Doing a Deal: Part 3
For reasons stated in Part Two (AM214), gallery-less dealers are not a generally recommended agent for promotion and sales.
However, there are those few who have succeeded in establishing respectable dealerships with reliable collectors, and they would normally offer a written agreement to artists to act as their ongoing representative or agent, for all or most art-related income-generation purposes. In these circumstances artists would normally expect to receive a cash advance, to be recouped from anticipated commission on sales or against the dealer ‘buying-in’ works from the artist. Essential features of such agreements, preferably and normally in writing, would include all or most of the provisions which a full blown gallery dealership would also contain:
- Parties’ names and contact data
- REPRESENTATION: agent’s engagement exclusively (or in connection with other agents) to promote and represent the artist by one or any combination of:
- selling work
- arranging commissions
- arranging exhibitions
- arranging lectures, talks, media appearances
- WORK: which ones – all visual work, only paintings, only works on paper, sculpture alone, and so on; and whether in relation to existing or future work.
- COPYRIGHT: does the artist allow the agent to deal with authorisation of reproductions or works; if so, on what terms, and under what arrangements (eg only in writing after the artist has agreed to all the terms including payment).
- MORAL RIGHTS: does the artist require the dealer to assert the artist’s moral rights not to have the work treated in a derogatory way (by any addition, deletion, alteration or amendment) whenever it is seen in public; and require full credit to be obtained for the artist as the author wherever it is shown (by agreeing a standard form of words).
- GEOGRAPHY: territorial limit of the representation (ie UK only; EU; USA but not Canada; and so on).
- LENGTH OF REPRESENTATION: whether for a fixed term (normally no more than two years) or periodically renewable (eg two years initially, renewable annually thereafter) or indefinite subject to, say, 6 months written notice by either side.
- SALES: the method and manner of execution (always in writing, preferably using a standard Contract of Sale pro-forma); pricing; timing of release into the primary market-place; gallery’s commission; VAT arrangements on UK sales, export taxes on foreign sales); artist’s rights in the decision-making process.
- COMMISSIONS- the method and manner of execution (always in writing, preferably using a formal Commission Agreement containing all relevant details of work to be executed, by when, for what price, delivery and installation, copyright and moral rights); artist’s right to be consulted and/or to veto acceptance of commissioners’ offers.
- EXHIBITIONS: the method and manner of execution both in-house and elsewhere (written documentation); timing and venues; artist’s right to be consulted and/or to veto acceptance of exhibition offers.
- CONSIGNED WORKS: details of finished or future works to be deposited with (consigned to) the gallery for sale/nfs; how many required per annum (or other fixed period); how frequently, content and media to be used.
- BOUGHT IN WORKS: which works and how many will be (or may be) bought in by the gallery at the outset and periodically thereafter; prices (including discount to the gallery, re-sale prices and whether the artist will have a right to share in the resale profits).
- ARTIST’S PAYMENTS: when and how; statements of account regularly to be given to the artist; details of all transactions including names of purchasers, commissioners, fees, prices, and so on; whether cash advances / stipends are to be set-off against future income, if so, how and when.
- AUDIT: artists right to have access to the gallery’s accounts and records, for the purposes of audit by an independent auditor named by the artist, in the event of a dispute over the gallery’s statements and payments to the artist.
- RESTRAINT OF TRADE: whether, and if so to what extent, the parties wish to restrict their respective use of information and trade achieved (while the deal was operating) after it has ended; for example, the gallery may wish to continue to act as agent, perhaps not exclusively, for a defined ‘mopping-up’ period after the deal has ended; likewise the artist may want’ to be able to sell works directly to collectors achieved by the gallery, on the understanding that some commission is paid to the gallery.
- ARBITRATION: agreement to refer future disputes to an independent arbiter, mutually agreed.
- CONTACT DATA: mutual notification of any changes
- ASSIGNMENT: whether or not the gallery can transfer the benefits and obligations of the deal to any other agent/gallery, without achieving the artist’s written consent.
- ARTIST’S DEATH: agreement as to what should happen to the works, benefits and obligations covered by the deal in the event of the artist’s death
- PROPER LAW: if one party is resident trading/practising beyond the UK, the parties should agree which law is to be used to decide any disputes that may arise in future performance, failure to perform, or interpretation of the deal.
Some Classic Disputes
The following three examples have been chosen to illustrate the types of deals that are still being made in the UK, and the problems that can arise.
CASE ONE: artist showing with the gallery for two years; substantial number of works sold; partial payment to artist; thousands of pounds outstanding; artist engages new dealer and consigns new works to them; no written documentation exists between first gallery and artist nor between artist and second gallery. Issues arising include: was the artist entitled to make a new deal with the second gallery; how does the artist hope to prove the terms and conditions of either deal, so that he or she can begin to receive outstanding payments from the first gallery; will the same thing happen again with the new deal.
CASE TWO: artist exhibited a body of work (nfs) and stored them at the exhibition venue; the gallery had represented the artist for many years; no written documentation of the artist/gallery deal (it had worked well for over a decade, so why create ‘unnecessary’ paperwork!); gallery goes bankrupt and its proprietors reemerge trading under a new name; artist seeks works stored with bankrupt gallery from ‘new’ gallery, works not found. Issues arising include: difficulty of artist proving the nature and extent of the dealership with the first gallery, and of proving that the works in dispute were in fact stored there: was the first gallery a company that was wound up by the courts, and what happened to its ‘assets’; is the ‘new’ gallery really the old one trading under a new name.
CASE THREE: artist offered a deal with ‘gallery-less’ dealer who promised to establish a primary and secondary market-place for the ‘unsold’ artist’s work; artist consigns his or her whole body of work to the dealer; nothing happens for two years; artist wants works back and regards deal as at an end; written documentation of the deal, signed by the artist, agreed to last for two years. Issues arising include: the documentation made no provision as to what would happen to works unsold at the end of the deal; no arrangements made and agreed for the gallery recouping its outlay for merchandising and/or framing works; artist did not take expert legal advice before signing the documentation, which was drawn up by the dealer’s solicitors.
Each of the above cases is real, suitably anonymised; all are ongoing legal disputes.
The artists concerned are having to raise substantial amounts of money to pay the fees of their lawyers, whose main problems lie in the absence of documentation in the first two cases and, in the third case, the absence of provisions in the documentation dealing with the events that eventually happened – a failed deal and how to mop up the loose ends.
During the period the first two of these three articles were published, the volume of enquiries from artists seeking information and help has been significant. The one common error made by every artist in all such cases was the complete failure to achieve any documentation of the deal and its operating. All of which returns us to the first of these pieces (AM213) which explained the legal basics and good practices.
© Henry Lydiate 1998