1L A L I V E Avocats Contractual Problems of Authenticity and Attribution The Swiss Law Approach...

1L A L I V E

Avocats

Contractual Problems of

Authenticity and Attribution

The Swiss Law Approach

Carolyn Olsburgh

2

TitreSous-titre

L A L I V E

Avocats

Authenticity and Attribution – Swiss law

INTRODUCTION

Situation:

Purchase of a work of art with the belief that it is an original (or by a certain artist)…

… but it later turns out to be a fake.

Major change in Switzerland since 1st June 2005

3

TitreSous-titre

L A L I V E

Avocats


INTRODUCTION

Scope of presentation:

• Contract between buyer and seller not relationship with expert

• Code of obligations not Vienna Convention on Contracts for the International Sale of Goods (CISG)

• System in the absence of contractual derogations not clauses limiting/excluding seller’s liability

4

TitreSous-titre

L A L I V E

Avocats


INTRODUCTION

or Performance of the contract

Seller’s liabilityfor defects

Debtor’s liabilitynon-performance

Art. 97 et seq. Art. 197 et seq.

Not applicable

Deception (dol)Fundamental

Mistake(erreur essentielle)

Formation of the contract

Art. 23 - 24(1)(4) Art. 28

Evidentiary difficulties

5

TitreSous-titre

L A L I V E

Avocats


I. PRE-CONTRACTUAL DUTY TO INFORM

Section I

THE SELLER’S PRE-CONTRACTUAL DUTY

TO INFORM THE BUYER

6

TitreSous-titre

L A L I V E

Avocats


I. PRE-CONTRACTUAL DUTY TO INFORM

- Recognised in art transactions

- Basis: duty of good faith (Art. 2 CC)

- Existence / extent: disparity of knowledge between the parties

access to information

- Exception: awareness of other party’s mistake

- Breach: « culpa in contrahendo » damages

7

TitreSous-titre

L A L I V E

Avocats


II. REMEDIES OF THE DEFRAUDED BUYER

Section II

REMEDIES OF THE DEFRAUDED BUYER

8

TitreSous-titre

L A L I V E

Avocats







Not applicable




Art. 23 - 24(1)(4) Art. 28


9

TitreSous-titre

L A L I V E

Avocats


II.1 REMEDIES – FUNDAMENTAL MISTAKE

Section II.1

FUNDAMENTAL MISTAKE

(“erreur essentielle”)

10

TitreSous-titre

L A L I V E

Avocats



Authenticity / Attribution

=

“a fact which, pursuant to the rules of good faith in the course of business, could be considered by the mistaken party as a

necessary basis of the contract” (Art. 24(1)(4) CO).

operative mistake

11

TitreSous-titre

L A L I V E

Avocats



‘Van Gogh case’(Swiss Supreme Court, 16 October 1956)

“The authenticity of the painting which was admitted by both parties, at the time the contract was concluded, was a circumstance which objectively, in the perspective of loyalty in business, seemed paramount, so that a mistake on this issue could not be considered as a simple mistake as to the motives without any legal consequences. It was clear that the claimant would not have bought the painting and would not have paid the requested price had he not been persuaded of its authenticity”.

Autoportrait, 1889, Musée d'Orsay,

Paris

12

TitreSous-titre

L A L I V E

Avocats



Three cumulative requirements:

1. The purchaser had no knowledge that the object being sold was a fake

2. The authentic nature of the object was a decisive element for the purchaser when entering the contract

3. The seller should have realised that the authenticity of the object was a decisive element for the sale

Right to nullify the contract

1 year from discovery of

mistake(Art. 31 CO)

13

TitreSous-titre

L A L I V E

Avocats



1. Restitution

1 year from knowledge of claim10 years after claim arose (Art. 67)

Payment of purchase price(‘Picasso case’)

reimbursement of purchase price

return of object

Seller Buyer

14

TitreSous-titre

L A L I V E

Avocats



2. Damages

Seller Mistaken Buyer

claim if mistakeis attributable to

buyer’s negligence(Art. 26)

no claim (unless culpa in contrahendo)

15

TitreSous-titre

L A L I V E

Avocats







Not applicable




Art. 23 - 24(1)(4) Art. 28


16

TitreSous-titre

L A L I V E

Avocats


II.2 REMEDIES – LIABILITY FOR DEFECTS

Section II.2

SELLER’S LIABILITY FOR DEFECTS

17

TitreSous-titre

L A L I V E

Avocats



Lack of authenticity / misattribution

=

absence of a quality promised by the seller, orwhich the buyer could reasonably expect,

which substantially reduces the value of the object

seller’s liability for defects (Art. 197)

18

TitreSous-titre

L A L I V E

Avocats



- No need of seller’s fault

- No need of seller’s knowledge (Art. 197(2))

- Only if buyer was not aware (Art. 200) or could not have been aware

- Buyer’s duty to examine the object and notify the seller of defects (Art. 201)

19

TitreSous-titre

L A L I V E

Avocats



Buyer may rescind the contract (Art. 205 and 208)

• reimbursement of purchase price• direct damages• further damages (only if fault)

return of object

Seller Buyer

20

TitreSous-titre

L A L I V E

Avocats



Limitation period for claims relating to cultural property

1 year following delivery

Good faith seller Bad faith seller

1 year after discovery

30 years following delivery

30 years following delivery

Art. 210(1bis) Art. 210(1bis) Art. 210(3) and 210(1bis)

1st June 2005

21

TitreSous-titre

L A L I V E

Avocats


CONCLUSION

Performance of the contract


Formation of the contract or

Art. 23 - 24(1)(4) Art. 197 et seq.

Fundamental mistake

Nullity: 1 year/unlimited (Art. 31)Reimbursement: 1 year/10 years (Art. 67)Damages (culpa in contrahendo): 1 year/10 years (Art. 60)

Good faith seller: 1 year /30 yearsBad faith seller: 30 years(Art. 210)

22

TitreSous-titre

L A L I V E

Avocats


CONCLUSION

Liability for defects v. fundamental mistake

1. Limitation Period2. Proof3. Damages

1L A L I V E Avocats Contractual Problems of Authenticity and Attribution The Swiss Law Approach...

Documents

Transcript of 1L A L I V E Avocats Contractual Problems of Authenticity and Attribution The Swiss Law Approach...