Lawyer Zuzana Valoušková gave us some valuable advice as to what we should consider when buying a work of art. What to remember and what to avoid?
The advantage of purchasing a work from the author themselves lies in the fact that there is no doubt concerning the authorship, which is usually evidenced by a certificate of authenticity. On the other hand, some artists impose requirements on the buyer regarding the future handling of the work, typically when exhibiting it. In the case of a work’s sale by an entity other than the artist, the question of provenance, or origin, may be crucial. It is thus advisable to carry out a comprehensive ‘background check’ on the more valuable works, ideally in collaboration with renowned experts on the period or specific artist. It is also important to thoroughly investigate the condition of the work and how it has been treated in the past. When selling through a gallery or the artist’s representative, it is critical to make sure that these entities are authorised to handle the work. If purchasing from another collector, the marital status of the seller and any community property may be relevant. Therefore, out of caution, I recommend seeking the consent of the other spouse in writing.
Contract of purchase
When valuable works are involved, it is worthwhile to entrust the preparation of the contract documentation containing adequate buyer protection to an attorney experienced in copyright and art law. In the purchase contract, it is useful to include certain representations and warranties by the seller, particularly those concerning the legal title, authorship, provenance of the work, and the authority to possess the work. In addition to the aforementioned consent of the spouse, it is also crucial to make sure that the owner is not insolvent. Furthermore, the purchase price and the method of payment must be determined – payment in cash is limited by law to CZK 270,000. Finally, the handover of the work must be arranged, including, for example, framing, transport, or insurance.
Ownership vs. copyright
Upon conclusion of the purchase contract, ownership of a certain part is transferred, however, this does not mean that the new owner can use it freely. Unless otherwise stated in the contract, the work is to be used only for the owner’s own purposes. The moral rights of the author include, among others, the right to decide on the publication of the work, the right to appropriate authorship, including the right to decide whether and how authorship should be indicated, and the right to inviolability of the work. The latter defines the right to grant permission for any alteration or other intervention in the work and the right to use the work in a manner that does not diminish its value, or the right to so-called authorial supervision. The author’s property rights pass on to their heirs or other legal successors upon death, while moral rights are linked only to the author, are non-transferable, and expire upon their death. Therefore, if the buyer wishes to exhibit or rent the work of a living author, they should negotiate a licence from the author.
Right of withdrawal
The buyer is entitled to withdraw from the contract if a material defect in the object of purchase is proven, for example, if it is a fake. However, they are obliged to notify the seller of this fact as soon as they have discovered or should have / could have discovered it. The assessment of whether the buyer has exercised their right in time may depend on different circumstances – the situation may be different if the counterfeit is obvious, and different if, for example, several experts disagree. Other defects that are not so fundamental, such as damage or defects in framing, are then considered to be a non-substantial breach of the purchase contract. In these cases, the buyer is only entitled to have the defect remedied or to a reasonable reduction in the purchase price.
Zuzana Valoušková gave a more detailed presentation on this issue during an online lesson for EduArt Club members. Zuzana now works at the JŠK law firm and has extensive experience in art law. Her experience to date includes advising contemporary artists, galleries and artists on contract law, copyright law, sales, and loans, working with clients in commercial negotiations, preparing contractual documentation, and advising on specific risks in the field of collecting or investing in art.