An article written by Fountain Court’s Aaron Taylor, entitled ‘Resale Restrictions in the Contemporary Art Market’, has been published by the specialist journal Art Antiquity and Law.
The article considers the validity and enforceability clauses that restrict the purchaser’s freedom to resell the work (often, by giving the vendor gallery first refusal on any resale for a specified period). Such clauses, which are now common in contracts for the sale of in-demand art on the primary market, give rise to several legal issues, including the application of the restraint of trade doctrine and of the Consumer Rights Act 2015, and various issues of remedies – including the availability of injunctions and the award of damages both against the reseller and against a third party who assists in or procures the reseller’s breach of contract.
Whereas it has sometimes been suggested that there is an emerging consensus that resale restrictions will often be unenforceable in English law, Aaron is of a different view. The article concludes that “resale restrictions in contracts for the sale of contemporary art are generally likely to be valid and enforceable in English law. If such a clause has been clearly and reasonably drafted (as to the duration and terms of the restriction, and as to the consequences of breach), I would usually expect it to be upheld on its terms“.
This piece was originally produced for Art Antiquity and Law and can be found here (for subscribers). If you are a non-subscriber and would like to see the piece, please contact Sam Ismail who will arrange for you to be sent a PDF copy.
