It is vital to understand how the law affects buyers and sellers of art. Over the past several years various authorities or artist experts have ceased authenticating works of art as a means of protecting themselves from lawsuits. Recently, there have been movements to change the New York Arts and Cultural Affairs Law. This law outlines several things, including protections in an art sale. Judith Wallace, Counsel at Carter Ledyard & Milburn LLP, discusses the complexities, nuances, and ramifications of a proposed law change in Art Law on Protecting Expert Opinion.
Art collectors rely on the opinions of experts in order to gauge authenticity of a work, art value and market trends. One of the current law’s protections are “express warranties.” An express warranty acts as a safeguard for both seller and buyer. Unless the seller explicitly states that they are only offering opinions and not facts, a buyer can take the opinion as a guarantee. However, a court can rule that the opinion is not a guarantee in special circumstances. This allows for cases when the market has changed drastically or other similar situations. Express warranty specifically applies to sales between dealers and non-dealers for unique works. This cannot be applied to sales between galleries or auction houses since they have their own set of rules governing them.
The proposed change in the law would make it so expert opinions cannot be considered guarantees. Wallace argues that the issue with this is that it can make legal disputes more complicated. It would be a change that benefits few. The unclear language of the amendments distorts who would be responsible for the expert opinion. This could hurt private collectors and be ineffectual against legitimate liability claims. If the work has been sold to several private collectors, it would also confuse who was ultimately responsible.
Wallace goes into further detail on the precedent for the current protections and the failings of the proposed amendments. Becoming familiar with the rights of all parties in a sale and the changes that may be coming is a way to maintain control over a collection. As an art collector, this is an issue you want to educated on and be aware of changes. Read the full essay by Wallace by clicking the link above.