Authenticity of Authorship and the Auction Market

Abstract

Over the last twenty years the art auction market has been transformed from one where the prevalent bidders were experienced dealers and professional agents acting on behalf of collectors and museums, into a market where many novice participants are engaged directly into bidding for themselves. The influx of a new class of participants into the auction market has produced a group of individuals, sometimes naive and very often inexperienced in the rules, conventions and pitfalls of the art and antique auction. Thus, these changes in the auction market have produced a burgeoning population of potential victims of the fraudulent practices that often occur in the auction market. This article explores the protection against such fraud - the warranty of authenticity. The major established auction houses provide such warranty protection, but the warranty may vary by type of merchandise and be limited by disclaimers. The article also reviews the case law where some courts have been reluctant to impose liability by giving the auction houses wide discretion in their use of disclaimers. The article surveys the warranty protection that exists by comparing the established international auction houses to various regional auctioneers.

Keywords: auctions, contracts, warranty, disclaimer, fraud