As a practicing artist, I know how exciting it is to find and secure gallery representation. As an attorney, I have represented artists whose consignment agreements with a gallery went sour, and so I am well aware of the possible pitfalls that may arise once this relationship has commenced.

In Massachusetts, the artist is protected in her relationship with a gallery by Massachusetts General Law Ch. 104A, which creates a specific type of legal relationship, known as a “trust relationship,” between art owners and art dealers. The statute provides that an art dealer has a fiduciary duty to protect the trust assets of the art owner (i.e., their works of art and sales fees) as trust property. An art dealer cannot use or claim an art owner’s fine art as property of the gallery.  Consequently, when money from the sale of a work comes to the art dealer, the law treats the money as property of the art owner, not the art dealer. The art dealer cannot collect his percentage from the sale of the artwork until the art owner’s share has been paid.

Under Massachusetts General Law Ch. 104A, Section 2 (c), art dealers are charged with maintaining accurate records for better transparency both in day-to-day business and in the event of a bankruptcy filing. Art dealers must keep a copy of the written statement provided by the art owner upon delivery of the work. When the art work is sold, the dealer must record the date of the sale, the amount of the sale, and the name and contact information of the purchaser. In addition, if the consignor is the artist who created the work or the artist’s heirs, the dealer must provide the consignor with the name and contact information of the purchaser of the work.

The statute also provides guidelines for payment when a consigned work is sold. A gallery must pay the owner monies due from the sale of the consigned work within 90 days of receipt of payment. The failure to provide payment within 90 days subjects the gallery to an additional payment for damages (5% interest plus reasonable attorneys’ fees). If payment has not been made to the artist within 180 days, this figure increases to three times the amount owed, plus 5% interest. The art dealer is at all times responsible and liable for the loss of or damage to the work of fine art.

If you have questions about consignment agreements or concerning dealings with an art gallery, please contact Mia Rosenblatt Tinkjian.