New York’s highest court has decided to review a recent ruling that says salerooms in the state must reveal consignors’ names to buyers.
In September the
Supreme Court rejected the claim that New York's auctioneers follow
common practice when preserving the anonymity of their clients
and said that a binding auction contract in the state must include
the name of both buyer and seller.
The surprise ruling followed a legal action
brought by Chester, New York saleroom William J. Jenack against a
buyer who declined to pay his bill. Lawyers for Albert Rabizadeh, a
Long Island-based dealer in Russian works of art, argued that the
auction house had lacked the proper documents to demand payment of
$400,000 ($460,000 including premium) for a silver and enamel box
by Ivan Petrovich Khlebnikov.
Their argument was based on the letter of
the General Obligations Law, the statute covering contracts between
buyers and sellers in New York, which says a legally recognised
contract must include the names of both parties. Justice Peter B.
Skelos (with three other justices concurring) agreed that a simple
consignment number was not enough.
Legal opinion has been split on the ruling
and its implications for New York auctioneers. "As of now you can
back out of any transaction where the name of the seller is not
provided," said Peter Stern of Manhattan art lawyers McLaughlin
& Stern. Others, such as Jonathan Olsoff of Sotheby's, have
argued the significance of the ruling has been overstated as it
related only to cases when a purchaser defaults.
The Court of Appeals announced in January its intention to
review the case in the spring.