Disputes relating to art work occur often when substantial amounts of money are at stake. Recently the New York Supreme Court delivered a landmark pre-motion ruling which has allowed part of a £6,000,000 law suit to proceed on the basis of breach of contract. The ruling is groundbreaking as it is the first time a judge’s decision has been based on Article 15 of New York’s Arts and Cultural Affairs Law. The case revolves around an edition of a Jeff Koons sculpture Gazing Ball (Centaur and Lapth Maiden) (2013) which was paid for by a London Art Dealer, Fabrizio Moretti in 2014 but had not been delivered by the Gallerist David Zwirner’s gallery. Amongst other charges Moretti alleged that the gallery was in breach of contract and its warranties on the following basis:

  1. Delivery: No specific date for delivery was set out in the agreement. Moretti alleged that there had been a breach of contract. Payment had been made therefore delivery should have taken place within a reasonable time. Zwirner asserted that since Moretti did not specify a delivery date, he acquiesced to receiving the edition of sculptures when they were complete. The court ruled that when a precise delivery date is not indicated then the question relating to when this should occur is one of reasonableness.
  2. The number of works: Moretti claimed that the sculptures should have been in an edition of three, as detailed in the agreement. Therefore the additional sculpture displayed at the Zwirner’s gallery was in breach of this provision. Zwirner denied this and said that the exhibited work was a “prototype” and did not form part of the edition.
  3. Dimensions of the sculpture: The dimensions of the sculptures were not in accordance with those specified in the agreement. Zwirner argued that Moretti had been informed of the minor differences in dimensions.

In this pre-trial motion the judge was asked to consider whether these claims could be determined on a matter of law. He sided with Moretti on these points. His decision was based on Article 15 of New York’s Arts and Cultural Affairs Law amended in 1991. This requires sellers that produce multiple works of the same art to provide buyers with vital information about them such as information relating to their size and the number of editions created. The purpose of this is to protect buyers from a seller’s fraudulent or deceptive practices.  Without this requirement the judge stated that a buyer that spends “millions of dollars for a valuable artwork would potentially have to wait until the minute before the art work is delivered to receive information concerning the artwork.”

Depending on the nature of a contract, different types of breaches can occur. For instance it can occur when a party fails to honor an obligation or when one party to a contract makes it impossible for the other to perform its obligations. However unlike this case not all breaches lead to litigation. This depends on the seriousness of the breach and who the parties are. In the interest of settling a matter out of court, saving costs and time where possible, parties may wish to resolve their dispute through an alternative mode of dispute resolution. If you would like to have your contract reviewed or need advice on a possible breach of your contract please contact Tony Fisher on [email protected].