Oregon Art Consignment Law: Managing Artists, Galleries and Dealers

Originally posted on December 12, 2006

By Kohel M. Haver

When you give your work to someone else to sell, or advertise to sell for you, you set up a legal relationship called a consignment. This is true for art galleries but also true for the corner coffee shop displaying your work to decorate its walls. When it works everybody wins. You get to sell your work and the galleries have some art on the wall, new and fresh work to sell. In my experience, when there is money involved it’s a good idea that everyone “is on the same page.”

These sales arrangements work best is everyone has a clear understanding of the promises they make and what the law says about those transactions. First, here is the scorecard (who is who)

“Art dealer” means an individual, partnership, firm, association or corporation, other than a public auctioneer, that undertakes to sell a work of fine art created by another.
“Artist” means the creator of a work of fine art or, if the artist is deceased, the artist’s personal representative, heirs or legatees.
“Gallery” means an art dealer who receives and accepts a work of fine art from an artist for the purpose of sale or exhibition, or both, to the public on a commission or fee or other basis of compensation.
“Consignment” means delivery of a work of fine art to an art dealer for the purpose of sale or exhibition, or both, to the public by the art dealer at other than a public auction.
“Artist” also means an artist or any person who delivers a work of fine art to an art dealer for the purpose of sale or exhibition, or both, to the public on a commission or fee or other basis of compensation.

What kind of work is covered? The Oregon Consignment law will cover the transaction if the consigned items are Fine Art which means it is an original work of visual art such as a painting, sculpture, drawing, mosaic or photograph; or a work of calligraphy; a work of original graphic art such as an etching, lithograph, offset print, silk screen or other work of similar nature; a craft work in materials including but not limited to clay, textile, fiber, wood, metal, plastic, glass or similar materials or work in mixed media such as a collage or any combination of the art media.

What is a consignment? Whenever an artist delivers a work of the artist’s own creation to an art dealer in this state for the purpose of exhibition or sale, or both, on a commission, fee or other basis of compensation, the delivery to and acceptance thereof by the art dealer constitutes a consignment. When the work is delivered for consignment, the artwork is considered trust property in the hands of the art dealer, who is trustee for the benefit of the artist until the work of fine art is sold to a bona fide third party.

The proceeds of the sales are just as much yours as the artwork was. The proceeds of the sale of a work of fine art are also trust property in the hands of the art dealer who is trustee for the benefit of the artist until the amount due the artist from the sale is paid. This means that the Gallery does not own, but merely holds, the artwork for the artist and the same goes for the proceeds from the sale of the art. Both belong to the artist. This is true even if the gallery is buying the work itself. It’s trust property until the artist is paid.

What does the term “trust property” mean? The gallery is considered to be the agent of the artist for the purpose of the exhibition or sale, or both, of the work of fine art within this state. The work of fine art, or the artist’s portion of the proceeds from the sale of such work is subject to the claims of a creditor of the gallery. It also means that a gallery is liable for the loss of or damage to the work of fine art while it is in the gallery’s possession where such loss or damage is caused by the failure of the gallery to use the highest degree of care.

If the art gets damaged who pays for it? If the artwork is damaged or destroyed, the value of the work of fine art is the value established in a written agreement between the artist and gallery prior to the loss or damage or, if no written agreement regarding the value of the work of fine art exists, the artist’s portion of the fair market value of the work of fine art.

Removing the art from the gallery. Take the work out of the gallery after the show is finished because the gallery will not be held liable for the loss of, or damage to the work of fine art if the artist fails to remove the work within a period of 30 days following the date agreed upon for removal of the work. This agreement can be made in the written contract between the artist and the gallery or, if no written agreement regarding a removal date exists, 30 days after notice to remove the work of fine art is sent by registered mail or by certified mail with return receipt to the artist at the artist’s last-known address.

The artist can know who bought the work. The artist is entitled to know the name and address of the purchaser. Upon written demand from the artist, the gallery shall furnish the artist with the name and address of the purchaser of the artist’s work, and the date of purchase and the price paid for the work, for any sale totaling $100 or more. If the gallery refuses to furnish that information specified above, the artist shall be entitled to obtain an injunction prohibiting such conduct and in addition, receive money damages in an amount equal to three times the artist’s portion of the retail value of the work.

What the artist should have in a contract between an Artist and Gallery.

Artist and art dealer should execute a consignment contract, which includes consent to display, the artwork. An art dealer may accept a work of fine art, on a fee, commission or other compensation basis, on consignment from the artist who created the work of fine art only if prior to, or at the time of, acceptance the art dealer enters into a written contract with the artist establishing:

(a) The retail value of the work of fine art;

(b) The time within which the proceeds of the sale are to be paid to the artist, if the work of fine art is sold;

(c) The minimum price for the sale of the work of fine art; and

(d) The fee, commission or other compensation basis of the art dealer.

An art dealer who accepts a work of fine art on a fee, commission or other compensation basis on consignment from the artist may use or display the work of fine art or a photograph of the work of fine art or permit the use or display of work or photograph only if:

(a) The art dealer gives notice to users or viewers that the work of fine art is the work of the artist; and

(b) The artist gives prior written consent to the particular use or display. If display rights are a concern to you please address this issue in your agreement.

The proceeds of the sale. Payments of sale proceeds of consigned work due the artist are not subject to claims of dealer’s creditors. The proceeds from a sale of a work of fine art on consignment shall be paid to the artist within 30 days of receipt by the gallery unless the artist expressly agrees otherwise in writing. If the sale of the work of fine art is on installment, the funds from the installment shall first be applied to pay any balance due the artist on the sale, unless the artist expressly agrees in writing that the proceeds on each installment shall be paid according to the percentage established by the consignment agreement. The artist’s portion of funds received on the sale of the work of fine art or on installment shall not be subject to the claims of a creditor of the gallery.

You can’t be tricked into signing away these rights. In Oregon a contract provision waiving protections for artist is void.

It’s your money. It is unlawful for a gallery to willfully and knowingly secrete, withhold or appropriate a work of fine art or the proceeds from sale thereof for the gall
ery’s own use or the use of any person other than the artist, except pursuant to a bona fide sale or as otherwise consistent with the terms of consignment. Violation can be a Class C felony.

Penalties for not following the law: An art dealer violating the consignment law can be liable to the artist for $100 plus actual damages, including incidental damages sustained as a result of the violation.

And, if the art dealer violates, the artist’s obligation for compensation to the art dealer is voidable by the artist.

You can recover your attorney fees if you need to file a lawsuit. In any action under any provision of the Oregon Consignment Law, the court may award reasonable attorney fees and costs to the prevailing party. To the ears of this lawyer, Oregon has a very strong consignment law. As an artist you do have a lot of power in these transactions.

In Conclusion: Good luck with your ventures and before you conclude the deal:

- Get it in writing

Remember the value of the confirming thank you note which restates your basic agreement.

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