Duty Defining Terms May Be Subject To UCTA, But In This Case Were Reasonable

Avrora Fine Arts Investment Limited v Christie, Manson & Woods Limited [2012] EWHC 2198 (Ch)

Avrora was the corporate vehicle of a rich Russian who was a prolific purchaser of art. Avrora bought a painting at a Christie's auction, which was described as "Odalisque" by a Russian artist, Kustodiev. The painting was so described in the catalogue, with the description being "based upon careful study" and representing "the opinion of experts". As is standard with auctions, the buyer had to pay Christie's a buyer's premium on top of the auction price. Doubt was subsequently cast about the attribution. Avrora sued Christie's for breach of warranty, negligence and misrepresentation.

The conditions of sale included the following:

An express warranty for five years that the painting was the work of the named artist. This was described as a limited warranty. Apart from the limited warranty Christie's gave no representation, warranty or guarantee or assumed any liability of any kind in respect of the painting with regard to, inter alia, attribution. All statements were statements of opinion and were not to be relied on as statements of fact. Such statements did not constitute a representation, warranty or assumption of liability by Christie's. Christie's was not responsible in any way for errors and omissions in the catalogue and all property was sold "as is" without any representation or warranty of any kind. The buyer's sole remedy was cancellation of the sale and refund of the original purchase price, including buyer's premium. The Court (Newey J) found, on the evidence, that the painting was probably not by Kustodiev (but that Christie's were not negligent or guilty of misrepresentation in making the attribution). Christie's was therefore in breach of warranty and Avrora could cancel the sale and recover the price in accordance with the limited warranty. On the matters of negligence (i.e. negligent misstatement), misrepresentation and the reasonableness of the exclusion clauses under UCTA, the Court decided as follows:

Exclusion of negligence. Although the terms did not mention negligence, they were clearly designed to cover all liability except for breach of the limited warranty. The terms as drafted prevented a duty of care arising, since they made it clear that Christie's was not assuming responsibility (i.e. they successfully defined Christie's responsibility as not including a duty of care). [The claim for negligence failed therefore unless...