Contractual Implications of “Getting Banksy’d”

MEAGHAN GOLDSTEIN—On October 5, 2018, right after the gavel fell accepting a $1.4 million telephone bid, someone in the crowd at Sotheby’s (London) triggered a remote-control shredder encased in the framing of the Banksy painting up for auction. The spray-painted canvas Girl with Balloon passed partway through the hidden shredder before stopping—half safely ensconced in the frame, half hanging in tatters.

Embed from Getty Images

Immediately following the stunt, Banksy quoted Picasso on Instagram: “the urge to destroy is also a creative urge.” Banksy’s stunt was indeed a simultaneous act of destruction and creation. The new post-shred work is “the first artwork in history to have been created live during an auction,” according to Alex Branczik, Sotheby’s Head of Contemporary Art in Europe. Joanna Brooks, a publicist who fields media requests for Banksy, announced that Sotheby’s requested a new authentication certificate from Pest Control, Banksy’s authentication agency. That new certificate came with a new name: Love is in the Bin.

How, then, does the auction-winner’s bid hold up as a legal contract? She, the anonymous winning bidder, agreed to pay the equivalent of $1.4 million for the intact work Girl with Balloon. Arguably, among other possible remedies, she’d have recourse under U.C.C. § 2-601 (Buyer’s Rights on Improper Delivery) to reject the tender of the painting for failure to conform to the contract. Per the terms of Sotheby’s Conditions of Business, all sales are as-is. However, Sotheby’s own language suggests that “as-is” refers to an object’s condition prior to sale: “. . . the property is sold with all existing faults and imperfections. We encourage potential buyers to inspect each item carefully before bidding.” (emphasis added). If a defect—in this case, irreversible physical damage—occurs after the bid has been made and accepted, it can hardly be considered part of the as-is condition.

Had the seller rejected delivery and repudiated the contract, would Sotheby’s have any recourse? In truth, Sotheby’s would benefit from such an outcome because the painting’s value is believed by critics to have increased immediately upon shredding. Offer Waterman, a contemporary British art dealer, told the New York Times that the artwork is no longer only a painting, but also a “conceptual moment,” and therefore far more valuable for its ostensible “damage.” Likely, if the buyer had backed out of her contract, Love is in the Bin would have fetched a far higher bid than Girl with Balloon at a future auction.

Further, if the shredded Love is in the Bin is indeed worth significantly more than Girl with Balloon, might Sotheby’s have a tortious interference claim against Banksy himself to recover lost profit? Possibly, so long as Sotheby’s truly did not know about the shredder in advance. There are questions about Sotheby’s claim to ignorance. How did Sotheby’s experts not notice the weight and bulk of a shredder in the frame? Why were the lots auctioned out-of-order? Why was Girl with Balloon mounted on the wall when all other works were displayed on a podium? Nonetheless, Sotheby’s claims not to have known about the stunt, and Banksy’s spokesperson agrees that Banksy, notoriously anti-establishment, is not likely to collude with an institution like the auction house. In that case, Sotheby’s might have an action against Banksy for tortious interference—that is, an intentional act by a third party intended to prevent a party to a contract from fulfilling obligations under that contract. By shredding Girl with Balloon, Banksy arguably prevented Sotheby’s from delivering that work to the purchaser, even though Sotheby’s was under contract to do so. The subsequent renaming of the work and issuance of a new certificate suggest that Sotheby’s is, truly, no longer able to sell Girl with Balloon because that work no longer exists.

It should come as no surprise that the anonymous buyer intends to keep the decimated painting she unknowingly purchased. Whether she is interested primarily in the monetary value, the aesthetic value, or the cultural value of Banksy’s work, her estate has undoubtedly increased in value in the last six weeks, despite the $1.4 million check she’ll be endorsing over to Sotheby’s.