In 2003, Artist Ken Feingold entered into an “Artists Agreement” with the Ace Art Gallery that provided the gallery with exclusive international representation of Feingold’s work for twelve months. The parties agreed that, if either party then wanted to cancel, they could do so with 90 days notice. Any unsold inventory at the end of the ninety days would then be returned to the artist.
Notably, they also agreed that if Feingold owed money to the gallery, “If the artist cannot reimburse Ace Art Gallery at that time, Ace Art Gallery has the right to hold the inventory for another ninety days until it has produced enough sales or decided to acquire the work(s) at the prices established just prior to the cancellation of the agreement to equal the outstanding debt to Ace Gallery. Then all remaining unsold works would be returned to the artist and all the above terms of the contract become null and void.”
In 2009, the gallery decided to cancel the contract, and claimed that Feingold owed the gallery $85,780.13. However, the parties had not agreed on any prices for the art since 2005, and apparently, the gallery felt those values were no longer representative and wanted to be paid in money rather than art. So, the gallery did not attempt to sell the art and instead placed it in storage, leading to a lawsuit in the Southern District of New York, Feingold v. Chrismas.
Feingold moved for summary judgment, and the gallery opposed on the basis that, because there were no prices established for the art “just prior” to the cancellation, Feingold was in breach of the contract. But the Court held that when reading that clause in the proper context, “just prior” meant the most recent agreement prior to cancellation. Indeed, the presence of that clause precluded the gallery from seeking monetary damages, and instead provided the gallery with an extra ninety-day window to avail itself of its only contractual remedies: either selling or purchasing the art. The Court found that, because that window had long since closed, the gallery was required to return the art.
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