Terms of Art
Contracts for the Purchase of Original Art from the Artist
by
Cindy Hill, Esq. for Fine Art Registry™
You’ve often seen advice that you should get the terms of your sale or purchase of a piece of artwork in writing. But does just any old writing do? What is it about a piece of paper that turns it into a genuine contract, enforceable in court?
The classic law-school definition of a contract is simply a ‘meeting of the minds,’ whether that meeting is put into writing or just sealed with an old-fashioned handshake. Most states have statutes that require certain kinds of contracts to be in writing – such as those for the sale of real estate, or for renting an apartment or selling a car – in order to ensure that one of the parties who might be more vulnerable than the other gets information critical to their purchase or lease. And most states subscribe to the Uniform Commercial Code, which prescribes the terms of contracts for sales of certain commercial consumer goods. But fine art works are not likely to fall under either of these written-contract-required scenarios. That means legally speaking, the handshake, together with steps taken to put the contract in motion (such as a down-payment or full payment, or delivery of the item), are enough to constitute a contract for the sale of a piece of art – even without anything at all in writing. (Caveat: some art installations such as site-fixed sculpture may qualify as real-estate enhancements, and their construction might trigger real estate requirements for written contracts which are filed in local land records – but that’s a subject for another day.)
The problem with an art purchase contract is: What exactly has been bought and sold? When I sell you a cherry pie, it becomes, wholly and completely, your pie. You can eat it, freeze it, or throw it in someone’s face (though that may be a criminal assault, depending on the circumstances). You could throw it away, or feed it to the hogs. Our ‘contract’ for the pie might even be completely unspoken: If I had a price sign up, and you handed me the cash and I handed you the pie, we had a ‘meeting of the minds’ (the sign was my proposed price for the item displayed; by proffering that amount, you indicated that we agreed on the price), and the steps to complete the exchange were fully executed. I tucked the money in my cash box and you walked away with the pie, and all was over.
The sale of a piece of artwork might, at first glance, resemble the sale of a pie. Perhaps I’ve got a price tag up on my painting sitting on my front porch. You ring my doorbell and hand me the amount of cash I’ve got noted on the price tag, then pick up the painting and carry it out to your minivan and drive away with it. But unlike the purchaser of pie, the purchaser of artwork can not lawfully throw it in someone’s face, eat it, or feed it to the hogs, as that would violate the artist’s moral rights. He or she can not take pictures of it and then sell the photographs. In fact, he or she may not be able to put it up for public display in a commercial or museum setting. That’s because I retain copyrights and moral rights in my artwork which, no matter how lovely it may be, I don’t retain in my cherry pie. (Actually, my daughter and I have a home cake business, baking organic special occasion cakes, and I have often wondered whether the designs for these works of edible art – creative ideas that we’ve fixed in a tangible, if perishable, medium – might give rise to copyright claims. But I don’t stay up nights thinking too hard about it.)
This means that when you drive away with my painting in your minivan, it’s likely that you aren’t really sure what you’ve purchased, and I may have just done myself serious professional and economic harm by not jotting down your name and address so that I know where my copyrights and moral rights have driven off to. It’s not that the sale of a piece of artwork is terribly complicated, but it is a serious transaction, the exchange of consideration in the form of compensation for an example of creativity and skill that is unique in all the world, and which enhances not only the room it’s hung in, but all of humankind by its very existence – for such is the nature of art. This being the case, it is fitting that the occasion of an art sale be granted proper dignity and clarity by spelling the terms of the sale out in writing, so that both seller and purchaser understand the nature of the transaction, as well as to ensure both artist and art purchaser’s rights are understood and protected .
That piece of writing – a contract, or legal agreement – does not have to be in any magical language or special legalese. Courts will be more likely to accept and enforce the terms in the piece of writing if it is clearly title “Agreement” or “Contract,” has a date on it, and is signed and dated by both the seller and buyer. Many artists put notices regarding their copyright retention on a sales receipt slip; while this is probably better than nothing, if the sales receipt has not been signed by both parties, it does raise a question of whether it contains terms which represent a ‘meeting of the minds’ of both parties. There is no harm in using printed sales receipt forms as the piece of paper on which to write your contract – just make sure that it is clear that the writing on that receipt shows the terms that the buyer and seller both agree to, and bears signatures which indicate their agreement.
The contract should state exactly what piece of artwork is being purchased, by a title or clear description, which can be supplemented by attaching a print out of a digital photo, or an instant snapshot, to the document. It also helps if the artwork is registered with Fine Art Registry, as the contract can then reference the identifying tag and database information for the work. Be as clear as you can with this description – is the work framed or unframed? Signed or unsigned? What media was used in its production? If the frame is an integral part of the artwork, as is sometimes the case with, for example, a handcarved frame especially designed for an important oil painting, be sure to note this; if the frame was for display in the studio only and won’t be delivered with the artwork, that would be another important thing to agree on.
Also note clearly the precise attribution which you want associated with the painting – exactly how you want your name on any future identifying information related to the work. This also serves to verify the origin of the artwork, often termed a certificate of authenticity, which enhances the work’s value to the purchaser and any subsequent buyers.
You should also then state the price, whether the payment has been received in full or, if not, the terms of financing, as well as the date and location of delivery. The purchase price also helps the purchaser to establish their basis in the work for investment and taxation purposes. However, in some instances, the purchaser or the seller might not want the price stated, for reasons best discussed with your personal accountant. In such a case, you might include in the agreement a statement as to whether or not the purchase price can be publicly disclosed, or reported to various art-price tracking sites, and in lieu of stating the price, the contract can simply say “for a purchase price agreed upon by the parties, the receipt of which is hereby acknowledged.”
And just as it may be that some women, I’m not saying who, don’t tell their husbands about every little pair of shoes they buy, in some cases the art purchaser or seller might not want the transaction disclosed publicly at all, in which case the agreement can contain a ‘nondisclosure clause’ which states that the name of the purchaser or any other terms can not be revealed. Since the sale of a painting to, say, a celebrity or corporate giant might be a fact which has economic value to the artist, the artist might well charge an additional fee, or decide not to sell the painting, if such a provision is requested. On the other hand, it would also be appropriate for the artist to ask whether or not she can use the purchaser’s name in promotional and marketing materials, such as in a list of clientele, and note the yea or nay in the agreement as well.
You should also note that the delivery of the artwork has been accomplished; that the purchaser inspected the artwork and finds it to be in satisfactory condition and to in fact be the artwork identified in the agreement. If the delivery takes place at a separate place and time than the agreement to purchase (such as with a commissioned work; or where a large or important artwork is going to be crated and shipped to the purchaser’s home rather than thrown in the back of the minivan), be sure that the purchaser signs a statement to this effect noting the date and acceptance of delivery.
The agreement should then answer any and all questions that are likely to come up regarding copyright and moral rights in the painting, including whether the purchaser may or may not:
- display the work publicly, in a business, government, or nonprofit/museum/educational setting
- make copies or derivative works without further permission of the artist
- alter the work, reframe it, or (such as in the case of a sculpture or mobile) paint it
If the contract is for an artwork to be installed at a particular location, then it should set out terms for whether or not, or when, the work could be removed, and whether or not the artist need be notified before removal. The agreement could also include a provision requiring the purchaser to notify the artist or, if the work is registered, the Fine Art Registry, at the time of any subsequent sale, and to notify any subsequent purchasers of the copyright and moral rights retained by the artist.
Sitting down and going over these terms with a potential art purchaser is time consuming, but it also serves to remind the purchaser and the artist of the value of a genuine work of art. There may be instances when, upon hearing about the copyright and moral rights which the artist is retaining, the purchaser may not wish to buy the artwork. It’s important to remember both that all the terms of a contract for the purchase of art are negotiable. The point is to come to that ‘meeting of the minds’ where the buyer and seller agree as to the terms and conditions of the sale. If a court can plainly see that the buyer and seller came to an agreement, which is plainly written in terms they both understood and acknowledged, then the court will enforce the agreement as a legal contract and protect the rights of both seller and buyer as stated in the agreement.
— Cindy Ellen Hill, Esq.
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