"Doubt, indulged and cherished, is in danger of
But if honest, and bent on thorough investigation,
It may soon lead to full establishment of the truth."
"Provenance" in the art world means knowing where the art comes from. This includes knowing whether the art has good title. It involves tracing backwards the path of all owners of the art until the very beginning when the artist sold or gave it away. Hence, it involves checking that the artist sold or gave the art to A, who then sold/gave it to B, and B to C, so on so forth, until it reaches your present transaction.
Understandably, the exercise can be tedious but necessary.
In Singapore (and most Anglo- American, European and Commonwealth countries), a person cannot give away what he does not have in the first place. Accordingly, a person with no title to pass (ie. a seller with no ownership) cannot pass ownership to a buyer.
Stolen Art does not have title. Its title remains with the owner-victim.
If the art piece you want to buy has been stolen, you will not have title (and become the owner) even if you paid good money for it and bought it from an innocent seller.
Unless you buy art from the artist, you cannot be sure if the art you acquire comes with ownership rights. Only thorough investigation can establish provenance.
The Writer's article "Art Stolen: a Buyer's Exposure", covers the legal exposure that befalls a buyer of stolen art. Just contact the Writer if you would like a copy of that article.
The wisest course of action would be to have a lawyer involved early in the transaction to help you with the investigation of provenance and vet your contract.
But if misfortune befalls you in having bought stolen art, this article suggests the legal recourse a buyer may have against his seller.
"We cannot solve our problems with the same thinking we
used when we created them."
Simply, arm yourself with knowledge.
The circumstances of a sale and purchase transaction can affect the rights and obligations of the buyer and seller. Is the seller an auction house, a gallery or "the man-in-the-street" doing it as a one-off sale.
Because seller's often want anonymity, a buyer may not know.
The circumstances surrounding buying art are a plenty. This article deals with one. Its parameters lie in the story below.
Zac, hearing that art is now a good investment, decides to look for his first purchase (a painting that he can hang on his living room wall) that will hopefully appreciate in time should he tire of it and wish to sell it.
One Saturday afternoon, Zac strolls into an Art Gallery in Singapore and "lo and behold", finds "the one". He is captivated by a lady dressed in white. Although still an amateur at art appreciation, Zac knows that he is looking at the work of a master.
It looks expensive.
The listed price is unbelievably affordable.
Without a second thought, Zac moves quickly to make the purchase.
The sale is concluded and Zac happily walks out with the painting.
Unknown to Zac, the Gallery bought the painting at a steal too from a "dealer" who stole it. In fact the Straits Times had reported the theft a few days ago, but Zac missed the article.
The thief is caught, confesses to his crime and offers details of who he sold it too. The Gallery owner in turn cooperates with the police and Zac's contact details are given to the police.
Zac falls off his chair when the police call him with the story. Not wanting to get into any trouble, a heart-broken Zac hands the painting over to the police.
Angry, Zac marches down to the Gallery seeking his remedy.
In the story
- The art is sold privately, and not at an auction
- The buyer (Zac) is a consumer and not a dealer. Zac does not buy and sell art for his living.
- The seller (Gallery) is in the business of buying and selling art.
- The Gallery is the actual seller of the art. It is not an agent selling it for someone else.
The contract to buy and sell the painting is therefore between Zac and the Gallery.
To determine if the Gallery broke (breached) the sale and purchase contract, the contract itself must be looked at. Depending on the circumstances, an art contract may be verbal, written or a combination of both.
The terms of the contract will determine the relative rights and obligations of the seller and buyer.
And sometimes, there is intervening legislation that can be referred to.
In this article, the focus is on the Sale of Goods Act and the Unfair Contract Terms Act. There is other legislation that may be relevant. A lawyer should be engaged for a complete overview of your situation.
Seller's obligation – to give good title
Terms stated in the contract
Stolen art does not have good title.
The Gallery not being the actual owner of the painting, did not have an ownership title to transfer to Zac.
The Gallery however did have the painting in its possession. In handing the painting over to Zac, the Gallery transferred possession to Zac.
Whether the Gallery breached an obligation to transfer ownership to Zac would depend on the terms of the contract they entered into.
Did the terms include ....
"The seller will transfer the title of the painting to the buyer on the payment of the price."
Or perhaps the term read as follows instead ....
"The seller will transfer to the buyer such title as the seller has to the painting on the payment of the price."
There is a significant difference here.
In the second example, the Gallery has not breached the term. It had possession and not ownership. It transferred possession to Zac. It did not have ownership and therefore its failure to transfer ownership is not a breach.
Terms not stated in the contract
What if the art contract does not say anything about transferring ownership – title?
Fortunately, a buyer can look upon the Sale of Goods Act which implies a condition on the part of the seller that the seller has the right to sell the goods – Section 12(1).
Only an owner of the good or someone with the authorisation of the owner has the right to sell the good. The Gallery being neither an owner of the painting nor having his authorisation has seemingly breached this implied condition in the contract.
However, the Act also provides that if the contract states or it can be inferred from the circumstances an intention that the seller will transfer only such title as he has, this implied condition will not apply – Section 12(3).
So what is in the contract is crucial.
Remedies, conditions and warranties
A question at the forefront of a wronged buyer's mind is how to respond to a seller's breach.
That would depend on if the breached term is a condition or a warranty.
The right to sell in the Sale of Goods Act is a condition.
If implied into the art contract, the buyer will have choices in his response.
Condition or Warranty?
A condition is an important term. The breach of a condition offers the innocent party several options depending on the outcome he desires.
A buyer can choose to
- ignore the breach and waive the condition
- exercise his right to treat the contract as repudiated. The buyer can choose to accept the seller's refusal to fulfil his obligations. By accepting the seller's refusal, the buyer treats the contract as terminated.
- treat the breach of condition as a breach of a warranty and ask for damages
A warranty is a less important term. The breach of a warranty allows a buyer to ask for damages. The buyer cannot reject the goods and treat the contract as having been repudiated by the seller.
(Sections 11(1) and (2) of the Sale of Goods Act)
Here are 2 more implied conditions under the Sale of Goods Act that are worth a buyer's consideration:-
Some other implied conditions that may have been breached
The strength of a buyer's position against a seller may depend on how many conditions have been breached. Best read each term carefully to consider its impact.
Depending on the contents of the contract, the Sale of Good Act may imply 2 more conditions.
- In the sale of a good by
description, the good must correspond with its
- Suppose the painting is not at the Gallery. Zac buys the painting based on a photograph of it and its description in the contract.
- The contract describes the painting ......
- "The painting to be sold by the seller and bought by the buyer in this contract is identical to be image of it in Appendix A. It is an oil on canvas by Master Ping Pong, dated 1965, with dimensions 60 by 60 inches. The seller is the first owner, having bought it directly from the artist."
- The description is breached. The Gallery bought the painting from a dealer.
- The seller (knowing the particular
purpose the buyer is buying the good for), must ensure
that the good is reasonably fit for that
- Suppose Zac asks the Gallery how he can keep track of the appreciating value of the painting given that it is his intention to sell it. Hearing this question, it becomes clear to the Gallery that the particular purpose for Zac's purchase is to sell the painting. Since the ability to transfer ownership is a fundamental requirement for a seller, the painting cannot be fit for a re-sale by Zac.
- There is a breach.
- But how if Zac tells the Gallery to hold the painting for him for a few days while he checks the provenance of the painting. He then returns a few days later and buys it. The seller may raise this fact to show that Zac did not rely on the skill or judgment of the Gallery.
- The "fit for particular purpose" condition cannot be implied if the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller.
An implied warranty under the Sale of Goods Act
Under the Sale of Goods Act, there is an implied warranty that the buyer will enjoy quiet possession of the goods, except that the buyer may be disturbed by an owner so disclosed or known to the buyer – Section 12(2)(b).
Where art is stolen, this warranty is often breached alongside the implied condition that the seller has a right to sell (mentioned above). When the theft is discovered, the art is surrendered. A buyer loses his enjoyment of quiet possession.
However, the Act also provides that if the contract states or it can be inferred from the circumstances an intention that the seller will transfer only such title as he has, this implied warranty will not apply – Section 12(3).
Such a term in the contract throws up the possibility of the seller not being the owner and accordingly not having the right to sell. It throws up too the possibility of a buyer having his enjoyment of quiet possession interfered with as a consequence.
So here we go again. What is in the contract is crucial.
Can a seller exclude or limit his liability for a breach?
Not if the term pertains to
- The seller having the right to sell
- The buyer being able to enjoy quiet possession
- The good corresponding with its description if a sale of good is by description
- The good being fit for a particular purpose known to the seller
The Unfair Contract Terms Act will not allow it – Sections 6(1) and (2).
A Time limit to sue
6 years from the breach of the contract is the time given to a buyer to sue the seller.
If the Gallery is not willing to give Zac a full refund, Zac has 6 years to sue it.
Originally published July 20, 2019
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.