A Legal Commentary on the Park West at Sea Art Auction Invoice
Fine Art Registry Investigates
by
Cindy Hill, Esq. for Fine Art Registry™
Purchasers at Park West at Sea cruise ship art auctions receive a number of documents related to their purchases which contain critical terms and conditions all art buyers should understand. Many of these terms should jump out as red flags, cautioning purchasers that what they think they are buying is not really what they are buying. According to Park West's own sales documents, the art auction isn't really an auction at all in the same sense that most art buyers or estate or country auction goers are familiar with. Let's read through these documents carefully, with an attorney's eye, and see what Park West says it is selling you, and under what terms.
According to Park West at Sea auction goers, the document, on Park West at Sea stationery with a Delaware corporate address, and a first line that reads "Bill and Ship To," is the document the auction customer is handed to sign upon completion of the auction. Text underneath the line for the purchaser's signature clarifies that this is an "invoice." This invoice contains important legal contract terms that a purchaser should read and consider. It would be important to compare these terms with those listed in the auction catalog and on the purchaser's bidding paddle, which this invoice states are part of the contract.
The front of the invoice contains a list of the items you are agreeing to purchase. The left-hand side of the invoice lists the "lot numbers" of these items, and the far right-hand side lists shipping codes. In between, you'll find a column for the artist's name as well as the title of the work, and then a variety of dollar figures for the item, shipping and handling, appraisals, and so on.
NO VERBAL REPRESENTATIONS ARE VALID
Under the purchaser's signature is a paragraph of text.
The first two lines read:
THE PURCHASER, BY SIGNING THIS INVOICE, ACKNOWLEDGES RECEIPT OF A COPY HEREOF, AND HAS AGREED TO PURCHASE THE ABOVE DESCRIBED GOODS AND SERVICES ON THE TERMS AND CONDITIONS STATED IN THIS INVOICE AND THE PURCHASER'S BIDDING PADDLE. NO VERBAL AGREEMENTS OR REPRESENTATIONS SHALL BE OF ANY FORCE OR EFFECT UNLESS SET FORTH IN WRITING IN THIS INVOICE.
What this means is that whatever the auctioneer said, whatever anyone else either in the room or working for the auction company or the cruise line or Park West said, it is only the terms on this invoice that apply. This means the only representation being made about the nature of the artwork is the artist's name and title as listed, with no reference whatsoever as to whether the item is an original, a print, a lithograph, authorized or unauthorized, on paper or canvas, etc.
The text paragraph goes on to say:
CREDIT CARD PURCHASERS AGREE TO PAY, IN ADDITION TO THE AMOUNTS SHOWN ON THIS INVOICE, ANY FINANCE CHARGES, FEES OR OTHER AMOUNTS DUE UNDER ALL APPLICABLE AGREEMENTS GOVERNING THE USE OF SUCH CARD. NON-U.S. RESIDENTS ARE RESPONSIBLE FOR ALL TAXES, DUTIES, BROKERAGE FEES, CUSTOMS FEES OR OTHER CHARGES WHICH MAY APPLY TO THE TRANSPORT OR IMPORTATION OF THE ARTWORK.
We will look at the credit card agreement separately, but in the first instance this means the purchaser is agreeing to pay not only the amount on the invoice but any other charges tacked on to the credit card bill.
The invoice totals section includes a fee for the artwork, plus fees for appraisals on each piece (whether or not those appraisals are provided), a shipping and handling charge plus an "in-transit handling" charge.
THE BACK OF THE INVOICE
The inverse of the invoice states that ALL SALES ARE FINAL, and repeats that the terms and conditions of the sale are those on the invoice as well as on the "bid card." The terms listed on this back side of the invoice are those which really describe what it is the purchaser has bought, and it is, from a legal standpoint, a very interesting description.
Appraisals
The first item listed is Appraisals. The invoice says that Park West appraisals are available and are recommended for insurance purposes, and that a charge of $35 for the first item and $15 for each additional item is levied for the appraisals. It does not, however, state that the appraisals are attached or how one goes about getting a copy of them. More telling, however, is the second paragraph of this appraisal description. The appraisals are strictly Park West's estimate of a "replacement value" which is an intriguing concept on a theoretically irreplaceable unique original or limited edition work. The invoice states that Park West is not making an appraisal based on comparative sales ("third party auction prices or internet prices") which is an industry standard in determining art values, as it is in real estate values. Park West also states clearly, several times over, that they will not be liable for legal claims that their stated appraisal values were too high or too low or "otherwise inaccurate." They state plainly that they do not issue refunds if another appraiser has a different opinion than theirs. This means that, after you receive your work at home, if you take it to an appraiser and discover its appraisal value is more like $30 than $3,000, then you have no recourse against Park West, assuming this invoice is legal and enforceable in court (a matter which has not yet been definitively decided in a court of law).
Guarantee
The next entry on the invoice is entitled Terms of Guarantee. Park West states that all art comes with a Park West Certificate of Authenticity which will include a full written description of the artwork. There is no assurance as to when and how this certificate will arrive, and it is not attached to the invoice nor is there any assurance that it will be appended to the artwork. All the rest of the Terms of Guarantee clarify that Park West is only guaranteeing the first line of the description, not the full written description. That is, they are guaranteeing only that the image was originally authored by the person they state it was authored by. All other terms of description – "physical condition, size, quality, rarity, importance, provenance, exhibitions and literature of historic relevance..."– are specifically NOT guaranteed. Accordingly, any such representations are entirely unenforceable.
The guarantee states that if, within five years of the purchase, you return the item in exactly the same condition in which it was sold, and it is established that the identification of Authorship (as defined above – "'Authorship' means the identity of the creator") is not substantially correct, Park West will rescind the sale, as the sole and exclusive remedy for any problems with the sale or the piece.
These two primary sets of terms regarding appraisals and guarantees should warn a purchaser that they are on shaky ground; the seller here is drastically limiting their liability and repeatedly distancing themselves from all verbal representations made regarding the items sold, as well as even many of the written representations made about the pieces, guaranteeing only that, say, an image of a blue woman by Picasso was originally authored by Picasso, but making no guarantee whatsoever as to whether what is being sold is an original painting, a copy, a photograph, a poster print, or an authorized series print, or even what medium it is in. But the "Additional Terms and Conditions" go on to not only add further costs and fees to the transactions, but to raise further red flags which should make any purchaser wary.
These terms repeat that all sales are final, then note that they are adding a 15% "Buyers Premium" to the price, as well as the mysterious 1% "transit fee" which is in addition to shipping and handling. These terms and conditions again limit Park West's liability to recision of the sale, and require the purchaser to file any claims regarding the artwork within sixty days of receiving the piece. For those unhappy auction customers who have managed to secure a recision of their purchase transaction, Park West has refused to return this 15% buyers fee, which, in the case of purchases in the amount of tens of thousands of dollars, can be quite substantial.
What are you getting?
But most intriguing are paragraphs 16 and 17. Paragraph 16 states:
In some cases the example of a limited edition work you will receive will be annotated in a different manner than as the example displayed at the auction. The value of the example you receive will be substantially the same as that of the example displayed at the auction and will in all other respects be the same work as that displayed at the auction.
And paragraph 17 states:
If you purchase an artwork described as an "embellished work" or a "mixed media with lithograph" work, you may not receive the example of the work displayed at the auction. You likely will instead receive a unique work that is a variation of the example displayed at the auction. The value of the example you receive will be the same as that of the example displayed at the auction and will be substantially equivalent to that displayed at the auction.
What this means, in a nutshell, is that the item you thought you bought at auction is not the actual item you bought. The shipping codes appear to support this interpretation: returning to the front of the invoice, most of the codes indicate a letter "P" for "pull from stock," and very few are noted as a letter "T" for "take off ship."Though you purchased a specific item onboard, a different item is shipped to you from a warehouse someplace. That item can look different, and can have a "different annotation" meaning is a different numbered print, perhaps even from a different printing series than the item you made bids on while onboard.
Verbal representations
The additional terms and conditions again repeat that:
No verbal agreements or representations shall be of any force or effect unless set forth in writing by the seller in the invoice.
SUMMARY
On the whole, the Park West at Sea auction sale invoice contains significant red flags which should caution any purchaser to thoroughly consider what it is they are buying and what the final price including all fees and costs, for that item will be. The question remains, however, were these terms and conditions available to purchasers prior to entering the auction? And a further question remains, would a court hold a purchaser to those terms if they were only presented after the hammer fell? It's also unknown whether a court would compel a sale under these terms if an auction-goer, once presented with this invoice, refused to sign and proceed with the sale. These questions will only be answered on case-by-case basis as consumers challenge the documents in different courts.
A wise purchaser at any auction, at sea or on land, will request and inspect all descriptions of the pieces being offered as well as all terms of sale BEFORE engaging in the auction process, and will not engage in any substantial purchase without fully understanding its terms.
— by Cindy Hill, Esq.
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September 28, 2007
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