By Daniel S. Kokhba, Esq.
On October 21, 2013, Sotheby’s Institute of Art and the Entertainment Arts & Sports Law Section of the New York State Bar Association, hosted a panel discussion entitled “Everything You Wanted to Know About Gallery Ethics (But Where Afraid to Ask)”, moderated by Judith Prowda, Senior Faculty Member at the Sotheby’s Institute of Art, on topics ranging from gallery business practices to fiduciary duty obligations. Panelist, Richard Lehun, founding member of Stropheus, emphasized the growing significance of fiduciary duty claims as a distinct and separate alternative to contract claims. The imbalance of power between parties and the resulting relationship of dependence created responsibilities. To what extent, if any, the parties may seek to limit such fiduciary obligations through carefully crafted contracts that seek to carve out or narrowly define them remains an open issue.
Other speakers, Andrea Crane of Andrea Crane Fine Art and Serra Pradhan of Marianne Boesky Gallery discussed the informal nature of gallery transactions. For example, often agreements are sealed with a handshake, which can lead to ambiguity, conflict and even litigation if the artist and the gallery that represents her disagree about the terms of their agreement. The panel suggested that perhaps added formalism through contract can clarify the parties’ rights and obligations.
Panelists also commented about possible means of fraud detection. Where there is a strong suspicion that an item is stolen, such as where it lacks adequate provenance, or where the sale is being done in a hurry to frustrate creditors, prudent dealers and dealers and gallery owners should be prepared to politely turn down the business.
In all, the panel engaged in thoughtful discussion and shed light on interesting and evolving areas of art law alongside business realities.
About the Author
Daniel S. Kokhba, Esq. is a Partner at Kantor Davidoff, Mandelker, Twomey & Gallanty, P.C. and focuses his practice on commercial law, art law and employment law. He may be reached at Kokhba@kantordavidoff.com or 212-682-8383
This article is intended as general information, not legal advice, and is no substitute for seeking representation.