It sold for $33.2 Million on November 7, 2007 at Sotheby’s in New York.
For purposes of our discussion today, let’s say someone broke it during the auction preview.
What would a broken or damaged Tete de femme sell for? Likely less than $33.2 Million? Surely.
Personal property (and even real property) can be damaged by customers, auction staff, and even spectators. What is the implication of such damage?
It could be a car where someone walks by and scratches it. It could be a pottery vase that gets dropped. Someone sits in a chair and it breaks. Maybe a handrail breaks as someone grabs it. What happens next? Who’s responsible?
Initially we would look at any possible insurance. The questions to answer first are: Does the owner of the property have insurance? Does the auctioneer (agent) have insurance?
Secondly, we would rely on the contract between the auctioneer and the client. Does the contract say who is responsible in these situations?
Beyond the contract and any insurance claims, who’s out for the damage and who’s responsible? The answer is: It depends.
General tort law dictates that the injured party may be due compensation from the person causing the damage if there was negligence. However, if there’s negligence on the part of the owner and/or auctioneer, then possibly the breakage (damage) becomes their responsibility.
Essentially, the question becomes,“Who’s fault is it?” For example for our aforementioned chair that breaks … was the chair in delicate condition and therefore should have been roped off so nobody could sit in it? Or, was it in good shape, but someone sat in it and leaned back, stressing the wood until it broke?
Claims consider if one or the other parties acted without normal, customary, reasonable care — in other words was negligent.
Relatedly, many have heard of The Pottery Barn Rule which is known as the “you break it, you buy it” policy, by which a retail store holds a customer responsible for damage done to merchandise on display.
Actually, most states and courts have deemed this rule unenforceable — absent negligence or willful destruction — as the vendor naturally assumes risk in displaying property in reach of customers — normally with no discouragement of handling.
Of course, such signs as, “you break it, you buy it,” may deter damage by either putting customers on alert to possible liability, and/or work as a bluff resulting in a party actually paying for property harm.
Too, there is the issue of loss or damage by the auctioneer. Auctioneers with auction houses are generally charged with a bailment of property, becoming the bailee. The bailee must take reasonable care of the bailor’s property or be held responsible for any loss or damage.
We wrote about auction house bailment several years ago here: https://mikebrandlyauctioneer.wordpress.com/2010/04/07/the-auction-house-lost-my-stuff/
Lastly, if a staff member of the auctioneer breaks or damages something, the resolution is likely found in the employment or independent contractor agreement between the auctioneer and staff. Absent that, the measurement of negligence on either party likely resolves who is responsible for restitution.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.