Private Sales
2 Private Sales n recent years, the commercial fragility of what were perceived to be preeminent New York art galleries was laid bare in newspaper head- lines and lawsuits that highlighted the financial woes of the hap- less collectors who consigned art to be sold, and the art purchasers Iwho acquired more (or less) than they bargained for. That fragility renders art transactions commercially unique when it is combined with the in- trinsic properties of fine art. The artwork, for one thing, is often singular and ir- replaceable. Moreover, its value, which largely depends on the artist’s reputation at the time of the sale, may fluctuate extensively because an artist’s reputation is largely subject to public whim. And artwork is frequently purchased on impulse by a shockingly uninformed buyer: The buyer often turns a blind eye to securing a written purchase contract (let alone to having the contract reviewed by legal counsel), neglects to have the property physically inspected or professionally ap- praised, fails to do a title search, and, if the work is a fine-art multiple, makes no inquiry about the technique of production. Defects abound in artwork as frequently as in other property. Accordingly, the art buyer should observe the same precautions ordinarily used by the prudent buyer in other commercial transactions of like value. Those precautions are ad- dressed at length throughout the three main sections of this chapter: Sales by Dealers, Sales by Collectors, and Secured Transactions. SALES BY DEALERS Whether the dealer is a private dealer, a single commercial gallery, or a gallery with numerous branches or franchised outlets, the dealer’s art sales are governed by principles of contract and tort law, by federal and state penal statutes, and in certain jurisdictions by specific legislation regulating sales of art.
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