A recent trial in the High Court in London has highlighted a few notable truths about doing business in the art world.

The trial centers around a commission allegedly owed to the famous Swiss auctioneer Simon de Pury, who claims to be owed a $10 million commission from the sale of Paul Gauguin’s 1892 oil painting “Nafea Faa Ipoipo (When Will You Marry)?”   There was no written agreement for the alleged commission and the deal took two years to complete.

The painting sold for $210 million in 2014, but was initially reported to have been sold for $300 million.  Had the painting been sold for $300, it would have been the most expensive sale known for a piece of fine art.

Indeed, from these facts alone, we can glean certain truths about art transactions.

First, art transactions are often done under a cloak of privacy, and the information that the public receives about the price of art may be incorrect.  With the disclosures made in the lawsuit, we now know that the sale of the Gauguin would rank third – not first —  in the highest grossing sales of art ever, behind Willem de Kooning’s 1955 painting “Interchanged” with a reported sale price of $300 million in 2016, and Cézanne’s “Card Players” with a reported sale price of $250 million in 2011, according to the New York Times.

Second, many transactions and the lucrative commissions that accompany them are often done on a handshake.  While this may be surprising to those who are unfamiliar with such transactions, the art world continues to operate on an old-fashioned, familiar basis.

Third, art transactions are often complex.  The two year time frame of this transaction reflects what was likely significant due diligence by the parties to the transaction, not surprising when one considers the amount of money at stake.