Levin made his somewhat satirical comment after describing the aftermath of the November 2006 sale by Sender of a group of guaranteed works at Phillips de Pury & Company that caused considerable consternation in the art world. As one well-connected adviser put it, “Sender was given priority because the dealers believed he was a true collector, and now he’s viewed as a speculator and a seller.”

In the collector’s defense, Levin says he personally called every dealer whose artists’ works were going up at auction, giving them the heads-up required in the resale agreements and even offering a 10 percent discount—the same markdown Sender had received from the galleries—on the prices Phillips had guaranteed. Only one dealer, whom Levin didn’t identify, decided to buy back a work before the auction; the rest exercised their option not to.

One of the works, Richard Prince’s Tender Nurse, 2002, made $2,256,000. Sender had bought it at a 2003 exhibition at Barbara Gladstone, where the prices ranged from $40,000 to $95,000. 

A number of dealers and players in the market believe that resale agreements are unenforceable, but several prominent attorneys contradict that notion. “I do believe they are enforceable,” says John Silberman, a leading New York entertainment and intellectual-property lawyer. “You just have to do it right and make it very clear.” The New York art law attorney Peter Stern says, “They are enforceable in the case ofthe first buyer, but it gets more tenuous” with subsequent owners.

For collectors, the prospect of being blackballed by an important primary market dealer is a strong incentive to honor the agreements .At the same time, galleries may be cautious about alienating big clients, especially when the market slackens. “If someone chose not to come to me and resold a work, I would not question them,” says a New York dealer who has used resale clauses. “I may never sell them work again, but I may—it’s an open discussion.”

The use of resale agreements started to flourish in 1990, at the peak of that era’s contemporary-art boom, when increasing numbers of collectors were auctioning works or selling them privately in order to maximize profits on investments in art that had been promoted by primary-market dealers. In one case, Mary Boone sold an important Eric Fischl painting in 1986 at a discounted price of $70,000 to a client who told her that he was going to donate it to Canada’s National Gallery in Ottawa. Years later, Boone learned the collector was offering the picture to another individual for $1.4 million. She declined to comment about the matter, but one of her gallery directors, Ron Warren, says she began using resale clauses after that.

Another powerful New York dealer, Marianne Boesky, has gone in the opposite direction. “For many years we did use resale agreements for most primary sales of major works,” she says, “but in the past few years, I have come to use them very, very infrequently.” She believes the agreements are legally binding but says  that “the process of enforcing them was very uncomfortable.”

Boesky declined to cite any examples for this article, but she is known to have interceded in a 2006 Christie’s New York sale of a painting by Lisa Yuskavage, whom she represented at the time. It made just over $100,000—approximately double what Boesky had sold it for six months earlier. After the dealer contacted the auction house, the  consignor, who apparently hadn’t offered Boesky the right of first refusal, wound up being forced to give  her part of the upside. Boesky then gave a percentage to the artist, as is her usual practice with resales. 

The bottom line, of course, is money, and with it the dealer’s desire not to upset artists involved in secondary-market transactions. Still, many players bristle at the very notion of the right of first refusal, given the logistics of dealing with restrictive clauses in a timely and practical fashion.

“Look, here’s half the industry putting these terms  on the bottom of the invoice, but I think it’s a restraint of trade,” says one New York  dealer who asked not to be named. “As a collector myself, if I bought a Richard Tuttle, say, 30 years ago and the dealer is out of business or semiretired, do I  have to call him and resell it to him? It also gets to an extreme when the artist has left the gallery where the original transaction took place—what are you supposed to do?”