In the press and in popular culture, art theft and art forgery tend to be linked, and are often glamorized to a greater or lesser extent.¹ The reality, however, is usually far more mundane, if not outright seedy (although efforts at recovery often have admirable, even >heroic overtones). In recent years, there have been several highly-publicized instances of forgery, including the sales of fake works by modern masters like Mark Rothko and Jackson Pollock that brought down the eminent Knoedler Gallery, and the extraordinarily successful fakes of the German painter Wolfgang Beltracchi, who after his fraud was disclosed, became the subject of many press articles, newscasts, and even a documentary, “Beltracchi: The Art of Forgery” (2014).

Unlike art thieves, however, art forgers and art fakers sometimes go on to a secondary career as fake-artists in their own right, enjoying a kind of glamorous notoriety, as Beltracchi has done. But Beltracchi is not alone in this. John Myatt now sells his “legitimate fakes,” Others have included Elmyr de Hory, Eric Hebborn, whose posthumous reputation as a master forger resulted in a recent auction of a number of his drawings in the style of old masters, and Mark Landis, who, somewhat uniquely, donated his faked works to museums. Perhaps the most famous forger was Hans van Meegeran, who forged Vermeers in pre-war Germany, selling one to Hermann Goering. Fakes and forgeries are even not infrequently the subject of exhibitions highlighting the forger’s own art. Some commentators have even suggested that fakes may be “the great art of our age.”     

The aura of the master forger, though, means little to the buyer who finds himself or herself the proud owner of something considerably less than what was expected. When a work fails to conform to expectations (and a seller’s representations), the buyer normally will demand that the seller rescind the sale, take back the forged work and return the purchase price. For the seller, the incentive to quietly unwind the sale is a face-saving move – where the notoriety of a lawsuit carries significant reputational risk, as well as cost, angst, and uncertainty.

But if an amicable rescission of the sale is not feasible, the disgruntled buyer will likely bring an action against the ultimate seller of the work, the art merchant (dealer, gallery, or auction house), or both. The basis of such a claim is typically a mixture of tort law and contract law – fraud, misrepresentation, or for breach of warranty. While the elements the buyer will need to show are different for each of these causes of action, a common additional consideration for all of them is timing –

(i)                 what statute of limitations will apply, after which the action cannot be brought,

(ii)               when that limitations period begins to run (whether at the time the event occurred, when the buyer should have known about it, or when the buyer actually discovered it), and

(iii)             whether a court would apply the equitable doctrine of laches to bar the buyer’s claim (laches is essentially the position that the buyer has waited too long to bring the claim, and that as a result of that delay, the seller suffers damage or prejudice, which usually has to be in the form of evidence or witnesses no longer being available).

The details of each of these three timing elements will vary, depending on where the action is brought and what state’s (or country’s) law applies.

To bring a claim for fraud, the buyer will need to establish must establish that

(i)              a representation of a material fact was made,
(ii)             the representation was untrue,
(iii)           the party making the representation knew it to was untrue,
(iv)             the party made the representation intending to deceive the buyer and in order to induce the buyer to act on the representation,
(v)             the buyer justifiably relied on the representation, and
(vi)             by relying on it, suffered harm (i.e., damages).

A claim for misrepresentation similarly will require the buyer to show that

(i)                the party making the statement was aware that the buyer would use the information for a particular purpose,
(ii)              the relationship of the parties required that the information be provided with care, and
(iii)             the buyer justifiably relied on the information.

The factual needs for making successful claims of fraud and misrepresentation can be challenging.

Claims based on breaches of warranties are closer to breaches of a contractual relationship between the parties, and so, depending on the documentation involved in the sale, it is possible that certain warranties may have been waived or curtailed. Close attention to all documentation is critical. In U.S. art transactions, warranties will typically be governed by the Uniform Commercial Code (the UCC)(enacted in each individual state, with some modifications). The UCC warranties applicable to art transactions are

(i)                 express warranties,²
(ii)               implied warranties of merchantability,³ and
(iii)              implied warranties of fitness for a particular purpose.⁴

For certain types of cross-border art sales (usually those between art dealers or galleries), the Convention on the International Sale of Goods (CISG) may apply instead. The UCC warranties find their CISG analogues in the presumptions set out in CISG art. 35(2)(concerning what qualifies as conforming goods).

For art sales, the warranty that is the subject of most litigation is the express warranty. The express warranty can come into existence through

(i)                 the seller’s affirmation of a fact or promise,⁵

(ii)               the seller’s description of the artwork,⁶ or

(iii)             the seller’s statements of opinion about the artwork.⁷

The key elements for an express warranty are what are called the “core description” of the artwork (i.e., artist, period, date, etc.),⁸ and also any statements the seller makes that become “part of the basis of the bargain.”⁹ If the artwork fails to conform to the seller’s affirmations or promises, the warranty is breached, regardless of the seller’s good-faith or malicious intentions in making the false statement. Unlike in fraud or misrepresentation, with warranties, the seller does not need to intend to deceive the buyer.

Disputes concerning implied warranties occur less frequently in art sales, but they do sometimes arise, and when they do, they almost always involve implied warranties of merchantability (that an object is saleable), or implied warranties of fitness for a particular purpose (which will depend upon the statements made by seller to buyer and also by buyer to seller – if a seller knows that a buyer has specific requirements, and is relying on the seller’s expertise to meet those requirements, an implied warranty of fitness for that particular purpose may exist).

As in many kinds of transactions, art sales require caution, due diligence (research and confirmation into the seller as well as the work and the work’s provenance), and a skepticism to serve as a counterbalance to the collector’s natural impulse, which usually is passion and enthusiasm. Much of the art trade operates more loosely and informally than typical business transactions, and buyers may be hesitate to ask questions for fear of losing out on an opportunity or seeming out of step. Still, caveat emptor remains wise counsel.

---