Art Dealer Entitled to $10 Million Commission on Sale of Gauguin Painting

Negotiations for the sale of high-value goods are often tense and fast-moving and it can be difficult to piece together after the event exactly what was said and done. The Court of Appeal, however, confronted just such a task in upholding an art dealer’s claim to a seven-figure commission on the sale of a Paul Gauguin painting.

After prolonged discussions, the dealer had succeeded in negotiating the painting’s sale by a family trust to a representative of a Middle Eastern royal family for $210 million. The trustees, however, refused to pay his commission on the basis that he had breached his duty of good faith in concealing from them the existence of an earlier offer from the same buyer of $230 million.

In upholding the dealer’s claim, a judge found that he had twice informed one of the trustees that a previous higher offer had been received. That deal had not gone through and the subsequent sale at the lower price was in part due to a decline in the market for impressionist works. At a meeting between the dealer and two of the trustees, a consensus had been reached that the former would be entitled to a $10 million commission on completion of the sale.

In dismissing the trustees’ challenge to that decision, the Court rejected arguments that the judge had reached perverse conclusions on the evidence and was plainly wrong. An alternative analysis of events put forward by the trustees, whilst possible, was not the only rational explanation of what happened. Even had a breach of fiduciary duty on the dealer’s part been established, it would not have been so serious as to disentitle him to his commission.

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