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Art & Law: Types of Contracts and Jurisdictions

In this new series appearing monthly, we discuss the basic legal aspects of working as an artist, freelancer, or business owner in the cultural sector. It has been drafted exclusively for Contemporary Lynx by Oskar Roesler – founder of Roesler Group, which offers tailor-made legal advice to clients, including: artists, collectors, galleries, and foundations. Their lawyers bring years of experience in corporate law, copyright law and trade agreements pertaining to art dealership.

In the last instalment, we specified the types of agreements and related statements recommended by lawyers. Also, we described how to designate an agreement’s parties properly and why this aspect is important. Another step in laying the foundations for a collaboration between an artist and gallery is designating the law applicable to our legal relation and deciding on the type of agreement we want to sign.

How to sign an agreement if an artist and a gallery are located in two different countries?

In the first place, the parties should agree on the applicable law, especially if the artist and gallery are located in two different countries. This matter is of paramount significance not only to the types of regulations, which will be binding in reference to our agreement, but also to any pursued claims. Usually, the applicable law of a country, specified in an agreement, has direct bearing on the court jurisdiction decided by parties. From an artist’s point of view, who often has more limited funds and organizational possibilities than a gallery, this aspect is certainly worth paying attention to. Navigating regulations of a foreign country might pose substantial difficulties to an artist and thus hinder the possibility of obtaining any compensation from a gallery, if the claims were to be pursued in this country (loss of the gallery’s image notwithstanding). Therefore, we encourage you to choose the type of jurisdiction that might actually (not theoretically) serve your cause.

Any deliberations on the types of agreements must be preceded by dispelled doubts about the title thereof that already offers clues about the interpretation of the parties’ intent and the form of agreement we are dealing with. However, it is the content and its specific provisions detailing the obligations of both parties that shall be subject to an analysis and determine a document’s type. If our agreement will be subject to any contracts under the universally binding law, then it might turn out that our legal relation should be governed by the provision that the parties are unable to modify or exclude on the basis of their agreement. For this reason, seeking legal counsel on the subject is highly recommended.

Consignment contract

As far as specific types of agreements are concerned, the blueprint for an artist-gallery agreement is called – consignment contract. On the basis of such contract, an artist consigns works of art to a gallery for the purpose of sale on behalf of the artist and for an agreed amount of commission. Upon entering into this type of standard agreement, the artist receives payment for their piece only after it is sold by the gallery. As we have pointed out above, if this type of agreement is regulated by law we wish to indicate as applicable, then it is important for the parties’ obligations to reflect essentialia negotii, that are required by the country’s law so that a given type of agreement is considered binding. In other words, these are the quintessential contents defining an action, for instance: in case of a sale, the core elements are a transfer of ownership and release of an item in exchange for the obligation to pay a given price. It will allow us to avoid any potential disputes of an interpretative nature.

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Collaboration with a New Art Gallery

Oskar Roesler Nov 16, 2020

Part: 1

Entering into collaboration with a new art gallery/company/employer is a moment worth cherishing and this remains so at any stage of your career. Yet overwhelming euphoria, excitement and joy notwithstanding, there are certain things you should take care of first: remember to keep a cool head and lay the groundwork for the path you are to follow.

In the upcoming articles, we demonstrate how artists and gallery owners could formulate an agreement which avoids significant imbalance in rights and obligations. This will ensure both parties draw equal benefits from their collaboration.

The other aspects of the legal artist-gallery relation 

Nonetheless, we recommend not to limit the stipulations of such an agreement only to the receipt, delivery, sale, and terms of payment. We also advise to draft detailed clauses specifying other areas of collaboration between the two parties pertaining to the legal artist-gallery relation. These key aspects might include: insurance of artworks, their cataloguing, display, transportation, protection of an artist’s image or, what is of utmost importance in this case – the liability clause in case of the piece’s loss or damage, as well as principles of cost settlement and delivery of artworks, if the agreement is terminated.

If the transaction detailed in an agreement is initiated/managed by an art gallery, taking into account the participation of a third party or if the sale is initiated by an artist, then it is worth to designate the exact percent division of profit from sale. It might turn out to be one of the key provisions in the future. Other additional clauses will be discussed in the upcoming articles from this series.

Agency contract 

Another type of available agreement is called – agency contract. It establishes an artist’s representation by a gallery, art advisor, or an agent which then enters into agreements on behalf of the artist in exchange for remuneration or commission. This agreement makes no mention of any form of artworks’ consignment. Therefore, this might appeal to artists who wish to present their works in their own studio, for instance: artists who are capable of working with multiple art galleries acting as middlemen only due to their strong position or intend to sell their works in the country other than the one in which the gallery is located and for this sale to be overseen by the party familiar with the particular demands of the market. Only entrepreneurs can enter into this type of agreement in selected countries, including Poland. In other words, the provision of this agreement is deemed valid only if it is signed by a gallery and artist running a business (e.g. sole proprietorship, foundation operating a business or commercial law company). Furthermore, we also recommend to specify other terms of collaboration in much detail as possible instead of limiting the agreement to basic obligations of the parties.

Be incredibly careful 

However, we might want to establish our legal relation in the manner other than the one specified by law of a given country for variety of reason, such as taxes. In the European culture, it is the freedom of contract that allows parties to shape their legal relation and structure of collaboration, according to their own will. Although these rules might not be reflected in the country’s law, you should bear in mind that all principles of collaboration must be delineated in painstaking detail. If any dispute on the basis of a contract’s interpretation arises, the relevant specific regulations referring to such a regulated agreement cannot be taken into account. The provisions of an agreement written down by both parties are subject to interpretation in the first instance. Any stipulations, which we failed to include explicitly in the agreement, will be very hard to prove. For this reason, you should be incredibly careful and thorough while entering into such an agreement. You should also seek professional legal advice in case of any doubts.

All in all, we recommend stating all aspects and nature of your collaboration in the contract. Other additional clauses and their proper structure will be discussed further in the upcoming articles from the series.

Disclaimer:

All materials published on this website are made available for reference purposes only and must not be treated as tantamount to legal advice on any specific matter. Nonetheless, we make every effort for this information to be complete, accurate, and up-to-date.

The owner of the website bears no liability for any statements made in the contents posted on this website, any potential mistakes and inadequacies in the materials, as well as potential results of actions undertaken on the basis thereof. The website’s visitor should personally seek legal counsel in all matters pertaining to their rights and obligations.

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About The Author

Oskar
Roesler

Founder of Roesler Group, which offers tailor-made legal advice to clients including artists, collectors, galleries and foundations. Their lawyers bring years of experience in corporate law, copyright law and trade agreements pertaining to art dealership.

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