Art Gallery Lawyers for Montana

Yes, you absolutely need a written Art Consignment Agreement before handing over your artwork to any gallery. A verbal agreement, handshake deal, or email exchange isn't enough to protect your rights if something goes sideways. The gallery may seem reputable, but you’re placing valuable property in someone else’s control, and there are real legal and financial risks if expectations aren't clearly spelled out. A formal contract protects your ownership, defines obligations, and gives you leverage if disputes arise. Why the Agreement Matters A written consignment contract serves several key purposes. First, it makes it legally clear that you retain ownership of the artwork until it's sold and you’ve been paid. Without this, the work might be treated as gallery inventory if the gallery gets sued or files for bankruptcy. Second, it confirms whether the gallery carries insurance and who’s liable if your work is damaged, stolen, or lost. Third, it lays out financial terms, including pricing authority, commission percentage, and payment deadlines. That avoids unpleasant surprises like the gallery giving a steep discount without your approval or taking months to pay you after a sale. Core Terms You Should Include Start with a detailed inventory listing each piece on consignment. Include the title, medium, dimensions, inventory number, and agreed-upon price. The agreement should state that the artwork remains your property until sold and that the gallery holds it in trust. Specify the consignment period—whether it’s three months, six months, or open-ended with the right to terminate on notice. Define the commission split clearly. Many galleries take 40 to 50 percent, but it can vary. Spell out who sets the prices and whether the gallery can offer discounts without your permission. Next, address payment terms. Thirty days after the sale is common, but it should be written. Include a clause about how you’ll be notified of sales and what accounting the gallery must provide. Insurance is another key issue. Make sure the gallery confirms in writing that it carries insurance covering theft, fire, water damage, and other common risks, and that your artwork is included at full retail value. If they don’t insure, you may need to. Don’t forget what happens if the work doesn’t sell. The agreement should cover how and when unsold pieces are returned and at whose expense. Some artists require the gallery to return the work within 10 days of the consignment ending. Also consider a termination clause so you can exit the agreement if needed, such as for breach or change in business direction. Other Clauses That Add Protection Include a copyright clause stating that you retain all intellectual property rights in your work. The gallery should only have a limited, non-exclusive license to use images of your work for promotional purposes. If the gallery wants exclusive rights to sell your work during the consignment period or in a specific geographic area, make sure the scope is clearly defined. You can also address marketing expectations, such as whether the gallery will display the work, include it in exhibits, or promote it online. A dispute resolution clause can save time and legal fees if something goes wrong. Mediation followed by arbitration is a common approach in art contracts. And make sure the agreement names the applicable law—typically the state where the gallery operates. Professional Advice and Red Flags Some states have specific laws protecting artists in consignment situations. For example, New York and California require galleries to treat consigned art and proceeds from sales as trust property. In New York, these protections apply automatically when artwork is delivered to a gallery for exhibition or sale, even without a written agreement. However, in many other states with consignment laws, these protections only apply when there is a written consignment agreement between the artist and gallery. Approximately half of the 32 states with art consignment laws require written documentation as a condition for legal protection. If you’re dealing with a high-value piece or a large consignment, consider having a lawyer review the contract before signing. Any gallery that resists putting terms in writing or downplays the need for a formal agreement is a red flag. A professional gallery should expect to sign one and may already have a standard form. That doesn’t mean you can’t negotiate parts of it. If you need help drafting or reviewing an Art Consignment Agreement, the attorneys on Contracts Counsel would be happy to assist you.