Legal advice for galleries and the art trade
A gallery runs on relationships. With the artists you represent and with the collectors who buy from you. Those relationships are built on trust, and trust is not the same as law. In a sector where much is agreed verbally and a contract is sometimes no more than a handshake, it pays to have your position on paper.
This page sets out Dutch law and Dutch market practice.
The consignment agreement and the risk of insolvency
Consignment is the most common contract in the gallery world. The artist or owner leaves a work with the gallery for sale. Ownership stays with the consignor. The gallery acts as intermediary and takes a commission on sale, usually a percentage of the price.
That sounds straightforward. There are risks attached that gallery owners often overlook.
Insolvency is the most urgent one. If the gallery goes under while works are held on consignment, those works in principle do not form part of the estate, because ownership never passed. The trustee may take a different view, particularly where the bookkeeping is untidy or where the gallery’s own stock and consigned work run together. A written consignment agreement recording work by work what is held on consignment is your best protection.
Damage and theft come second. Who is liable if a work is damaged in the gallery, or disappears? Record whether the gallery insures, and for what value. Record too what applies if the gallery passes the work to a third party without permission, for an exhibition elsewhere for instance.
Then there is authority to sell. The gallery may sell, but only on the terms set out in the agreement. If the gallery sells below the agreed price, or swaps the work for another without consulting the owner, you have exactly the dispute a proper contract would have prevented.
Exclusive representation, commission and notice period
Many galleries work with an exclusive representation contract. The gallery represents the artist for a set period in a set territory and receives commission on all sales that fall within it.
Scope is the main negotiating point. Does the exclusivity cover all work or only new work? Worldwide or only in one territory? And if the artist sells directly from the studio, does that sale fall under it and is commission due?
Jaap regularly comes across exclusivity contracts that are too vague. Artist and gallery had a good conversation and agree in broad terms, but the details are nowhere. That works while the relationship works. As soon as there is friction, the gaps show.
Termination deserves as much attention as the start. If the artist wants to move to another gallery, the questions are whether a notice period applies and what happens to the works then in stock. And if the gallery sells shortly after termination to a collector it introduced itself, you want to know whether anything is still payable.
What belongs in a gallery’s general terms
If you sell regularly, general terms belong with it. They govern how the sale comes about, payment and delivery. Liability after delivery, the right of withdrawal on online sales and the dispute procedure belong there too.
The right of withdrawal deserves separate attention. On distance sales, so through a webshop or after an online presentation, a consumer buyer in principle has fourteen days to change their mind, art included. If you sell online, you have to tell your buyers so.
The warranty of authenticity is the second point. Sell a work with a particular attribution and you create expectations. Set out in your terms what you do and do not warrant, and when a buyer can return the work.
Paying the resale right as a gallery or dealer
As a gallery owner or art dealer you sit right inside the resale right. On every resale of an original artwork above the €3,000 threshold where you are involved as a professional party, the royalty is due. You have to provide all information needed for collection, so the sale price, the date of sale and the identity of the parties. Failing to do so can be unlawful.
On smaller transactions and with lesser-known artists it gets forgotten. An artist has twenty years to claim the royalty, so sound bookkeeping saves you an awkward conversation later.
Selling art online and the fourteen-day right of withdrawal
The art trade is going digital. Galleries sell through their own webshop, through platforms such as Artsy and Catawiki, and through social media. Sell online to consumers and Dutch consumer law applies.
Before the sale you inform the buyer about the price, the characteristics of the work, your identity and contact details, and the right of withdrawal. That right means the buyer may return the work within fourteen days without giving reasons. There are exceptions, for made-to-order work for instance.
And what you say online about a work has to be accurate. Describe a work as oil on canvas measuring 80 by 60 centimetres and deliver something else, and it does not conform to the agreement.
More about artist contracts with a gallery →
Get in touch with Jaap Versteeg
Are you a gallery owner or art dealer wanting your contracts drafted or reviewed? Or is there a dispute with an artist, a buyer or an intermediary? Get in touch with Jaap Versteeg. Call 020 675 88 21 or email him for an initial consultation.
