Ref: Coin World article dated May 2, 05, p. 72 by Mr. A. R. Vartian. Related to the Uniform Commercial Code, Sec. 2-725 as it relates to statutes of limitations on coin guaranties by third party grading cos. As I understand the article: 1) YOU, as the owner of the coin at the time it was incapsulated by grading service, is the ONLY ONE guarantied the coins grade and its authenticity. If you sell this coin, the buyer has no such guarantee. 2) If you believe there is a grading error or that the coin may not be authentic, YOU must, within 4 years of incapsulating, submit it for any consideration by grading company. NO ONE else has this right. Note: After 4 years even you don’t have any recourse to make it right. So explain to me again, just how a slabbed coin can be of more value. Especially if it had been done over four years ago. I fail to see any advantage in encapsulated coins, when this is taken into consideration.
Well, first of all the article isn't relative to slabbed coins or the guarantee issued by the grading companies. The guarantee issued by the grading companies is separate and beyond what this article deals with. Slabbed coins aren't even mentioned. The article states - " The Uniform Commercial Code implies into every sale of collectibles a warranty from every sale that the goods are merchantable, i.e; authentic. " The article further states that dealers can disclaim this warranty if they do so in writing. Then the article goes on to say that this warranty implied by the UCC is only good for 4 years. And that is because within a 4 year time frame the buyer should be able to determine if the item in question is authentic or not. The grading companies issue their guarantees over and above the UCC. There is no time limit and the guarantee does not expire. Neither does the guarantee only apply to the original buyer. It applies to the coin regardless of who owns it or how many times it has been sold. The real key here is that this 4 year staute of limitations only pertains to the warranty implied by the UCC. It has absolutely nothing to do with the waranty or guarantee that is voluntarily issued by the grading companies.
There are so called top tier tpgs that have guarantees that do indeed expire. Some after 10 years from slab date. Some of their coins slabbed before 2000 are not covered as well. It is late tonight, but if you would like, I will be glad to post quotes from their websites or provide links to the guarantee limitations.
You are partially right here GD, while slabbed coins may not be mentioned, the article is related in that coins are being sold encapsolated by coin dealers TO collectors FOR collections. Yes, this is exactly what it says, and it applies to every coin dealer who sells coins. Be they raw or in plastic coffins. The grading companies issue their own warranties, with definate limitations. These constitute explicit contracts and usually have limits and restrictions. Read the fine print. In conclusion, when I read the article I thought it purtained to coins as it was being presented in Coin World as such. When they said collectible, I thought of coins, which brings me to encapsulation of “coins”. After all, that is what we are here talking about, I thought.
From NGC's website, the page entitled "NGC COIN GRADING GUARANTEE": WARNING: THIS GUARANTEE IS LIMITED. The NGC Guarantee does not apply to copper, bronze or copper nickel coins graded by NGC prior to April 1, 2000. To the extent that the NGC Guarantee applies to copper, bronze, or copper nickel coins, the NGC Guarantee expires with respect to such coin(s) on the ten year anniversary of the date of encapsulation by NGC. All U.S and World coins - including but not limited to Pattern coins, Varieties, Tokens and Medals, Mint Errors, American Colonials, Confederation coinage and Private and Territorial Gold - are guaranteed for grade and authenticity only. The NGC Guarantee does not apply to clerical errors on the label. There are additional limitations, but relate primarily to improper storage, damaged slabs, tampering and the like that are not necessarily pertinent for this discussion. From the Anacs guarantee: Anacs guarantees that each coin submitted to it for grading shall be graded by Anacs grading experts in accordance with Anacs grading standards, policies and procedures. In the event the purchaser of an Anacs coin believes it has been overgraded under Anacs standards and procedures, the purchaser may submit the coin to Anacs for re-examination under a procedure which precludes the graders from being aware of the grade originally assigned. The re-examination fee is $15. If the re-examination grade is lower than that originally assigned by Anacs, Anacs agrees to pay to the owner of the coin the difference between fair market value of the coin at the re-examination grade and the fair market value at the grade originally assigned by Anacs. For purposes of this guarantee, the fair market value of a coin shall be established by using the most accurate pricing guide(s) as determined by Anacs for the specific issue at that time. Anacs will also refund the re-examination fee. This guarantee shall apply only to gold and silver coins and shall not apply to (1) any coin submitted for re-examination in a damaged or unsealed coin holder or (2) clerical error as to the description or grade of the coin which would be readily noticed on inspection. Any dispute under this Guarantee will be resolved by binding arbitration in Columbus, Ohio, pursuant to the rules and regulations of the American Arbitration Association. I was thinking PCGS also had an exclusion for copper and similar metal coins, but could not find it easily, so I may have remembered incorrectly for that service.
Another common misconception is that the top services will not slab coins that have been cleaned, but they will. They state as such on their sites. They will not slab coins that have been harshly cleaned, however.
Won't ANACS grade any damaged coin though, no matter how much it has been cleaned, with net grades? I have a half dime from them that is bent and net graded because of that. - James
You're right cwt - I forgot about the 10 yr limit on copper that NGC has in respect to grade. That is because of the Red - Red Brown - Brown designations being part of the grade. They will not guarantee that a Red coin will stay Red for longer than 10 yrs. But you'll notice there is no time limit or expiration of the guarantee for gold & silver coins and the guarantee never expires on authenticity for any coin.
I stand by my comments OldDan. It seems that your contention is that the grading companies can get out of or negate their guarantee because of the UCC code. I disagree because they, the grading companies, offer a written guarantee that goes above and beyond the UCC code. And this written guarantee is indeed a contract that they cannot retract after 4 years or any amount of time. But by all means, don't take my word for it. Write to Mr. Vartian and ask him.
Exactly!! A slabbed coin is not more valuable. The increased prices for a slabbed coins are courtesy of robust marketing campaigns of PCGS, NCG, et al. My belief...a collector should buy the coin not the package!!
If I might make an additional comment - the only people I have ever seen who will pay more for a slabbed coin than they will for the very same coin raw are those who do not trust their own abilities when it comes to grading, attributing and authenticating said coin. Collectors and dealers alike, who ARE confident in their own abilities, WILL NOT pay more for a coin just because it is slabbed.
True, gold and silver coins retain their guarantee. While you may be correct (and I would hope that would be the case) about the authenticity guarantee never expiring for any coin, that is not how the limitation are spelled out. The wording as to what expires is stated as "the NGC guarantee", not "the NGC grade guarantee". I would have to take the literal meaning to include the entire guarantee as to what will expire since no qualifiers or exceptions were included in their statement. Grade and authenticity qualifiers are used in some portions of their explanation of limitations, so I would have to think if only the grade guarantee expired for copper (and noted others) coins, it would have also been so noted in that limitation.
