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Supreme Court to review ruling over consignors’ names being revealed

18 February 2013Written by ATG Reporter

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.

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