The Virtues of Common Law Theories and Disclosure Requirements in the Market for Fine Art

For centuries common law warranties and fraud theories have regulated misattribution and mistaken provenance in the market for fine art. Scholars have in recent decades proposed theories to supplement protection for unsophisticated buyers transacting with auction houses or dealers. Academia has also proposed the imposition of securities regulations upon auction houses for the purpose of protecting sellers—an argument that can be extended to protect buyers transacting with either auction houses or dealerships. In practice, the theories put forth to protect purchasers may not have an added benefit and will likely disrupt liquidity. The extension of regulations akin to the securities laws to protect buyers can supplement protection in certain circumstances and promote efficient pricing. While the imposition of standardized due diligence and disclosure requirements is not amenable to artwork, a flexible standard requiring disclosure of material facts in attribution and provenance assessment will protect purchasers while enhancing market valuation