Tags: Art | UCC

Beware Unlawful Art Practices

Monday, 24 November 2014 12:38 PM Current | Bio | Archive

State and federal laws govern an art gallery or auctioneer's warranties and transactions. Every dealer is expected to abide by the Uniform Commercial Code (UCC) that protects them and consumers. Dealer Warranties set by the UCC are relatively easy to understand.

An express warranty (endorsement or sanction) is created when a buyer is made to believe or understand that a seller affirms as truth essential qualities about art being sold. The buyer trusts or counts on that fact in good faith.

If a dealer states a painting was created by a certain artist and painted in 1852 and it has not been restored, those facts will be taken as truth and the buyer depends on it being fact.

The UCC counts on a seller to provide (verbally or otherwise) an accurate description of art being sold and the seller's statements become a part of the basis for the bargain.

Affirmations of authenticity, provenance or opinions regarding aesthetics can be made in a sales contract or in a brochure, catalogue, book, pamphlet, advertisement and more. The UCC considers dealers experts with superior knowledge and their representations are considered fact, not opinion.

An express warranty is established when a seller affirms facts or makes promises to a buyer regarding art being sold. If the art does not conform, or if it is forged, it is a breach of the warranty.

Merchantability of artwork depends on dealer recognition and credibility, the art's provenance and historical data, quality, condition, categorization, period and evaluation.

Under UCC guidelines, buyers can accept and rely on as fact all the data a dealer gives and the buyer need not examine or question the art unless suspicious of it. Oral disclaimers of warranties that are not on a Bill of Sale are usually not favored by courts.

The UCC declares art sold by a dealer should pass without objection in the trade, be as described and be appropriately labeled and identified. If art once traded as authentic is discovered to be fake, it is considered not sellable and the buyer and/or owner can seek restitution under UCC mandates within a four-year period of the date of purchase.

Warranties of authorship in auction sale catalogues or in gallery brochures have a statutory of four, unless otherwise stated. Auction and dealer terms for authorship are:

Robert Reid:
In the opinion of the seller the work is by Robert Reid (American, 1862-1929).

Attributed to:
The work is of the period of the artist. It may be in part or
in whole a work by Robert Reid, based on careful study.
Most auction-houses and sellers assume no liability, risk
or responsibility for the authenticity of merchandise. They
will not repurchase an Attributed work.

Manner of:
Possibly a later period than the artist, but resembling his
artistic style; the seller assumes no responsibility for the
authenticity of this category.

Circle of:
Closely related to but not executed by the artist. Painted
during the period of the artist. The seller assumes no
responsibility for authenticity.

Studio of:
A work possibly executed in the presence of or under the
supervision of the artist

A copy of the work of the artist

Signed Robert Reid:
Has a signature facsimile of the artist.
This category does not state the signature is by the artist.

Bears the signature:
Has a signature that may or may not be of the artist.

The painting was executed on or near the date given.

Bears the date:
The date may or may not be when the work was executed.

Intentional deception resulting in injury to another is fraud. Fraud includes a false and material misrepresentation made by someone who knows it is falsified or who claims ignorance of the truth, or whose naiveté is presented as absolute truth, when it is not fact.

Fraud consists of misrepresentation, concealment or nondisclosure of a material fact, misleading conduct and devices or contrivance that take advantage of another person. It includes trickery, cunning, dissembling, evil intent and unfair practices by which one person cheats, cons or swindles another.

Embezzlement is a person's fraudulent appropriation (or use) of property lawfully taken and in that person's possession (like consigned art). Embezzlers take consignments, sell the property and do not pay the owner for it, or they take money in "shares" for property, sell it and do not pay investors their legal share.

False pretense is a statutory offense. It includes obtaining property through misrepresented facts and false representations with the intent to defraud or to take title.

Larceny is the unlawful taking of a person's property with the intention of depriving the owner of its use, or covertly taking the money from a sale of the property. When a dealer takes a painting on consignment, sells it and does not pay the consignor for the property, it can be construed as larceny. When someone takes or sells artwork without the owner's consent it is larceny.

That person's intention is to deprive the owner of its use and to convert the artwork to the use and benefit of the thief. Obtaining property by false pretense or by issuing a bad check (no funds available to cover the check) can be identified as embezzlement and larceny. Check bouncing is a criminal offense. Petit (Petty) Larceny (for items of little value) and Grand Larceny (for items over $250) are common criminal offenses.

Art world wheeler-dealers move in a free-market system filled with secrecy. Knowledge is one of the only firewalls of protection a collector-investor has to combat dishonesty and pressure-filled sales tactics.

Those who act in a professional manner are suspicious of those who make outrageous claims, or who play cleverly planned confidence games to defraud and swindle, but the lust for wealth and power often overthrows a sense for what is decent, legal and above-board.

Patricia Jobe Pierce is a freelance writer, art historian, art dealer-consultant, certified AAA appraiser, public speaker, photographer and American art authenticator for museums, auction houses and collectors. She graduated from Boston University with a BFA in 1965, is owner and director of Pierce Galleries, Inc. in Nantucket and Hingham, Mass., and is author of many works, including, "Art Collecting & Investing: The Inner Workings and the Underbelly of the Art World." For more of her submissions, Click Here Now.

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State and federal laws govern an art gallery or auctioneer's warranties and transactions. Every dealer is expected to abide by the Uniform Commercial Code (UCC) that protects them and consumers. Dealer Warranties set by the UCC are relatively easy to understand.
Art, UCC
Monday, 24 November 2014 12:38 PM
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