The importance of galleries in the financial success of artists cannot be understated. In the art world, galleries are the equivalent of record companies and movie studios–they bring art to the public. They are institutions lending context and credibility to the works they display. While the concert violinist on the street corner can command only small tips from passing pedestrians, that same violinist can command many thousands of dollars if she walks into the nearby concert hall and plays the exact same piece on a Friday night. So too can artists command much higher sums for their works inside of galleries.
For this reason, exclusive gallery representation agreements (sometimes called “gallery contracts” or “gallery representation contracts”) are becoming the norm. In a way these types of agreements make sense. Galleries want art for their walls and artists want to know that they will have a place to display (and sell) their art when they are ready. Unfortunately, there are many pitfalls to the gallery representation agreement arrangement that artists need to be aware of before signing them.
Here are seven of the most common issues in gallery representation agreements:
1. Geography. Most gallery representation agreements require the artist to provide artwork exclusively to a particular gallery. Artists will want the geographic region to be as small as possible–i.e. the particular city in which the gallery is located. Galleries will want the geographic region to be broad, sometimes extending to the whole state. In large states like California, having an exclusive gallery agreement with a gallery in Los Angeles that prevents the artist from working with other galleries in California would severely limit the artist’s ability to hold shows in San Francisco or San Diego without cooperation of their Los Angeles gallery. Artists must pay attention to the geography, which is usually defined in just a passing word or sentence towards the beginning of an agreement.
2. Term. The “term” of a gallery agreement will generally be a period of years and the agreements will usually renew automatically for additional terms unless cancelled. Artists may like the idea of having a long term contract but what if the relationship with the gallery owner falls through? Artists need to make sure there is a means of getting out of the agreement or not renewing additional terms in the event the relationship sours. The best term would provide that the agreement could be cancelled at any time with proper notice. Galleries will typically agree with such a term because they also do not want to have to host receptions and shows for an artist that is not selling.
3. Consignment and Percentage Splits. A typical gallery agreement will be structured as a consignment. The most complicated parts of a gallery agreement may include descriptions of how the art is consigned to the gallery, who pays the costs associated with photographing the artwork, whether the artist is entitled to copies of the photographs, who sets the retail sale price, and percentage split of revenue between the artist and the gallery. Much of the negotiation in a gallery agreement will be with regard to these provisions and it is key that the artist understand how the net retail prices are determined under a particular agreement. If an artist is entitled to 50% of the net retail price but the gallery deducts the costs of framing and installation costs before calculating the net price, there will be much less to split. Artists will want to limit the costs that can be deducted or ask for a percentage of the gross sales prices.
4. Framing, Shipping, & Installation. The costs associated with framing, shipping, and installing art can add up. Gallery agreements usually attempt to push these costs onto the artist wherever possible. Artists simply need to understand how these provisions operate in their particular agreement. Sometimes the galleries will pay for shipping to shows out of the state that the gallery is attending but will usually require that an artist pay for shipping back to the artist of any unsold art. These provisions are absolutely negotiable so it is never wise to assume the costs without first negotiating for better terms.
5. Safekeeping & Insurance. Art galleries are buildings just like any other and can be burglarized or erupt in flames. The gallery needs to maintain adequate insurance to cover the potential loss of artwork in such events. Ideally, the insurance will provide for coverage up to the full retail sales price. Artists may need to ask for a copy of the gallery’s insurance policy and have it reviewed by an attorney, especially if the artwork is of significant monetary value.
6. Solo Art Shows. One of the benefits to an artist of having gallery representation is knowing that the gallery will provide them a place to hold solo art shows for their new works. A typical gallery agreement may promise the artist one solo gallery show every several years. If the artist is prolific, they may want to negotiate for more frequent shows. Costs of producing the shows will usually be allocated in the agreements. The artist wants to be sure that they agreement does not make them responsible for paying the costs of hosting the opening reception. Sometimes these costs can be passed on to the artist in clever ways–e.g. by deducting them from the retail sales prices of pieces of art. Artists should read the provisions of their agreement carefully.
7. Copyrights. Although it is rare, some galleries are now attempting to take control of the artist’s copyrights in their artwork. Artists want to avoid assigning their copyrights because reprints and books may provide additional streams of revenue that continue long past the sales of the initial pieces.