What are the key points to formalise before entrusting a work to a gallery?
Delivering a work of art to a gallery marks the starting point of the contractual relationship between an artist or a collector and the gallery that will be responsible for promoting, exhibiting and selling the work entrusted to it. However, this step can carry risks if it is not properly governed by a written contract and, at the very least, by a consignment receipt (bon de dépôt). Securing these relationships is a matter for galleries, dealers and secondary market professionals as much as for the artists and collectors who entrust their works to them. Where the contractual relationship between the gallery and the artist, or a collector wishing to entrust this art world professional with the sale of his collection, is intended to last, it is strongly advisable to negotiate, draft and sign a representation agreement or a collaboration agreement. Whether it is called a deposit agreement, a consignment receipt or a consignment document, such a document is essential to secure the relationship between the parties.
Why is a deposit agreement or a consignment receipt essential?
A deposit agreement is essential to set out, at the very least, the terms agreed between the artist or the owner of the work and the art gallery. This document protects both parties and clarifies the rights and obligations of each. Without a written contract, the party forced to take action against its former contracting partner in the event of a dispute will find it more difficult to prove the parties’ respective obligations. Such a dispute may concern, in particular, the duration of the deposit, the terms on which the work is offered for sale, the split of the sale price, any discounts on the sale price that the gallery may grant, the conditions for returning the work, or the condition of the work when it is returned.
The key clauses of the consignment receipt
Six points must be addressed whenever a work is entrusted to a gallery with a view to its sale: the period during which the work is entrusted to the gallery, a precise and detailed description of the work, the conditions of sale, the insurance of the work, the copyright in the work, and the conditions for its return.
- Duration of the deposit: the contract must specify the exact period during which the work will be exhibited or available for sale at the gallery.
- Conditions of sale: the contract must set out precisely the sale price of the work and the commission the gallery will receive if the work is sold. Commissions generally range from 30% to 50% of the sale price. Any discounts the gallery may grant, with or without the consent of the artist or the collector, must be specified.
- Detailed description of the work: a very precise description of the work (photographs, dimensions, condition, numbering in the case of a multiple, etc.) should be annexed to the contract to avoid any future misunderstanding between the parties and any potential difficulty.
- Liability in the event of damage: the contract must specify who is liable for the work in the event of loss, theft or damage, and whether insurance is taken out. In the latter case, the type of insurance and the insured value are key points for discussion.
- Reproduction rights: if the gallery wishes to use images of the work in marketing materials (catalogue, website), these rights must be expressly defined and the artist must grant authorisation.
- Return of the work: if the work is not sold, the arrangements for its return (transport costs, condition of the work) must be provided for.
If the work of art is entrusted to a foreign gallery, located in a country other than the one where the artist or collector resides, further points of attention must be taken into account.
Lastly, any consignment receipt, deposit agreement or consignment agreement must be drawn up in duplicate, dated and signed.
The risks of handing over a work without a consignment receipt
Without a consignment receipt or a deposit agreement with the gallery, the artist or the owner of the work is exposed to a number of risks, including a dispute over the sale price, a challenge to the art gallery’s commission, or the loss of or damage to the work entrusted.
It is therefore essential to set out in writing any agreement with an art gallery, through a well-drafted deposit agreement or consignment receipt, and to take all necessary precautions.
Although the art world has not yet made it standard practice to put the relationships between the various parties into contracts, the growing number of disputes brought before the courts shows that dispensing with these minimum precautions is far too great a risk for anyone seeking to enforce their rights.
An article by Alexis Fournol, Attorney (Avocat à la Cour) and Partner of the Firm.
As part of its art market practice, Fournol & Associés advises in particular on contract law. The Firm assists art galleries, artists and collectors in negotiating and drafting their deposit and consignment agreements.
