Don’t You Trust Me?

Artists and dealers rarely if ever discuss in public their professional business relationships. Much praise, therefore, is due to London-based artist Alvaro Barrington and his gallery dealer Sadie Coles for recently speaking publicly about the workings of their business relationship; and to Block 336, the Brixton-based artist-run project space and studio provider, for inaugurating a series of interactive Artists’ Legal Rights Sessions, a recent subject of which was Gallery Representation and Consignment.

The thrust of these discussions was that trust is the foundation of a successful artist-dealer relationship. Barrington ‘started from an idea of trust and then moved forward with that trust’. Coles, for her part, ‘makes contracts for artists for commissions, or museum shows, or specific projects, but I’ve never actually had a contract with an artist, ever’. Coles evidently means that she makes written contracts for commissions and so on, but makes no written contracts for representing artists – a common slip of the tongue which can mislead a business party into the belief that nothing agreed in writing means that in law there is no legally enforceable and binding contract: not so. Coles further explains that her artist relationship is ‘like a marriage, except that you don’t get married’: not so.

A verbal agreement, followed by activity on both sides demonstrating adherence to it, legally binds the business parties (in most business settings, including artist-dealer representation). For all practical purposes – as well as in UK law – an artist and dealer are effectively ‘married’ to each other. And if all goes well, the absence of a written contract anticipating possible business problems will not matter. But business problems can and do arise, which terms and conditions of a good written contract should ideally anticipate and go a long way to avoid or mitigate or even solve.

Coles amplified her marriage simile: ‘The worst bit about marriage is actually the divorce … if I had a contract with someone and they wanted to leave the gallery, that’s when it gets really unhappy and messy … if someone wants to leave, I’d rather they just leave … I’m not really interested in binding them through any legal agreement.’ But an artist can always leave, even if they have a legally binding agreement with the dealer. Put another way, a legally binding artist-dealer agreement does not in UK law shackle the artist to stay with the dealer; rather, it covers not only their active business relationship, but also makes provision for tidying up outstanding business matters when that relationship ends, and it does so for the following reasons.

UK law would invariably not enforce a contract for the provision of personal services (in our case by artist and dealer to each other) by ordering a defaulting party to deliver the services they had contracted to perform, but it would instead assess the value of any economic damage done to the other party by the non-performance, and order payment of financial compensation by the defaulter. In other words, if an artist wanted to leave a gallery, they could do so even if they had a written contract with the dealer, but the value of that contract should ideally be to balance and resolve what would be owed by each party to the other on departure/divorce – such as shares of sales made, production costs paid, artwork consigned but unsold and so on.

Coles also advocated the importance of sound communication between artist and dealer: ‘As long as things are transparent and clear, you will have a relationship without conflict.’ Coles explained that she would have detailed discussions with prospective artists, dealing with rights and duties to each other (‘almost like a code of conduct’), including consignment arrangements, production costs, commission on sales and so on. Such commendable professional discussions should ideally form the basis of a record of what has been agreed – if only as a memory aid in years to come and/or if the artist died or the dealer went bust. So why not put everything agreed into a written memorandum of understanding or agreement or contract?

Coles explained that any such agreed arrangements would be reviewed over time: ‘If an artist becomes enormously successful and the prices become very, very high, you renegotiate their commission rate because there’s much more value in the works … and that’s absolutely normal.’ Not only would it be good professional business practice to include such a review provision in a written contract, it would also be sound professional practice to include a record of arrangements for all financial dealings during the currency of the relationship.

Even though Coles professed to being against such written contracts with artists, she does in practice ensure that they are paid effectively and efficiently: ‘The moment the money comes in, you pay the artist their share … this is not your money.’ And to guard against mixing the artist’s share of purchase payment with the gallery’s share, Coles pays the artist’s money into a client (escrow) bank account separate from the gallery. Again, it would be good to include the gallery’s commitment to this sound arrangement in a written contract.

Towards the end of her contributions to discussions, Coles came close to setting out ideal practices for business dealings with artists, and her advice to artists was valuable: ‘Be very, very clear and transparent, and work out an agreement between you and the person who represents you … it’s your work, and someone like me wants it … so I will probably agree to your terms.’ It would have been equally – perhaps even more – valuable if Coles had added that any such agreed terms should ideally be recorded in writing signed by both parties.

Throughout discussions, Barrington evidently agreed with Coles on the need for trust: ‘I think of galleries and their artists as being like a couple … and generally, if a person is going to cheat or do whatever, that’s because their communication hasn’t necessarily worked out … what needs to happen is for the artists and the dealers that they work with to have a real relationship where there’s trust, there’s love and there’s respect … artists just have to follow their own truths and find the dealer who champions those truths and understands them.’ Fine and important words about trust, but in saying so Barrington appears to have side-stepped the elephant in the room: the written contract question.

Mutually beneficial use of written artist-dealer contracts continues to be misapprehended by many dealers, and many artists mistakenly believe that avoiding a written contract prevents them from being tied to a dealer, or go along with ‘don’t you trust me?’ dealers out of a sense that they have less business experience and are therefore the weaker bargaining party. It need not necessarily be so.

© Henry Lydiate 2021

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.