The 6 must-have protections for art buyers
When a buyer eyes a “must-have” work of art, caution sometimes flies out the window. When emotions run high, intelligence runs low. A buyer needs to exercise prudence before they close the sale or troubles may result. The 6 Representations and Warranties art buyers must have are outlined here.
Protections are particularly important if the buyer is purchasing the art as an investment, and proper documentation is essential for safeguarding their asset.
Before signing on the dotted line or cutting a check, a buyer should demand a minimum of six (6) representations and warranties from the seller.
A representation is an assertion as to a fact, true on the date the representation is made, that is given to induce another party to enter into a contract or take some other action.
A warranty is a promise of compensation or restitution if the assertion is false.
There may be more than six (6) promises required from a seller in addition to the applicable statutory warranties.
But the following assurances are a must and should be included in any art purchase agreement:
- The seller has ownership of the artwork and the authority to sell it.
- The artwork is free from any claims, liens, security interests, pledges or encumbrances.
- The seller is not aware of any third-party claims or information likely to give rise to any claims concerning the authenticity, provenance or ownership of the subject artwork
- All information provided by the seller regarding provenance of the artwork is true and accurate (“provenance” being the history and backstory of the piece, if any).
- The artwork was not illegally imported or exported.
- The sale of the artwork does not violate the laws of the artwork’s country of origin.
These six (6) areas cover a huge swath of legal disputes that we have experienced in the art world and our art law practice.
The buyer should be exercising their own independent diligence to confirm the facts covered by these representations and warranties. The ultimate value of the art depends on the accuracy of the documentation.
But if statements pertaining to one of these promises turn out to be false, and the buyer is embroiled in a dispute over the piece as a result, it’s good to know that the buyer reserved a remedy against the seller.
These representations and warranties provide the buyer with valuable information regarding the artwork in question and help the buyer to make an informed decision. They act as assurances given by the seller to the buyer.
In addition, these representations and warranties protect the buyer and give him/her peace of mind, as well as options to cancel or renegotiate the deal.
Most importantly, these 6 representations and warranties mitigate some of the most prevalent risks associated with purchasing artwork.