Good legal advice is vital for protecting yourself when buying or selling art, yet art transactions are often made on trust.
Roland Foord, senior partner at law firm Stephenson Harwood LLP, has seen what can happen when that trust proves to be misplaced.
“The art world has long been, and remains, entirely unregulated,” he says. “It’s a world that operates on trust and a handshake. It’s remarkable how often, despite the best efforts of lawyers such as myself to persuade people that they should have a proper contract when they’re spending several million pounds, paintings get sold on an invoice without any particular safeguards for either party.”
It’s worth remembering that when writing a contract for a sale, provided the two parties of the contract agree with what it says, you can write what you like – so you can, for example, limit your liability as a seller by specifying that it’s only your opinion that a painting is by a particular artist.
“You can have the buyer acknowledge if you will that your opinion is a reasonable one to hold and if he’s prepared to do that, or if he’s got his own advice, you might stipulate that no warrant is given at all as to whether in fact it’s by Monet or not – it’s entirely at the buyer’s risk,” says Foord.
On the other hand you may want to guarantee that it a painting is by a particular artist. This makes a work of art considerably more attractive to the buyer and is an approach commonly used by auction houses.
Besides issues of authenticity, Foord advises examining where the work has been over the years, in order to avoid buying something that turns out to belong to someone else.
“Provenance is important, particularly if there is any suggestion of its presence in Germany or central Europe in the 1930s through the war years.”
If there are gaps in the provenance around that time, you ought to be wary because because there may be adverse claims to it from the descendants of victims of the Holocaust.
Even shorter, more recent gaps in its history can be suspicious: it is reasonably common to keep stolen works of art out of circulation for a few years and then bring them back to the market in an unusual location. With this in mind, a search of the Art Loss Register – a database of stolen art – is often advisable.
Foord adds that you can expect a degree of protection when buying from a reputable dealer, because they will be keen to protect their good reputation.
“If you’re buying from an eminent dealer, it is more likely that if something goes wrong they will take the work of art back,” he says. “But there will always be the very rare occasions where you may get to litigation.”