GUIDE TO A MODEL CONSIGNMENT CONTRACT INTRODUCTION
Most galleries do not purchase work outright. Instead, they
accept the work “on consignment.” In effect, they borrow work
from an artist for display in the gallery, and then pay the
artist only when it sells. This arrangement limits the gallery’s
capital outlay, so they can devote more of their resources to
paying for rent, staff, publicity, or other costs of doing
A consignment arrangement has advantages and disadvantages. For
example, one advantage is that consignment can allow a gallery to
show risky or difficult work, since their money is not tied up in
purchasing inventory. However, a disadvantage is that even though
the artist’s work is in the gallery’s possession, the artist
isn’t paid until the work is sold. This business arrangement is
complicated enough that misunderstandings and difficulties can
arise if the parties have not been clear about the terms of the
arrangement from the beginning.
Even in the best relationships based on trust and a good working
relationship, there is no substitute for a contract. To minimize
and hopefully avoid possible conflicts, the rights and
obligations of both the artist and the gallery should be clearly
written in a contract. Do not rely on assumptions and the
memories of verbal conversations. A good contract, such as the
model Consignment Contract developed by the Professional
Guidelines Committee, is fair to both
parties. It is in the interest of both parties to discuss all the
issues presented here. The contract outlines the responsibilities
and rights of both the gallery and the artist.
Many galleries are accustomed to using their own contract. If the
gallery already has a contract that it wants to use, it can be
signed “as is”, or it can be viewed as a starting point for
discussion. The artist can use the model contract as a checklist
or guide for negotiating modifications and revisions. Your
business relationship with the gallery may include specific
arrangements that require additions or deletions, which you
should initial. In addition,
amendments that arise after the original contract has been signed
should also be put in writing and signed by both parties (see
clause # 18).
For a deeper understanding of contracts, read the book, The
Artist-Gallery Partnership by Crawford & Mellon. The first half
the book is dedicated to explaining contracts at length in a
style that is easy to understand. Several other books offer
further explanation for most segments of a contract or additional
contracts as needed. (See Useful Books for Legal and Professional
Advice, also in these Guidelines.)
As a preface to the Consignment Contract, the following overview
provides a brief explanation for each part of the contract.
"THE SOCIETY OF NORTH AMERICAN GOLDSMITHS AND THE COPYRIGHT OWNER
HAVE PREPARED THE FOLLOWING MATERIALS AS AN INFORMATIONAL AID TO
EDUCATE THE READER ABOUT COMMON SITUATIONS THAT GENERALLY ARISE
IN THE CRAFTS FIELD. THESE MATERIALS, INCLUDING ALL SAMPLE
AGREEMENTS, CANNOT AND DO NOT ADDRESS ALL OF THE LEGAL ISSUES
THAT MAY BE
PERTINENT TO ANY INDIVIDUAL CIRCUMSTANCES. THE READER SHOULD NOT
ASSUME THAT THE INFORMATION CONTAINED HEREIN WILL SATISFY ALL OF
THEIR NEEDS. LAWS VARY FROM STATE TO STATE, AND THESE MATERIALS
ARE NOT A SUBSTITUTE FOR OBTAINING LEGAL ADVICE FROM A LICENSED
ATTORNEY IN YOUR STATE. THE READER IS ENCOURAGED TO SEEK SUCH
PRIOR TO USE OF THESE MATERIALS. SNAG AND THE COPYRIGHT OWNER
DISCLAIM ANY RESPONSIBILITY FOR ANY AND ALL LOSSES, DAMAGE, OR
CAUSES OF ACTION THAT MAY ARISE OR BE CONNECTED WITH THE USE OF
THESE MATERIALS AND/OR FORMS.
Agreement made this _________ day of the month of __________
20__ by and
between ________________________ (artist) located
______________________________________ (gallery) located at
Recitals Gallery exhibits and sells artwork; artist has created
and owns the artwork listed in the List of Inventory (the
“Artwork”) and desires to exhibit and sell the same; Therefore,
the parties agree as
1. Scope of Agency. The artist appoints the gallery to act as
artist’s exclusive/ nonexclusive agent in the following
geographic area: ___________________________ for the exhibition
sale of artwork in the following media:
This agency shall cover only artwork submitted by the artist
while this agreement is in force. The gallery shall document
receipt of all artworks consigned.
2. Consignment of Inventory. Gallery accepts on consignment, the
artworks listed on the List of Inventory attached to this
agreement. Additional lists may be incorporated into this
agreement if signed by both parties.
3. Pricing and Terms of Payment. The gallery shall sell the
artworks only at the retail price specified on the List of
Inventory. The gallery and the artist agree that the gallery's
is to be _____ percent of the retail price of the artwork. Both
parties must agree to any change to the retail price or the
gallery’s commission in advance.
Option 1. In the case of discount sales, the discount shall be
deducted from the gallery's commission. The artist will be given
the full artist’s share of the retail price as agreed.
Option 2. If the gallery is required to give its customer a
collector's discount of _______% percent from the retail price,
the amount of the discount shall be split equally by the gallery
the artist, provided, however, that the artist's share of the
discount shall not exceed _________ % percent of the retail
Option 1. The gallery shall pay the artist all proceeds due the
artist within thirty days of sale of any artwork. No “sales on
approval” or “on credit” shall be made without the written
the artist. All installment proceeds received by the gallery
shall first be paid to the artist until the artist has been paid
Option 2. The gallery shall pay the artist all proceeds due to
the artist within 10 days of the last day of the month in which
the piece was sold. No “sales on approval” or “on credit” shall
be made without the written consent of the artist. All
installment proceeds received by the gallery shall first be paid
to the artist until the artist has been paid in full.
6. Accounting. The Gallery shall furnish the artist with an
accounting every ______ months.
The first such accounting to be given on the __________day of
__________ , 20___. Accounting shall identify each artwork sold
during the accounting period and the location of all artworks
consigned to the gallery that have not been sold. A complete and
final accounting shall be provided in the event of termination of
this agreement. Accounting for one-of-a-kind Artwork. For
one-of-a-kind artwork with a retail price of $500 or more, the
gallery will furnish the name, mailing address, and telephone
number of the client/collector who purchases the artwork. Artist
agrees not to contact the client for the purpose of selling
artwork directly to the client and the gallery will be informed
or receive a copy of any
communication between artist and client that relates to this
artwork as long as the contract remains in effect.
Approval Sales. The gallery shall not permit any artwork to
remain in the possession of client for a period exceeding seven
days unless such artwork is purchased and fully paid for by
client, or unless artist provides prior written approval.
7. Fiduciary Responsibilities. Title to each of the artworks
shall remain in the artist’s name until the artist has been paid
in full. Upon payment, title then passes to the purchaser. All
proceeds from the sale of the artworks shall be held in trust for
the artist until the artist is fully paid. The gallery shall pay
all amounts due to the artist before any proceeds of sales can be
made available to any and all creditors of the gallery.
8. Loss or Damage. The gallery shall be strictly liable for loss
or damage to any consigned artwork from the date of delivery to
the gallery until the artwork is returned to the artist or
delivered to a purchaser. In the event of loss or damage that
cannot be restored, the artist shall receive the same amount as
if the artwork had been sold at the retail price. If restoration
is suggested or pursued by the gallery, the artist shall have
veto power over the choice of the
restorer. The artist shall be responsible for all repairs to
artwork necessitated by artist’s faulty workmanship.
9. Insurance. The gallery shall insure the artwork for its full
wholesale price. In the event an insurance claim is made, the
gallery shall pay all deductibles.
10. Transportation of Artwork. Packing and shipping charges,
insurance costs, other handling expenses, and risk of loss or
damage incurred in the delivery of the artworks:
A. From the artist to gallery shall be borne by the artist
B. From the gallery to the artist shall be borne by the gallery
C. From the gallery to any point other than the artist shall be
borne by the gallery
The gallery is also responsible for storing and using custom-made
boxes and shipping containers made specifically for artwork.
11. Commission. If the artist sells any artwork directly to a
purchaser through contacts established initially through the
gallery, then the gallery shall be entitled to a commission of
__________% percent of the selling price. If the gallery's agency
is exclusive, then the gallery shall receive a commission of
_____% percent of the selling price for each studio sale of art
by the artist that falls within the scope of the gallery's
12. Promotion. The gallery shall use its best efforts to promote,
display and sell artworks. The gallery shall clearly identify the
artist’s name with all artworks and shall include the artist’s
on the bill of sale for any artwork sold by the gallery.
13. Reproduction. The artist reserves all copyrights to the
reproduction of the artworks except as noted in writing to the
contrary. The gallery may arrange to have the artworks
to publicize and promote the artworks through means to be agreed
by both parties. In every such use, the artist shall be
acknowledged as the creator and copyright owner of the artwork.
The gallery shall include on each bill of sale of any artwork the
following legend: "All copyrights to reproduction of the artwork(s)
identified herein are retained by the artist."
14. Copyright. The gallery shall take all steps necessary to
insure that the artist’s copyright in the consigned artworks is
protected in the artist’s name.
15. Security Interest. Title to and a security interest in any
artworks consigned or proceeds of sale under this agreement are
reserved to the artist. The artworks shall not be subject to
by the gallery's creditors. The gallery agrees to execute and
deliver to the artist, in the form requested by the artist, a
financial statement and such other documents, which the artist
may require to perfect its security interest in the artworks. In
the event of the purchase of any artwork by a party other than
the gallery, title shall pass directly from the artist to the
purchasing party. In
the event of a purchase of any artwork by the gallery, title
shall pass only upon full payment to the artist of all sums due
hereunder. The gallery acknowledges that it has no right to and
shall not pledge or encumber any artworks in its possession nor
incur any charge or obligation for which the artist may be liable.
16. Duration and Termination of Consignment. The artist and the
gallery agree that the initial term of consignment for the
artwork shall continue until _________, 20__, and that the
artist will not ask for return of the artwork prior to this date
unless the agreement is breached by the gallery. Thereafter, this
agreement shall continue until written notification of
termination from either party to the other. Within thirty days of
the termination notification, all accounts shall be settled and
all unsold artwork shall be returned to the artist at the
gallery’s expense. The agreement shall automatically terminate
with the death of the artist or if the gallery becomes bankrupt
or insolvent, or breaches the agreement.
17. Miscellany. All modifications, deletions or additions to this
agreement must be in writing and signed by both parties. This
agreement constitutes the entire understanding between the
18. Governing Law. This agreement shall be governed by and in
accordance with the laws of the State of ________________.
IN WITNESS WHEREOF, the parties hereto have signed this agreement
as of the date below.
Company Name (if any):
APPENDIX A: SAMPLE LIST OF INVENTORY for consignment of all work
The artist should fill out form in triplicate. Keep one copy for
the artist’s records. Send two copies to the gallery with the
(Fax or e-mail additional copy so gallery or exhibition sponsor
is expecting the box if the work is valuable or one-of-a-kind.)
Gallery should sign and return one copy to the artist and keep
one copy for their records.
LIST OF INVENTORY ON CONSIGNMENT
This is to acknowledge receipt of the following artworks on
Artist should list both the wholesale and retail price for the
convenience of the gallery and to avoid any misunderstandings.
Title Medium Description Wholesale Retail # of items Price Price
Gallery acknowledges receipt of artwork listed.