MANHATTAN (CN) – An Upper East Side art gallery did not have an enforceable contract over the $6.5 million sale of Piet Mondrian’s 1923 work “Composition,” a federal judge ruled after a three-day bench trial.
Asher Edelman, founder of Edelman Arts on East 74th Street, set out to buy a Mondrian painting for a client in 2005.
“By simultaneously negotiating to buy the painting and to sell it, Edelman was engaged in arranging a back-to-back transaction, one in which an art dealer has both a buyer and seller in place and is prepared to take payment from the buyer and pay its own price over to the seller upon receipt of that payment from the buyer,” U.S. District Judge Richard Holwell summarized. “Such transactions are common in the art world.”
Edelman Arts bought “Composition,” hoping to sell it to the London-based Art International U.K., which in turn hoped to unload the artwork to Germany-based Galerie G.
Art International said it conditioned its purchase of the painting on Galerie G’s prepayment, but the deal fell through.
Galerie G was not a party to the lawsuit, which was filed on Jan. 19, 2006.
Holwell dismissed the breach of contract charge last week.
“It was undisputed at trial that the subject of the condition precedent, i.e., that funds be received from Galerie G, never occurred,” Holwell wrote.
“Accordingly, the agreement cannot be the basis for a breach of contract claim, and judgment must be entered in favor of Art International,” he added.
An attorney for Art International praised the decision.
“The issues in this case are of critical importance to the art industry and how galleries, dealers and other players conduct sales of major works,” Seyfarh Shaw attorney Katherine Perrelli said in a statement. “The extensive litigation surrounding the proposed transaction involved multiple parties on either side from several different countries, with the ultimate seller of the painting several times removed from the entity with whom our client was dealing. We are extremely pleased that the court rejected Mr. Edelman’s attempt to bind Art International to a deal that was clearly never consummated.”