2.07.2011

Marketing Mondays: The Gallery Contract

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“I’m wondering if you have ever written a post about gallery contracts?”
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This was one of many—and I mean many—questions from MM readers asking about this topic. Until now I have not written a post about contracts. They’re complicated and I’m not a lawyer. But I do have some gallery contracts, so I’ll write from my experience. I hope you’ll all respond with yours.

Your options in agreeing to a deal: the handshake*, above, and the signed contract



Whose Contract is It?
A contract is typically written to protect the writer of the contract. So if a gallery presents you with the contract, you should know that the document is first and foremost designed to protect the gallery. That doesn’t mean the gallery is out to get you, only that its primary concern is to protect itself. 

Kinds of Contracts
In my experience, there are two kinds of contracts:
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. A boilerplate contract lays out out the relationship between the dealer and the artist with regard to the terms of representation. This is the standard contract the gallery generates and uses for each of its artists. Nothing in the wording makes it specific to the individual artist. Some galleries have two such contracts: one for their represented artists, the other for artists who are showing one time in a particular show.  The one-time contracts are usually no more than a consignment. 

Do you have to agree to everything in a standard contract? In my experience, no. There are certain items I don’t agree to—for example, exclusive national representation, or the gallery’s stipulation that it retain work for more than six months. (If work is selling, or if there has been serious expressed interest, sure, hold onto some work. But don’t tie up my inventory for two years if it’s going to end up in the black hole at the back of your storage closet.)

. A contract specific to you and your needs is preferable, but not always available. I’ve found that discussing a gallery's standard contract with the dealer, and crossing out and initialing certain items we’ve discussed, is a reasonable way for the contract to meet my needs without drawing up a new contract and/or consulting with my attorney at $200 an hour (a good benchmark for a professional service fee, by the way). If you feel you must generate a contract and you don't wish to engage the services of an attorney, check out one of these useful books:
Business and Legal forms for Fine Artists, Tad Crawford, Allworth Press
The Artist-Gallery Partnership: A Practical Guide to Consigning Art, Tad Crawford and Susan Melton, Allworth Press
The Artist’s Guide, Jackie Battenfield, DaCapo Press; especially Chapter Eight: “How to Read and Work with the Fine Print: Contracts, Legal Issues, and the Art of Negotiation”

Features from Standard Contracts
I have contracts with some galleries and not with others. The ones I have signed are not onerous. They spell out a few basic terms:
. Artist is the owner of the work until a sale is made; gallery is working on behalf of the artist
. Artist retains ownership of the copyright to the work--and thus the right to reproduce the image at will--unless that right is specifically ceded to the owner of the work. (I would not give that right away, though I might licence the use of an image for a limited edition of prints. For this you might wish to consult with an attorney, or at least discuss the terms with your dealer, who may have experience in the matter.)
. Percentage of commission on sales is usually 50/50 (non profits may take less; beware the gallery that expects more than 50%)
. The  geographic region within which the gallery requests exclusive right to represent the artist should be defined. It's typically limited to a city or a region. Your primary gallery--the biggest gallery to represent you, or the one in the biggest city, or perhaps just the one with the biggest demands--may expect a percentage of sales. If that's the case, there should be percentage limits (10 percent) and time limits. Edward Winkleman's How to Start and Run a Commercial Gallery (Allworth Press) should be on your bookshelf for the light it sheds on the dealer's side of things
. Insurance the gallery is providing should be defined. Ask: How I would be reimbursed if work is stolen or damaged?
. The terms by which the work is delivered and retrieved spell out who's responsible for getting the work to and from the gallery. Usually the artist delivers to the gallery, and the gallery delivers to the client or back to the artist
. When I get paid. This is a biggie. First the work has to sell. That could be right away or a year or more from the time you deliver the work.  After the sale:
. . . . The dealer has to get paid, the payment has to clear, the dealer writes a check and you receive it. In the best of times, this process takes about a month.
. . .   Things get complicated when there are multiple layers at each stop. For instance: when a consultant makes the purchase for her client. She needs to get paid from the collector or corporation for whom she is working, and then writes a check to the gallery, who then writes a check to you. Galleries typically have a designated time in the month to pay bills—like we do—so if a check comes in late, payment may not occur until the next cycle.  
. . . . Add bookkeepers to the mix—and in a consultant-generated sale, there may be a corporation’s business office, a consultant’s bookkeeper and even a gallery’s bookkeeper, some of whom may be part-time or freelance financial people who work on specific days each month—and you can see how the payment process can be attenuated to cartoonish length. Except that there’s nothing funny about the wait for money you need to pay your bills.  

With Some Galleries I Have Only a Consignment Contract
I’ve worked with some of my dealers for over a decade. It doesn’t seem necessary to have terms spelled out, as we have done business together for a long time and we communicate regularly. I trust them. They let me know when there are sales and they pay me in a timely manner. They know I’m not going to show in another gallery in their area (exceptions are discussed, like inclusion in a group show) and I know they’re going to do their best to represent me. This is the classic “gentlemen’s agreement,” which now includes women.  

What I do have with every gallery, however, is a consignment sheet listing the work that is held by the gallery. If they don’t provide it to me, I provide it to them. Two signed copies, one for each of us.  Every year, usually at the beginning of the year, I provide an annual inventory to acknowledge what they have. (Yes, I’m a Type A personality.) It has happened that a sale was made and not recorded, or recorded but not paid. During the recent down economy some dealers cut back on administrative help, and sometimes things fall through the cracks. I can recall two instances in which my inventory differed by the gallery’s by one painting; and in both instances, the gallery found it had made a sale but neglected to pay me. A check was issued and sent immediately. Another instance: a gallery believed it had returned a work to me but my inventory indicated otherwise. I trusted the dealer to either find the work or reimburse me for it. Shortly after our discussion I got a call: “You were right. I did have it. The box had slipped behind another.” Bottom line: the consignment contract allowed me to know a work was missing, and the dealer to know that it had not been sold.

Some Questions You Had:
. “When you are grateful to participate in a show does it seem pushy to send a contract?” 
Gratefulness goes both ways. A dealer should feel privileged to have you show in their gallery, too. Request or generate at least a consignment sheet.

. “What is the standard amount of discount the gallery can give?” 
There is no standard anything in the art world. Discuss these terms up front with the dealer.  Ten percent seems to be the "courtesy" extended to clients (so build it into your retail price). Twenty percent is extended for big-ticket sales or multiple sales. Collectors may ask for more than that, but a dealer who is working ardently on your behalf will stop there.

. “Does the discount have to come out of the artist’s share?”
If you are asking: does the discount come only out of the artist’s share, that’s not fair or right. If you are asking, does the discount also have to come out of the artist’s share, that’s fairly common. There is no standard. Some dealers assume the entire discount in their share of the sale. Others split the discount up to 10 percent and then assume the rest out of their own share of the sale; others up to 20 percent. But it should never come only out of the artist's share.

. Is it plausible to eliminate a clause requiring the artist to pay return shipping if the work has been sold and is being sent to a client? The gallery offers “free shipping” as a form of discount, but it’s expecting me to pay the shipping. 
Now that is one cheap-ass gallery!  Do they offer your cleaning services to the client? Do they have you serve wine at your own opening? Ugh.  While there are many variations on the theme, usually you deliver your work to the gallery on your dime and the dealer returns it to you on theirs. If/when they sell the work, they are responsible for the getting it to the client, not you. (One of the universe's little jokes on artists: The more successful you are, the less you have to pay for anything.)

. When I joined my gallery (no actual contract signed, just consignment forms), they told me I could participate in group shows within our city, just no solo shows.  I have been asked to be in a four-person show at another gallery. My gallery said it would require a 35% commission, which leaves 15% for the gallery putting on the show.  I can understand my gallery would want a percentage, but isn’t 35 percent high?
High? It's stratospheric! Ten percent for the representing gallery is reasonable. After all, your raised profile within the city is good for your gallery, too. Be sure to include a "Courtesy of . . ." credit. Refer to Winkleman's How to Start and Run A Commercial Gallery, specifically pages 39-40: "Sharing artists with other galleries."

. Is standard payment 30 days after close of show? 
In a perfect world, and assuming that work has sold during the show, perhaps. See my comments above, in When I Get Paid under Features from Basic Contracts.

. How would a gallery feel if an artist creates a contract, with payment schedule, marketing agreement, discount policy, shipping policy and future sales agreement.  Would galleries feel it is too pushy or would they see it as professional? 
How would you feel if the gallery told you what to paint, when to paint it, how to paint it and what to do with those brushes when you were finished? The artist/gallery relationship is a relationship—a relationship of equals who bring equal but different talents to the business of showing and selling art. Talk with a dealer to learn how she likes to do business. If she doesn’t generate a contract, create one reflecting the terms you have discussed. Dealers, would you weigh in here?

. What if a gallery refuses to give me a contract and refuses to sign the one I provide?
My first response is to ask why a business such as your gallery would want to engage in selling art without some kind of conract with its artists. At the very least a signed consignment form acknowledges what the gallery has of yours--whether for insurance purposes, for sales reference, or for inventory. Personally, I'd be wary of anyone who doesn't want to acknowledge the business arrangement I have with them. And if I had work with the gallery under those circumstances, I'd be sure to have screen grabs or printouts of the artist-inventory page on the gallery website. If there's no record of the artist's work anywhere, well, that just smells funny. I might discreetly talk to the gallery's other represented artists. But, frankly, I'd be more likely to get out. Artists and dealers, please weigh in.

. What do I do if a have a contract and the gallery is withholding payment?
You need legal help. A few suggestions:
. Read Chapter Eight of Jackie Battenfield's book, noted above
. Sometimes just reminding the dealer that you have a signed contract will get a check generated. Deadbeat dealers are sleazy but they're not stupid; they tend to take the path of least resistance. Speak up and ideally they'll pay up
. Contact Volunteer Lawyers for the Art in your area. You may get some free advice, but typically you'll end up with some names of art-and-artist-friendly attorneys who would represent you for a fee. Some VLA attorneys will charge you somewhat less than their normal going rate. Sometimes just having an attorney step in will get the wheels turning
. If you have a day job at a corporation, see what's in your benefits package; it's possible you have access to discounted legal fees
. Quietly share your experience with other artists. The art world whisperstream contains a good deal of cautionary information. It's not slander if you tell your truth.

I think that’s it. Remember, I’m not a lawyer; I’m just speaking from my own experience.

Over to you: Comments? Questions? Answers?



* The Great Handshake, 1992; relief-block print (two-color, dark over light w/rainbow inkings), 13-1/2 x 21-3/4 in. image, 17-1/2 x 23 in. paper . Signed in pencil, artist’s proof. Hand-printed by the artist on acid-free paper.  The Alcorn Studio & Gallery

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7 comments:

annell said...

Another great post. With some galleries I have had contracts, and with some not, just a consignment agreement. It does seem best to spell everything out, than you know what is expected, and you have agreement. Sometimes things don't work out and you have to work it out on the spot.

Anonymous said...

Hi,

A most informative, cohesive & well-written post Joanna, but I would just like to query one point - that of the question surrounding the gallery commission and buyer discounts.

Where a buyer receives a discount for multiple purchases say, whether they ask for it first, the artist is willing to accept it upfront ( say 10% on two or more) or if the gallery offers it as an incentive to buy or appreciation of repeat business, then the gallery's cut, the commission, typically 50%, should theoretically be deducted fom the sale price after the sale has taken place, as it is a fixed percentage in the event of of a successful sales transaction is it not? Both parties would get a little less but both could actually gain more in bigger sales overall.

Apologies, I am posting this anonymously as obviously as an artist I work with galleries, and this is just my personal perspective & experience.

Many thanks!

Anonymous said...

What about a gallery that wants to re-frame the work before showing it? My work was tastefully and professionally framed but the gallerist (whose gallery also provides framing services) thought the pieces would look better/sell better with larger mats, requiring new larger frames as well. She said she would give me a reasonable deal on the framing costs.

This is an established and respected gallery in a wealthy city on the west coast.

Joanne Mattera said...

Anonymi:
I'm not a dealer, remember, simply an artist who has been showing for a number of years with a number of galleries.

Anon #1: Typically the artist and dealer share in the discount. Price of painting is $10,000. It gets discounted 10%. Price paid is $9000; artist and dealer each receive $4500.

Anything beyond 10 percent depends on what artist and dealer work out. I've had a dealer absorb from her commission anything over 10 percent. I've had another dealer rebuff outright a collector who asked for an outrageous 40 percent. And another who worked hard to find a middle ground between the asked-for 30 percent and the finally agreed upon 15, a discount we shared.

It's wrong for the artist to absorb the discount totally.

Anon #2: Your dealer is scamming you. Don't spend the extra money to reframe. If a collector wants to reframe it, that's between her/him and the dealer.

Marc said...

This is a fascinating article, I'm really grateful for it being shared. I note with interest that you have more than one contract that deals with several galleries at the same time. Until now I had only thought of attaining that single contract as a measure of success.

Unknown said...

Can an artist remove certain clauses from a contract. For an example an artist wishes to handle commission requests on their own and not involve the gallery. Can they revise a contract like that?

Unknown said...

Can an artist renegotiate a contract if they wish. For example an artist is fielding many requests for commissioned work and doesn't want to include the gallery (50% is extortion)...