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Art Law and the Business of Art

Martin Wilson

Art Law and the Business of Art is a comprehensive and practical guide to the application of UK law to transactions and disputes in the art world. Written by Martin Wilson, an art lawyer with over 20 years’ experience in the field, it outlines and explains the relevant law and how the art business operates in practice, as well as offering a discussion of the most pressing ethical questions involving artworks.
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Table of contents

Martin Wilson

Preface
Notes
Glossary of art terms
Table of cases
Table of legislation
1. The artist and the artwork
1.1 Copyright
1.1.1 What types of artwork are protected by copyright?
1.1.2 The requirement of originality
1.1.3 Duration of protection
1.1.4 Ownership of copyright
1.1.5 Copyright infringement
1.1.6 Substantial part
1.1.7 Inexact copies and imitation
1.1.8 Fair dealing
1.1.9 The internet
1.2 Moral rights
1.2.1 Introduction
1.2.2 Moral rights
1.2.3 Application of moral rights
1.3 Artist’s resale right
1.3.1 Introduction
1.3.2 Artist’s resale royalty in the United Kingdom
1.4 Royalties and enforcement
1.4.1 Introduction
1.4.2 Royalties
1.4.3 Enforcement
1.5 Graffiti art
2. Auction sales: introduction
2.1 The popularity and psychology of the auction
2.2 The auction process
2.2.1 The decision to sell
2.2.2 Consignment of the property and the choice of auction house
2.2.3 The seller’s commission and costs
2.2.4 The sale calendar
2.2.5 Cataloguing
2.2.6 Provenance
2.2.7 Estimates
2.2.8 Condition reports
2.2.9 Catalogue and marketing
2.2.10 The reserve price
2.2.11 Viewing
2.2.12 Saleroom announcements
2.2.13 Buyer registration
2.2.14 Bidding
2.2.15 The hammer
2.2.16 Charges to the buyer
2.2.17 Payment and proceeds of sale
2.2.18 Collection
3. Auctions: the auction house
3.1 The auction house and the seller
3.1.1 Fiduciary duties
3.1.2 Duty to care for the principal’s property
3.1.3 Duty to act with skill and care
3.1.4 Auctioneer’s obligations to the seller imposed by consumer law
3.1.5 Auctioneer’s contractual rights and obligations in relation to the seller under the agency agreement
3.2 The auction house and the buyer
3.2.1 The auctioneer’s liability to the buyer
3.2.2 The rights and obligations of the buyer
3.2.3 Exclusions and limits on liability
4. Auctions: financial arrangements
4.1 Advances, loans and credit arrangements
4.1.1 Interest
4.1.2 Security
4.1.3 Consumer Credit Regulations
4.2 Guarantees and risk sharing arrangements
4.2.1 Guarantees
4.2.2 Risk sharing arrangements
5. Ownership and authenticity
5.1 Title and ownership
5.1.1 Title to stolen property
5.1.2 Conversion
5.1.3 Ownership of abandoned or lost property
5.1.4 Limitation periods
5.2 Authenticity and attribution
5.2.1 Underattribution – the sleeper
5.2.2 Overattribution – misattributions and forgeries
5.2.3 Blockchain
6. Auctions: policing the saleroom
6.1 Mock auctions
6.2 Bidding agreements and auction rings
6.3 Estimates and consumer pricing information
7. Auctions: online auctions
7.1 Forms of online auction
7.1.1 Online bidding in physical auctions
7.1.2 The eBay model
7.1.3 The time limited online only auction
8. Auctions: negotiating agency agreements
8.1 Introduction
8.2 Timing of the sale
8.3 Marketing of the sale
8.4 Seller’s warranties
8.5 Catalogue description
8.6 Loss and damage to the artwork
8.7 Aftersales
8.8 Payment
8.9 Withdrawal
8.10 Cancellation of the sale
9. Private sales of art
9.1 Introduction
9.2 Structure and negotiation of a private sale agreement between buyer and seller
9.2.1 Parties
9.2.2 Price
9.2.3 Warranties
9.2.4 Disclaimers of warranty
9.2.5 Condition
9.2.6 Passing of title
9.2.7 Release of the artwork to the buyer
9.2.8 Transfer of risk
9.2.9 Authenticity
9.2.10 Confidentiality
9.2.11 Disputes
9.3 Structure and negotiation of private sale agreements using agents
9.3.1 Purpose of the appointment
9.3.2 The artworks to be sold
9.3.3 Exclusivity
9.3.4 Term
9.3.5 Price
9.3.6 Agent’s commission
9.3.7 Sale charges
9.3.8 Payment
9.3.9 Warranties
9.3.10 Physical possession
9.3.11 Insurance
9.3.12 Transfer of ownership and risk
9.3.13 Confidentiality
9.3.14 Disputes
9.4 Implied terms in private sales
9.4.1 Correspondence with description
9.4.2 Satisfactory quality
9.4.3 Title, quiet possession and freedom from charges
9.5 Exclusions and limits on liability in private sales agreements
9.5.1 Exclusions and limitation of liability in the conditions of sale
9.6 Agent’s liability to the buyer and seller
9.7 Transparency, secret commissions and the problems arising from subagency
9.8 The art dealer
9.8.1 Introduction
9.8.2 Stock sales
9.8.3 Agency sales
9.8.4 Sales on behalf of the artist
9.8.5 Agreements between dealers and artists
10 Ethics, public policy and art
10.1 Holocaust restitution claims
10.1.1 Holocaust confiscation and looting
10.1.2 Postwar restitution efforts
10.1.3 The 1998 Washington Conference
10.1.4 Holocaust restitution claims in the United Kingdom
10.1.5 The Spoliation Advisory Panel
10.1.6 Holocaust (Return of Objects) Act 2009
10.1.7 Immunity from seizure in the United Kingdom
10.1.8 Holocaust looted art databases
10.2 Cultural property and heritage
10.2.1 International conventions on cultural property protection
10.2.2 United Kingdom cultural property protection legislation
10.2.3 Codes of conduct
10.2.4 Civil remedies
10.2.5 The future
10.2.6 Guidance for the collector
10.3 Listed building protection
10.3.1 Introduction
10.3.2 Fixtures and fittings
10.3.3 Objects and buildings within the curtilage of a listed building
10.4 Endangered species
10.4.1 The CITES Convention
10.4.2 The protected species
10.4.3 CITES licences required
10.4.4 Exceptions
10.4.5 Enforcement
10.4.6 Ivory and rhino horn
10.5 Freedom of expression
10.5.1 Introduction
10.5.2 Obscenity and sex
10.5.3 Art, religion and race
10.6 Furniture and Furnishings Fire Safety Regulations
11. Art and taxation
11.1 Tax and art
11.1.1 Capital gains tax
11.1.2 Inheritance tax
11.1.3 Estate duty and capital transfer tax
11.1.4 Domestic VAT
11.1.5 Import VAT
11.2 Tax efficient arrangements
11.2.1 Conditional exemption
11.2.2 Sales to the nation
11.2.3 Acceptance in lieu
11.2.4 Cultural gifts scheme
11.2.5 Lifetime gifts
11.3 Conditional exemption from inheritance tax
11.4 Sales to the nation
11.5 Lifetime gifts
11.6 Acceptance in lieu
11.6.1 Who may benefit from the scheme?
11.6.2 The Acceptance in Lieu Panel
11.6.3 Objects which may be considered
11.6.4 Value and condition
11.6.5 Acceptance in Lieu Panel decision
11.6.6 Advantages for the owner
11.7 Cultural gifts scheme
11.7.1 Who may benefit from the scheme?
11.7.2 The Acceptance in Lieu Panel
11.7.3 Objects which may be considered
11.7.4 Value and condition
11.7.5 Acceptance in Lieu Panel decision
11.7.6 Tax reduction
11.7.7 Limits on the scheme
11.7.8 Rules for the institution to which the object is given
11.8 Resident nondomiciliaries
11.9 Domestic VAT
11.9.1 Normal VAT rules
11.9.2 Secondhand goods margin scheme
11.9.3 Auctioneer’s margin scheme
11.10 Import VAT
11.11 Brexit
12. Shipping, export and insurance of art
12.1 Export of cultural property
12.1.1 No export licence required
12.1.2 Individual export licence required
12.1.3 Referral to the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest
12.1.4 Temporary admission scheme
12.1.5 ATA carnet scheme
12.1.6 Bonded warehousing
12.2 Import of cultural property into the European Union
12.3 Insurance of art
12.3.1 Loss and damage
12.3.2 Inherent vice
12.3.3 Terrorism cover
12.3.4 War and confiscation
12.3.5 Moth, vermin and woodworm damage
12.3.6 Wear and tear
12.3.7 Atmospheric change
12.3.8 Insufficiency in packing
12.3.9 Title insurance
13. Museums
13.1 Introduction
13.2 Museum accreditation and ethics
13.2.1 Due diligence
13.2.2 Disposal and deaccessioning
13.2.3 Conflicts of interest and commercial relationships
13.3 Purchases and acquisitions by museums
13.3.1 Outright purchase by the museum from museum funds
13.3.2 Donation
13.3.3 Acquisition with assistance from the Art Fund, government and National Lottery Fund grants
13.3.4 Long- and short-term loans
13.4 Loans to and by museums
13.4.1 Loan agreement
13.4.2 Structure and negotiation of the loan agreement
13.4.3 Government indemnity scheme
13.5 Deaccessioning and disposal of artworks by museums
13.5.1 Museums Association deaccessioning guidelines
13.5.2 Legislative provisions on deaccessioning
14. Art funds
14.1 Introduction
14.2 Choosing an art fund
14.2.1 The art fund manager
14.2.2 Asset acquisition due diligence
14.2.3 Market sector
14.2.4 Liquidity
14.2.5 Return objective
14.2.6 Fee structure
14.2.7 Ticket size
14.3 Investors and risk appetite
14.4 Valuation and audit
15. Art disputes
15.1 Disputes and court proceedings
15.1.1 Introduction
15.1.2 Making a claim
15.1.3 Legal costs
15.1.4 Alternative dispute resolution
15.1.5 Legal proceedings
15.1.6 Injunctions
15.2 Title disputes
15.2.1 Commercial considerations for sellers
15.2.2 Burden of proof of ownership
15.2.3 Consequences of a claim where artwork is in agent’s hands
15.2.4 The commercial consequences of a claim
15.2.5 Timing of the claim
15.2.6 Slander of goods and title
15.2.7 Settlement options
15.3 Authenticity disputes
15.3.1 Forgery and misattribution
15.3.2 Claims by buyers of inauthentic or misattributed artworks
15.3.3 Claims by sellers of underattributed artworks
15.4 Condition disputes
15.5 Saleroom disputes
15.5.1 Missed bids
15.5.2 Nonbidders
15.5.3 Bidding sequences
15.5.4 Refusal to accept bids
15.6 Payment disputes
15.6.1 Passing of title on payment in full
15.6.2 Retaining possession of the artwork
15.6.3 Securing a deposit or part payment
15.6.4 Interest
15.6.5 Legal proceedings
15.6.6 Publicity
15.7 Alternative dispute resolution
15.7.1 Mediation
15.7.2 Early neutral evaluation (ENE)
15.7.3 Expert determination
15.7.4 Arbitration
16. Anti-money laundering and sanctions compliance
16.1 Anti-money laundering
16.1.1 Money Laundering Regulations 2007 and the regulated industries
16.1.2 Proceeds of Crime Act 2002
16.1.3 Typical ‘know your client’ and anti-money laundering procedures
16.2 Sanctions compliance
16.2.1 Introduction
16.2.2 Sanctions in place in the United Kingdom
16.2.3 Trade sanctions
16.2.4 Penalties for breaching sanctions
16.3 Facilitation of tax evasion
17. The Bribery Act
17.1 Introduction
17.2 Active and passive bribery
17.3 Improper performance
17.4 Bribery of a foreign public official
17.5 Transparency and disclosure
17.6 Corporate failure to prevent bribery
17.7 Penalties
17.8 Practical guidance
18. Confidentiality and data protection
18.1 Confidentiality
18.2 Data protection
18.2.1 European General Data Protection Regulation
18.2.2 The five GDPR principles for handling personal data
18.2.3 Lawful, fair and transparent collection and processing of data
18.2.4 Use of personal data
18.2.5 Accuracy of personal data
18.2.6 Protection of personal data
18.2.7 Data breach reporting obligations
18.2.8 Data subject right to information
Index