ARTSMART CONSIGNMENT AGREEMENT

The ArtSmart Consignment Agreement is a legal document that grants temporary rights to sell the works listed on your behalf. Like any other consignment agreement, it gives an artist the power to establish the terms of sale of an artwork. It stipulates how your work should be presented, and how you will be compensated. It is your insurance policy against anyone selling the work for less than you have designated, or under circumstance that you wouldn’t agree to if you were present at the time of the sale. Whenever work leaves your studio, it should be accompanied by a consignment agreement. 

Think of the ArtSmart Consignment Agreement as a prenuptial—you’re co-authoring terms that are unequivocally clear. For example, your gallery has a booth at an art fair and it needs to take split-second decisions  to make deals. One of these deals comes with a 20% discount on two of your paintings. You have no way of expressing your needs at that moment. But you can “be in the room” with a clause in a consignment agreement that requires the gallery to eat the additional part of a larger discount. Similarly, the gallery can request a clause allowing it to offer a larger discount under specific circumstances—to a prominent collector on the last day of the fair, for instance.  

Consignment agreements are likely to get more specific as you develop your practice. You may not understand that your work needs to be shown with a certain type of lighting scheme, for example, until you’ve had a bad experience. So it’s important that you get into the habit early, whether you’ve been working with a gallery for years or are beginning a new relationship with one; whether it’s for a solo or group exhibition or for an art fair; whether you’re consigning one piece or 20. 

One of the core services I offer is negotiating consignment agreements with galleries on behalf of artists— and I’ve seen it all. From artists having to pay to have artwork shipped back at their expense if it doesn’t sell to artists never seeing unsold work again. I most often see artists wanting to establish a consignment agreement for an existing gallery relationship because they feel like their terms aren’t being met.  

Often, galleries will send you a consignment agreement. If they do, make sure it contains the terms  listed below, as well as any specifics that you want to include. If they don’t send you an agreement, you can use the ArtSmart Consignment Agreement in your toolkit and send it to the gallery. If you’re worried about what a gallery might think if you make demands, consider the risks of not being upfront and having your work presented badly, or sold in a way that isn’t in line with your expectations. You don’t have to have an underdog mentality: selling your work is a business agreement and you’re the one with the goods. 

TERMS OF THE CONSIGNMENT SHOULD INCLUDE:

List of Artwork

Title, date, medium, retail price, your inventory number and an image of the work. This information identifies the work without a doubt.

Time Period of Consignment

A beginning and ending timeframe. This could be exact dates or simply state that the consignment ends a certain number of months after the closing date of the exhibition. The period can go on in perpetuity, and there can be open-ended consignments. But I think there should always be dates as it allows you to have more control over your inventory.

Commission Split

This is how much money you will get from the proceeds of the sale and how much money the consignee will keep. This is typically 50/50.

Discount Split

This is how much a discount to a buyer you are willing to split with the gallery. Typically, artists share a 10-15% discount. Anything above that, you can stipulate, you either will not share the discount or you would prefer to be consulted before the sale is complete. A gallery can argue for exceptions within specific contexts.

Production Split

Almost every artist incurs expenses associated with making their work. It has become customary that if you track these labor and material expenses and communicate the information in a timely manner, the gallery will split these costs with you. As mentioned elsewhere (other than for painters!), this is usually a 50/50 split.

Production Cost Reimbursement

Specify if you want production costs to be paid up front. For example, if you are unable to front the production costs 100%, then specify that once a commitment is made to an exhibition or fair, that you will invoice for 50% of the production up front.  

Image Access

Galleries and institutions typically have their exhibitions photographed professionally. You should absolutely take advantage of this free photography and request hi-res copies for your records.

Photo Credit

When there are printed materials associated with the exhibition, it’s important to have your name credited alongside the photograph of the work. The photographer should also be credited.

Name of Collector & Location

Stipulate that you would like to know who buys your work and where the work will be located. This is important for your database, for future sales, and future exhibitions, because the prominence of a private collection can help sell your work. If your work is in a museum collection, that’s even better. Also, it’s important to know where your work is located and who owns it so you can contact them for exhibition loans.

Insurance Coverage

When your work is being consigned, the consignee must insure the artwork ‘nail-to-nail.’ This means that from the time someone comes and picks up the work, through shipment, during the exhibition, through return shipment, and back to your studio (if the work isn’t sold), it’s completely covered and protected by the consignee's insurance.

Transportation Costs

All costs associated with packing, crating, and shipping the work, including the return shipment, are the responsibility of the consignee.

Damaged Work

All costs associated with packing, crating, and shipping the work, including the return shipment, are the responsibility of the consignee.

Special Terms

Exhibition specifics

Where the work can be shown (or not shown), for example at a particular art fair.

Installation Specifics

If the work is to be displayed in a certain way, with equipment requirements (e.g. projected or on a monitor) or on display with no other works near it.

Of course, all the above items are negotiable and each situation will have its own particulars. For example, some galleries may be unable to afford shipping, so you’ll have to decide if it’s worth doing the show and shouldering the shipping costs.

Consignment Terms

A consignment agreement shows that there are two sides to the artist/representative relationship. It allows for discussion. The artist gets insight into how the gallery operates and their decision-making process, and the gallery gets to see where the artist’s priorities and wishes lie.

You, the artist, are the consignor. The gallery or institution to whom you are consigning the works is the consignee. A consignment agreement should contain the following terms:

Instructions

  • Step 1: COPY AND PASTE into your own Document

    Step 2: READ the full document so you know what you need to think about and change

    Step 3: HIGHLIGHT the changes that need to be made

    Go line by line and make sure to update all of the items that are relevant to you.

    Names of Parties- Names, company names, addresses of parties to the contract.

    Scope- Detailed description of the product being produced, or the work being done.

    Cost- Cost of the product or work being done.

    Payment Schedule- At which phase of the project or work completion each payment needs to be made and when the initial deposit is due.

    Intellectual Property- What part of the IP is owned by the artist and what part is owned by the fabricator. For example, the artist can designate that they own the design of the entire sculpture, and the fabricator, because they designed and used a special tool to make the sculpture, owns the IP of the tool.

    Term and Termination of the Agreement- What is the duration of the agreement and how can the agreement be terminated before that time by either party.

    Warranties- Assurance that the product or work delivered will be of good quality.

    Indemnification- The artist and fabricator indemnify themselves against each other and any third party, for any defects in the product or work unless due to negligence or wrongful acts. This is also known as a “hold harmless” clause——saying that if any defects occur, the person who committed the defect due to negligence will compensate the person who was harmed.

    Insurance- Assurance that the fabricator will hold certain levels and types of insurance, like general liability and worker’s compensation, during the agreement.

    Limitation of Liability- Neither party will be held liable for any incidental or consequential damage arising from the sale of the product. Incidental damages are costs incurred with a contract breach, e.g. labor costs required to repair something. Consequential damages are a result of a breach in contract, like legal fees incurred in order to fight a party in court.

    Confidentiality- Any information such as designs, materials, and intellectual property will remain confidential between the parties.

    No Performance- Agreement is based on the work performed and product produced, but there is no guarantee that the work or product will sell.

    Force Majeure- If either of the parties cannot perform due to any act of God such as fire, casualty, flood, earthquake, war, strike, lockout, or epidemic, then the party shall give written notice that they cannot complete the contract as set forth. The contract can be renegotiated at that time, or after a certain amount of time the agreement may be terminated.

    Dispute Resolution- All disputes that are unresolvable by the parties will enter a nonbinding arbitration to resolve the agreement and terms. Arbitration is like mediation, so it’s saying that before a lawsuit happens the parties will enter into mediation with a registered mediator to work things out.

    Nonbinding- means that there will be no court-enforced payment from the losing party.

    Signatures of Parties- Signed and dated by the parties involved.

    Always double check spelling of names involved, proper business names, dates and year and MOST IMPORTANTLY what you have agreed to pay.

    Step 4: NEGOTIATE

    As I’ve mentioned in the book, all agreements and contracts are negotiations. Make sure you negotiate and get what you need. This is the time to send up any red flags. Don’t leave important relationships up to a handshake, get everything you want and need in writing.

    Step 5: SIGN and GET A COUNTERSIGNATURE

    Don’t rush and forget the last step. Sign the agreement and make sure you receive a countersignature. Save this in your database or your filing system.