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Violinist sues auctioneer over sale of bows


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I'm wary of "trial by Maestronet", but lets consider Martin's interpretation of the Maine Gazette report step by step:

1) The vendor enters into a contractural agreement with "the auction house" in which they are able to earn a commission on the sales price of the goods in return for marketing them, and have exclusive rights to the sale for a period of time.

2) After signing the contract and - presumably - as a result of marketing or valuation undertaken by "the auction house", there is communication between the vendor and a third party ("the agent") who has a purchaser for the goods.

3) Any sale forthcoming from this communication, and within the time limitations of the contract would be a breach of contract with "the auction house". Therefore the auction house agrees to the instruction of "the vendor", but payment from "the agent" will be made to "the auction house", from which it will deduct the commission to which it is legally entitled.

4) "The auction house" never receives full, or any payment for the goods, and therefore cannot pay "the vendor" the sums owed less its commission.

5) It seems that the buyer will not return the goods that he paid for, perhaps because he can't get a refund either.

In a recent thread (now locked) about a violin at Skinners, the issue of a contract being a contract was raised. The same principle would have applied in order for the auction house to protect its right to making a commission from the sale of these bows. However, since the auction house is the last in the chain before the vendor, it has ended up in the line of litigation as the vendor has tried to recover the value of his lost assets. A truly complex set of affairs. I can only feel very sorry for anyone in the debacle who has not received their expected payment - seemingly the auction house as well as the vendor. As I've said before, it will be highly relevant to anyone who deals in commission sales and sells subject to trial periods to see how the legal judgement stands. Let's watch and not come to any hasty conclusions.

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The reported details aren't particularly clear and there are a few conflicting statements.

Bromptons claimed "The deal isn't done until there is money in the bank (presumably from the buyer)." Seems to me they're acknowledging some fiduciary/contractual relationship with the seller.

The report claims Stoyanovich nominated Morneweg as his designated agent in the sale of his bows.

Morneweg claims that all she did was find a buyer, and has no contractual relationship with the seller.

Here's a hypothetical scenario:

Alice consigns her instrument to shopkeeper Betty.

Charlie tells David there's a nice fiddle at Betty's.

David tries out Alice's instrument and keeps it (whether David paid for it or not, either to Charlie or Betty, is actually relatively immaterial, as far as Alice is concerned).

Betty can neither come up with Alice's instrument or payment.

Who should Alice sue in this case and have best chances to be made whole?

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The report states the (2007?) lawsuit was dropped "without prejudice."

That means the buyer can sue the defendant (again) for the very same reasons. (Could have been some minor procedural error or the buyer willingly dropped the case himself, w/o forfeiting his rights to sue the defendant for the very same reasons.)

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In Zoyanovich's case against AXA (his insurance company), he and his legal advisers are very firmly of the view that the buyer has stolen the bows, not the agent or Bromptons.


My own concern is the same as Ben's. If I send an instrument to someone on trial, and my insurance specifically covers instruments on trial, does this insurance in fact cover a situation where the buyer (or an agent thereof) fails to pay and makes off with the goods? If not, then we have been sold a pup and we should not be letting instruments out on trial without full payment in advance, or a hefty deposit at least.

Does anyone have experience of this type of scenario?

At any given time I have 4 or 5 items out on trial or "approval" ... I can't see how anyone can function without knowing they are protected in this situation.

Personally I would strenuously avoid intermediaries!

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Stoyanovich and his lawyer may have been under that impression at the time, but we now know how the judge ruled on that theory.

Once a seller consigns his fiddle/bow it's no longer covered by his insurance. Doesn't matter who ultimately might have "disappeared" with it. If someone disappears with a fiddle consigned to a shop, the shop (or its agents) is responsible.

Scenario in post #28 still stands.

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This is a matter of major significance for traders, so I'd like to be sure we're discussing facts.

Can you cite the judgment? It would be useful to see the wording.

As far as consignment goes, all consignment agreements I have signed (as a seller or an agent) specify whose insurance the item will be covered by ...

If you consign to any UK auction house you are automatically charged for the item to be insured by their insurers, unless you choose to show that it's covered already for consignment, in which case the risk is all yours.

The facts may be different if you're consigning for a treaty sale through an auction house, but that's just a speculation.

Unless you can show otherwise.

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Will, auction houses have increasingly turned to private sale in all sectors over the last ten-years or so. Check out their websites! Sometimes they simply have the client base to make a deal where they know that an auction-estimate will be too low, or too much risk for the vendor. Sometimes they offer a work for private sale at a retail price first, and if it doesn't find a customer will submit it to auction after an agreed period of time. However, property consigned for auction sale very rarely gets offered privately prior to the sale, and only under highly unusual circumstances.

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