artwork.
Importantly, in recognition of the fact that it is often difficult to establish whether a defect is inherent, or the consequence of mistreatment or natural wear and tear after delivery, the additional provisions state that:
goods which do not conform to the contract of sale at any time within the period of six months starting with the date on which the goods were delivered to the buyer must be taken not to have so conformed at that date. (46)
This provision provides additional protection for the buyer by changing the burden of proof: if the deterioration occurs within six months of delivery, the seller must prove that the goods conformed on delivery. The exceptions to this rule are (i) if it is established that the goods did so conform at that date or (ii) its application is incompatible with the nature of the goods or the nature of the lack of conformity. (47) In the case of artworks, which may be composed of experimental or unstable materials, the six-month leeway could assist the buyer but is not likely to provide a sufficient period of protection, in which case it would be prudent to negotiate a longer timeframe in the sale contract. If the provisions of Part 5A do not give the buyer a sufficient remedy, the separate common law remedy to reject goods and sue for damages is still available, with certain exceptions which are outside the scope of this paper. One of the benefits of the Part 5A rules is that theoretically they can be applied without the intervention of a court and they do not stipulate time limits, so consumers are not confined to bringing actions within the six-year limitation period; for that reason they might still prove to be of potential assistance to art purchasers. (48)
SPECIFIC CONSUMER PROTECTION LEGISLATION
UCTA 1977 applies primarily to exclusion clauses in consumer contracts, but some provisions may also apply to business contracts and negotiated contracts that are not based on standard terms. Section 6 provides that liability for breach of the obligations arising from the implied terms about title in section 12 of the SGA 1979 "cannot be excluded or restricted by reference to any contract term". (49) A seller who tries to exclude his liability for selling an artwork without valid legal title by incorporating an express term to that effect in the contract for sale, will be unsuccessful and the contract will be voidable. With respect to the other implied terms under consideration, those of correspondence with description and satisfactory quality, UCTA 1977 provides that they cannot be excluded or restricted by reference to any contract term in respect of transactions 'as against a person dealing as a consumer'. A person who 'deals as a consumer' is defined as someone who "neither makes the contract in the course of a business nor holds himself out as doing so; and the other party does make a contract in the course of a business". (50) If the buyer is not a consumer, liability under the implied terms can be excluded but must satisfy the requirement of reasonableness. (51)
The requirement of reasonableness is also applied to contract terms or notices in general in cases where a person attempts to exclude or restrict his liability for negligence. The test to determine reasonableness is that:
the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made. (52)
The factors to be considered in determining whether the requirement of reasonableness has been satisfied are set out in Schedule 2 of UCTA 1977 and include the relative strength of the parties' bargaining positions, whether the customer was induced to agree to the term and "whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties)."
Particular rules regarding dealing as a consumer apply to auction sales, as section 12(2) of UCTA 1977 states that a buyer at auction "is not in any circumstances to be regarded as dealing as consumer" if he is an individual, the goods are second-hand and the auction is a public one in which individuals have the opportunity of attending the sale in person. Second-hand goods in this context have been described both as used goods and new goods that have had a previous owner. (53) This description would relate to a traditional public auction such as those conducted by Christie's and Sotheby's and allows the auctioneers to restrict or exclude the implied terms as to sale by description and satisfactory quality under Sections 13 and 14 of the SGA 1979, subject to the requirement of reasonableness, which they would not be able to do otherwise. In the case of Avrora v. Christie's, (54) Newey J. held that Christie's attempt to exclude any liability for negligence in its conditions should be assessed in relation to UCTA 1977. His reasoning was that a provision purporting to prevent an assumption of responsibility would be subject to UCTA 1977 if it attempts to 'rewrite history', or 'parts company with reality'. He went on to state that:
The reality was that Christie's had taken responsibility for the attribution of 'Odalisque' to Kustodiev. It stated that that was its opinion; it gave Avrora a warranty to that effect; it indicated that its views reflected research (for example, by presenting itself as a centre of excellence and, more specifically by explaining in the 'Important Notes and Explanation of Cataloguing Practice' that more qualified catalogue entries--e.g. 'Attributed to ...'--were 'based upon careful study' and represented 'the opinion of experts', tending to suggest that an unequivocal attribution would be too); and it was intending to charge the buyer a substantial premium. That Christie's may not have wanted to assume tortious liability in respect of the attribution cannot, I think, be determinative. (55)
In applying the reasonableness test to the conditions, the Court particularly focused on the strength of the parties' relative bargaining positions and the familiarity of the buyer with Christie's terms. Although, on the facts of the case, Newey J. concluded that the conditions were not unreasonable, the application of UCTA 1977 demonstrated that, were it not for the auction house's successful exclusion of liability, a duty of care would have arisen. The outcome may have been more generous in relation to a consumer claimant, rather than a company such as Avrora, and even though a buyer at auction is not considered a consumer under UCTA 1977, other consumer protection provisions, as will be touched on below, could still step in to perform a similar role in assessing the fairness of an auction house's standard terms.
ADDITIONAL EUROPEAN CONSUMER PROTECTION RULES
The Unfair Terms in Consumer Contracts Regulations 1999 (the 'UTCCRs'), which implement the EU Directive on Unfair Terms and Consumer Contracts (93/13/EEC), provide an additional layer of protection for buyers. They apply exclusively to terms in consumer contracts that have not been individually negotiated, and so would cover the majority of transactions entered into with members of the art trade where they sell on the basis of standard form terms and conditions of business. Unlike UCTA 1977, they are not restricted to exclusion clauses, and apply to any unfair terms. The UTCCRs provide that "an unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer." (56) A consumer is defined as a 'natural person' who "is acting for purposes which are outside his trade, business or profession", therefore excluding legal persons such as companies. (57) An unfair term is considered to be a term that is not individually negotiated, and "contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer." (58) In cases where a specific term of a contract is negotiated, the UTCCRs may still apply to the rest of the contract "if an overall assessment of it indicates that it is a pre-formulated standard contract' (59). The concept of 'good faith', which is not traditionally an English law concept, is not explained in the Regulations and the only guidance that is given as to the meaning of 'unfair' is an indicative and non-exhaustive list in Schedule 2 of terms that would be regarded as unfair. This list contains examples such as "giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract". (60) Of relevance to the subject of authenticity, in particular, is the following:
inappropriately excluding or limiting the legal rights of the consumer vis-a-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations ... (61)
This could make an attempt on the seller's part to exclude any liability for a misdescription of the artwork unfair. Harvey and Meisel write, in relation to auction sales, although the principle would also apply to sales by any member of the art trade seeking to limit its liability for the work turning out to be wrongly attributed or inauthentic, that:
it could be argued that a condition attempting to absolve the seller and auctioneer from the consequences of misdescription of the goods is an attempt to exclude the legal rights of the consumer as against the seller or supplier for total, partial or inadequate performance by the seller or supplier--because the goods are not of the contractual description. (62)
While the protection afforded to consumers by the UTCCRs may often not be any more far reaching than that accorded by UCTA 1977, they are significant in the case of second-hand goods bought at public auction, since those goods are excluded from the scope of UCTA 1977.
The Consumer Protection from Unfair Trading Regulations 2008 (the 'CPRs') are a result of European harmonising legislation, in the form of the Unfair Commercial Practices Directive (2005/29/EC), that seeks to create greater uniformity in the laws of Member States and principally introduces a general prohibition on unfair commercial practices. However, the sanctions for infringing the prohibitions set out in the CPRs are criminal in nature and do not, in themselves, affect the validity of any contractual agreements. (63) They are therefore not further discussed in the present context.
Further protection for consumers has developed specifically in relation to transactions that are not made face-to-face. These rules are becoming increasingly relevant, in particular given the rise of art sales over the Internet. The Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) ('Distance Selling Regulations') apply to any distance contracts concluded by means of distance communication, the most common of which would be telephone, e-mail, fax, postal order, or over the Internet. Distance contracts are defined as:
any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sales or service provision scheme run by the supplier who, for the purposes of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded. (64)
The supplier is defined as a person acting in his "commercial or professional capacity" and a consumer is someone "acting for purposes which are outside his business". Therefore a sale between two private individuals or between two businesses would not be covered. The Distance Selling Regulations will apply only when the sale is arranged through an organised scheme, for example, when a gallery regularly sells works of art by telephone or online, but not to casual transactions. (65) If, before the contract is made, the buyer and seller meet in person, the Distance Selling Regulations will not apply, even if the actual sale is concluded remotely. Another notable exception is that the Distance Selling Regulations do not apply to contracts 'concluded at auction'. (66) The term 'auction' is not defined although it has been interpreted as "referring to a process whereby goods are sold to the highest bidder as a result of competitive bidding". (67) There has been some debate over the scope of the term, and whether it relates equally to traditional and Internet auction models, as there is a difference between the two in the level of the auctioneer's control and whether the auction is concluded by the auctioneer's direct action. In contrast to the law of some other jurisdictions, under English law, by virtue of section 57(2) of the SGA 1979, an auction sale is concluded by the fall of the hammer or 'in other customary manner', which could encompass both traditional auctions and Internet auctions that conclude with the expiration of time rather than the fall of the hammer. The new Regulations that entered into force on 13th June 2014 (see below) refer in particular to 'public auctions' and defines these as methods of sale where: "goods and services are offered by a trader to consumers through a transparent, competitive bidding procedure run by an auctioneer" and where the consumers "attend or are given the possibility to attend in person", which would rule out some, but not all, online auction models.
The Distance Selling Regulations require that certain information is given to consumers, such as the identity and address of the supplier, a description of the main characteristics of the goods, their price including taxes, the delivery costs, any arrangements for payment or delivery, and the buyer's cancellation rights, which must be provided in a 'clear and comprehensible' manner. (68) They further provide that, unless otherwise agreed, the supplier should perform its side of the contract within 30 days. (69) One of the most significant provisions relates to cancellation rights, as the consumer is allowed seven days from the day on which the contract is concluded to give the supplier notice of cancellation of the contract. (70) If the seller is in breach of the agreement by failing to provide the relevant information, the breach extends the consumer's right of cancellation period by up to three months depending on how long it takes for the information to be provided. (71) This operates to the advantage of a buyer engaged in a distance sale compared to a face-to-face sale, as ordinarily a gallery's or dealer's terms of business would not allow the return of an artwork. Regulation 17 provides that, if a consumer exercises his cancellation rights, he will be treated as "having been under a duty throughout the period prior to cancellation to retain possession of the goods, and to take reasonable care of them" and, on cancellation, the consumer is under a duty to restore the goods to the seller, effectively acting as a bailee. A buyer of artworks must therefore take care that they are not damaged during the period between giving notice of cancellation and restoration to the seller. The buyer is under a duty only to deliver the artworks to the seller at the buyer's premises, i.e., make them available for collection. Upon delivery, he will be discharged from his duty to take care of the artworks but, if he chooses to deliver the artworks to the seller at the seller's premises, this duty will be replaced by a duty to take reasonable care to see that they are received by the seller and not damaged in transit. (72) The buyer and seller cannot contract out of these cancellation rights, since any terms contained in a contract to which the Distance Selling Regulations apply that are inconsistent with them will be void. (73) The Distance Selling Regulations have been replaced as from 13th June 2014 by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the 'new Regulations'), as discussed below.
A further European consumer protection mechanism is Directive 2000/31/EC, implemented in the United Kingdom by the Electronic Commerce (EC Directive) Regulations 2002, which aims to ensure the free movement of information society services between Member States, including the sale of goods online. (74) The Electronic Commerce Regulations complement the Distance Selling Regulations as they also dictate the basic general information that must be provided by an online seller (Regulation 6) and certain further requirements that must be complied with when contracts are concluded by electronic means (Regulation 9). These do not, however, address issues of specific concern to art transactions.
TRENDS AND DEVELOPMENTS
A major trend in the art market over recent years has been the proliferation of online sales, both privately and by auction. Art Tactic's Art & Finance Report 2013 states that more than 300 online, art ventures have been launched in recent years. (75) Some of these sales are conducted through entities offering traditional auction services but doing so exclusively online, such as Auctionata, or Paddle8, which offers themed and benefit auctions, or Tarisio, which specialises in stringed instruments. The appeal of online auctions to buyers tends to be lower premiums as well as the efficiency and flexibility of Internet bidding. Alternatively, there are a growing number of websites offering virtual browsers a range of art and antiques from a selection of artists and dealers, such as ArtQuid and 1stdibs, which describes itself as the 'premier online luxury marketplace'. (76) Amazon is amongst the latest and most high-profile entrant into this category, with its launch of Amazon Art in August 2013. Leading auction houses are also expanding their Internet presence, an example being Christie's new offerings of 'online only' and 'flash sales', allowing it to offer large volumes of work, such as collections from artists' and celebrities' estates, at modest prices to a wider audience. (77) Christie's bid to attract a broader client base is apparent in its offering of 50 'online only' sales in 2013, for which an average of 45 to 75 per cent of successful bidders have been new clients. The auction house describes its online auctions and other initiatives as "building accessibility to the burgeoning interest in art". (78)
This rise of online art buying has provided ease of access to buyers all over the world but also has notable disadvantages for novice and inexperienced purchasers. A recent New York Times article on the subject states that: "Every day works labelled 'original' and 'authentic' and attributed to titans of the art world are offered at closeout prices by online galleries and auction sites. And every day people buy them." (79) The article cites by way of example an academic study that found that 91 per cent of the drawings and sculptures sold by an online auction house, which purported to be by Henry Moore, were forgeries. Transactions made exclusively on e-commerce sites give unscrupulous sellers the benefit of relative anonymity and unaccountability and can make it impossible for buyers to conduct due diligence in relation to the artworks, negotiate any contractual protection or effectively enforce their legal rights.
Consumer laws in relation to distance and 'off-premises contracts' are progressing parallel to the rise in non-face-to-face sales. The United Kingdom implemented the Consumer Rights Directive (2011/83/EU) on 13th December 2013 in the form of the new Regulations, which came into force on 13th June 2014 and applies to contracts entered into on or after that date. The new Regulations require that sellers provide a comprehensive list of information in writing to the buyer as well as a copy of the signed contract. The scope of the information required depends on the type of contract being entered into and whether it is categorised as on-premises, distance or off-premises. For instance, if a trader, acting on behalf of another trader, makes a distance or off-premise contract, he is required to supply his own identity and address details as well as the details of the other trader (except in the case of a public auction, where the auctioneer's details can be provided instead). (80) A dealer who is selling artworks on consignment for another dealer would therefore be obligated to reveal who he acts for. This is not the case in relation to on-premises contracts, where, for example, the dealer concludes the contract in the presence of the buyer at his gallery. The definitions of the various types of contracts are convoluted and it is not immediately clear whether contracts concluded at art fairs, for example, would be termed 'on' or 'off' premises. The answer may lie in whether the dealer involved regularly exhibits there, as the definition of 'business premises' includes "any movable retail premises where the activity of the trader is carried out on a usual basis". (81) In cases of doubt, it is likely that dealers will be obliged to provide the full range of information specified in the new Regulations to avoid being in breach of the rules. The new Regulations also increase the time period in which the consumer may withdraw from the contract, without giving any reason, from seven to fourteen days. If the seller is late in providing the consumer with relevant information on the right to cancel the contract, the fourteen-day cancellation period is suspended until the consumer receives the information; if, however, the seller fails to provide the information altogether, rather than simply to provide it late, the period of cancellation is extended to twelve months, a significant increase from the current three month cancellation period. Evidently, the law is developing further towards strengthening the protection of consumers, and while the provisions of the new Regulations, like the existing legislation, may not have a profound effect on the matters of most importance to art purchasers, the growing emphasis on consumer protection should be reflected in the decisions made by English courts in the future.
Potentially most significant to the current development of English consumer law is the Draft Consumer Rights Bill , presented to Parliament on 23rd January 2014, which will consolidate the law in relation to consumers. The Bill unites much of the existing consumer law in one place and applies to the supply of goods, digital content or services by a trader to a consumer. Contracts for the sale of second-hand goods at auction are excluded from its scope. The Bill restates provisions from the SGA 1979 in relation to satisfactory quality (clause 9), fitness for purpose (clause 10) and correspondence with description (clause 11). Importantly, the Bill states that the mandatory pre-contractual information to be given by a trader to a consumer regarding the main characteristics of goods, provided for by Articles 5 and 6 of the Consumer Rights Directive, is to be treated as a term of the contract. The Bill also addresses consumer remedies in the event that any of these terms are breached, including an early right to reject goods and a final right to reject. The right to reject allows the consumer to treat the contract as at an end and receive a refund from the trader, subject to various qualifications.
Another area that is addressed and reformed by the Bill, in compliance with the Consumer Rights Directive, relates to delivery. Unless otherwise agreed by the parties, the default period for delivery of goods under a contract will be 30 days. The Bill also borrows provisions from UCTA 1977, stating that certain implied terms, including those above, cannot be excluded or restricted from a consumer contract. In addition, Part 2 of the Bill, entitled 'unfair terms', states the requirement for contract terms to be fair, adopted from the Unfair Terms in Consumer Contracts Regulations 1999. The Bill also extends the fairness requirement to notices, which includes written and oral notices. Clearly, the aim of the Bill is to consolidate much of the piecemeal legislation that has addressed consumer rights over the past decades and to provide a more unified approach across the European Union, both to protect consumers and to make it easier for traders to comply with the rules.
As has been explored above, traditionally courts have appeared to favour the caveat emptor principle when deciding cases relating to the sale of artworks, particularly in relation to sale by description. However, the leading cases dealt with sales between members of the art trade and did not give rise to consideration of consumer protection issues. There is therefore an argument to be made that such cases would be decided differently in relation to private individuals, particularly vulnerable or inexperienced purchasers, with no art expertise or knowledge of the customs of the art market.
Historically, despite legislative effort, the effectiveness of consumer protection rules has been thwarted in part by their fragmented nature, which makes it difficult for consumers to know when or how to seek redress and what remedies they are entitled to. The Consumer Rights Bill seeks to resolve this situation. Whether the application of consumer protection rules, once united by the proposed Bill, will more easily filter through to art transactions is questionable. While the emphasis on consumer protection in relation to commercial goods generally is growing, the impact on the art trade is not yet so apparent. Perhaps this will change over time as consumers realise that their rights and remedies apply in the context of art purchases as well as everyday goods. Certainly, the rise and popularity of alternative means of transacting, particularly via Internet sales, has had a profound impact on the operation of the art market; it remains to be seen whether the corresponding increase in consumer protection provisions will better equip individuals to face the challenges of buying art.
(1) See e.g. Leaf v. International Galleries  2 K.B. 86, Harlingdon & Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd  Q.B. 564, Drake v. Thomas Agnew & Sons Ltd  EWHC 294 (Q.B.).
(3) The s. 12(2) term is treated as a warranty, pursuant to s. 12(5A), limiting the buyer's remedy to damages if there is a breach of the term.
(4) Section 3, Limitation Act 1980.
(5) Pursuant to s. 5 of the Limitation Act 1980, the limitation period in claims based on contract generally runs from the date the cause of action accrued.
(6) Section 32, Limitation Act 1980.
(7)  1 W.L.R. 1315.
(8) At 1323.
(9) At 1325.
(10) Martin Bailey, 'Rembrandt Research Project Ended', Art Newspaper, No. 221, Feb. 2011, p. 8.
(11) Joseph Travers & Son Ltd v. Longel Ltd (1948) 64 T.L.R. 150.
(12) Section 13(3) SGA 1979: "A sale of goods is not prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer."
(13) Benjamin's Sale of Goods, gen. ed. M. Bridge, 8th edn (2010, Thomas Reuters), p. 537.
(14) Section 13(1 A) SGA 1979.
(15)  2 K.B. 86.
(16) At 94.
(18)  EWHC 2198 (Ch), noted by Jordan Holland in (2012) XVII Art Antiquity and Law 365.
(19)  Q.B. 564.
(20)  EWHC 294 (QB), noted by A.H. Hudson in (2003) VIII Art Antiquity and Law 201.
(21) At 568.
(22) At 569.
(23) At 584.
(24) At 577.
(25) Brian W. Harvey, and Franklin Meisel, Auctions Law and Practice, (3rd edn, 2006, Oxford University Press,), p. 207.
(26)  177 L.T. 189.
(27) Current at July 2013.
(28) Current at Oct. 2011.
(29)  Tr LR 163.
(30) Above, note 18.
(31) Anita Singh, 'Russian Oligarch Wins 1.7m [pounds sterling] Refund from Christie's after Auction House Sold him 'Fake' Painting', Telegraph, 27 July 2012, avail, at: < http://www. telegraph.co.uk/culture/art/artsales/9432441/Russian-oligarch-wins-1,7m-refund-from-Christies-after-auction-house-sold- him-fake-painting.html>
(32) Geoffrey Woodroffe, and Robert Lowe, Woodroffe & Lowe's Consumer Law and Practice, (8th edn, 2010, Sweet & Maxwell,) p. 44.
(33)  Q.B. 1028.
(34) Benjamin, above, note 13, p.550, 11-027.
(35) Dealers who attempt to escape liability under s. 14(2) by pretending to be private sellers are subject to criminal liability under the Consumer Protection from Unfair Trading Regulations 2008, which were designed to address unfair commercial practices. In brief, Reg. 3(4), read with Reg. 5(2)(a) and Reg. 5(4)(j), provides that a misleading action will be an unfair commercial practice if it contains false information as to the nature, attributes and rights of the trader. These are defined in Reg. 5(6) as including the trader's identity, assets, qualification, status, etc. The penalty for a person found guilty of an offence of this nature is a fine and/or imprisonment for up to two years.
(36) Harvey and Meisel, above, note 25, at p. 194.
(37) Benjamin, above, note 12, p. 555.
(38) Rogers v. Parish (Scarborough) Ltd  Q.B. 933 (para. 11-038).
(39) Section 15(2C)(b) SGA 1979.
(40) Woodroffe and Lowe, above, note 32, at p. 52.
(41) Page 559, 11-040.
(42) Implementing the EC Directive on Consumer Goods and Associated Guarantees.
(43) Section 48B(2).
(44) Benjamin, above, note 12, at p. 640, 12-084.
(45) Ibid, p. 647.
(46) Section 48A(3).
(47) Section 48(A)(4).
(48) Ibid, p. 652, 12-109.
(49) Section 6.
(50) Section 12(1) UCTA 1977.
(51) Section 6((3) UCTA 1977.
(52) Section 11 UCTA 1977.
(53) Harvey and Meisel, above, note 25, at p. 196.
(54) Above, note 18.
(55) Ibid., at 145.
(56) Regulation 8(1).
(57) Regulation 3(1).
(58) Regulation 5(1).
(59) Regulation 5(3).
(60) Schedule 2, para. 1(m).
(61) Schedule 2, para. 1(b).
(62) Harvey and Meisel, above, note 25, at p. 201.
(63) Regulation 29.
(64) Regulation 3(1).
(65) Regulation 9(1).
(66) Regulation 5(1)(f).
(67) Harvey and Meisel, above, note 25, at p. 19.
(68) Regulation 7(1).
(69) Regulation 19(1).
(70) Regulations 10 and 11.
(71) Regulation 11(3) and 11(4).
(72) Regulation 17(6).
(73) Regulation 25.
(74) Directive 2000/31, Art. 1.1.
(75) Available at <http://www.deloittelux-library.com/artandfinance/2013/lu_en_wp_ artandfinancereport_15032013.pdf>.
(76) Ivan Macquisten, '1stdibs targets Europe after buying up Online Galleries', Antiques Trade Gazette, Issue 2058, 22 Sept. 2012, p. 3.
(77) Charlotte Bums, 'Auction House Bids for Artists' Estates', Art Newspaper, Number 239, Oct. 2012, p. 6.
(78) Laura Battle, 'Christie's and Sotheby's Deepen Rivalry Ahead of Art Sales', Financial Times, 16 June 2013, avail, at < http://www.ft.eom/ems/s/0/4b97cdaa-d43e-11e28639-00144feab7de.html#axzz2tZn6We6T>
(79) Patricia Cohen, 'A Picasso Online for Just $450? Yes It Is a Steal', New York Times, 3 Sept. 2012, avail, at < http://www.nytimes.com/2012/09/03/arts/design/growth-in-online-art-market-brings-more- fraud.html?_r=0>
(80) Schedule 2(d).
Gregor Kleinknecht, Partner, Hunters and Petra Williams-Lescht, Solicitor, Hunters.
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|Author:||Kleinknecht, Gregor; Williams-Lescht, Petra|
|Publication:||Art Antiquity & Law|
|Date:||Jul 1, 2014|
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