Under art consignment agreements, an artist will give a gallery or dealer a work of art to sell on the artist’s behalf. The gallery pays no money up front, and instead pays the artist when the painting sells. Many artists have these types of agreements with their galleries – even though many times they are not written down (don’t do that!).
Below are a few things to help you understand how art consignment agreements work:
- Under an art consignment agreement, the gallery does not own the work. Legally, they are referred to as a “bailee” and under the law, they have a duty to protect and preserve the artwork given to their care. Some state laws even define the duties that galleries owe to the artist that has consigned work.
- The art consignment agreements should provide for general payment terms. That is, when payment is owed (generally upon sale of the work) and what type of payment is accepted (typically money only – many galleries will often trade other galleries for consigned artwork, with no money changing hands. This is not ideal for the artist.).
- The art consignment agreements should consider whether the gallery is to provide insurance for the works. Despite everyone’s best efforts, it is always possible that the artwork could be damaged, lost, or stolen. Insurance will help mitigate the pain.
- As I noted above, there are laws in certain states (California being one of them) that governs artist consignment and they may create duties (such as a duty to notify and pay the artist when the piece has been sold) for the gallery owner. Any gallery owner should be aware of these duties, and adhere to them.
Art consignment agreements can be a great way for a gallery to take a chance on a new artist without having to put money up front – but don’t make the mistake of doing it on a handshake (I know that this is all the rage in the arts community, but it’s dumb unless you like paying litigators). Get a consignment agreement and protect your art and your income.
