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When it comes to the sale of visual art, like paintings, sculpture, or photography, the artist-gallery relationship is paramount. In order to make sure this business relationship remains clear and mutually profitable, the artist and gallery need to agree to a contract that meets their needs. Unfortunately, artists will often opt for a quick template or “boilerplate” contract in an attempt to save money or avoid getting mired in contract law. While that may seem like a convenient option, all that does is provide a false sense of security.
Every time an artist begins working with a gallery or a museum, they should negotiate a new contract that is specifically tailored to their new project. Of the many contract questions that may arise as a result of an exhibition, I have highlighted a few key issues that every artist and gallery should be aware of.
A consignment agreement entrusts the artist’s work to a gallery, dealer, or agent who will then promote, market, exhibit, and sell the art. As in other consignment arrangements, a percentage is kept by the gallery or dealer, often around 50%. With any contract, specificity is key. The parties will want to have definitions of the basic terms, and all the information regarding the rights and responsibilities of the gallery, agent, or dealer, so that everyone receives their due.
Many artists make the mistake of signing something which, unbeknownst to them, allows the gallery to make prints of the piece and to sell them—sometimes years after the exhibit closed. Intellectual property and copyright concerns should all be addressed and covered so that everyone’s rights are fully protected.
Management agreements are those in which a manager renders advice, guidance, and direction to the artist in exchange for management fees, which can range anywhere from 10 to 30% of the proceeds from any art sale. These agreements can be exclusive or non-exclusive, which determines whether the artist is able to work with multiple managers or just one. An artist should know their rights before signing with anyone who wants to help manage their career.
Licensing agreements allow another company to use the artist’s work, such as in magazines, on t-shirts, hats, or bags. The artist is not giving away their rights to the work forever. They are only licensing the art to a company to use for a specific time and purpose. Using the work outside of the one permitted would be a breach of contract wherein the artist could pursue legal recourse. A well-drafted licensing agreement should be clear about what the company is allowed to do with an artist’s work.
“Collaboration agreement” is a generic term for a contract between two or more artists who are working together on a project. It defines the rights and responsibilities of each artist. If two or more artists are producing group art installations or a group art show where they share property, a collaboration agreement will help them define what rights they each have to the work, and to any sales or royalties that are generated as a result.
In art-world contracts, many times automatic renewals can be an issue. Agreements are often automatically renewed unless the artist cancels the agreement 30–60 days prior to its expiration—and failing to do so means the artist will be bound by the agreement for another year, regardless of whether the artist proactively approved the renewal or not.
Freedom of Expression
If you use or transfer any license in your copyrighted work, you may want to make sure that you maintain the freedom to put your own work on your own blog and social networks. You may also want to make sure that you are still allowed to sell the work yourself. If that is the case, your contract should say so. Note: Often, even if you sell your own work, you may still owe the agent, manager, or gallery their fee. This will depend on the contract.
Of course, it is vital to establish the terms of your compensation. After a sale, does the artist get paid within the year, within a quarter-year of the sale, or only when the gallery receives its money? Know what the parameters of the compensation are, and consider inserting a mediation clause to help settle any disputes quickly and inexpensively.
Sometimes art gets damaged in unexpected ways, especially at gallery openings or when the art is in transit. This can be quite costly for the artist and the gallery, so you should make certain that you have the right insurance.
Lastly, never forget the tax ramifications of any sale. Be sure to keep good records of your sales. Wherever you are in your career, an unexpected audit is never fun.
There are many moving parts and many things that can go wrong, even in the most successful of art exhibits. Fortunately, there are just as many ways to protect yourself against calamity. If you are wise enough to seek legal representation before you pop open the champagne at your premier, you can avoid unnecessary headaches. To speak with a qualified entertainment industry attorney, please click here.