Dr. Art on Contracts with Galleries & Collectors

by Matthew Deleget, courtesy of New York Foundation for the Arts

This column addresses the issue of contracts between artists, galleries and collectors. A contract is the essential tool that informs both parties of their responsibilities and objectives. If you and your gallery/collector work well together, you will rarely, if ever, refer to it.

Since I am not a lawyer (I’m not even a doctor), I thought it best to cull information from the top publications in the field dealing with the business of art. I compiled the following highlights from the five books listed below (see Great Publications on Contracts) in order to shed some light on consignment agreements with galleries, formal representation contracts with galleries, and bills of sale with collectors. Contracts address important issues of ownership and negotiation.

Consignment Agreements with Galleries

Whenever you consign works to a gallery for an exhibition, you do not need a formal representation contract, but you do need a consignment agreement in writing that discusses the following 7 points:

  • Names of the specific works to be exhibited.
  • Duration of the consignment.
  • Payer of shipping and insurance to and from the exhibition.
  • Insurance during the exhibition.
  • Retail prices of the works (to be set by you).
  • Your income on sales and when you will receive payment (usually within 30 days after the sale).
  • Gallery’s commission on sales (all discounts given on sales should be born by the gallery).

Representation Contracts with Galleries

Formal contracts should be signed prior to the start of your representation. Here are all of the possible points that need to be covered. Not all areas may be relevant to your situation. Customize a contract that suits your individual needs.

  • Parties Involved in the Contract – (the gallery and you).
  • Duration of the Contract – (fixed term, contingent on sales, options to extend the term of duration).
  • Scope of the Contract – (media covered, past and future work, gallery’s right to visit the studio, commissions, exclusivity, territory, studio sales, exchanges, charitable gifts).
  • Shipping – (who pays to/from the gallery, carriers, crating).
  • Storage – (location, access by artist).
  • Insurance – (what is protected, in-transit, on-site).
  • Framing – (who pays for framing).
  • Photographs – (who pays, amount required [color and b+w], ownership of negatives and transparencies, controls of films).
  • Artistic Control – (permission for book/magazine reproduction, inclusion in gallery group exhibits, inclusion in other exhibits, artist’s veto power over purchasers).
  • Gallery Exhibitions – (dates, work to be shown, control over installation, advertising, catalog, opening, announcements/mailings).
  • Reproduction Rights – (control prior to sale of work, retention on transfer or sale of work, copyrights).
  • Damage or Deterioration – (choice of restorer, expense/compensation to artist, treatment for partial/total loss).
  • Protection on the Market – (right of gallery to sell at auctions, protection of works sold at auction).
  • Selling Prices – (should address who bought your work, the selling price, initial scale, periodic review, permission discounts, negotiation of commissioned works, right to rent vs. sell).
  • Billing and Terms of Sale – (extended payment, credit risk, allocation of monies as received, division of interest changes, qualified installment sale for tax purposes, exchanges/trading up, returns).
  • Compensation of the Gallery – (right to purchase for its own account).
  • Income from other Sales – (rentals, lectures, prizes/awards, reproduction rights).
  • Accounting/Payment – (how often, right to inspect financial records, currency to be used).
  • Advances/Guarantees – (time of payment, amounts and intervals, applications to sales).
  • Miscellaneous – (confidentiality of artist’s personal mailing list, resale agreements with purchasers, rights of gallery to use artist’s name and image for promotional purposes).
  • General Provisions – (representations and warranties, applicable laws, arbitration).

Bills of Sale with Collectors

An informal contract called a Bill of Sale should accompany each artwork you sell to a collector. A Bill of Sale states your rights as an artist and it must be signed by you and the collector. Here are the 6 points to be covered:

  • Your ownership of the copyright of the artwork.
  • Your share of the royalties on the resale of artwork (in California only).
  • Your right to photograph and reproduce the artwork for publicity purposes.
  • Your right to re-acquire the work for a retrospective.
  • Your right to share in any of the artwork’s rental income.
  • Your right to limit the exhibition of artwork in public.
     

An Example of a Bill of Sale

Using the 6 points listed above, here is an example of the language you could use in writing a Bill of Sale for collectors:

  • The artist holds the copyright of the artwork.
  • The artist must be informed of the resale or transfer of the artwork, including the name of the new owner and the price of sale. According to California state law, should the price be more than $1,000 over the original price, the seller must give 10% of the amount over the original price to the artist.
  • The artist has the right to photograph the artwork, if necessary, for publicity or reproduction purposes.
  • The artist has the right to include the artwork in a retrospective show for a maximum of 3 months.
  •  If the purchaser rents out the artwork, the artist must receive 25% of rental income.
  • The artwork cannot be exhibited in public without the written approval of the artist.

Other Points for Bills of Sale with Collectors

Here are some other points you may also want to include in your Bill of Sale:

  • The artwork is original, unless otherwise indicated.
  • The artwork is certified to be free of all defects due to faulty craftsmanship or faulty materials for a period of 12 months from date of sale. If a flaw(s) appear during this time, all repairs must be made by the artist.

Take Precautions!

Galleries, as well as private dealers, consultants, curators, and publishers, will usually provide you with a contract. Read it before you sign it and make sure you understand every item it covers! If you do not understand every point, ask the gallery to put an explanation for you in writing or consult a lawyer.

Also, whenever you mail a contract, register it at the post office with a return-receipt so you will have a record of when it was received.

Great Publications on Contracts

The following publications discuss issues surrounding the business of art. They are all worth adding to your library.

Art Office: 80+ Business Forms, Charts, Sample Letters, Legal Documents & Business Plans for Fine Artists by Constance Smith and Sue Viders. Published by ArtNetwork in 1998. Cost: $14.95. Call (530) 470-0862. Web site: http://artmarketing.com. This valuable resource provides ready-made forms on every subject related to the subject of arts and business. Artists are encouraged to photocopy the forms and use them directly!

Art Marketing 101: A Handbook for the Fine Artist by Constance Smith. Published by ArtNetwork in 1997. Cost: $24.95. Call (530) 470-0862. Web site: http://artmarketing.com. This book covers every area related to marketing your art: the business of art, getting ready to exhibit, presentation know-how, marketing savvy, entering the mainstream, and publishing.

Taking the Leap: Building a Career as a Visual Artist by Cay Lang. Published by Chronicle Books in 1998. Cost: $16.95. Call (415) 537-4230. Web site: http://www.chronbooks.com. This great book offers insight into creating your artist’s packet, planning a strategy when things begin to happen, creating a command post, staging an art exhibition, making connections, and other helpful hints.

This article originally appeared as part of the Dr. Art series, written by Matthew Deleget for the New York Foundation for the Arts. www.nyfa.org. It is for informational purposes only and should not be understood as business/legal counsel. It is reprinted with permission.

Published by CAR_admin on Tue, 01/08/2008 - 12:22am
Updated on Fri, 07/11/2014 - 2:33pm