Often young unestablished artists are unable to secure deals or representation with established galleries. So they have to turn to non-gallery-owning dealers for agency deals. The likely problem areas when negotiating an appropriate contract in such situations are examined in this article.
The most basic requirement is that both parties are comfortable with each other. There is no point if the artist does not trust the dealer nor if the dealer represents an artist whose work the dealer has little sympathy for.
Assuming that this fundamental hurdle is crossed, we need to then examine the written contract (which is a must) setting out the nature of the deal; its arrangements and serving as a complete and accurate record for the parties.
Parties discussing the contract must considering the following terms of their written contract.
The name, address and other key information of the artist and the dealer should be clearly stated. It should also be made clear whether the dealer is acting privately or for a company.
Nature of the Deal
Whether the dealer is exclusively appointed to promote the artist and his works or if other dealers may also be appointed by the artist has to be set out. This will affect the amount of effort and resources that a dealer is prepared to devote to an artist. It should also state clearly if the dealer is to be given any of the following rights to and on behalf of the artist:
- to sell work;
- to arrange commissions;
- to arrange exhibitions;
- to arrange lectures, talks, media appearances.
Also it is important to set out which works are to be promoted, sold, exhibited, and so on, namely: prints, paintings, sculpture, photographs, drawings, installations, or any other work.
Whether the dealer is to be given the right to sell reproductions or rights to reproduce the artist’s work, for what price, and in what manner.
Sale of reproductions and of reproduction rights can be very profitable for a dealer and the artist should make it very clear what, if anything, the dealer is permitted to do. Written copyright licences should always be used, and the dealer’s duties in this regard should be made very clear. It is very important is to specify how the artist is to verify how many reproductions have been made by the dealer as this is often a point of dispute between parties.
Whether the dealership is to extend to Singapore, South East Asia, the whole of Asia or the world should be stated. If nothing is said about the geographical extent, then the assumption is that the artist has struck a deal which will extend throughout the world.
Length of Time
Whether the contract is to be for a fixed period – a one-off venture, for a month, a quarter, a half-year, a year, or more should likewise be stated. Often a periodic dealership is arranged, ie from year to year until terminated by either party giving the other the appropriate written notice.
Whether the dealer has a right to sell work and whether that right is to be exclusive (even to the exclusion of the artist) or to be in conjunction with others. Whether the dealer is only allowed to sell by using the artist’s written contract of sale and, if so, a copy of such a contract should be annexed to the written dealer’s contract, and would include obvious details such as selling prices, commissions, rights to borrow back, and so on.
Whether the dealer has the right to negotiate commissions for the artist and, if so, whether exclusively or in conjunction with others; if a written commission agreement is to be used, that should be annexed to the dealer’s contract as well.
A clause similar to that for commissions should be included.
If the artist intends to consign finished works to the dealer in order to start the relationship, a clause should be included to this effect and, a separate written consignment agreement should be signed between the parties embodying the administrative arrangements for such work, and including the dealer’s written confirmation of receipt of it and the circumstances that an artist can request for their return.
It should be made absolutely clear whether the dealer is to receive a fee for his work, and how that will be calculated and paid e.g. as commission on any deals arranged and, if so, what percentage: as a flat fee; or as a retainer. GST should be discussed and agreed. The method of payment to the dealer must be clearly stated e.g. from receipt of monies on behalf of the artist, or payable back to the dealer after the artist has been paid; and whether by cash or cheque.
Of equal importance: when and how the artist is to be paid. Whether statements of account, invoices, and names and addresses of buyers, commissioners and so on shall be supplied. Whether and, if so, when, where and how advances to the artist from the dealer are to be paid – and whether they are to be offset against income derived for the artist or to be non-returnable in the event of no such incomes arising. Knowing who has bought an artist’s works is important information for the artist but, as set out below, often gives rise to problems.
Restraint of Trade
Whether the dealer is to be allowed to act for the artist on any matter after the end of the dealership arrangement, or to use any knowledge or information about the artist and his work gained during the currency of this agreement. Reciprocally, whether the artist is to be allowed to strike private deals with business contacts achieved by the dealer during the currency of the agreement; or, indeed, to use such contacts after the dealership deal has ended. This is a particularly tricky area and has given rise to enormous problems in the past; a prudent and balanced clause here can avoid a great deal of future trouble.
A useful clause can be inserted which will enable both parties to have disputes arising under the agency deal to be referred to an independent arbitrator, instead of having to take such matters straight to a court for settlement which can involve great expense in time and money. The arbitrator nominated should be someone acceptable to both parties and generally respected in the arts community.
Names and Addresses
A simple clause should be inserted by which both parties agree to inform each other of any changes that may occur.
A useful clause, particularly when making a deal which might involve overseas commitments or, in fact, when hiring an agent who is a foreigner or has a foreign aspect to his dealing operations. The clause should state which law will govern the interpretation and resolution of any dispute arising under the agreement – if parties to the deal are from Singapore, then Singapore law should be stated as applying.
There are a number of other matters which are not mentioned above which could be appropriately inserted. The most important thing for both parties to remember is to discuss the above points and reach agreement on them. It seems a very long checklist, but it is really a list of the matters which any professional dealer or artist would want to discuss in any event.
Having reached an agreement on all these points, as appropriate, one or other of the parties should arrange to have the agreement drawn up, preferably by a lawyer experienced in dealing with such matters; and both parties should then seek legal advice as to the meaning of the written draft before signing it. When signed and dated, each party should keep a copy for future reference.