Lucky and Sam Are the Trustees of a Collection of Paintings

question 6

Multiple Choice

Lucky and Sam are the trustees of a collection of paintings acquired by Joe during his career as the proprietor of an art gallery. They have no special expertise. They decide to sell some of the paintings and employ Michael's Gallery Ltd to sell the paintings at auction. One of the artworks is acquired for £500 by Philip Mould, who, after extensive research, proves that it is by Lucian Freud and is worth over £1million.
Which of the following statements is most likely to be true?

• A) Lucky and Sam are liable for the difference between the value of the painting and the price for which it was sold only if it can be shown that they acted without reasonable care in selecting, appointing, or supervising the agent, and that this failure was causative of the loss.
• B) Lucky and Sam are liable for the difference between the value of the painting and the price for which it was sold because this is the loss which has been suffered by the trust, and they have a duty to make good the shortfall.
• C) Lucky and Sam are liable for the difference between the value of the painting and the price for which it was sold if it can be shown that they failed to exercise reasonable care at any point.
• D) Lucky and Sam will only be liable if they had cause to believe that the painting was exceptionally valuable before they consigned it for sale.

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Definitions:

Alimony

Financial support paid by one ex-spouse to another after divorce or separation, as dictated by a court order or agreement.

Bankruptcy Petition

A legal document filed by an individual or business entity declaring their inability to pay outstanding debts, seeking relief through bankruptcy proceedings.

Court Order

A formal directive issued by a court that requires a party to do or refrain from doing something; it's legally binding and enforceable.

Conceals Property

Intentionally hiding or covering up property to obstruct its proper use, retrieval, or discovery, often for deceitful or unlawful purposes.