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Risks when you buying Art

There’s an intrinsic ‘aleatory element’ when it comes to buying art. This was established by the Austrian Supreme Court (OGH) already back in 1929. At the time, a plaintiff purchased a violin, which had allegedly been crafted by the famous Absam luthier, Jacobus Stainer (17th century), off an antiques dealer for 1,200 dollars. However, it then emerged the violin was a less valuable model made by Egidi Klotz II. The plaintiff wanted to reverse the transaction, but had to enter legal proceedings.

While the case is many decades behind us now, the inherent issue is more current than ever. Often purchasers pay a princely sum for apparently genuine artefacts only to then discover they can’t demand their money back. Essentially, it’s always all about who takes the risk when forgeries are involved. If the dealer knows of the object’s forged nature but cunningly kept quiet about it, the bill of sale can be contested for as long as 30 years. Warranty claims and avoidance on account of mistakes can be used by the purchaser if the dealer assured the item’s true provenance. However, in this case, we’re talking about relatively brief periods of time, from 2 to 3 years.

In 2009, an auction house in Lindau described a Buddha statue as originating from the Sui dynasty (581-618). At the same time, liability and warranty were excluded from the auction conditions. The plaintiff purchased the statue, which at a later stage turned out to be a forgery, for €20,295. The German Federal Supreme Court of Justice sustained the lawsuit, as the auction conditions in this specific case were ineffective and the age of the statue, due to its description, was earmarked as a trait the original statue would have had.

Cases which are more difficult to assess are those where both the dealer and purchaser were convinced of the genuine nature of the work of art and its provenance was not assured. There are two possible solutions: focus on the principle of balance of the services or on the personal responsibility of the parties in the contract. In the first instance, the dealer takes on the risk, in the second case the purchaser. In the Stainer violin case the OGH issued a decision based on the parties’ personal responsibility. That’s not always the case and can vary from country to country. In Austria and France, for instance, in certain circumstances the purchaser can rescind the agreement due to a conspicuous disproportion between the sale price and its actual value.

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Dr. Georg Huber, LL.M. ist Partner der Innsbrucker Rechtsanwaltskanzlei Greiter Pegger Kofler & Partner. Er hat in Innsbruck und Chicago studiert und ist sowohl in Österreich als auch New York als Rechtsanwalt zugelassen. Zu seinen bevorzugten Tätigkeitsgebieten zählen unter anderem IT- und IP-Recht, wobei er sich auch immer wieder mit urheberrechtlichen Fragen befasst.

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