Art Buisiness

Question 1

What is provenance, and why is it important in the art market?

Answer 1

Provenance is the history of ownership of an artwork. It is important because it helps establish the artwork’s authenticity, legal title, and can impact its value.

Question 2

What is a consignment in the art business?

Answer 2

A consignment is an agreement where an artist or owner provides artwork to a dealer or gallery to sell on their behalf, typically with a commission fee upon sale

Question 3

What are some ethical considerations in the art business?

Answer 3

Ethical considerations include:
1. Authenticity
2. Provenance
3. Conflict of interest
4. Fair representation
5. Transparency in transactions.

Question 4

How does cultural heritage affect the art market?

Answer 4

Cultural heritage laws and regulations impact the** legality** and ethics of acquiring and selling artworks, particularly with regards to looted or repatriated art.

Question 5

What is a ‘buyers premium’ at an auction?

Answer 5

Additional fee paid by top buyer on top of the hammer price.

Usually a percentage of the hammer price.

Question 6

Define ‘hammer price’ in the context of auctions.

Answer 6

The winning bid for an item before buyers premium or taxes.

Question 7

Why is the meaning of ‘white glove sale’ in auction industry?

Answer 7

An auction where every lot is sold.

It indicates high demand and successful curation.

Question 8

What does the term ‘guarantee’ mean in art auctions?

Answer 8

An agreement where the auction house or a third party ensures a minimum sale price for an artwork.

It provides a safety net for the seller.

Question 9

What is ‘art securitization’?

Answer 9

Creating financial instruments backed by art assets.
Allows investors to buy shares in art collections.

Question 10

Describe ‘fractional ownership’

Answer 10

Allows multiple investors to own shares of a high value artwork, sharing benefits and risks proportionally.

Question 11

What is an ‘art fund’

Answer 11

Pools capital from investor to acquire and manage a diversified portfolio of artworks, aiming for financial returns

Question 12

Define ‘art appraisal’ and its significance.

Answer 12

The process of estimating the market value of an artwork.

It is essential for insurance, sales, and tax purposes.

Question 13

What is the ‘Catalogue Raisonne’ and its purpose in art authentication?

Answer 13

A comprehensive, annotated listing of all known works by an artist.

Used to verify authenticity and provenance.

Question 14

Explain ‘conservation’ in art.

Answer 14

Preservation, protection, and restoration of artworks to ensure their longevity and historical integrity.

Question 15

What is ‘driot de suit’ (artists resale rights)?

Answer 15

Legal right allowing artists to receive a percentage of the resale price of their works.

Question 16

What is the purpose of ‘exhibition loan agreement’

Answer 16

Outlines the terms under which an artwork is temporarily lent to an institution for display, detailing care, insurance, and duration.

Question 17

Define ‘blockchain technology’ and its application in the art market.

Answer 17

Creates a secure, transparent ledger for tracking art provenance and ownership.

Reduces fraud and enhances trust.

Question 18

What does ‘deaccessioning’ mean in the museum context?

Answer 18

Process by which a museum permanently removes an artwork from its collection to raise funds or refine its holdings

Question 19

Explain ‘due diligence’ in art transactions

Answer 19

Involves the thorough investigation and verification of an artworks authenticity, provenance, and legal status before purchase/sale.

Question 20

What is an ‘artist estate’ and its role in the art market?

Answer 20

Manages the legacy, works, and intellectual property of a deceased artist.

This includes authentication, exhibitions and sales.

Question 21

Describe cultural patrimony laws and their impact on art trade.

Answer 21

Protects a nations cultural heritage by restricting the export and sale of significant artworks and artefacts.

Question 22

Describe cultural patrimony laws and their impact on art trade.

Answer 22

Protects a nations cultural heritage by restricting the export and sale of significant artworks and artefacts.

Question 23

What is an ‘art mortgage’?

Answer 23

Allows collectors to borrow money using their artworks as collateral, leveraging the value of their collection for liquidity.

Question 24

Explain ‘art leasing’ and its benefits.

Answer 24

Allows businesses and individuals to rent artworks for a specified period

Provides access to high-quality art without the commitment of ownership.

Question 25

What are ‘art investment indices’ and their function?

Answer 25

Track the financial performance of the art market, helping investors gauge market trends and potential returns.

Question 26

Describe the ‘right of first refusal’ in art sales.

Answer 26

Gives a party the opportunity to match an offer on an artwork before the seller can accept another offer.

Question 27

What is ‘price fixing’ in the art market and its legality?

Answer 27

Involves colluding to set the prices of artworks, which is illegal under antitrust laws.
It restricts competition and manipulates the market.

Question 28

Explain ‘art derivative’ in financial markets.

Answer 28

A financial instrument whose value is based on the price movements of artworks or art indices.

Allows investors to hedge or speculate on art market trends.

Question 29

Define ‘museum accession’ and its procedures.

Answer 29

Museum accession is the process of formally adding an artwork to a museum’s permanent collection.

Involves documentation, cataloging, and often board approval.

Question 30

What is a ‘bidding ring’ in the auction context?

Answer 30

Collusion among bidders to keep auction prices low by agreeing not to bid against each other.

It is illegal and undermines fair market competition.

Question 31

Define ‘dealer’s markup’ and its factors.

Answer 31

Dealer’s markup is the price increase added by dealers when reselling artworks.
Influenced by factors such as
1. Acquisition costs
2. Market demand
3. Dealer reputation

Question 32

What is a ‘private treaty sale’ in the art market?

Answer 32

A negotiated sale of an artwork directly between the buyer and seller. Often facilitated by a dealer or auction house, outside of the auction process.