Christie’s Inc. v. SWCA, Inc.

On July 16, 2002, SWCA, Inc. (defendant) signed an agreement with Christie’s Inc. (plaintiff). Under the agreement, Christie’s would sell a sculpture believed to be by Pablo Picasso on behalf of SWCA. The agreement entitled Christie’s to rescind the sale at any time if it reasonably determined that the sale could expose Christie’s to liability. Prior to this agreement, the author of the Picasso sculpture catalogue raisonné—or comprehensive catalog—issued a certificate of authenticity for the sculpture. SWCA tendered this certificate to Christie’s. On July 19, 2002, Christie’s sold the sculpture to Samuel I. Newhouse Junior. In September 2004, Christie’s became concerned about the sculpture’s authenticity, and sent it to France for Picasso’s son Claude to inspect. Claude later issued an additional certificate of authenticity. But Christie’s wariness persisted; eventually, it concluded that the sculpture was a surmoulage—a cast of a cast, rather than a cast of Picasso’s original clay rendering. Most experts considered surmoulages to be unauthentic. In 2005, Christie’s rescinded the sale to Newhouse and then sought to rescind the sale from SWCA, seeking a refund of the purchase price. SWCA refused to return the money, and Christie’s sued. The parties filed cross-motions for summary judgment. SWCA argued, among other things, that Christie’s attempt to rescind breached their contract because its determination of unauthenticity was not reasonable.