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Contractual Problems of Authenticity and Attribution The Swiss Law Approach Carolyn Olsburgh. L A L I V E Avocats. Authenticity and Attribution – Swiss law INTRODUCTION. Titre Sous-titre. Situation:

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L A L I V E Avocats

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

  2. Authenticity and Attribution – Swiss law INTRODUCTION TitreSous-titre 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 L A L I V E Avocats

  3. Authenticity and Attribution – Swiss law INTRODUCTION TitreSous-titre • 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 L A L I V E Avocats

  4. Formation of the contract Performance of the contract Fundamental Mistake (erreur essentielle) Deception (dol) Debtor’s liability non-performance Seller’s liability for defects Art. 23 - 24(1)(4) Art. 28 Art. 97 et seq. Art. 197 et seq. Evidentiary difficulties Not applicable Authenticity and Attribution – Swiss law INTRODUCTION TitreSous-titre or L A L I V E Avocats

  5. Authenticity and Attribution – Swiss law I. PRE-CONTRACTUAL DUTY TO INFORM TitreSous-titre Section I THE SELLER’S PRE-CONTRACTUAL DUTY TO INFORM THE BUYER L A L I V E Avocats

  6. Authenticity and Attribution – Swiss law I. PRE-CONTRACTUAL DUTY TO INFORM TitreSous-titre - 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 L A L I V E Avocats

  7. Authenticity and Attribution – Swiss law II. REMEDIES OF THE DEFRAUDED BUYER TitreSous-titre Section II REMEDIES OF THE DEFRAUDED BUYER L A L I V E Avocats

  8. Formation of the contract Performance of the contract Fundamental Mistake (erreur essentielle) Deception (dol) Debtor’s liability non-performance Seller’s liability for defects Art. 23 - 24(1)(4) Art. 28 Art. 97 et seq. Art. 197 et seq. Evidentiary difficulties Not applicable Authenticity and Attribution – Swiss law II. REMEDIES OF THE DEFRAUDED BUYER TitreSous-titre or L A L I V E Avocats

  9. Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre Section II.1 FUNDAMENTAL MISTAKE (“erreur essentielle”) L A L I V E Avocats

  10. Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre 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 L A L I V E Avocats

  11. Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre ‘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 L A L I V E Avocats

  12. Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre • Three cumulative requirements: • The purchaser had no knowledge that the object being sold was a fake • The authentic nature of the object was a decisive element for the purchaser when entering the contract • 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) L A L I V E Avocats

  13. return of object Seller Buyer reimbursement of purchase price Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre 1. Restitution 1 year from knowledge of claim 10 years after claim arose (Art. 67) Payment of purchase price (‘Picasso case’) L A L I V E Avocats

  14. Authenticity and Attribution – Swiss law II.1 REMEDIES – FUNDAMENTAL MISTAKE TitreSous-titre 2. Damages no claim (unless culpa in contrahendo) Seller Mistaken Buyer claim if mistake is attributable to buyer’s negligence (Art. 26) L A L I V E Avocats

  15. Formation of the contract Performance of the contract Fundamental Mistake (erreur essentielle) Deception (dol) Debtor’s liability non-performance Seller’s liability for defects Art. 23 - 24(1)(4) Art. 28 Art. 97 et seq. Art. 197 et seq. Evidentiary difficulties Not applicable Authenticity and Attribution – Swiss law II. REMEDIES OF THE DEFRAUDED BUYER TitreSous-titre or L A L I V E Avocats

  16. Authenticity and Attribution – Swiss law II.2 REMEDIES – LIABILITY FOR DEFECTS TitreSous-titre Section II.2 SELLER’S LIABILITY FOR DEFECTS L A L I V E Avocats

  17. Authenticity and Attribution – Swiss law II.2 REMEDIES – LIABILITY FOR DEFECTS TitreSous-titre Lack of authenticity / misattribution = absence of a quality promised by the seller, or which the buyer could reasonably expect, which substantially reduces the value of the object seller’s liability for defects (Art. 197) L A L I V E Avocats

  18. Authenticity and Attribution – Swiss law II.2 REMEDIES – LIABILITY FOR DEFECTS TitreSous-titre - 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) L A L I V E Avocats

  19. Authenticity and Attribution – Swiss law II.2 REMEDIES – LIABILITY FOR DEFECTS TitreSous-titre Buyer may rescind the contract (Art. 205 and 208) return of object Seller Buyer • reimbursement of purchase price • direct damages • further damages (only if fault) L A L I V E Avocats

  20. 30 years following delivery 30 years following delivery 1 year after discovery Authenticity and Attribution – Swiss law II.2 REMEDIES – LIABILITY FOR DEFECTS TitreSous-titre Limitation period for claims relating to cultural property 1 year following delivery 1st June 2005 Good faith seller Bad faith seller Art. 210(1bis) Art. 210(1bis) Art. 210(3) and 210(1bis) L A L I V E Avocats

  21. Authenticity and Attribution – Swiss law CONCLUSION TitreSous-titre or Formation of the contract Performance of the contract Seller’s liability for defects Fundamental mistake Art. 197 et seq. Art. 23 - 24(1)(4) 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 years Bad faith seller: 30 years (Art. 210) L A L I V E Avocats

  22. Authenticity and Attribution – Swiss law CONCLUSION TitreSous-titre Liability for defects v. fundamental mistake • Limitation Period • Proof • Damages L A L I V E Avocats

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